WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
Wa Fang Dian Bearing Company Limited
For the year 2018
Auditor’s Report
Reference Page
Auditor’s report 1-6
Financial statements
— Consolidated balance sheet 7-8
— Balance sheet of parent company 8-10
— Consolidated income statement 10-11
— Income statement of parent company 11-12
— Consolidated cash flow statement 12-13
— Cash flow statement of parent company 13-14
— Consolidated statements of changes in equity 15-17
— Statements of changes in equity of parent company 17-19
— Notes to financial statement 20-105
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
Auditors’ Report
(English Translation for Reference Only)
To the shareholders of Wafangdian Bearing Company Limited
1. Opinion
We have audited the financial statements of Wafangdian Bearing Company Limited (“Wafangdian
Bearing Company”), which comprise the consolidated as well as Company’s balance sheet as at 31
December 2018, the Company’s and the consolidated income statement, cash flow statement and
statement of changes in shareholders’ equity for the year then ended, and the related notes to the
financial statements.
In our opinion, the accompanying financial statements of Wafangdian Bearing Company present
fairly, in all material respects, the Company’s and the consolidated financial position as at 31
December 2018, the Company’s and the consolidated results of operations and cash flows for the
year then ended in accordance with Accounting Standards for Business Enterprises.
2. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Chinese Certified
Public Accountants. 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 Chinese
Certified Public Accountants, and we have fulfilled our other ethical responsibilities of the code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit.
3. Key Audit Matters
Key audit matters are those matters that we consider, 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 audit
opinion thereon, and we do not express a separate opinion on these matters.
1. Inventory impairment
Key Audit Matter How the matter was addressed in the audit
Up to December31st, 2018, as The main audit procedures carried out for addressing the key
described in the Note VII,6 closing audit matters are as follows:
balance of inventory is 1. Evaluate the design of the internal control of the
76,663.38Million Yuan, provision procurement and payment cycle, determine if it is
for inventory impairment is implemented, identify significant internal control
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
1,912.27million Yuan, provision for deficiencies, and conduct operational effectiveness
impairment decreased by testing.
1,805.33million Yuan, which is the 2. Together with stock count, inspect the inventory’s
key factor to the gross profit and physical condition so to understand whether the
significantly affect the financial condition is normal.
statements. Therefore, we identify 3. Review the provision recognition basis and whether is
the provision for inventory consistent with prior period.
impairment is the key audit matter. 4. In accordance with lower of NRV and cost method,
evaluate the documents, assumption and accrual method
for provision, and examine whether the NRV is based on
the conclusive evidence and ensure its reasonableness.
5. Consider the principle of NRV recognition, review
whether the calculation is correct( adequate not
excessive)
6. Examine the change of provision accrued previously
during the year, examine the impairment provision
reverse calculation and review accounting whether is
reconciled to the accounts in the income statement.
2. Revenue recognition
Key Audit Matter How the matter was addressed in the audit
Revenue and profit of bear sales has The main audit procedures carried out for addressing the key
significant effect on profit of audit matters are as follows:
Wafangdian Bearing Company. 1. Understand and evaluate effectiveness of design and
Revenue recognition depends on operation of the management ‘s internal control over revenue
whether appropriate evaluation is 2. Carried out analytical review and evaluate the
made to whether the sales risk and reasonableness of sales income and gross profit margin of
rewards transfer conditions are in Wafangdian Bearing Company.
conformity with the terms regulated 3. Sampling test the sales contracts, evaluate the
in the sales contract. Due to the consistency between the contract price and actual settlement
complexity of the commercial price.
contract, significant judgment needs 4. Sampling select product sales revenue record, reconcile
to be made, therefore, we to sales invoice, contracts, dispatch note, acceptance note and
recognized revenue recognition as evaluate the recognition of revenue whether is in line with
key audit matters. the accounting standards applicable to Wafangdian Bearing
Company.
5. Select key clients for confirmation letter so to ensure the
accuracy and authenticity.
6. Sampling select the transactions before and after the
balance sheet date, test the dispatch note and other supporting
documents so to ensure whether the transaction is recorded
into the appropriate accounting period.
3. The purchase and storage of Wazhou Liaoyang Bearing construction Co.,Ltd’s old factory
land
The Company’s subsidiary, Wazhou The main audit procedures carried out for addressing the key
Liaoyang Bearing construction Co.,Ltd, audit matters are as follows:
its land where old factory located has 1. Obtain the land buy back contract signed between the
been successfully bought and 35.5904 Company and Liaoyang Land Reserve Centre and
million Yuan was recognized as income examined the accuracy of the booking amount.
and at the same time, default charge of 2. Check the land listing notice and physically visited the
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
31.2029 million Yuan for the land swap Liaoyang Land Reserve Centre and made inquiry
in 2009, 4.3875 million Yuan was regarding this issue and also check any receipt after
recognized as net income. This balance sheet date so to ensure its authencity.
business is abnormal and involved 3. Check the closing book value of the acquisition cost for
significant amount, therefore, we new factory land and plant when the factory was
consider it as key audit matter. relocated so to ensure the gain on the land purchased is
real
4. Obtained the arbitration results regarding compensation
for breaching the land swap contract with Baolin Estate
company and recognized the default loss.
4. Other Information
The management of Wafangdian Bearing Company(hereinafter referred to as the “Management”) is
responsible for the other information. The other information comprises the information included in
the Wafangdian Bearing Company2018 annual report, but does not include 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.
5. Responsibilities of the Management and Those Charged with Governance for the
Financial Statements
The Management is responsible for the preparation of the financial statements in accordance with
Accounting Standards for Business Enterprises to achieve fair presentation; and designing,
implementing and maintaining internal control which is necessary to enable that the financial
statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing Wafangdian
Bearing Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the Management either
intends to liquidate Wafangdian Bearing Companyor to cease operations, or have no realistic
alternative but to do so.
Those charged with governance are responsible to overseeing Wafangdian Bearing Company’s
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
financial reporting process.
6. 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 auditing standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are generally
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
During the course of audit in accordance with auditing standards, we exercise professional
judgment and maintain professional skepticism. We also carry out the following works:
(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 audit. 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 understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of its internal control (this sentence would be deleted in circumstance
when we are also responsible to issue an opinion on the effectiveness of internal control in
conjunction with the audit of the financial statements).
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management.
(4) Conclude on the appropriateness of the 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 in
accordance with the auditing standards or, if such disclosures are inadequate, we shall modify our
opinion. 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, structure and content of the financial statements, including
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
the disclosures, and also whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
(6) Obtain sufficient and appropriate audit evidence of financial information from Wafangdian
Bearing Company and express our opinion. We are responsible for directing, monitoring and
implementing the group audit and take full responsibility for 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 etc., 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 those
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence and
related safeguards, where applicable.
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 prohibited public disclosure about the matter or when, in 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.
ShineWing Certified Public Accountants LLP CPA： (Audit Partner)
CPA：
China, Beijing April 26, 2019
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
II. Financial Statement
1. Consolidated Balance Sheet.
Unit: RMB Yuan
Item Opening Balance Closing Balance
Current assets ：
Monetary fund 247,229,860.99 82,860,774.83
Financial assets held-for-trading
Financial asset measured at FV and any change
298,925.16
recognized in income
Bills receivable and Account receivable 1,235,257,555.58 1,338,261,849.60
Include:Bills receivable 93,624,563.82 209,923,835.91
Account receivable 1,141,632,991.76 1,128,338,013.69
Account paid in advance 21,885,856.45 39,863,576.53
Other receivables 92,255,736.14 21,895,381.98
Include:Interest receivable
Dividend reciivable 1,250,000.00
Inventory 747,511,054.75 693,836,428.55
Non-current assets due within 1 year
Other current assets 14,184,383.36 5,386,473.92
Total current assets 2,358,623,372.43 2,182,104,485.41
Non-current assets
Financial assets available-for-sale 2,000,000.00 2,000,000.00
Investments held-to-maturity
Long-term receivable
Long-term equity investment
Investment property 129,270,498.66 136,874,108.05
Fixed assets 661,598,663.85 710,247,969.72
Construction in progress 48,159,927.20 82,689,318.94
Construction materials
Fixed assets disposal
Biological assets
Gas and petrol assets
Intangible assets 85,667,085.86 87,530,122.26
Development expenditure
Goodwill
Long-term prepaid expense 1,208,536.46 700,228.04
Deferred tax assets 11,639,248.03 11,625,939.19
Other non-current assets
Total non-current assets 939,543,960.06 1,031,667,686.20
Total assets 3,298,167,332.49 3,213,772,171.61
Current liabilities
Short-term loan 620,000,000.00 648,000,000.00
Note payable and Accounts payable 1,058,073,857.65 930,315,566.45
Note payable
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
Accounts payable
Accounts received in advance 21,286,971.52 31,634,532.72
Commission charge payable
Accrued payroll 12,248,327.93 16,660,148.64
Tax payable 7,242,006.46 13,849,972.32
Other payables 131,854,654.39 93,313,193.92
Interest payable 748,135.28 1,190,100.00
Dividends payable 360,000.00
Non-current liabilities due within I year 50,000,000.00
Other current liabilities 4,920,248.12 3,967,022.53
Total current liabilities 1,855,626,066.07 1,787,740,436.58
Non-current liabilities
Long-term loan
Debenture payable
Long-term payables 396,698.98 1,894,004.70
Special payables
Contingent liabilities
Deferred income 61,284,650.74 37,754,771.56
Deferred tax liabilities 836,872.15 888,084.06
Other non-current liabilities
Total non-current liabilities 62,518,221.87 40,536,860.32
Total liabilities 1,918,144,287.94 1,828,277,296.90
Owner’s equity (shareholders’ equity)
Capital stock 402,600,000.00 402,600,000.00
Capital public reserves 485,691,050.47 485,691,050.47
Less: treasury share
Surplus reserve 136,770,391.01 134,278,527.26
Undistributed profit 354,961,603.07 362,925,296.98
Difference of foreign currency translation
Equity attributable to parent company 1,380,023,044.55 1,385,494,874.71
Minority interest
Total owner’s equity 1,380,023,044.55 1,385,494,874.71
Total owner’s equity and liabilities 3,298,167,332.49 3,213,772,171.61
2. Balance Sheet Of Parent Company
Unit: RMB Yuan
Item Opening Balance Closing Balance
Current assets ：
Monetary fund 146,186,890.65 78,901,032.57
Financial asset measured at FV and any change
298,925.16
recognized in income
Financial assets held-for-trading
Bills receivable and Account receivable 1,299,378,046.46 1,316,629,887.08
Include:Bills receivable 89,620,372.80 203,511,631.58
Account receivable 1,209,757,673.66 1,113,118,255.50
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
Account paid in advance 19,008,909.78 37,510,877.11
Other receivables 14,963,827.46 20,605,278.47
Include:Interest receivable
Dividend receivable 1,250,000.00
Inventory 680,255,742.99 622,177,633.83
Non-current assets due within 1 year
Other current assets 13,765,726.62 4,067,326.65
Total current assets 2,173,858,069.12 2,079,892,035.71
Non-current assets
Financial assets available-for-sale 2,000,000.00 2,000,000.00
Investments held-to-maturity
Long-term receivable
Long-term equity investment 211,583,897.67 211,583,897.67
Investment property 113,277,687.13 119,890,581.55
Fixed assets 460,415,212.74 490,076,503.07
Construction in progress 47,699,459.65 82,374,150.54
Construction materials
Fixed assets disposal
Biological assets
Gas and petrol assets
Intangible assets 67,683,392.22 68,788,824.54
Development expenditure
Goodwill
Long-term prepaid expense 1,017,695.53 453,531.31
Deferred tax assets 10,350,000.00 10,350,000.00
Other non-current assets
Total non-current assets 914,027,344.94 985,517,488.68
Total assets 3,087,885,414.06 3,065,409,524.39
Current liabilities
Short-term loan 620,000,000.00 648,000,000.00
Note payable and Accounts payable 929,608,079.68 810,566,646.33
Note payable
Accounts payable
Accounts received in advance 21,976,484.62 31,518,509.16
Commission charge payable
Accrued payroll 5,520,469.68 9,803,431.58
Tax payable 4,783,202.06 10,821,733.56
Other payables 50,471,992.39 54,100,405.81
Include:Interest payable 748,135.28 1,190,100.00
Dividends payable 360,000.00
Non-current liabilities due within I year 50,000,000.00
Other current liabilities 3,869,474.53 3,869,474.53
Total current liabilities 1,636,229,702.96 1,618,680,200.97
Non-current liabilities
Long-term account payable 296,698.98 296,698.98
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
Debenture payable
Special payables
Contingent liabilities
Deferred income 29,671,957.77 33,560,207.56
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 29,968,656.75 33,856,906.54
Total liabilities 1,666,198,359.71 1,652,537,107.51
Owner’s equity (shareholders’ equity)
Capital stock 402,600,000.00 402,600,000.00
Capital public reserves 485,678,443.26 485,678,443.26
Less: treasury share
Surplus reserve 136,770,391.01 134,278,527.26
Undistributed profit 396,638,220.08 390,315,446.36
Total owner’s equity 1,421,687,054.35 1,412,872,416.88
Total owner’s equity and liabilities 3,087,885,414.06 3,065,409,524.39
3. Consolidated Income Sheet.
Unit: RMB Yuan
Account for the
Item Account for the prior period
current period
1.Total operating income 2,168,398,656.83 2,190,412,052.05
Including: Operating revenue 2,168,398,656.83 2,190,412,052.05
Interest income
Handling charge and commission income
2.Total operating cost 2,182,504,811.35 2,206,331,311.07
Including: Operating cost 1,891,027,679.53 1,886,614,598.45
Interest expenses
Handling charge and commission income
Tax & surcharges for main operations 16,302,542.85 19,418,083.12
Selling expenses 165,543,842.56 157,721,750.23
Administrative expense 57,666,053.69 57,345,250.36
Research and development expense 5,922,083.68 4,065,054.17
Financial expense 41,027,386.88 50,697,810.00
Including: interest expenses 44,744,788.35 49,123,067.63
interest revenue 531,265.45 655,727.60
Loss of impairment of assets 5,015,222.16 30,468,764.74
Add:Other income 8,337,141.38 7,856,994.07
Investment income(loss with "-") 1,250,000.00 500,000.00
Gains of change of fair value of assets(loss with"-") -49,309.20
Including: Income form investment on associated enterprise and jointly
enterprise
Asset disposal income (loss with "-") 1,789,718.35 -728,247.65
3.Operating profit (loss with"-") -2,778,603.99 -8,290,512.60
Add: Non-operating revenue 14,491,888.12 19,009,072.44
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
Less: Non-operating cost 1,425,061.85 583,661.43
4.Total profit(loss with"-") 10,288,222.28 10,134,898.41
Less: Income tax expenses -343,947.56 -48,050.75
5. Net profit(Loss with"-") 10,632,169.84 10,182,949.16
(I) continuous operating net profit (net loss is marked with "-") 10,632,169.84 10,182,949.16
(2) termination of net profit (net loss is marked with "-") 10,632,169.84 10,182,949.16
Net profit attributable to shareholders of parent company 10,632,169.84 10,182,949.16
Minority interests
6. Other comprehensive income net off tax
Total comprehensive income net off tax attributable to parent Company
(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
(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.Avaliable-for-sale financial assets fair value movements
3.Profit/loss on reclassification from held to maturities to
avaliable-for-sale financial assets
4.Cash flow hedges effective portion
5.Foreign currency translation difference
6. Others
Total comprehensive income net off tax attributable to minority
shareholders of the Company
7. Total comprehensive returns 10,632,169.84 10,182,949.16
Total comprehensive returns available for parent company
Total comprehensive returns available for minority shareholders 10,632,169.84 10,182,949.16
8.Earnings per share
(1) Basic earnings per share 0.03 0.03
(2) Diluted earnings per share 0.03 0.03
4. Income Sheet of Parent Company.
Unit: RMB Yuan
Item Account for the current period Account for the prior period
1.Total operating income 2,162,469,546.51 2,138,730,061.84
Less:Total operating cost 1,892,827,228.39 1,847,965,184.83
Tax & surcharges for main operations 13,232,173.66 16,201,656.03
Selling expenses 162,404,118.64 154,364,032.50
Administrative expense 35,822,039.38 34,167,585.76
Research and development expense 4,821,297.84 3,152,824.17
Financial expense 32,834,353.49 50,747,589.77
Including: interest expenses 36,542,875.47 49,115,876.12
interest revenue 508,137.99 608,102.10
Loss of impairment of assets 3,997,682.39 29,792,760.86
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
Add:Other income 7,608,454.73 7,686,358.23
Investment income(loss with "-") 1,250,000.00 500,000.00
Gains of change of fair value of assets(loss with"-") -49,309.20
Asset disposal income (loss with "-") 1,789,718.35 14,622.70
2.Operating profit (loss with"-") 27,129,516.60 10,539,408.85
Add: Non-operating revenue 7,076,458.32 18,374,751.29
Less: Non-operating cost 9,566,764.26 552,045.56
3.Total profit(loss with"-") 24,639,210.66 28,362,114.58
Less: Income tax expenses -279,426.81 5,933.09
4. Net profit(Loss with"-") 24,918,637.47 28,356,181.49
(I) continuous operating net profit (net loss is marked with "-") 24,918,637.47 28,356,181.49
(2) termination of net profit (net loss is marked with "-")
5. Other comprehensive income net off tax
(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
(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.Avaliable-for-sale financial assets fair value movements
3.Profit/loss on reclassification from held to maturities to
avaliable-for-sale financial assets
4.Cash flow hedges effective portion
5.Foreign currency translation difference
6. Others
6.Total comprehensive returns 24,918,637.47 28,356,181.49
7.Earnings per share
(1) Basic earnings per share 0.06 0.07
(2) Diluted earnings per share 0.06 0.07
5. Consolidated Cash Flow Statement.
Unit: RMB yuan
Account for the Account for the prior
Item
current period period
1.Cash from operating activities
Cash received from sale of goods or rendering of services 1,112,014,767.44 998,989,298.82
Refund of taxes and fares 1,658.70
Other cash received relating to operating activities 38,046,426.13 37,275,712.97
Sub-total of cash inflows 1,150,062,852.27 1,036,265,011.79
Cash paid for goods and services 488,161,825.66 615,213,585.04
Cash paid to or on behalf of the employees 244,372,366.50 235,991,883.53
Tax payments 71,020,587.66 75,725,151.63
Other cash paid relating to operating activities 117,904,178.47 111,459,211.26
Sub-total of cash outflows 921,458,958.29 1,038,389,831.46
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
Net cash flows from operating activities 228,603,893.98 -2,124,819.67
2.Cash flows from investing activities
Cash received from return of investment 305,344.34
Cash received from investment incomes 500,000.00
Net cash received from disposal of fixed assets, intangible assets and 1,604,578.24 1,528,671.91
other long-term assets
Proceeds from sale of subsidiaries and other operating units
Other cash received relating to investing activities
Sub-total of cash inflows 1,604,578.24 2,334,016.25
Cash paid to acquire fixed assets, intangible assets and other 5,684,584.60 11,304,923.42
long-term assets
Cash paid to acquire investment
Net cash used in acquiring subsidiaries and other operating units
Other cash paid relating to investing activities
Sub-total of cash outflows 5,684,584.60 11,304,923.42
Net cash flows from investment activities -4,080,006.36 -8,970,907.17
3.Cash flows from financing activities
Cash received from absorbing investment
Including: Cash received from increase in minority interest
Proceeds from borrowings 618,000,000.00 785,000,000.00
Other proceeds relating to financing activities 528,584,751.74 521,431,915.89
Sub-total of cash inflows 1,146,584,751.74 1,306,431,915.89
Repayment of borrowings 696,000,000.00 776,900,000.00
Distribution of dividends or profits & interest expenses 60,930,753.07 37,194,632.90
Cash paid for other financing activities 483,543,639.87 563,166,532.83
Sub-total of cash outflows 1,240,474,392.94 1,377,261,165.73
Net cash flows from financing activities -93,889,641.20 -70,829,249.84
4. Effects of foreign exchange rate changes on cash -245,938.73 -2,264,902.30
5.Net increases in cash and cash equivalents 130,388,307.69 -84,189,878.98
Add: cash and cash equivalent, at the beginning of year 58,043,497.54 142,233,376.52
6.Cash and cash equivalent at the end of the year 188,431,805.23 58,043,497.54
6. Cash Flow Statement Of Parent Company.
Unit: RMB yuan
Account for the Account for the prior
Item
current period period
1.Cash from operating activities
Cash received from sale of goods or rendering of services 1,079,953,679.32 987,766,383.45
Refund of taxes and fares
Other cash received relating to operating activities 21,555,153.70 33,836,533.17
Sub-total of cash inflows 1,101,508,833.02 1,021,602,916.62
Cash paid for goods and services 597,924,911.90 659,906,982.03
Cash paid to or on behalf of the employees 188,621,706.87 181,332,361.19
Tax payments 57,095,678.19 61,677,022.01
Other cash paid relating to operating activities 134,797,427.06 102,320,046.29
Sub-total of cash outflows 978,439,724.02 1,005,236,411.52
Net cash flows from operating activities 123,069,109.00 16,366,505.10
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
2.Cash flows from investing activities
Cash received from investment incomes 305,344.34
Obtain the cash received from the investment income. 500,000.00
Net cash received from disposal of fixed assets, intangible assets and other long-term
1,604,578.24 1,508,577.31
assets
Proceeds from sale of subsidiaries and other operating units
Other cash received relating to investing activities
Sub-total of cash inflows 1,604,578.24 2,313,921.65
Cash paid to acquire fixed assets, intangible assets and other long-term assets 5,434,940.58 10,716,219.62
Cash paid to acquire investment
Net cash used in acquiring subsidiaries and other operating units
Other cash paid relating to investing activities
Sub-total of cash outflows 5,434,940.58 10,716,219.62
Net cash flows from investment activities -3,830,362.34 -8,402,297.97
3.Cash flows from financing activities
Cash received from absorbing investment
Proceeds from borrowings 618,000,000.00 785,000,000.00
Other proceeds relating to financing activities 528,584,751.74 521,431,915.89
Sub-total of cash inflows 1,146,584,751.74 1,306,431,915.89
Repayment of borrowings 696,000,000.00 776,900,000.00
Distribution of dividends or profits & interest expenses 52,728,840.19 37,104,632.90
Cash paid for other financing activities 483,543,639.87 563,256,532.83
Sub-total of cash outflows 1,232,272,480.06 1,377,261,165.73
Net cash flows from financing activities -85,687,728.32 -70,829,249.84
4. Effects of foreign exchange rate changes on cash -245,938.73 -1,726,793.72
5.Net increases in cash and cash equivalents 33,305,079.61 -64,591,836.43
Add: cash and cash equivalent, at the beginning of year 54,083,755.28 118,675,591.71
6.Cash and cash equivalent at the end of the year 87,388,834.89 54,083,755.28
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
7. Consolidated Sheet Of Changes In Shareholder’s Equity
Unit: RMB yuan
Amount in current period
Owner’s equity attributable to parent company
Minority
Item less：
Capital public Surplus public General shareholders’ Owner’s equity
Capital stock treasure Undistributed profits Others
reserves reserves provision for risk equity
stock
1.Balance at the end of last 402,600,000.0
485,691,050.47 134,278,527.26 362,925,296.98 1,385,494,874.71
year 0
Add: changes in accounting
policies
Changes in previous errors
Others
2.Balance at the beginning of 402,600,000.0
485,691,050.47 134,278,527.26 362,925,296.98 1,385,494,874.71
this year 0
3. The changes in this year
2,491,863.75 -7,963,693.91 -5,471,830.16
（decrease with“-”）
（1）Total of 10,632,169.84 10,632,169.84
comprehensive income
（2）Capital contribution
and reduction
1）Ordinary share
2）Capital contributed by other
equity instrument holders
3）Share-based payments
charged to equity
4）Others
(3）Profits distribution 2,491,863.75 -18,595,863.75 -16,104,000.00
1)Provision for surplus public
2,491,863.75 -2,491,863.75
reserves
2)provision for general risks
3)distribution for
-16,104,000.00 -16,104,000.00
owner(shareholders)
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
4)others
(5）interior transference of
owner’s equity
1)capital (capital
stock)transferred by the
capital public reserves
2)capital (capital
stock)transferred by the
surplus public reserves
3)loss offset by the surplus
public reserves
4)others
4. Balance at the end of the
402,600,000.00
current period
Unit: RMB yuan
Amount in previous period
Owner’s equity attributable to parent company Owner’s equity
Minority
less： General
Item Capital Capital public Surplus public shareholders’
treasure provision for Undistributed profits Others
stock reserves reserves equity
stock risk
1.Balance at the end of last 402,600,000
485,691,050.47 131,442,909.11 359,603,965.97 1,379,337,925.55
year .00
Add: changes in accounting
policies
Changes in previous errors
Others
2.Balance at the beginning of 402,600,000
485,691,050.47 131,442,909.11 359,603,965.97 1,379,337,925.55
this year .00
3. The changes in this year
2,835,618.15 -4,026,000.00 -1,190,381.85
（decrease with“-”）
（1）Total of comprehensive
2,835,618.15 2,835,618.15
income
（2）Capital contribution
and reduction
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
1）Ordinary share
2）Capital contributed by other
equity instrument holders
3）Share-based payments
charged to equity
4）Others
(3）Profits distribution 2,835,618.15 -6,861,618.15 -4,026,000.00
1)Provision for surplus public
2,835,618.15 -2,835,618.15
reserves
2)provision for general risks
3)distribution for
-4,026,000.00 -4,026,000.00
owner(shareholders)
4)others
(5）interior transference of
owner’s equity
1)capital (capital
stock)transferred by the
capital public reserves
2)capital (capital
stock)transferred by the
surplus public reserves
3)loss offset by the surplus
public reserves
4)others
4. Balance at the end of the 402,600,000
485,691,050.47 134,278,527.26 355,577,965.97 1,378,147,543.70
current period .00
8. Sheet Of Changes In Shareholder’s Equity Of Parent Compamy.
Unit: RMB yuan
Amount in current period
Owner’s equity attributable to parent company
Item
Surplus public Owner’s equity
Capital stock Capital public reserves less：treasure stock General provision for risk Undistributed profits
reserves
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
1.Balance at the end of last year 402,600,000.00 485,678,443.26 134,278,527.26 390,315,446.36 1,412,872,416.88
Add: changes in accounting policies
Changes in previous errors
Others
2.Balance at the beginning of this year 402,600,000.00 485,678,443.26 134,278,527.26 390,315,446.36 1,412,872,416.88
3. The changes in this year（decrease with“-”） 2,491,863.75 6,322,773.72 8,814,637.47
（1）Total of comprehensive income 24,918,637.47 24,918,637.47
（2）Capital contribution and reduction
1）Ordinary share
2）Capital contributed by other equity instrument
holders
3）Share-based payments charged to equity
4）Others
(3）Profits distribution 2,491,863.75 -18,595,863.75 -16,104,000.00
1)Provision for surplus public reserves 2,491,863.75 -2,491,863.75
2)provision for general risks
3)distribution for owner(shareholders) -16,104,000.00 -16,104,000.00
4)others
(5）interior transference of owner’s equity
1)capital (capital stock)transferred by the capital
public reserves
2)capital (capital stock)transferred by the surplus
public reserves
3)loss offset by the surplus public reserves
4)others
4. Balance at the end of the current period 402,600,000.00 485,678,443.26 136,770,391.01 396,638,220.08 1,421,687,054.35
Amount in previous period
Item
Owner’s equity attributable to parent company Owner’s equity
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
Capital public less：
Capital stock Surplus public reserves Undistributed profits
reserves treasure stock
1.Balance at the end of last year 402,600,000.00 485,678,443.26 131,442,909.11 368,820,883.02 1,388,542,235.39
Add: changes in accounting policies
Changes in previous errors
Others
2.Balance at the beginning of this year 402,600,000.00 485,678,443.26 131,442,909.11 368,820,883.02 1,388,542,235.39
3. The changes in this year（decrease with“-”） 2,835,618.15 21,494,563.34 24,330,181.49
（1）Total of comprehensive income 28,356,181.49 28,356,181.49
（2）Capital contribution and reduction
1）Ordinary share
2）Capital contributed by other equity instrument holders
3）Share-based payments charged to equity
4）Others
(4）Profits distribution 2,835,618.15 -6,861,618.15 -4,026,000.00
1)Provision for surplus public reserves 2,835,618.15 -2,835,618.15
2)provision for general risks
3)distribution for owner(shareholders) -4,026,000.00 -4,026,000.00
4)others
(5）interior transference of owner’s equity
1)capital (capital stock)transferred by the capital public reserves
2)capital (capital stock)transferred by the surplus public reserves
3)loss offset by the surplus public reserves
4)others
4. Balance at the end of the current period 402,600,000.00 485,678,443.26 134,278,527.26 390,315,446.36 1,412,872,416.88
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
I. General Information
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, 1997. In the opinion of the directors, its
parent and ultimate holding company is Wafangdian Bearing Group Company Limited
(“Wazhou Group”).
The Company’s B shares have been listed on the Shenzhen Stock Exchange since 19February,
1997.
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 has
the following functional departments including: procurement department, portfolio
investment department, operating department, HR, marketing department, manufacturing and
construction department, quality control department, financial department and logistic
department. Wholly owned subsidiaries include Wazhou Liaoyang Bearing Manufacturing
Co., Ltd(“Liaoyang Bearing”), Dalian Wazhou Precision Electric Motor Car Bearing
(“DalianElectrical Motor”),and Wazhou Precision of Spherical Roller
Bearings(Wafangdian)Co., Ltd(“Spherical Bearings”).
The addresses of the registered office and principal place of business of the Company are
No.1, Phrase 1, Gongji Street, Wafangdian North, Liaoning Province, and the PRC.Legal
representative is Meng Wei.
The Company is principally engaged in the manufacturing and sale of bearing, bearing spare
parts, engineering equipment, automobile spare parts and relating products, bearing repair,
maintenance and technology service etc and also in renting mechanical equipment and estate,
inspection of bearings, mechanical equipment, measuring instruments and meters.
II.Financial Statement Consolidation Scope
The Group’s financial statements consolidation includes Liaoyang Bearing, Dalian Wazhou
Precision Motor Car Bearing Company and Spherical Bearing three companies. There is no
change for consolidation scope by comparing to last year.
Please refer to “VII. Change of consolidation scope” and “VIII. Equity within other entity” in
the Note to the financial statements.
III. Financial Statements Preparation Basis
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
（1） Basis of preparation
The Company’s financial statements are prepared on the basis of going concern assumption,
according to the actual occurred transactions and events and in accordance with ‘Accounting
Standards for Business Enterprises’ and relevant regulations, and also based on the note IV
“Significant Accounting Policies, Accounting Estimates”.
（2） Going concern
The group has evaluated the going-concern capability for the 12 months from the end of the
reporting period, and has found no significant doubts about the going-concern capability.
Therefore, the financial statements are prepared on the assumption of going concern.
IV. Significant Accounting Policies and Accounting Estimates
Specific accounting policy and estimates reminder: the group established the accounting
policy and estimate, such as operation cycle, bad debt recognition and measurement,
dispatched inventory measurement and classification of fixed assets and FA’s depreciation,
intangible asset’s amortization, 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 Standard for Business Enterprise, and reflect the relative information for the
financial position, operating performance, cash flow of the Group truly and fully.
2. Accounting period
The Group adopts the Gregorian calendar year as accounting period, i.e. from Jan 1 to Dec
31.
3.Operating cycle
Normal operating cycle refers to the duration starting from purchasing the assets for
manufactuing up to cash or cash equivelant realisation. The group sets twelve months for
one operating cycle and as the liquidity criterion for assets and liability.
4. Funcitonal currency
The Group adopts RMB as functional currency.
5. Accounting for business combination under same control and not under same control
As an acquirer, the assets and liabilities that The Group obtained in a business combination
under the same control should be measured on the basis of their carrying amount in the
consolidated financial statements on the combining date. As for the balance between the
carrying amount of the net assets obtained by the combining party and the carrying amount of
the consideration paid by it, the capital surplus shall be adjusted. If the capital surplus is not
sufficient to be offset, the retained earnings shall be adjusted.
For a business combination not under same control, the asset, liability and contingent liability
obtained from the acquirer shall be measured at the fair value on the acquisition date. The
combination cost shall be the fair value, on the acquisition date, of the assets paid, the
liabilities incurred or assumed and equity securities issued by the acquirer in exchange for the
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
control of the acquire, and sum of all direct expenses(if the combination is achieved in stages,
the combination cost shall be the sum of individual transaction). The difference when
combination cost exceeds proportionate share of the fair value of identifiable net assets of
acquiree should be recognized as goodwill. If the combination cost is less than proportionate
share of the fair value of identifiable net assets of acquiree, firstly, fair value of identifiable
asset, liability or contingent liability shall be reviewed, and so the fair value of non-monetary
assets or equity instruments issued in the combination consideration , after review, still the
combination cost is less than proportionate share of the fair value of identifiable net assets of
acquire, the difference should be recognized as non-operating income.
6. Method of preparation of consolidated financial statements
All subsidiaries controlled by the Group and structured entities are within the consolidation
scope.
If subsidiaries adopt different accounting policy or have different accounting period from the
parent company, appropriated adjustments shall be made in accordance with the Group policy
in preparation of the consolidated financial statements.
All significant intragroup transactions, outstanding balances and unrealized profit shall be
eliminated in full when preparing the consolidated financial statements. Portion of the
subsidiary’s equity not belonging to the parent, profit, loss for the current period, portion of
other comprehensive income and total comprehensive belonging to minority interest, shall be
presented separately in the consolidated financial statements under “minority interest of
equity”,”minority interest of profit and loss”, “other comprehensive income attributed to
minority interest” and “total comprehensive income attributed to minority interest” title.
If a subsidiary is acquired under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. When preparing the comparative
consolidated financial statements, adjustments shall be made to relevant items of comparative
figures as regarded that reporting entity established through consolidation has been always
there since the point when the ultimate controlling party starts to have the control.
If a business consolidation under common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is
obtained. For example, if a business consolidation under common control is finally achieved
in stages, when preparing the consolidated financial statements, adjustments shall be made for
the current consolidation status as if consolidation has always been there since the point when
the ultimate controlling party starts to control. In preparation of comparative figures, asset
and liability of the acquiree shall be consolidated into the Group’s comparative financial
statements, but to the extent no earlier than the point when the Group and acquiree are both
under ultimate control and relevant items under equity in comparative financial statements
shall be adjusted for net asset increased in combination. To avoid the duplicated computation
of net asset of acquiree, for long-term equity investment held by the Group before the
consolidation, relevant profit and loss, other comprehensive income and movement in other
net asset, recognized for the period between the combination date and later date when original
shareholding is obtained and when the Group and the acquiree are under common control of
same ultimate controlling party, shall be respectively used for writing down the opening
balance of retained earnings of comparative financial statements and profit and loss for the
current period.
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
If a subsidiary is acquired not under common control, its operation results and cash flow shall
be consolidated since the beginning of the consolidation period. In preparation of the
consolidated financial statements, adjustments shall be made to subsidiary’s financial
statements based on the fair value of its all identifiable assets, liability or contingent liability
on the acquisition date.
If a business consolidation under non-common control is finally achieved in stages,
consolidation accounting method shall be disclosed additionally for the period in which the
control is obtained. For example, if a business consolidation not under common control is
finally achieved in stages, when preparing the consolidated financial statements, the acquirer
shall remeasure its previously held equity interest in the acquiree at its acquisition-date fair
value and recognize the resulting gain or loss as investment income for the current period.
Other comprehensive income, under equity method accounting rising from the interest held in
acquiree in relation to the period before the acquisition, and changes in the value of its other
equity other than net profit or loss, other comprehensive income and profit appropriation shall
be transferred to investment gain or loss for the period in which the acquisition incurs,
excluding the other comprehensive income from the movement on the remeasurement of ne
asset or liability of defined benefit plan.
When the Group partially disposes of the long –term equity investment in subsidiary without
losing the control over it, in the consolidated financial statements, the difference, between
disposals price and respective disposed value of share of net assets in the subsidiary since the
acquisition date or combination date, shall be adjusted for capital surplus or share premium,
no enough capital surplus, then adjusted for retained earnings.
When the Group partially disposes of the long –term equity investment in subsidiary and lose
the control over it, in preparation of consolidated financial statements, remaining share of
interest in the subsidiary shall be remeasured on the date of losing control. Sum of the share
disposal consideration and fair value of remaining portion of shareholding minus the share of
the net assets in the subsidiary held based on the previous shareholding percentage since the
acquisition date or combination date, the balance of above is recognized as investment
gain/loss for the period and goodwill shall be written off accordingly. Other comprehensive
income relevant to share investment in subsidiary shall be transferred to investment gain /loss
for the period on the date of losing control.
When the Group partially disposes of the long –term equity investment in subsidiary and lose
the control over it by stages, if all disposing transactions are bundled, each individual
transaction shall be seen as a transaction of disposal of a subsidiary by losing control. The
difference between the disposal price and the share of the net assets in the subsidiary held
before the date of losing control, shall be recognize as other comprehensive income until the
date of losing control where it is transferred into investment gain/ loss for the current period.
7. Joint arrangement classification and joint operation accounting
The Group’s joint arrangement includes joint operation and joint venture. For joint operation,
the Group as a joint operator shall recognize its own assets and its share of any assets held
jointly, its liabilities and its share of any liabilities incurred jointly, its revenue from the sale
of its share of the output arising from the joint operation, its share of the revenue from the
sale of the output by the joint operation; and its expenses, including its share of any expenses
incurred jointly. When an entity enters into a transaction with a joint operation in which it is a
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
joint operator, such as a sale or contribution of assets, it is conducting the transaction with the
other parties to the joint operation and, as such, the joint operator shall recognize gains and
losses resulting from such a transaction only to the extent of the other parties’ interests in the
joint operation.
8. Cash and cash equivalent
The cash listed on the cash flow statements of the Group refers to cash on hand and bank
deposit. The cash equivalents refer to short-term (normally with original maturities of three
months or less) and liquid investments which are readily convertible to known amounts of
cash and subject to an insignificant risk of changes in value.
9. Translation of foreign currency
(1) Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank
of China (“PBOC”) when the transaction incurs. Monetary assets and liabilities in foreign
currencies are translated into RMB at the exchange rate prevailing at the balance sheet day.
Exchange differences arising from the settlement of monetary items are charged as in profit or
loss for the period. Exchange differences of specific borrowings related to the acquisition or
construction of a fixed asset should be capitalized as occurred, before the relevant fixed asset
being acquired or constructed is ready for its intended uses.
(2) Translation of foreign currency financial statements
The asset and liability items in the foreign currency balance sheet should be translated at a
spot exchange rate at the balance sheet date. Among the ower’s equity items except
“undistributed profit”, others should be translated at the spot exchange rate when they are
incurred. The income and expense should be translated at spot exchange rate when the
transaction incurs. Translation difference of foreign currency financial statements should be
presented separately under the other comprehensive income title. Foreign currency cash flows
are translated at the spot exchange rate on the day when the cash flows incur. The amounts
resulted from change of exchange rate are presented separately in the cash flow statement.
10. Financial assets and financial liabilities
A financial asset or liability shall be recognised when the entity becomes a party to the
contractual provisions of a financial instrument.
(1) Financial assets
1)Classification, recognition and measurement
The Group classifies its financial assets in the following categories: at fair value through
profit or loss, loans and receivables, held-to-maturity financial assets and available-for-sale.
The classification depends on the purpose for which the financial assets were acquired.
Management determines the classification of its financial assets at initial recognition.
Receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. Receivables are subsequently measured at amortised cost
using the effective interest method.The amortisation, impairment and any gain or loss from
derecognition shall be recognized in the profit and loss for the current year.
Available-for-sale financial assets are non-derivative financial assets that are either
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
designated in this category or not classified as financial assets of any other class at initial
recognition. This category includes the derivative financial assets that linked to the
investments in equity instruments without a quoted price in an active market, no fair value
can be reliably measured and must be settled by delivery of such an equity instrument, and
shall be measured at cost subsequently. Others have a quoted price in an active market or fair
value can be measured reliably although no quoted price available, they shall be measured at
fair value. Any change on fair value shall be recognized in other comprehensive income and
subsequently be measured at fair value. Except impairment loss and exchange gain or loss
arising from foreign currency monetary financial assets, changes in fair value of
available-for-sale financial assets are directly recorded in shareholders’ equity until such
financial assets is derecognized and the accumulated fair value adjustments previously
recorded in equity are charged to profit or loss for the period. Interests for the period in
which the assets are held as investment in debt instrument is calculated using the effective
interest method and is charged to profit or loss for the period as ‘Investment income’. Cash
dividends declared by the investee company relating to available-for-sale equity instruments
are charged to profit or loss for the period as ‘Investment income’. Equity instruments that a
quoted price is not applicable in an active market and no fair value can be reliably measured,
shall be measured at cost.
2)Recognition and measurement of transfer of financial assets
Where an entity neither transfers nor retains substantially all risks and rewards of financial
asset and does not give up the control over such financial asset, then the entity recognises
such financial asset to the extent of its continuous involvement and recognises the
corresponding liabilities. The extent of the continuous involvement represents the extent to
which the entity exposes to changes in the value of such financial asset.
In the case where the financial asset as a whole qualifies for the derecognition conditions, the
difference between the carrying value of transferred financial asset and the sum of the
consideration received for transfer and the accumulated amount of changes in fair value that
was previously recorded under other comprehensive income is charged into profit or loss for
the period.
In the case where only part of the financial asset qualifies for derecognition, the carrying
amount of financial asset being transferred is allocated between the portions that to be
derecognised and the portion that continued to be recognised according to their relative fair
value. The difference between the amount of consideration received for the transfer and the
accumulated amount of changes in fair value that was previously recorded in other
comprehensive income of the part qualifies for derecognition and the above-mentioned
allocated carrying amount is charged to profit or loss for the period.
3) Impairment of financial assets
The Group assesses the carrying amount of financial assets other than financial assets at fair
value through profit or loss at each balance sheet date. If there is objective evidence that the
financial asset is impaired, the Group shall determine the amount of any impairment loss
accounts.
If an impairment loss on a financial asset carried at amortized cost has been incurred, the
amount of loss is measured at the difference between the asset’s carrying amount and the
present value of estimated future cash flows (excluding future credit losses that have not been
24
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
incurred). If there is objective evidence that the value of the financial asset recovered and the
recovery can be related objectively to an event occurring after the impairment was recognized,
the previously recognized impairment loss is reversed and the amount of reversal is
recognized in income statement.
Ifobjective evidence shows that impairment for available-for-sale financial assets will
occur,the cumulative loss arising from the decline in fair value that had been recognized
directly in equity is removed from equity and recognized as impairment loss. For an available
for sale debt instrument, if there is objective evidence that the value of the financial asset
recovered and the recovery can be related objectively to an event occurring after the
impairment was recognized, the previously recognized impairment loss is reversed and the
amount of reversal is recognized in income statement. For an available for sale equity
instrument, if there is objective evidence that the value recovered and the recovery can be
objectively related to an event occurring after the impairment loss recognized, the previously
recognized impairment loss is reversed and directly recognized in equity.
(2) Financial liabilities
1) Classification, basis for recognition and measurement
Financial liabilities of an entity are classified at initial recognition as “financial liabilities at fair
value through profit or loss” and “other financial liabilities” on initial recognition
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and those designated as fair value through profit or loss on initial recognition（relevant
basis for classification shall be disclosed by reference to financial assets ）. They are
subsequently measured at fair value. The net gain or loss arising from changes in fair value,
dividends and interest paid related to such financial liabilities are recorded in profit or loss for
the period in which they are incurred.
Other financial liability is measured at amortized cost by adopting the effective rate method.
2) Financial liability derecognition
A financial liability is derecognized when the underlying present obligations or part of it are
discharged. Existing financial liability shall be derecognized and new financial liability shall
be recognized when the entity sign the agreement with creditor to undertake the new financial
liability in replacement of existing financial liability, and the terms of agreement are different
in substance. Any significant amendment to the agreement as a whole or part o it is made, then
the existing liabilities or part of it shall be derecognized and financial liability after terms
amendment shall be recognized as a new financial liability. The difference between the
carrying amount of the financial liability derecognized and the consideration paid is recognized
in profit or loss for the period.
(3)Fair value measurement of financial asset and financial liability
If there is an acitve market for the financial assets and liability measured at fair value, the fair
value is measured at the quoted price in the active market; originally obtained or derived
financial assets or liability is measured at market trade price.If no active market exists for
the financial asset or liability, applicable valuation techniques is used for fair value
measurement. When valuating, the price in the most advantageous market shall be used for
fair value measurement and applicable valuation techniques which enough data is available
for and supported by other information shall be adopted, and the group chooses the input with
same characters of asset or liability as considered by market participant and try to give
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
priority in use of observable input. Unobservable input shall be used when observable
inputcan not be obtained or it is infeasible to be obtained.
11. Provision for bad debts of receivables
The Group shall review the carrying amount of receivables fully at the balance sheet date.
The Group shall calculate the full provision for bad debts for the following receivables:
debtor has been log-out, bankruptcy, minus net asset, significant poor cash flow and
significant nature disaster leads to discontinue production and the debtors could not pay for
the debts within the foreseeable time . Other solid evidences indicates that the receivables
cound not be paid or be of a slim chance.
The allowance method is applied to the potential loss of bad debt. The Group should make the
impairment test separately or in combination and accure the bad debt provisions which shall
be recorded into current profit or loss at the end of the period. If there is defined evidence for
the receivables not to or not likely to be received, which shall be recognized as the loss of bad
debt and write off the accrued bad debts provisions after going through the approval
procedure of the Group.
(1) Individually significant amounts of accounts receivable accrued bad debt provision as per
portfolio
The receivables with more than RMB 3 million
Judgment basis or amount standards of
individual amount shall be recognized as the
individually significant amounts
significant receivables;
The accruing method of the receivables The bad debt provisions shall be accrued based on
with individually significant amounts the difference between current value of future cash
flow and the carrying amounts.
(2) Accounts receivable accrued bad debt provision by credit risk portfolio
The basis of portfolio(aging analysis, other method)
Use the accounting aging of the receivables as the
Accounting aging
credit risk characteristics to classify the portfolio
Use the amount characteristics of the receivables ,
Related parties if the transaction party is related parties
characteristics need to classify the portfolio
Use the amount characteristics of the receivables,
the credit of transaction party, the nature of the
Risk-free amounts and the safeguard mechanism of
transaction as characteristics to classify the
portfolio
1) The percentage of provision for bad debts based on the age of receivables as followings:
Accounting aging Accrual percentage of the Accrual percentage of
receivables (%) other receivables (%)
Within 1 year 1 1
1-2 years 5 5
2-3 years 20 20
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Over 3 years 50 50
2) The other methods is applied to accrualing of bad debts provision
Related parties No bad debt provision is needed, unless the related party is
unable to pay back
Risk-free No bad debt provision is needed
(3) Individually insignificant amount accounts receivable but accrued bad debt provision as
per portfolio
The individual amount is not significant, but the
Accrual reason accrued bad debt provision on the basis of portfolio
can not reflect its risk characteristic
The bad debt provisions should be accrued based on
Accrual method the difference between current value of future cash
flow and the carrying amount.
12. Inventories
Classification of inventory: Inventories are classified as raw material, wrappage, low-valuable
consumable, working-in-progress, and finished goods etc.
The inventories are processed on perpetual inventory system, and are measured at their
budgeted cost on acquistion. The raw materials are accounted daily on their bedgeted costs.
The differences between the budget and actual costs is recorded into the costs of materials
purchased and cost of materials dispatched according to proportion of inventory in stock and
dispatched, and adjust the budgeted costs of raw material into actual costs. The
working-in-progress and finished goods are accounted on their budgeted costs; the differences
between the budgeted costs and actual costs are recorded into the costs of
working-in-progress and finished goods according to the receiving and sending out proportion,
and finaly adjust the budgetedcosts into actual costs.Inventory usage and dispatch is measured
at average cost as actual cost.Low value consumables and packaging materials is recognized
in the income statement by one-off method.
At the balance sheet date inventory should be measured at the lower of the cost and net
realizable value. For the inventories which are damaged, fully or partly obsoleted and selling
price below cost, the Group should calculate the provision for impairment of inventories
according to the estimated nonrecoverable part of cost. Finished goods and a large amount
raw materials should be calculated provision for impairment based on the difference of the
cost exceed the realizable value of single item. For raw and accessorial materials with a large
27
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
quantities and lower unit price should be calculated provison for impairment according to
classify of inventory.
For the finished goods, working in progress and raw material held for sale etc which shall be
sold directly, the net realizable value should be confirmed at the estimated selling price less
estimated selling expenses and related tax and expenses. The raw material held for production,
its realizable value should be confirmed at the estimated selling price of finished goods less
estimated cost of completion, estimated selling expenses and related tax. The net realizable
value of inventories held for execution of sale contracts or labor contracts shall be calculated
based on the contract price. If the quantities of inventories in the Group are more than
quantities if inventories subscribed in the sales contracts, the net realizable value of the
excessive part of the inventories should be calculated based on the general selling price.
13. Long-term equity investment
Long term equity investments are the investment in subsidiary, in associated company and in
joint venture.
Joint control is the contractual agreement sharing of control over an economic activity by all
participants or participants’ combination and decisions or policies relating to the operating
activity of the entity require the unanimous consent of the parties sharing the control.
Significant influence exists when the entity directly or indirectly owned 20% or more but less
than 50% shares with voting rights in the investee company.If holding less than 20% voting
rights, the entity shall also take other facts or circumstances into accounts when judging any
significant influences. Factors and circumstances include: representation on the board of
directors or equivalent governing body ofthe investee, participation in financial or operating
activities policy-making processes,material transactions between the investor and the investee,
interchange of managerial personnel or provision of essential technical information.
When control exists over an investee, the investee is a subsidiary of an entity. The initial
investment cost for long-term equity investment acquired through business combination
under common control, is the carrying amount presented in the consolidated financial
statements of the share of net assets at the combination date in the acquired company. If the
carrying amount of net assets at the combination date in the acquired company is negative,
investment shall be recognized at zero.
If the equity of investee under common control is acquired by stages and business
combination incursin the end, an entity shall disclose the accounting method for long-term
equity investment in the parent financial statement as a supplemental. For example, if the
equity of investee under common control is acquired by stages and business combination
incursin the end, and it’s a bundled transaction, the entity shall regard all transactions as a one
for accounting. If it’s not a bundled transaction, the carrying amount presented in the
28
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
consolidated financial statements of the share of net assets at the combination date in the
acquired company since acquisition is determined as for the initial cost of long-term equity
investment. The difference between the cost initially recognized and carrying amount of
long-term equity investment prior to the business combination plus the newly paid
consideration for further share acquired, and capital reserve shall be adjusted accordingly. If
no enough capital reserve is available for adjustment, retain earnings shall be adjusted.
If long-term equity investment is acquired through business combination not under common
control, initial investment cost shall be the combination cost.
If the equity of investee not under common control is acquired by stages and business
combination incursin the end, an entity shall disclose the accounting method for long-term
equity investment in the parent financial statement as a supplemental. If the equity investment
of investee not under common control is acquired by stages and business combination
incursin the end, and it’s a bundled transaction, the entity shall regard all transactions as a one
for accounting. If it’s not a bundled transaction, the carrying amount of the equity investment
held previously plus newly increased investment cost are taken as the initial investment cost
under cost model. If equity investment is held under equity method before the acquisition date,
other comprehensive income under equity method previously shall not be adjusted
accordingly. When disposing of the investment, the entity shall adopt the same basis as the
investee directly disposing of related assets or liability for accounting treatment. Equity held
prior to acquisition date as available for sale financial assets under fair value model,
accumulated change on fair value previously recorded in other comprehensive shall be
transferred into investment gain/loss for the period.
Apart from the long-term equity investments acquired through business combination
mentioned above, the cost of investment for the long-term equity investments acquired by
cash payment is the amount of cash paid. For long-term equity investment acquired by issuing
equity instruments, the cost of investment is the fair value of the equity instrument issued. For
long-term equity investment injected to the entity by the investor, the investment cost is the
consideration as specified in the relevant contract or agreement.
The Group adopts cost method to account for investment in subsidiary and equity method for
investment in joint venture and affiliate.
Long-term equity investment subsequently measured under cost model shall increase the
carrying amount of investment by adjusting the fair value of additional investment and
relevant transaction expenses. Cash dividend or profit declared by investee shall be
recognized as investment gain/loss for the period based on the proportion share in the
investee.
Long-term equity investment subsequently measured under equity method shall be adjusted
for its carrying amount according to the share of equity increase or decrease in the investee.
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
The entity shall recognize its share of the investee’s net profits or losses based on the fair
value of the investee’s individual identifiable assets at the acquisition date, after making
appropriate adjustments thereto in conformity with the accounting policies and accounting
period, and offsetting the unrealized profit or loss from internal transactions entered into
between the entity and its associates and joint ventures according to the shareholding
attributable to the entity and accounted for as investment income and loss based on such
basis.
On disposal of a long-term equity investment, the difference between the carrying value and
the consideration actually received is recognised as investment income for the period. For
long-term investments accounted for under equity method, the movements of shareholder’s
equity, other than the net profit or loss, of the investee company, previously recorded in the
shareholder’s equity of the Company are recycled to investment income for the period on
disposal.
Where the entity has no longer joint control or significant influence in the investee company
as a result of partially disposal of the investment, the remaining investment will be changed to
be accounted for as available for sale financial assets, and the difference between the fair
value of remaining investment at the date of losing joint control or significant influence and
its carrying amount shall be recognized in the profit or loss for the year. Other comprehensive
income recognized from previous equity investment under equity model shall be accounted
for on the same basis as the investee directly disposing of related assets or liability when
stopping using under equity model.
Where the entity has no longer control over the investee company as a result of partially
disposal of the investment, the remaining investment will be changed to be accounted for
using equity method providing remaining joint control or significant influence over the
investee company. The difference between carrying amount of disposed investment and
consideration received actually shall be recognised in the profit and loss for the period as
investment gain or loss, and investment shall be adjusted accordingly as if it was accounted
for under equity model since acquisition. Where the entity has on longer joint control or
significant influence in the investee as a result of disposal, the investment shall be changed to
be accounted for as available for sale financial assets, and difference between the carrying
amount and disposal consideration shall be recognized in profit and loss for the period, and
the difference between the fair value of remaining investment at the date of losing control and
its carrying amount shall be recognized in the profit or loss for the year as investment gain or
loss.
If the entity loses its control through partially disposal of investment by stages and it’s not a
bundled transaction, the entity shall account for all transactions separately. If it’s a bundled
transaction, the entity shall regard all transactions as one disposal of subsidiary by losing
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
control, but the difference between disposal consideration and carrying amount of the equity
investment disposed prior to losing control, which arises from each individual transaction
shall be recognized as other comprehensive income until being transferred into profit and loss
for the period by the time of losing control.
14. Investment property
Investment property of the Company includes land and property. Cost model is adpoted.
Investment property is depreciated or amortized under straight line method. Estimated net
residual value rate, useful life, depreciation rate as follows:
Estimated
Useful net Annual
Category life residual depreciation
(years) value rate rate
(%)
Use right of land 40 8.33%
Property and buildings
Including: Buildings 15 3 6.47%
Housing for 30 3 3.23%
production
Housing for 35 3 2.77%
non-production
15. Fixed assets
Recognition criteria of fixed assets: Fixed assets are defined as the tangible assets which are
held for the purpose of producing goods, rendering services, leasing or for operation &
management, and have more than one year of useful life, and whose unit price is over
RMB2,000.
Fixed assets shall be recognized when the economic benefit probably flows into the Group
and its cost can be measured reliably. Fixed assets include: building, machinery,
transportation equipment, electronic equipment and others.
All fixed assets shall be depreciated unless the fixed assets had been fully depreciated and are
still being used and land is separately measuered. Straight-line depreciation method is
adopted by the Group. Estimated net residual value rate, useful life, depreciation rate as
follows:
Estimated Annual
Useful life
No Category net residual depreciation
(years)
value rate rate
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
(%)
1 Housing and Buildings
Including: Buildings 15 3 6.47%
Housing for 30 3 3.23%
production
Housing for 35 3 2.77%
non-production
2 Machinery equipment 10-15 3 6.47%～9.70%
3 Transportation equipment 6 3 16.17%
4 Electronic equipment
Including: Computer 4 3 24.25%
General testing instruments 7 3 13.86%
Specialized electronic equipment 8 3 12.13%
Automated controlling equipment 8 3 12.13%
Automated controlling meters 8 3 12.13%
5 Others equipment
Including: Industrial kiln 7 3 13.86%
Tools & other production 9 3 10.78%
tools
Transmission equipment 15 3 6.47%
Non-operational equipment 18 3 5.39%
and tools
The Group should review the estimated useful life, estimated net residual value and
depreciation method at the end of each year. If any change has occurred, it shall be regarded
as a change in the accounting estimates.
16. Construction in progress
The criteria and time spot of constructions in progress’s being transferred to fixed assets:
Constructions in progress are carried down to fixed assets on their actual costs when
completing and achieving estimated usable status. The fixed assets that have been completed
and reached estimated usable status but have not yet been through completion and settlement
procedures are charged to an account according to their estimate values; adjustment will be
conducted upon confirmation of their actual values. The Group should withdraw depreciation
in the next month after completion.
17. Borrowing costs
The borrowing cost includes the interest expenses of the borrowing, amortization of
underflow or overflow from borrowings, additional expenses and the foreign exchange profit
and loss because of foreign currency borrowings. The borrowing costs incurred which can be
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
directly attribute to the fixed assets, investments properties, inventories requesting over 1 year
purchasing or manufacturing so to come into the expected condition of use or available for
sale shall start to be capitalized when expenditure for the assets is being occurred, borrowing
cost has occurred, necessary construction for bringing the assets into expected condition for
use is in progress. The borrowing costs shall stop to be capitalized when the assets come into
the expected condition of use or available for sale. The borrowing costs subsequently incurred
should be recorded into profit and loss when occurred. The borrowing costs should
temporarily stop being capitalized when there is an unusual stoppage of over consecutive 3
months during the purchase or produce of the capitalized assets, until the purchase or produce
of the asset restart.
The borrowing costs of special borrowings, deducting the interest revenue of unused
borrowings kept in the bank or the investment income from transient investment should be
capitalized. The capitalized amount of common borrowings should be calculated as follows:
average assets expenditure of the accumulated assets expenditure excess the special
borrowing, multiplied by the capital rate. The capital rate is the weighted average rate of the
common borrowings.
18. Intangible assets
The intangible assets of the Group refer to land use right, ERP system software. The cost of
outsourcing intangible assets shall include the purchase price, relevant taxes and other
necessary expenditures directly attributable to intangible assets. The cost invested into
intangible assets by investors shall be determined according to the stated value in the
investment contract or agreement, except for those of unfair value in the contract or
agreement.
Land use right shall be amortized evenly within the amortization period since the remised
date.ERP system softwareand other intangible assets are amortized over the shortest of their
estimated useful life, contractual beneficial period and useful life specified in the law.
Amortization charge is included in the cost of assets or expenses, as appropriate, for the
period according to the usage of the assets. At the end of the year, for definite life of
intangible assets, their estimated useful life and amortization method shall be assessed. Any
change shall be treated as change on accounting estimate.
19. Impairment of non-financial assets
The Group checks the long-term equity investment, fixed asset, construction-in-progress,
intangible asset and others on each balance sheet date. When impairment indicators occur, the
Group shall perform impairments test. For goodwill andindefinite life of intangible assets,
impairment test shall be performed irrelevant to any impairment indicators, if any at the end
of every year.
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Estimate of recoverable amount is the higher of its fair value less costs to sell and the present
value of the future cash flows expected to be derived from the asset. The group estimates the
recoverable amount based on single asset and estimates the recoverable amount based on the
asset group if the single asset estimation is impossible. Asset group is recognized if the cash
inflow from the group is independent from other asset or asset group.
After impairment test, if the book value exceeds the recoverable amount of the asset or asset
group, the book value shall be adjusted to recoverable amount and the difference should be
recognized as impairment loss.
Once any loss of impairment is recognized, it shall not be reversed in the future accounting
periods.
20. Long-term deferred expenses
Long-term deferred expenses of the Group refer to expenses which are paid and should be
deferred over the future period. The amortization period shall be more than one year (no
including 1 year). The expenses should be amortized evenly over the beneficial period. If the
deferred expense cannot take benefit for the future accounting period, the unamortized
balance of the deferred expenses should be transferred into the current profit or loss.
21. Employee benefits
Employee compensation comprises short-term benefit, post-employment benefit, termination
benefit and other long-term employee’s benefit.
Employee’s payables include salary, bonus, allowance, welfare, social insurance, housing
funds, labour union expense, staff training expense, during the period in which the service
rendered by the employees, the actually incurred short term employee benefits shall be
recognized as liability and shall be recognized in P&L or related cost of assets based on
benefit objective allocated from the service rendered by employees.
Post-employment benefits include the basic pension scheme and unemployment insurance etc.
Based on the risk and obligation borne by the Group, post-employment benefits are classified
into defined contribution plan and defined benefit plan. For defined contribution plan, liability
shall be recognized based on the contributed amount made by the Group to separate entity at
the balance sheet date in exchange of employee service for the period and it shall be recorded
into current profit and loss account or relevant cost of assets in accordance with beneficial
objective.
Termination benefits are employee benefits payable as a result of either an entity’s decision to
terminate an employee’s employment before the contract due date or an employee’s decision
to accept voluntary redundancy in exchange for those benefits. An entity shall recognize the
termination benefits as a liability and an expense at the earlier date when the entity cannot
unilateral withdraw the termination benefits due to employment termination plan or due to
34
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
redundancy suggestion, or when the entity can recognize the restricting cost or expense
arising from paying termination benefits. For the termination benefits that will not be
expected to be fully paid within twelve months after the end of the reporting period, it shall be
accounted as other long-term employee benefit. For employee internally retired informally,
termination benefits accounting shall be applied. The Group shall recognized the planned
wages and social insurance of retired employee in the current profit and loss account when
provision conditions are met, for the period since the termination of employee service
rendered until the formal retirement date.(termination benefit).
Other long-term employee benefit provided by the Group, shall be accounted for as defined
contribution plan if the defined contribution plan are met, otherwise shall be accounted for as
defined benefit plan.
22. Contingent liabilities
When the company has transactions such as commitment to externals, discounting the trade
acceptance, unsettled litigation or arbitration which meets the following criterion, provision
should be recognized: It is the Company's present obligation; carrying out the obligation will
probably cause the Company's economic benefit outflow; the obligation can be reliably
measured.
Provision is originally measured on the best estimate of outflow for paying off the present
obligations, and to consider the risk, uncertainty, time value of monetary relevant to
contingent items. If the time value of monetary is significant, the best estimate will be
determined by discounted cash outflow in the future. At each balance sheet date, the book
value of provision is reviewed and adjustment will be made on the book value if there is any
change, in order to reflect the current best estimate.
23. Share-based payment
An equity-settled share-based payment in exchange for the employee’s services is measured
at the fair value at the date when the equity instruments are granted to the employee. Such fair
value during the vesting period of service or before the prescribed exercisable conditions are
achieved is recognised as relevant cost or expense on a straight-line during the vesting period
based on the best estimated quantity of exercisable equity instruments, accordingly increase
capital reserve.
A cash-settled share-based payment is measured at the fair value at the date at which the
Group incurred liabilities that are determined based on the price of the shares or other equity
instruments. If it is immediately vested, the fair value of the liabilities at the date of grant is
recognised as relevant cost or expense, and corresponding liabilities. If it is exercisable only
when the vesting period of service is expired or the prescribed conditions are achieve, the fair
value of liabilities undertaken by the Group are re-measured at each balance sheet date based
35
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
on the best estimate of exercisable situation.
The fair value of the liabilities is re-measured at each balance sheet date. Any changes are
recognised in the profit or loss for the year.
If the granted equity instruments are cancelled within the vesting period, the equity
instrument shall be treated as accelerated vesting and the balance linked to the remaining
vesting period shall be recognized in the profit or loss account, accordingly be recognized in
the capital reserve. If employees or other parties can choose but fail to satisfy non-vesting
conditions during the vesting period, the Company sees this as cancellation of granted equity
instruments.
24. Principle of recognition of revenue
The revenue of the Group is mainly from selling goods, providing labour services and
abalienating the right of use assets. Recognition standards for revenue are as below:
1) Selling goods revenue: company has transferred all the significant risks and rewards of the
ownership of the goods to the buyers, and retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over
the goods sold. The relative sale proceeds have been reliably measured, respective
economic benefit probably inflow to the company, and the incurred or incurring cost can
be reliably measured, and then the revenue can be recognized.
2) The service revenue should be recognized when the total revenue and outcome of the
services can be estimated reliably, and the economic benefits associated with the
transaction are likely to flow to the company, the stage of completion of the service can
be estimated reliably. At the balance sheet date, revenue is recognised using the
percentage of completion method when the outcome of the services rendered are
estimated reliably. The percentage of completion method is determined as the proportion
of completed work measured/ services rendered to date over the total contracted services/
(the proportion of costs incurred to date over the total estimated cost). When the outcome
of the services cannot be estimated reliably, costs incurred may be probably recovered,
revenue is recognized only to the extent of costs incurred that are expected to be
recoverable, and costs shall be recognized as an expense in the period in which they are
incurred. When the outcome of the services cannot be estimated reliably and costs
incurred are not probable of being recovered, then these cost incurred are recognized as
an expense immediately, no revenue shall be recognized.
3) Revenue from transfer of asset use rights is recognised when the economic benefits in
connection with the transaction are probably flow to the Group and the amount of
revenue can be reliably measured.
.25. Government grants
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
A government grant is a monetary asset or non-monetary asset granted by government
without consideration. It shall be recognized when the company complies with the
conditions attaching to the grant and when the company is able to receive the grant.
Assets-related government grant is the government fund obtained by the company for the
purpose of long-term assets purchase and construction or establishment in the other forms.
Income-related grants are the grant given by the government apart from the assets-related
grants. If no grant objective indicated clearly in the government documents, the company
shall judge it according to the principle mentioned above.
Where a government grant is in the form of a transfer of monetary asset, it is measured at the
amount received. Where a government grant is made on the basis of fixed amount or
conclusive evidence indicates relevant conditions for financial support are met and expect to
probably receive the fund, it is measured at the amount receivable. Where a government
grant is in the form of a transfer of non-monetary asset, it is measured at fair value. If fair
value cannot be determined reliably, it is measured at a nominal amount of RMB1 Yuan.
Government grant are classified as assets-related government grants and income-related
grants.
Assets-related government grants are recognized as deferred income and assets are evenly
amortized to profit or loss over the useful life of the related asset.
Any assets are sold, transferred, disposed off or impaired earlier than their useful life expired
date, the remaining balance of deferred income which hasn’t been allocated shall be carried
forward to the income statement when the assets are disposed off.
Income-related government grants that is a compensation for related expenses or losses to be
incurred in subsequent periods are recognized as deferred income and credited to the
relevant period when the related expense are incurred. Government grants relating to
compensation for related expenses or losses already incurred are charged directly to the
profit or loss for the period. Government grants related to daily business, shall be recognized
as other income in accordance with business nature, otherwise, shall be recognized as
non-operating expenses.
If the group obtains the discount interest of policy preferential loans, it shall follow the
accounting standards according to the following principles, in the case of either the financial
allocation of discount interest funds to the lending bank or the financial allocation of
discount interest funds directly to the group.
(1) If interest discount funds is given to the lending bank, and bank provides loans at a
preferential interest rate to the group, the group's borrowing cost is measured at the
actual amount received, according to the loan principal and the preferential interest rate,
work out borrowing expense (or the fair value of the loan is taken as borrowing costs
37
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
and work out he borrowing expense at effective interest rate. Any difference between
the amount received and FV is recognized as deferred income. Deferred income is
amortised by using effective interest rate method within the loan term period and offset
borrowing expense).
(2) If interest discount funds are given to the group directly, the preferential interest shall
be offset the borrowing expense.
If any government grant already recognized needs to be returned to the government, the
accounting shall be differed according to the following circumstances:
1) originally recognized as offsetting of related assets' book value, assets book value shall
be adjusted
2) if any deferred income, book value of deferred income shall be offset, excessive portion
shall be accounted into income statement
3) Other situation, it shall be accounted into income statement directly
26. Deferred tax assets and deferred tax liabilities
The deferred income tax assets or the deferred income tax liabilities should be recognized
according to the differences (temporary difference) between the carrying amount of the assets
or liabilities and its tax base. Deferred tax assets shall be respectively recognised for
deductible tax losses that can be carried forward in accordance with tax law requirements for
deduction of taxable income in subsequent years. No deferred tax liabilities shall be
recognized for any temporary difference arising from goodwill initially recognition. No
deferred tax assets or liabilities shall be recognized for any difference arising from assets or
liabilities initial recognition on non-business combination with no effect on either accounting
profit or taxable profit (or deductible tax loss). At the balance sheet date, deferred tax assets
and deferred tax liabilities are measured at the tax rates that are expected to apply to the
period when the asset is realised or liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit
will be available to offset the deductible temporary difference, deductible loss and tax
reduction.
27. Lease
The leases of the Group refer to operating lease.
The rents paid for operating leases shall be recorded into the relevant asset costs or the profits
and losses for the current period by using the straight-line method over each period of the
lease term. Rents received, if the Group as a leaser shall be recognised as income under
straight line method.
28. Change of Significant Accounting Policy, Accounting Estimate and Prior Period
38
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Errors
(1) Effect of change on accounting policy
“The Notice of amendment to the standard enterprise’s financial statements format”
(Caikuai[2018]No.15 File) was announced by the Ministry of Finance on June 15,
2018(hereinafter referred to as Caikuai No.15File). Due to the No.15 File, some of asset items
and liability items have been merged and some of income statements items have been separated,
and “interpretation of financial statement format for the company in 2018” was announced on
September 7, 2018. Handling charge of personal income tax shall be clearly presented under
“other income”, the actual government received shall be presented under operating cashflow
column when preparing the cashflow statement regardless of asset related or income related.
The Company has prepared the financial statements in accordance with new statements format
and retrospectively made adjustment to the changes mentioned and respectively adjusted the
comparing figures in accordance with financial statements presentation, No 30, accounting
standards applicable in China.
Effect on the comparison figure as follows:
Restated figure
Figure prior to
Effect on on January
Items December memo
amount 1,2018
31,2017
re
Notes receivable 209,923,835.91 -209,923,835.91 -
Accounts receivable 1,128,338,013.69 -1,128,338,013.69 -
Notes receivable &
1,338,261,849.60 1,338,261,849.60
Accounts receivable
Other receivable 21,895,381.98 - 21,895,381.98
Notes payable 299,483,279.00 -299,483,279.00 -
Accounts payable 630,832,287.45 -630,832,287.45 -
Notes payable
930,315,566.45 930,315,566.45
&Accounts payable
Interest payable 1,190,100.00 -1,190,100.00 -
Other payable 92,123,093.92 1,190,100.00 93,313,193.92
39
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Restated figure
Figure prior to
Effect on on January
Items December memo
amount 1,2018
31,2017
re
Special payables 296,698.98 -296,698.98
Long term payable 1,597,305.72 296,698.98 1,894,004.70
Administration 61,410,304.53 -4,065,054.17 57,345,250.36
expense 4,065,054.17 4,065,054.17
R&D expense
The above policy change has been approved by the board meeting.
(2) Effect of change on accounting estimate
None
V. Taxation
1. The main applicable tax and rate to the Group as follows:
Tax Tax base Tax rate
Value-added tax
Sales revenue or Purchase 16%,13%,10%,6%,5%
(VAT)
City construction tax Value-added tax payables 7%
Education surcharge Value-added tax payables 3%
Local education
Value-added tax payables 2%
surcharge
Enterprise income
Current period taxable profit 15%
tax(EIT)
70% of cost of own property or revenue
Real estate tax 1.2% or 12%
from leasing property
RMB 6 per square
Land use tax Land using right area
meter
Notes: EIT rate for different tax payer
Tax principles EIT rate
Wazhou Liaoyang Bearing construction Co.,Ltd 15%
Dalian Wazhou Precision Motor Car Bearing 25%
Company Limited
Wazhou Precision of Spherical Roller 25%
Bearings(Wafangdian)Co., Ltd
2. Tax preference
The company obtained the qualification of high and new technology enterprises at 29
40
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
November, 2017.The Certificate No is GR201721200199, and the validity duration is three
years. The subsidiary of the Company, Wazhou Liaoyang Bearing construction Co.,Ltd
obtained the qualification of high and new technology enterprises at 17 November, 2017. The
Certificate No is GR201721000633 and the validity duration is three years. According to the
tax law, the company can be granted for the preferential tax policy of enterprise income tax
rate of 15% in three years.
VI. Notes to Consolidated Financial Statements
The following disclosure date on this financial statement without special indication, “opening”
refers to January 1, 2018; “closing” refers to December 31, 2018; “current period” refers to the
period from January 1, 2018 to December 31, 2018; and “last period” refers to the period from
January 1, 201 7 to December 31, 2017; with the currency unit RMB.
1. Cash and cash in bank
Item Closing Balance Opening Balance
Cash on hand
55,974.98
39,497.23
Cash in bank
188,375,830.25
58,004,000.31
Other cash and cash equivalents
58,798,055.76
24,817,277.29
Total
247,229,860.99
82,860,774.83
Including: sum of deposits overseas - -
Notes: at year end, other cash and cash equivalents are all security deposits for bank
acceptance notes. Because of the liquidity limitation, this will be deducted from the closing
balance of cash and cash equivalents.
2. Financial asset of fair value through income statement
Item Closing Balance Opening Balance
Tradable asset 298,925.16
Debt instrument investment
Equity instrument investment
Derivate
Others 298,925.16
Assigned as FV through income statement
Debt instrument investment
Equity instrument investment
Others
Total 298,925.16
3. Notes receivable and account receivable
41
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Items Closing Balance Opening Balance
Notes receivable 93,624,563.82 209,923,835.91
Account receivable 1,141,632,991.76 1,128,338,013.69
Total 1,235,257,555.58 1,338,261,849.60
3. 1Notes receivable
（1）Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 21,875,785.60 113,596,871.36
Trade acceptance notes 71,748,778.22 96,326,964.55
Total 93,624,563.82 209,923,835.91
（2）Notes receivable endorsed or discounted but not mature at the end of year
Item Closing amount Closing amount still
derecognized recognized
Bank acceptance notes 643,048,794.20
Trade acceptance notes 182,134,807.41
Total 825,183,601.61
3. 2Accounts receivable
(1) Category of accounts receivable
Closing balance
Items Booking balance Provision
Booking balance
Amount % Amount %
Accounts
receivable with
significant
5,092,669.00 0.42 5,092,669.00 100.00
individual amount
and separate bad
debt provision
Accounts
receivable with bad
debt provision
1,181,015,551.36 97.03 39,932,559.60 3.38 1,141,082,991.76
based on the
characters of credit
risk portfolio
Accounting
900,290,391.06 73.97 39,932,559.60 4.44 860,357,831.46
receivable age
42
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
recombination
Related party 280,725,160.30 23.06 280,725,160.30
Accounts
receivable with
insignificant
31,074,826.42 2.55 30,524,826.42 98.23 550,000.00
individual amount
and separate bad
debt provision
Total 1,217,183,046.78 100.00 75,550,055.02 - 1,141,632,991.76
(Continued)
Opening Balance
Items Booking balance Provision
Booking balance
Amount % Amount %
Accounts receivable
with significant
individual amount 5,092,669.00 0.42 5,092,669.00 100.00 -
and separate bad
debt provision
Accounts receivable
with bad debt
provision based on 1,170,649,399.63 97.29 42,311,385.94 3.61 1,128,338,013.69
the characters of
credit risk portfolio
Accounting
receivable age 882,463,038.56 73.34 42,311,385.94 4.79 840,151,652.62
recombination
Related party 288,186,361.07 23.95 - - 288,186,361.07
Accounts receivable
with insignificant
individual amount 27,541,279.51 2.29 27,541,279.51 100.00 -
and separate bad
debt provision
Total 1,203,283,348.14 100.00 74,945,334.45 - 1,128,338,013.69
1) Accounts receivable with significant individual amount and separate bad debt provision at
the end of year
Debtors name Closing Balance Proportion Reasons for provision
43
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Provision (%)
Accounts
for bad
receivable
debts
Company 1 5,092,669.00 5,092,669.00 100.00 Bankrupt
2) Accounts receivable with the bad debt provisions under accounting aging analysis method
Closing Balance
Aging Accounts Provision for Proportion
receivable bad debts (%)
Within1 year 705,997,799.29 7,059,977.98 1.
1 to 2 years 120,928,440.41 6,046,422.02 2
2 to 3 years 32,853,053.62 6,570,610.73 20
Over 3 years 40,511,097.74 20,255,548.87 50
Total 900,290,391.06 39,932,559.60 —
(2)Bad debt provision accrued and written-off (withdraw)
Bad debt provision has been accrued at the amount of 1,443,218.21Yuan and bad debt
reversal or withdrawn of 12,786.85Yuan incurred during the year.
(3) Accounts receivable written off in current period
Item Written-off Amount
Accounts receivable written off 162,813.26
Significant amount written off
Caused by
Nature of Procedure to
Company name amount reason related
receivable be performed
party
Company 2 Agreement to Internal
trade 88,183.57 N
exemption approval
Total
(4) The top five significant accounts receivable categorized by debtors
The total amount of top five significant accounts receivable categorized by debtors is
273,265,314.83Yuan, representing 22.45% of the closing balance of accounts receivable. The
bad debt provision of 468,310.23 Yuan is provided respectively.
4. Advances to suppliers
44
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
(1) Aging of advances to suppliers
Closing Balance Opening Balance
Items Amount Percentage Amount Percentage
(%) (%)
Within 1 year 16,544,941.90 75.60 36,499,031.46 91.56
1 to 2 years 2,983,581.73 13.63 3,085,092.20 7.74
2 to 3 years 2,357,332.82 10.77 205,543.10 0.52
Over 3 years - - 73,909.77 0.18
Total 21,885,856.45 100.00 39,863,576.53 100.00
(2) The top five significant advances to suppliers categorized by debtors
The total amount of top five significant advances to suppliers categorized by debtors is
14,295,615.73 Yuan, representing 65.32% of the closing balance of advances to suppliers.
5. Other receivables
Items Closing Balance Opening Balance
Interest receivable
Dividend receivable 1,250,000.00 -
Other receivable 91,005,736.14 21,895,381.98
Total 92,255,736.14 21,895,381.98
5. 1 Dividend receivable
Company Closing Balance Opening Balance
Shanghai ME Mechanical &
Electrical Equipment Chain Co., 1,250,000.00
Ltd
Total 1,250,000.00
5. 2 Other receivable
(1) The categories of other receivable
Closing Balance
Items
Booking balance Provision
Booking balance
Amount % Amount %
Other receivables with
significant individual
amount and separate
bad debt provision
Other receivables 93,109,161.09 93.94 2,103,424.95 2.26 91,005,736.14
45
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
identified bad debt
provision based on the
characters of credit risk
portfolio
Account receivable age
11,140,103.39 11.24 1,324,474.30 11.89 9,815,629.09
combination
Risk-free portfolio 81,190,107.05 81.91 81,190,107.05
Related party 778,950.65 0.79 778,950.65 100.00
Other receivables with
significant individual
6,010,285.50 6.06 6,010,285.50 100.00
amount and separate
bad debt provision
Total 99,119,446.59 100.00 8,113,710.45 - 91,005,736.14
(Continued)
Opening Balance
Items Booking balance Provision
Booking balance
Amount % Amount %
Other receivables
with significant
individual amount - - - - -
and separate bad
debt provision
Other receivables
identified bad debt
provision based on 23,164,214.87 80.78 1,268,832.89 5.48 21,895,381.98
the characters of
credit risk portfolio
Account receivable
13,674,486.90 47.69 1,268,832.89 9.28 12,405,654.01
age combination
Risk-free portfolio 9,489,727.97 33.09 - - 9,489,727.97
Related party - - - - -
Other receivables
with significant
individual amount 5,513,140.92 19.22 5,513,140.92 100.00 -
and separate bad
debt provision
Total 28,677,355.79 100.00 6,781,973.81 - 21,895,381.98
46
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
1) Other receivables accrued the bad debt provisions under accounting aging analysis method
Closing Balance
Aging Proportion
Other receivables Provision for bad debts
(%)
Within 1 year 7,196,270.61 71,962.71 1
1-2 years 922,327.08 46,116.35 5
2-3 years 1,014,525.40 202,905.08 20
Over 3 years 2,006,980.30 1,003,490.16 50
Total 11,140,103.39 1,324,474.30 —
2) Risk –free portfolio of other receivable has not been accrued for bad debts
Closing Balance
Aging Provision for Proportion
Other receivables
bad debts (%)
Prepaid electricity bill 4,233,192.02
Deposit 6,000.00
Others 76,950,915.03
Total 81,190,107.05
Note: others is the compensation receivable for Liaoyang Bearing construction Co.,Ltd old
factory demolishment at amount of 76,063,710.00Yuan
(2) Bad debt provision accrued or reversed
During the report period, bad debts are accrued at amounts of 1,331,736.64 Yuan and no bad
debt reversal or withdrawn incurred.
(3) No other receivables were actually written off for the year
(4) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Security deposit 5,289,305.79 4,226,867.84
Deposit 289,925.00 229,863.75
Personal petty cash 1,060,998.27 1,646,497.60
Others 92,479,217.53 22,574,126.60
Total 99,119,446.59 28,677,355.79
(5)Other receivables from the top 5 debtors
47
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
% of Closing
Closing
Name Category Aging the total Balance of
Balance
OR Provision
Compensation
Company A for plant 76,063,710.00 Within 1 year 76.74
moving
Company B Electricity bill 4,180,470.47 Within 1 year 4.22
Materials
Company C 2,341,773.02 Over 3 years 2.36 2,341,773.02
payments
Company D Heating fees 726,061.48 Within 1 year 0.73
Materials
Company E 490,288.89 Over 3 years 0.49 245,144.45
payments
Total —— 83,802,303.86 — 84.54 2,586,917.45
6. Inventories
(1) Categories of inventories
Closing Balance
Item
Book value Provision for decline Net book value
Raw materials 84,610,034.58 84,610,034.58
Finished goods 524,035,778.65 19,122,663.13 504,913,115.52
Semi-finished goods 149,030,115.58 149,030,115.58
Low-value
8,957,789.07 8,957,789.07
consumable
Total 766,633,717.88 19,122,663.13 747,511,054.75
(Continue)
Opening Balance
Item
Book value Provision for decline Net book value
Raw materials 56,740,605.63 910,648.85 55,829,956.78
Finished goods 512,690,931.09 36,265,289.07 476,425,642.02
Semi-finished goods 155,827,415.78 - 155,827,415.78
Low-value
5,753,413.97 - 5,753,413.97
consumable
Total 37,175,937.92 693,836,428.55
731,012,366.47
(2) Provision for decline in the value of inventories
Increase Decrease
Opening Closing
Item
Balance Reverse/ Others Balance
Accrual Other
Written- off transferred
Raw
910,648.85 - - 910,648.85 - -
materials
48
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Increase Decrease
Opening Closing
Item
Balance Reverse/ Others Balance
Accrual Other
Written- off transferred
Finished
36,265,289.07 3,150,916.16 - 20,293,542.10 - 19,122,663.13
goods
Total 37,175,937.92 3,150,916.16 - 21,204,190.95 - 19,122,663.13
7. Other current assets
Item Closing Balance Opening Balance Nature
VAT to be deducted 14,184,383.36 3,531,136.36 Input VAT
Prepaid income tax 1,855,337.56 Company Income Tax
Total 14,184,383.36 5,386,473.92 —
8. Available-for-sale financial assets
(1) Available-for-sale financial assets
Item Closing Balance Opening Balance
Booking Booking
Provision Book value Provision Book value
balance balance
Available-for-sal
2,000,000.0
e equity - 2,000,000.00 2,000,000.00 - 2,000,000.00
0
instruments
Measured as cost 2,000,000.0
- 2,000,000.00 2,000,000.00 - 2,000,000.00
method 0
2,000,000.0
Total - 2,000,000.00 2,000,000.00 - 2,000,000.00
0
(2) Available-for-sale financial assets measured at cost method
Proportion Cash
Booking Balance Provision
(%) dividend
Name
Opening Closing Opening Closing
Increase Decrease Increase Decrease
Balance Balance Balance Balance
Shanghai
ME
Mechanical
& Electrical 2,000,000.00 - 2,000,000.00 - - - - 4.76 1,250,000.00
Equipment
Chain Co.,
Ltd
49
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Proportion Cash
Booking Balance Provision
(%) dividend
Name
Opening Closing Opening Closing
Increase Decrease Increase Decrease
Balance Balance Balance Balance
Total 2,000,000.00 - 2,000,000.00 - - - - 4.76 1,250,000.00
(3)Provision for available for sale asset impairment: None
9. Investment property
(1) Investment property measured as cost method
Item Property Land use right Total
I. Initial Cost
1. Opening Balance 173,119,534.89 51,969,186.22 225,088,721.11
2. Increase 216,974.45 216,974.45
(1) Purchase
(2) Transferred from FA 216,974.45 216,974.45
3. Decrease
(1) Disposal
(2)Transfer to others
4. Closing Balance 173,336,509.34 51,969,186.22 225,305,695.56
II. Accumulated Depreciation
1. Opening Balance 75,125,524.13 13,089,088.93 88,214,613.06
2. Increase 5,222,156.17 2,598,427.67 7,820,583.84
(1)Accrued 5,222,156.17 2,598,427.67 7,820,583.84
3. Decrease
(1) Disposal
(2)Transfer to others
4. Closing Balance 80,347,680.30 15,687,516.60 96,035,196.90
III. Impairment Reserve
1. Opening Balance
2. Increase
3. Decrease
(1) Disposal
(2)Transfer to others
4. Closing Balance
IV. Book Value
1. Closing book value 92,988,829.04 36,281,669.62 129,270,498.66
50
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Item Property Land use right Total
2. Opening book value 97,994,010.76 38,880,097.29 136,874,108.05
(2) Investment property without owner’s certificates
Items Book value Reasons
Land certificate will be
Auto Bearing Western
handled by the Group
Industrial Zone workshop 34,429,644.71 because the land belongs
(cone)
to the Group
Land certificate will be
Auto Bearing Western
handled by the Group
Industrial Zone workshop 17,975,430.55 because the land belongs
(column)
to the Group
Liaoyang Bearing’s Main In the process of fire
workshop 6,345,870.41 protection
Liaoyang Bearing’s Office In the process of fire
building 912,351.32 protection
10. Fixed assets
Item Closing Balance Opening Balance
Fixed assets 661,598,663.85 710,247,969.72
Fixed assets disposal
Total 661,598,663.85 710,247,969.72
10.1 Fixed assets
(1) Fixed assets detail
Machinery Transportation Electronic Other
Item Property Device Equipment Total
Equipment Equipment
I. Initial Cost —— —— —— —— —— ——
1. Opening Balance 253,663,547.33 1,164,347,666.68 17,533,982.52 72,037,141.35 199,245,477.06 1,706,827,814.94
2. Increase 768,735.93 26,196,893.39 520,887.16 2,925,231.55 18,008,741.87 48,420,489.90
(1) Purchase 31,263.25 1,490,261.69 63,491.34 665,534.23 21,764.10 2,272,314.61
(2) Transferred from
737,472.68 24,706,631.70 457,395.82 2,259,697.32 17,986,977.77 46,148,175.29
construction-in-progress
(3) Acquired from
business combination
3. Decrease 863,221.00 1,528,338.12 323,582.96 3,093,227.26 1,269,230.77 7,077,600.11
(1) Disposal 863,221.00 1,528,338.12 323,582.96 3,093,227.26 1,269,230.77 7,077,600.11
(2) Others
4. Closing Balance 253,569,062.26 1,189,016,221.95 17,731,286.72 71,869,145.64 215,984,988.16 1,748,170,704.73
II. Accumulated —— —— —— —— —— ——
51
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Machinery Transportation Electronic Other
Item Property Device Equipment Total
Equipment Equipment
Depreciation
1. Opening Balance 146,076,825.72 644,284,826.15 13,394,879.03 53,181,861.81 139,385,508.19 996,323,900.90
2. Increase 8,571,552.88 67,202,511.06 1,128,225.06 4,031,375.07 13,520,119.98 94,453,784.05
(1)Accrued 8,571,552.88 67,202,511.06 1,128,225.06 4,031,375.07 13,520,119.98 94,453,784.05
(2) Other transfer
3. Decrease 660,500.52 1,369,133.95 296,777.11 865,946.04 1,269,230.77 4,461,588.39
(1) Disposal 660,500.52 1,369,133.95 296,777.11 865,946.04 1,269,230.77 4,461,588.39
(2) Other transfer
4. Closing Balance 153,987,878.08 710,118,203.26 14,226,326.98 56,347,290.84 151,636,397.40 1,086,316,096.56
III. Impairment
—— —— —— —— —— ——
Reserve
1. Opening Balance - 255,944.32 - - - 255,944.32
2. Increase
3. Decrease
(1) Disposal
4. Closing Balance 255,944.32 - - - 255,944.32
IV. Book Value —— —— —— —— —— ——
1. Closing book value 99,581,184.18 478,642,074.37 3,504,959.74 15,521,854.80 64,348,590.76 661,598,663.85
2. Opening book value 107,586,721.61 519,806,896.21 4,139,103.49 18,855,279.54 59,859,968.87 710,247,969.72
第十章 (2) Temporary idle fixed assets
Accumulated Book
Item Initial Cost Provision Memo
Deprecation Value
Plant and
9,932,063.10 9,401,856.17 229,671.00 300,535.93
machinery
Total 9,932,063.10 9,401,856.17 229,671.00 300,535.93
第十一章 (3) Fixed assets leases out under operating lease
Item Book Value
Machinery 134,403,665.77
Total 134,403,665.77
第十二章 (4) Fixed assets as pending certificate of ownership
Book value Reason for Pending
Item
Dalian machine industry area bearing
37,961,095.4 Land certificate is in the process
factory
In the process of fire protection
Liaoyang Bearing’s Main workshop 8,980,164.03
52
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Book value Reason for Pending
Item
Dalian machine industry area bearing
37,961,095.4 Land certificate is in the process
factory
In the process of fire protection
Liaoyang Bearing’s Office building 3,467,892.31
In the process of fire protection
Liaoyang Bearing’s Processing workshop 1,321,869.07
In the process of fire protection
Liaoyang Bearing’s Staff canteen 892,486.21
第十三章 11. Construction-in-progress
Item Closing Balance Opening Balance
Construction in progress 48,159,927.20 82,689,318.94
Construction materials
Total 48,159,927.20 82,689,318.94
第十四章 11.1 Construction-in-progress
第十五章 (1) Construction in progress details
Closing Balance Opening Balance
Item Book Book
Provision Book Value Provision Book Value
Balance Balance
Improvement
10,922,235.97 - 10,922,235.97 10,195,223.88 - 10,195,223.88
of railway
Improvement
of
7,193,865.18 - 7,193,865.18 30,689,629.52 - 30,689,629.52
seven-finished
products
Improvement
of precision 7,028,576.54 - 7,028,576.54 11,340,473.99 - 11,340,473.99
roller branch
Improvement
of precision 3,960,724.13 - 3,960,724.13
bearing plant
Improvement
2,553,930.59 - 2,553,930.59 3,703,419.57 - 3,703,419.57
of plant
Dalian
industry park 1,922,211.42 - 1,922,211.42 1,922,211.42 - 1,922,211.42
project
Grinding
1,807,569.95 - 1,807,569.95 1,960,571.95 - 1,960,571.95
product line
Epson
multi-purpose
832,500.00 - 832,500.00 832,500.00 - 832,500.00
furnace
innovation
Installation of
802,912.80 - 802,912.80 1,291,421.97 - 1,291,421.97
Super
53
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Closing Balance Opening Balance
Item Book Book
Provision Book Value Provision Book Value
Balance Balance
finishing
Machine
Improvement
of grinding 376,403.13 - 376,403.13 414,391.36 - 414,391.36
machine
Crane Project 331,423.18 - 331,423.18 2,734,957.91 - 2,734,957.91
Computer
321,293.28 - 321,293.28 2,081,977.04 - 2,081,977.04
Project
Improvement
of
277,094.01 - 277,094.01 1,483,761.06 - 1,483,761.06
second-finishe
d products
Improvement
236,621.46 - 236,621.46 1,016,610.51 - 1,016,610.51
of Auto
Overhaul
factory 225,772.70 - 225,772.70 472,585.86 - 472,585.86
reconstruction
Ring-oven
heat treatment
product line
194,358.80 - 194,358.80
Fume
purification
system
G17-16-01
Eco-Friendly 153,153.15 - 153,153.15 153,153.15 - 153,153.15
Project
Improvement
of axial
clearance 145,299.15 - 145,299.15 - - -
automatic
detection
G17-16-03
130,630.63 - 130,630.63 130,630.63 - 130,630.63
Mew plant
Improvement
of special 112,644.05 - 112,644.05 2,220,662.31 - 2,220,662.31
large branch
Sewage
Treatment 94,017.09 - 94,017.09 94,017.09 - 94,017.09
Equipment
Improvement
of
38,578.50 - 38,578.50 92,820.85 - 92,820.85
one-finished
products
G17-15-07
bear Vibration 31,384.62 - 31,384.62 31,384.62 - 31,384.62
detector.
Rockwell
5,862.07 - 5,862.07
apparatus
Heat treatment
- - - 160,551.84 - 160,551.84
product line
54
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Closing Balance Opening Balance
Item Book Book
Provision Book Value Provision Book Value
Balance Balance
Cool drying
- - - 7,863.25 - 7,863.25
System
Folklift 3t - - - 192,307.70 - 192,307.70
low voltage
- - - 59,829.06 - 59,829.06
switch board
Overhaul
Bainite - - - 846,153.80 - 846,153.80
furnace
Heat treatment
product line - - - 140,000.00 - 140,000.00
innovation
Others 8,460,864.80 - 8,460,864.80 8,420,208.60 - 8,420,208.60
Total 48,159,927.20 - 48,159,927.20 82,689,318.94 - 82,689,318.94
(2) Change in the significant construction in progress
Decrease
Opening Transfer Closing
Name Increase Other
Balance to fixed Balance
decrease
assets
Improvement of
10,195,223.88 2,729,429.78 2,002,417.69 10,922,235.97
railway
Improvement of
seven-finished 30,689,629.52 1,959,730.11 11,590,177.57 13,865,316.88 7,193,865.18
products
Improvement of
precision roller 11,340,473.99 3,593,948.74 717,948.71 7,028,576.54
branch
Improvement of
precision bearing 3,960,724.13 3,960,724.13
plant
Improvement of
3,703,419.57 692,499.26 456,989.72 2,553,930.59
plant
Dalian industry park
1,922,211.42 1,922,211.42
project
Grinding product
1,960,571.95 153,002.00 1,807,569.95
line
Installation of
SuperfinishingMach 1,291,421.97 172.72 488,681.89 802,912.80
ine
Crane Project 2,734,957.91 2,403,534.73 331,423.18
Computer Project 2,081,977.04 1,760,683.76 321,293.28
Improvement of
second-finished 1,483,761.06 1,206,667.05 277,094.01
products
Improvement of
1,016,610.51 779,989.05 236,621.46
Auto
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Decrease
Opening Transfer Closing
Name Increase Other
Balance to fixed Balance
decrease
assets
Special large project
2,220,662.31 2,108,018.26 112,644.05
improvemetn
Total 70,640,921.13 8,650,056.74 26,779,620.00 15,040,255.31 37,471,102.56
(Continued)
Percent of Including: Interest
Accumulated
investment Accumulated capitaliz Source of
Name Budget progress capitalized
against capitalized ation funds
interest
budget(%) interest rate (%)
Improvement of Loan/Self
14,472,691.67 96.03 96.03 90,837.36 - -
railway financing
Improvement of
Loan/Self
seven-finished 107,106,101.50 53.82 53.82 656,478.24 - -
products financing
Improvement of
Loan/Self
precision roller 27,209,771.00 50.10 50.10 1,203,099.87 - -
branch financing
Improvement of
Loan/Self
precision bearing 4,197,044.00 94.37 94.37 - - -
plant financing
Improvement of Loan/Self
5,019,050.70 74.21 74.21 387,121.55 - -
plant financing
Dalian industry Loan/Self
39,164,803.61 21.04 21.04 35,839.06 - -
park project financing
Grinding product Loan/Self
21,862,000.00 13.56 13.56 96,502.35 - -
line financing
Installation of
Loan/Self
SuperfinishingMa 4,120,996.00 31.34 31.34 293,535.85 - -
chine financing
Loan/Self
Crane Project 3,041,975.00 94.23 94.23 145,031.18 - -
financing
Loan/Self
Computer Project 4,843,610.00 42.98 42.98 28,152.78 - -
financing
Improvement of
Loan/Self
second-finished 19,630,400.00 3.78 3.78 17,042.64 - -
products financing
Improvement of Loan/Self
5,678,872.00 39.06 39.06 36,279.86 - -
Auto financing
Special large
Loan/Self
project 8,349,300.00 27.10 27.10 33,034.11
improvemetn financing
Total 264,696,615.48 — — 3,022,954.85 —
12. Intangible assets
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
(1) Intangible assets list
Item Land use right ERP software Total
I. Initial cost
1). Opening balance 124,220,541.52 6,272,685.89 130,493,227.41
2).Increase 97,087.38 97,087.38
(1) Purchase 97,087.38 97,087.38
(2) Internal development - - -
(3) Acquired by company
- - -
combination
3). Decrease
4). Closing balance 124,220,541.52 6,369,773.27 130,590,314.79
II. Amortization
1). Opening balance 36,823,081.84 6,140,023.31 42,963,105.15
2).Increase 1,839,045.41 121,078.37 1,960,123.78
(1)Accrual 1,839,045.41 121,078.37 1,960,123.78
3). Decrease
disposal
4). Closing balance 38,662,127.25 6,261,101.68 44,923,228.93
III. Provision
—— —— ——
for impairment
1). Opening balance - - -
2).Increase - - -
accrual
3). Decrease - - -
disposal
4). Closing balance - - -
IV. Book value —— —— ——
1.Closing Book value 85,558,414.27 108,671.59 85,667,085.86
2.Opening Book value 87,397,459.68 132,662.58 87,530,122.26
(2) At the end of reporting period, there is no intangible asset established by internal
development.
13. Long-term repayments
Item Opening Other Closing
Increase Amortization
Balance Decrease Balance
Decoration
fees for estate 700,228.04 197,572.00 133,559.14 - 764,240.90
used as office
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Item Opening Other Closing
Increase Amortization
Balance Decrease Balance
New industry
area plant - 456,989.72 12,694.16 - 444,295.56
coating repari
Total 700,228.04 654,561.72 146,253.30 - 1,208,536.46
14. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offsetting
Item Closing Balance Opening Balance
Deductible Deferred tax Deductible Deferred tax
temporary assets temporary assets
difference difference
Provision for
74,156,992.13 11,639,248.03 74,103,756.75 11,625,939.19
impairment of assets
Difference due to
depreciation of fixed - -
assets
Total 74,156,992.13 11,639,248.03 74,103,756.75 11,625,939.19
(2) Deferred tax liabilities before offsetting
Item Closing Balance Opening Balance
Taxable Deferred tax Taxable Deferred tax
temporary liabilities temporary liabilities
difference difference
Asset evaluation
increment in business
5,579,147.69 836,872.15 5,920,560.37 888,084.06
combination without the
same control
Total 5,579,147.69 836,872.15 5,920,560.37 888,084.06
(3) Unrecognized deferred tax assets details
Item Closing Balance Opening Balance
Deductible temporary difference 64,171,626.53 54,077,973.39
Deductible loss 459,466,293.85 397,192,964.20
Total 523,637,920.38 451,270,937.59
(4) Unrecognized deductible loss of deferred tax assets expired next period
Year Closing Balance Opening Balance Memo
2018 37,140,575.91
2019 165,776,239.43 167,843,583.34
2020 82,895,762.79 98,073,685.92
2021 2,537,711.73 4,295,275.09
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Year Closing Balance Opening Balance Memo
2022 90,683,086.40 89,839,843.94
2023 117,573,493.50
Total 459,466,293.85 397,192,964.20
15. Short-term loan
Loan category Closing Balance Opening Balance
Credit loan 620,000,000.00 648,000,000.00
Total 620,000,000.00 648,000,000.00
16. Payable and notes payable
Item Closing Balance Opening Balance
Notes payable 343,636,065.16 299,483,279.00
payable 714,437,792.49 630,832,287.45
Total 1,058,073,857.65 930,315,566.45
16.1 Notes payable
Notes category Closing Balance Opening Balance
Bank acceptance notes 311,880,000.00 295,396,000.00
Trade acceptance notes 31,756,065.16 4,087,279.00
Total 343,636,065.16 299,483,279.00
There is no unpaid expired notes payable by the end of the accounting period.
16.2 Accounts payable
(1) Accounts payable
Item Closing Balance Opening Balance
Goods payments 639,858,663.29 559,579,919.87
Project payments 44,726,806.40 50,109,631.21
Others 29,852,322.80 21,142,736.37
Total 714,437,792.49 630,832,287.45
(2) Accounts payable with age over 1 year
Company name Closing Balance Unsettle reason
Supplier A 14,227,757.35 undue
Supplier B 14,192,759.85 undue
Supplier C 11,637,409.03 undue
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Company name Closing Balance Unsettle reason
Supplier D 9,946,862.07 undue
Supplier E 4,934,492.85 undue
Total 54,939,281.15 —
17. Received in advance
Item Closing Balance Opening Balance
Goods payment 21,286,971.52 31,634,532.72
Total 21,286,971.52 31,634,532.72
18.Employee’s payable
(1) Category of employee’s payables
Item Opening Increase Decrease Closing
Balance Balance
Short-term employee’s
7,313,818.35 211,684,701.71 212,854,406.70 6,144,113.36
payable
Post-employment benefit
9,346,330.29 28,020,734.18 31,262,849.90 6,104,214.57
–defined contribution plan
Total 16,660,148.64 239,705,435.89 244,117,256.60 12,248,327.93
(2) Short-term employee’s payables
Item Opening Increase Decrease Closing
Balance Balance
Salaries, bonus,
allowance, and 204,820.34 161,019,018.16 160,962,316.81 261,521.69
subsidy
Welfare 3,200.00 15,940,475.72 15,943,675.72
Social insurance 595,786.05 18,332,788.63 18,871,999.12 56,575.56
Include: Medical
306,854.19 14,215,204.12 14,465,482.75 56,575.56
insurance
On-duty
injury 218,079.54 2,313,192.60 2,531,272.14
insurance
Maternity
70,852.32 1,804,391.91 1,875,244.23
insurance
Housing funds 2,267,654.57 14,830,662.52 14,763,399.01 2,334,918.08
Labour union and 4,242,357.39 1,561,756.68 2,313,016.04 3,491,098.03
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Item Opening Increase Decrease Closing
Balance Balance
training expense
Total 7,313,818.35 211,684,701.71 212,854,406.70 6,144,113.36
(3) Defined contribution plan
Item Opening Increase Decrease Closing
Balance Balance
Pension 9,010,407.61 27,449,670.72 30,425,917.38 6,034,160.95
Unemployment
335,922.68 571,063.46 836,932.52 70,053.62
insurance
Total 9,346,330.29 28,020,734.18 31,262,849.90 6,104,214.57
19. Tax payable
Item Closing Balance Opening Balance
Value-added tax 4,995,740.52 11,018,297.67
Individual income tax 66,493.10 140,904.05
City maintenance and construction tax 704,795.92 982,277.76
Real estate tax 301,009.33 294,515.16
Land use tax 193,448.39 204,027.14
Stamp duty 84,369.16 109,592.56
Education surcharge 523,013.95 728,270.43
Others 373,136.09 372,087.55
Total 7,242,006.46 13,849,972.32
Note: others is river maintenance fee of 371,571.37
20. Other payables
Items Closing Balance Opening Balance
Interest payable 748,135.28 1,190,100.00
Dividend payable 360,000.00 -
Other payable 130,746,519.11 92,123,093.92
Total 131,854,654.39 93,313,193.92
20.1 Interest payable
(1) Category of interest payable
Item Closing Balance Opening Balance
Interest for long-term loan with 65,300.00
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Item Closing Balance Opening Balance
instalments
Interest for short-term loan 748,135.28 1,124,800.00
Total 748,135.28 1,190,100.00
(2) Significant overdue unsettled interest:None
20.2 Dividend payable
Item Closing Balance Opening Balance
Ordinary share dividend 360,000.00
Total 360,000.00
20.3 Other accounts payable
(1) Other payables categorized by payments nature
Payments nature Closing Balance Opening Balance
Bid security deposits 1,205,409.62 1,118,409.62
Risk deposits from branch manager 259,777.75 259,777.75
Trademark fees 16,552,853.80 10,777,573.08
Others 112,728,477.94 79,967,333.47
Total 130,746,519.11 92,123,093.92
Note: others is mainly the payable to Liaoyang Baolin Estate Development Co.,Ltd for old
plant moving compensation of 63,309,263. 70Yuan, and payable to Wafangdian Bearing
Group Co.,Ltd for old plant moving compensation of 12million Yuan, deposit of distributor
10,121,526.78Yuan, freight of7,090,822.28Yuan, intercourse 6,915,811.73Yuan,.
(2) Significant other payables with age over 1 year
Name of company Closing Reason of unpaid or
Balance not carried forward
In the progress of
other payables company A 32,000,000.00
settlement
other payables company B 2,869,025.48 undue
other payables company C 952,000.00 undue
other payables company D 788,057.42 undue
other payables company E 735,916.46 undue
Total 37,344,999.36
21．Non-current liabilities due within one year
Item Closing Balance Opening Balance
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Long-term loan due within one year
50,000,000.00
Total 50,000,000.00
22. Other current liabilities
(1) Category of other current liabilities
Item Closing Balance Opening Balance
Government subsidy
3,967,022.53 3,967,022.53
Compensation for land removal
953,225.59
Total
4,920,248.12 3,967,022.53
(2) Government subsidy
Recorded
Related
Opening into non Other Closing
Project Increase with
Balance -operation Change Balance
asset/equity
income
Dalian sub-factory
2,704,235.83 - 2,704,235.83 2,704,235.83 2,704,235.83 asset
remove subsidy
High-end bearing
improvement 472,320.00 - 472,320.00 472,320.00 472,320.00 asset
project
Intelligent
equipment
manufacturing 400,000.00 - 400,000.00 400,000.00 400,000.00 asset
development
specific subsidy
Overhaul bearing
project discounting 240,000.00 240,000.00 240,000.00 240,000.00 asset
interest subsidy
Liaoyang Bearing
97,548.00 - 97,548.00 97,548.00 97,548.00 asset
Industry subsidy
Technical master
studio development 52,918.70 52,918.70 52,918.70 52,918.70 asset
subsidy
Total 3,967,022.53 - 3,967,022.53 3,967,022.53 3,967,022.53 ——
“Other Change”: the expected amortization occurred during the next year will be re-categorized
from deferred income to other current liabilities.
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
23.Long-term payables
Type Closing Balance Opening Balance
Long-term payables 100,000.00 1,597,305.72
Special payables 296,698.98 296,698.98
Total 396,698.98 1,894,004.70
23.1 Long-term payables
Payments nature Closing Balance Opening Balance
Equipment payments 100,000.00 100,000.00
Housing subsidy 1,497,305.72
Total 100,000.0 1,597,305.72
23.2 Special payables
Items Opening Increase Decrease Closing Formation Basis
Balance Balance
Granted by Wafangdian
Bureau of Finance and
Special
Wafangdian Bureau of
pollution 221,698.98 - - 221,698.98
Environment Protection with
treatment
approval with “WaCaiZhi Qi
No.[2004]217”
Dalian Financial Bureau and
Municipal Office of
Economic and Information
Informatization
75,000.00 - - 75,000.00 Technology Committee with
Construction
approval with “Da CaiZhi Qi
No. [2012]917” and “Da Jing
Xin Fa No. [2012]199”
Total 296,698.98 - - 296,698.98
24. Deferred income
(1) Category of deferred income
Item Opening Increase Decrease Closing Formation
Balance Balance Basis
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Item Opening Increase Decrease Closing Formation
Balance Balance Basis
Grant
Government
37,754,771.56 - 3,985,797.79 33,768,973.77
from
subsidy governme
nt
Old factory
removal and
new factory
Compensation and land
for land - 28,468,902.56 953,225.59 27,515,676.97 compensation
removal for Liaoyang
Bearing
construction
Co.,Ltd
Total 37,754,771.56 28,468,902.56 4,939,023.38 61,284,650.74 —
(2) Government subsidy project
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Governm Recorded Related
Opening
ent Increase
into non Other Closing with
Note
subsidy Balance -operation Change Balance asset/equ
item income ity
Compensa
tion for 27,042,358.18 2,704,235.88 24,338,122.30 asset A
plants
moving
Liaoyang
Bearing
4,194,564.00 97,548.00 4,097,016.00 asset B
Industry
subsidy
Developm
ent of
intelligent
manufactu 2,400,000.00 400,000.00 2,000,000.00 asset C
ring
equipment
subsidies
Improvement
of high-end
bearing 1,889,280.00 472,320.00 1,416,960.00 asset D
production
subsidies
Overhaul
bearing
project
1,660,000.00 240,000.00 1,420,000.00 asset E
discounting
interest
subsidy
Technical
master studio
568,569.38 18,775.21 52,918.70 496,875.47 asset F
development
subsidy
Total 37,754,771.56 18,775.21 3,967,022.58 33,768,973.77 -
(1) A: Deferred income: the compensation for plants moving is RMB 59,820,000.00 granted
from Dalian government-owned assets investment and operating Co., Ltd in 2011. And
the amount of making up for the removal loss of the current period is RMB
11,143,755.05；The rest of 48,676,244.95 are recognized as the removal compensation
related with assets, which is amortized 18 years, according to the new fixed assets
formed after the Dalian branch removal.
(2) B: Deferred income: the RMB 4,877,400.00 of “Industry development subsidies” is
distributed by the Liaoyang Economic and Development district Bureau of Finance in
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
2013. The grant is related to land and amortized over 50 years in accordance with land
amortization criteria.
(3) C: Deferred income: the RMB 4,000,000.00 of development of intelligent manufacturing
equipment subsidy is distributed by Dalian City Finance Bureau in 2012.The subsidies
are used in the project “Grinding vehicle integration and processing digitalization”.
Currently, the equipment has been used for production manufacturing and grant is
amortized over 10 years.
(4) D: Deferred income: the RMB 4,723,200 interest subsidy of “Improvement of bearing
base in high-end equipment sector” is distributed by Wafangdian Finance Bureau in
2013 for the year of 2011. The subsidy is specially used to improve the project of
improvement of bearing base in high-end equipment sector. The item is amortized within
10 years.
(5) E: Deferred income: the RMB 2,400,000.00 interest subsidy of “Axle box and bearing
technology improvement of grand axle load railway carriages” is granted by Wafangdian
Finance Bureau in 2014. The subsidy is now in processing the project “Axle box and
bearing technology improvement of grand axle load railway carriages”. Now the
equipment has been put into production, the government subsidy is amortized according
to the depreciation years of 10 years.
(6) F: Deferred income: the 700,000.00 RMB of the construction of workshop for
technology masters subsidy is granted by Dalian Finance Bureau in 2014 according to
“Da Cai She (Zhuan) No. [2013]26”, “Da Cai She (Zhuan) No. [2013]37”, “Da Cai She
(Zhuan) No. [2013]45”, “Da Cai She (Zhuan) No. [2014]27”, and “Da Cai She (Zhuan)
No. [2014]32”. The workingshop equipment has been transferred into fixed asset in
December 2016 and being amortised for 12 years, expense related parts are being put
into non-operating income directly.
25.Share capital
Opening Change for current period Closing Bala
Balance
Shareholders’ Issuing Distributing Transferring
name/category Amounts % new capital
shares shares reserves to Others Subtotal Amounts
share capital
Shares under
restriction for —— —— —— —— —— — — —— —
sale
Domestically
legal person 244,000,000.00 60.61 - - - - - 244,000,000.00
shares
Total shares 244,000,000.00 60.61 - - - - - 244,000,000.00
67
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
under
restriction for
sale
Shares without
—— —— —— —— —— — — —— —
restriction for sale
Domestically listed
158,600,000.00 39.39 - - - - - 158,600,000.00
foreign shares
Total shares
without restriction 158,600,000.00 39.39 - - - - - 158,600,000.00
for sale
Total shares 402,600,000.00 100.00 - - - - - 402,600,000.00 1
26. Capital reserves
Items Opening Balance Increase Decrease Closing Balance
Share premium 201,956,446.52 - - 201,956,446.52
Other capital reserves 283,734,603.95 - - 283,734,603.95
Total 485,691,050.47 - - 485,691,050.47
27.Surplus reserves
Item Opening Balance Increase Decrease Closing Balance
Statutory surplus reserve 113,687,908.35 2,491,863.75 116,179,772.10
Discretionary surplus reserve 20,590,618.91 20,590,618.91
Total 134,278,527.26 2,491,863.75 136,770,391.01
28. Undistributed profits
Item current year prior year
Closing balance of prior year 362,925,296.98 359,603,965.97
Add: Adjustments to the opening balance of
-
undistributed profits
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 362,925,296.98 359,603,965.97
Add: net profit attributable to shareholders of 10,632,169.84 10,182,949.16
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
parent company in the year
Less: Provision for statutory surplus reserves 2,491,863.75 2,835,618.15
Provision for any surplus reserves -
Provision of general risk -
Dividends payable for common shares 16,104,000.00 4,026,000.00
Share dividends -
Closing balance of current year 354,961,603.07 362,925,296.98
29. Operating revenue and cost
Items current year prior year
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from
principle 1,937,143,427.59 1,676,581,611.55 1,922,479,056.76 1,641,975,889.28
operation
Revenue from
231,255,229.24 214,446,067.98 267,932,995.29 244,638,709.17
other operation
Total 2,168,398,656.83 1,891,027,679.53 2,190,412,052.05 1,886,614,598.45
(1) Principle operation - classified according to products or operation
current year prior year
Items
Sales revenue Cost of sales Sales revenue Cost of sales
Export 293,027,890.14 262,654,137.84 234,072,205.39 205,467,061.62
Domestic 1,524,108,221.72 1,287,121,006.95 1,590,314,193.44 1,337,998,110.43
Including:
Transportation 456,109,746.33 412,643,553.04 528,390,448.84 453,145,292.04
vehicle bearings
Special use
451,495,303.58 391,695,074.06 498,257,042.55 429,351,698.43
bearings
General use
616,503,171.81 482,782,379.85 563,666,702.05 455,501,119.96
bearings
Industrial
120,007,315.73 126,806,466.76 98,092,657.93 98,510,717.23
Operations
Total 1,937,143,427.59 1,676,581,611.55 1,922,479,056.76 1,641,975,889.28
30. Taxes and surcharges
Items current year prior year
City construction tax 5,944,668.46 6,680,119.43
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Education surcharge 4,265,085.13 4,786,520.63
Stamp duty 1,037,222.54 1,371,160.98
Property tax 3,925,322.92 3,888,209.25
Tax on land use 2,459,673.48 2,599,596.72
Others -1,329,429.68 92,476.11
Total 16,302,542.85 19,418,083.12
Others: is the refund of overpaid business tax of 1,348,718.43 Yuan in the prior year.
31. Selling expenses
Items current year prior year
Employee benefit 47,563,505.33 45,704,507.04
Transportation expense 33,091,327.33 38,403,392.31
Travel expense 21,118,625.84 18,920,889.67
International freight 15,242,177.33 12,851,643.01
Trademark use fee 8,159,058.01 8,125,516.72
Conference expense 5,990,002.25 5,659,715.52
Others 34,379,146.47 28,056,085.96
Total 165,543,842.56 157,721,750.23
Note: others are the business activity fees of 10,467,132.32Yuan, and lease premium of
6,489,392.57Yuan.
32. Administrative expenses
Items current year prior year
Employee benefit 39,464,063.42
36,719,302.57
Intangible assets amortization 4,558,551.45
4,603,575.71
Guide and fire fighting expense 2,132,641.51
2,133,591.34
Depreciation expense 1,905,753.03
2,255,327.94
Travel expense 1,078,372.05
906,130.58
Business entertaining expense 652,659.54
811,447.20
Other expense 7,874,012.69 9,915,875.02
Total 57,666,053.69 57,345,250.36
33. R&D
Items current year prior year
70
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
R&D in technology 5,922,083.68 4,065,054.17
Total 5,922,083.68 4,065,054.17
34. Financial expenses
Items current year prior year
Interest expenses 44,744,788.35 49,123,067.63
Less: Interest income 531,265.45 655,727.60
Add: Exchange loss -4,934,814.03 1,395,736.41
Add: Others expenditure 1,748,678.01 834,733.56
Total 41,027,386.88 50,697,810.00
35. Assets impairment losses
Items current year prior year
Loss of bad debts 2,774,954.85
14,619,488.31
Provision for inventory impairment 2,240,267.31
15,619,605.43
Provision for fixed assets impairment 229,671.00
Total 5,015,222.16
30,468,764.74
36. Other income
Items current year prior year
Dalian sub-factory relocation subsidy 2,704,235.83 2,704,235.83
Railway high power locomotive bearing project
subsidy 2,000,000.00
Job stabilization subsidy 1,062,193.38
1,001,853.90
Special fund as overseas trade 2016 incentive 600,000.00
Improvement of high-end bearing production subsidies 472,320.00 472,320.00
Development of intelligent manufacturing equipment
subsidies 400,000.00 400,000.00
Export show subsidy（Dalian Commercial Bureau ） 300,000.00
High-tech enterprise subsidies 300,000.00
Overhaul bearing project discounting interest subsidy 240,000.00 240,000.00
Liaoyang Bearing Industry Development fund 97,548.00 97,548.00
Technical master studio development subsidy 71,693.91 113,536.37
Transformation and upgrade allowance 50,000.00
Personal tax handling charge refund of 2017 20,550.21
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Export credit insurance fostered fund 18,600.00
Insurance premium subsidy for the 1st important
technical equipment 1,460,000.00
Technology innovation subsidy in Liaoniing 736,999.97
International market development subsidy from
Foreign Trade bureau 406,000.00
Technology research and development Fund 209,500.00
Labour union subsidy
15,000.00
Total 8,337,141.38 7,856,994.07
37. Investment income
Items current year prior year
Available-for-sale financial assets in holding 12,500,000.00 500,000.00
Total 12,500,000.00 500,000.00
38. Gain /loss on FV movement
Items current year prior year
Financial asset measured at FV and any change
-49,309.20
recognized in the income statement
Including: FV change on derivative
Financial liability measured at FV and any
change recognized in the income statement
Investment property measured at FV
Total -49,309.20
39.Gain on assets disposal(loss listed “-“)
Amounts recognized
into current
Item current year prior year
non-recurring profit
or loss
Gain on disposal group classified as held
for sale
Gain on non-current assets disposal 1,789,718.35 -728,247.65 1,789,718.35
Gain on non-current assets disposal
classified as Held for sale
Gain on fixed assets disposal
Gain on intangible assets
disposal
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Gain on non-current assets disposal
1,789,718.35 -728,247.65 1,789,718.35
not classified as Held for sale
Gain on fixed assets disposal 1,789,718.35 -728,247.65 1,789,718.35
Gain on intangible assets
disposal
Gain on nonmonetary asset exchange
Gain on disposal of non-current asset in
the debt restruction
Total 1,789,718.35 -728,247.65 1,789,718.35
40. Non-operating income
(1) Non-operating income list
Amounts
recognized into
Item current year prior year current
non-recurring
profit or loss
Gain from debt restructuring 5,473,572.92 5,304,472.04 5,473,572.92
Penalty income 1,717,189.78 11,167,313.00 1,717,189.78
Others 7,301,125.42 2,537,287.40 7,301,125.42
Total 14,491,888.12 19,009,072.44 14,491,888.12
Note: others are the compensation of 76.06million Yuan for Wazhou Liaoyang Bearing
construction Co.,Ltd factory land removal, after new factory construction cost of
28.47millionYuan deduction and 12million Yuan payable to Baolin Estate as
compensation for land, the remaining balance of 4.3875million Yuan is accounted as
non-operating income.
41. Non-operating expenses
Amounts recognized into
Item current year prior year non-recurring profit or
loss for the year
Loss on disposal of
75,526.04 75,526.04
non-current asset scrapped
Debt restruction 1,294,685.13 1,294,685.13
Penalty loss 37,206.68 227,845.64 37,206.68
Others 17,644.00 355,815.79 17,644.00
Total 1,425,061.85 583,661.43 1,425,061.85
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
42. Income tax expenses
(1) Income tax expenses
Items current year prior year
Current income tax expenses -279,426.81 -
Deferred income tax expenses -64,520.75 -48,050.75
Total -343,947.56 -48,050.75
(2) Accounting profit to income tax expense adjustment
Items Current year
Consolidated total profit this year 10,288,222.28
Income tax expenses at applicable tax rate 1,543,233.34
Effect on subsidiary applied to different tax rate -1,576,016.03
Effect on prior period income tax -279,426.81
Effect on non-taxable income -762,013.83
Effect on non-deductible cost ,expense and loss 998,138.64
Effect on use of deductible loss from unrecognized deferred tax assets in
-4,613,400.92
the prior period
Effect on temporary difference or deductible loss from unrecognised
20,600,695.06
deferred tax assets this year
Accelerated R&D expense and disables salary -16,255,157.01
Income tax expense -343,947.56
43. Notes to cash flow statement
(1) Cash receipt/payment of other operating/investing/financing activities
1) Other cash received relating to operating activities
Items current year prior year
Interest income 531,265.45 544,059.82
Government subsidy 4,980,823.54 3,111,967.97
AR or AP 7,350,194.95 4,432,799.24
Return of reserve fund, deposit etc. 310,964.37 318,789.49
Others 24,873,177.82 28,868,096.45
Total 38,046,426.13 37,275,712.97
2) Other cash paid relating to operating activities
Items current year prior year
Travel expenses 22,164,193.50 18,692,697.87
Conference expense 5,581,529.84 2,164,337.17
Advertising expense 142,577.19 60,660.00
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Rent expense 5,856,403.64 3,369,060.08
Business promotion expense 13,948,129.48 12,770,680.62
Office expense 2,838,006.60 2,491,567.85
Collection and payment for others 15,885,908.70 11,791,443.11
Other expense 17,487,480.33 32,641,752.86
Security deposit transfer 33,980,570.14 27,477,011.70
Total 117,904,178.47 111,459,211.26
3) Others cash received relating to financing activities
Items current year prior year
Borrowings by presenting received order and
521,431,915.89
other borrowing
Notes discount 528,584,751.74
Total 528,584,751.74 521,431,915.89
4) Others cash paid relating to financing activities
Items current year prior year
Repayment of borrowings 15,838,675.45 563,166,532.83
Notes is due and cashed 467,704,964.42
Total 483,543,639.87 563,166,532.83
(2) Supplementary information of consolidated cash flow statement
Items current year prior year
1. Adjusting net profit into cash flows of operating —— ——
activities:
Net profit 10,632,169.84 10,182,949.16
Add: Provision for impairment of assets 5,028,009.01 30,468,764.74
Depreciation of fixed assets,Amortization ofmineral
99,675,940.23 98,002,793.91
resources, and biological assets
Amortization of intangible assets 4,558,551.45 4,603,575.71
Amortization of long-term deferred expenses 146,253.30 100,412.91
Losses on disposal of fixed assets, intangible assets, and
-1,789,718.35 728,247.65
long-term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed
75,526.04 -
with”-”)
Change of fair value profit or loss 49,309.20 -
Financial expense (income listed with”-”) 44,990,727.08 45,754,969.49
Investment loss (income listed with”-”) -1,250,000.00 -500,000.00
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Decrease of deferred tax assets(increase listed
-13,308.84 3,161.15
with”-”)
Increase of deferred tax liabilities(decrease
-51,211.91 -51,211.90
listed with”-”)
Decrease of inventories (increase listed with”-”) -54,562,502.07 132,973,248.94
Decrease of operating receivables (increase listed
-323,850,128.27 -18,431,088.69
with”-”)
Increase of operating payables (decrease listed
444,964,277.27 -305,945,642.74
with”-”)
Others -15,000.00
Net cash flows arising from operating activities 228,603,893.98 -2,124,819.67
2. Significant investment and financing activities
unrelated to cash income and expenses
Liabilities transferred to capital
Convertible bonds within 1 year
Financing leased fixed assets
3. Net increase (decrease) of cash and cash equivalent
Closing balance of cash 188,431,805.23 58,043,497.54
Less: Opening balance of cash 58,043,497.54 142,233,376.52
Add: Closing balance of cash equivalent
Less: Opening balance of cash equivalent
Net increase of cash and cash equivalent 130,388,307.69 -84,189,878.98
(3) Cash and cash equivalents
Items Closing Opening
balance balance
Cash 188,431,805.23 58,043,497.54
Including: Cash on hand 55,974.98 39,497.23
Bank deposit used for paying at any moment 188,375,830.25 58,004,000.31
Other monetary fund for paying at any moment
Cash equivalent
Including: bonds investment with maturity in 3 months
Closing balance of cash and cash equivalents 188,431,805.2 58,043,497.54
Cash and cash equivalents restricted in the parent
company or subsidiary
Note: The difference between cash and cash equivalent and cash at the end of this year refers to
the notes to the financial statementsVI.1.
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
44.Monetary category of foreign currency
(1) Monetary category of foreign currency
Item Closing Balance Exchange Closing Balance
(foreign currency) Rate (RMB)
Cash 9,352,369.50
Including：USD 1,174,794.45 6.6832 7,851,386.27
EURO 191,273.84 7.8473 1,500,983.20
HKD 0.03 0.88 0.03
Accounts receivable 120,791,655.49
Including: USD 8,312,973.09 6.6832 55,557,261.76
EURO 8,312,973.09 7.8473 65,234,393.73
Accounts payable 5,488,808.03
Including: USD 379,965.85 6.6832 2,539,387.77
EURO 375,851.60 7.8473 2,949,420.26
45. Government grant
(1)Details
amount Presented as Recorded into
Item
income statement
Compensation for plants moving 2,704,235.88 Other income 2,704,235.88
Railway high power locomotive
2,000,000.00 Other income 2,000,000.00
bearing project subsidy
Job stabilization subsidy 1,062,193.38 Other income 1,062,193.38
2016 encouragement of foreign trade
600,000.00 Other income 600,000.00
development special fund
Improvement of high-end bearing
472,320.00 Other income 472,320.00
production subsidies
Special project subsidy for intelligent
400,000.00 Other income 400,000.00
manufacture equipment development
Export show subsidy （ Dalian
300,000.00 Other income 300,000.00
Commercial Bureau ）
Subsidy for high tech company 300,000.00 Other income 300,000.00
Overhaul bearing project subsidy on
240,000.00 Other income 240,000.00
interest payment
Liaoyang bearing industry development
97,548.00 Other income 97,548.00
fund
Skill master studio subsidy 71,693.91 Other income 71,693.91
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
amount Presented as Recorded into
Item
income statement
Transformation and upgrade allowance 50,000.00 Other income 50,000.00
Personal tax handling charge refund of
20,550.21 Other income 20,550.21
2017
Export credit insurance fostered fund 18,600.00 Other income 18,600.00
Total 8,337,141.38 Other income 8,337,141.38
VII. Change of Consolidation Scope
No change
VIII. Interest in other entity
1. Equity of subsidiaries
(1) Organization structure of group company
Name of Nature of Share（%）
Location Registered Location Method
subsidiary operation Direct Indirect
Wazhou Liaoyang Manufacturing
Liaoyang Baita
Bearing and selling
Wafangdian District Weiguo Rd 100 acquisition
construction bearing and
No.61
Co.,Ltd machines
Dalian Wazhou Dalian Free Trade Manufacturing
Precision Motor Zone and selling
Wafangdian 100 investment
Car Bearing SanshiliYongsheng Rd bearing and
Company Limited No.12 machines
Wazhou Precision
Manufacturing
of Spherical
Wafangdian Beigongji and selling
Roller Wafangdian 100 acquisition
St No.1 bearing and
Bearings(Wafangd
machines
ian)Co., Ltd
2. No subsidiary with shareholding percentage change still within control this year.
IX. Risk Related to Financial Instruments
The main financial instruments held by the group company include borrowing, accounts
receivable, and accounts payable, tradable financial assets, tradable financial liability etc. The
details introduction about each financial instrument is referred to this notes No.VI above. The
related risks of these financial instruments and the risk management policy conducted to reduce
these risks by the group company are introduced as below. The Group management conducts to
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
manage and monitor these risks exposure and control these risks under certain risk level.
1. Objectives and policies of each risk management
The objectives of risk management conducted by the group company are to reach the balance
between risk and profit return by reducing the negative influence to operating performance
to the minimum level as well as maximising the shareholders’ and other investors’ profits.
Based on these objectives, the basic risk management policy is to recognize and analyse all
sorts of risk that the group company faced with, to set up the proper risk tolerance bottom
line conducting risk management, as well as to monitor these risks in a timely and effective
manner, and to ensure these risks under the limit level.
(1) Market risk
1) Currency risk
The currency risk is referred as the risk caused by the fluctuation of exchange rate. The main
currency risk that the company faced with is related to the USD since the main export
business is settled by USD. Other than the balance of foreign currency presented in Note VI.
44, all assets and liabilities of company are presented in RMB On December 31, 2018.The
balance in foreign currency of assets and liabilities may cause currency risk with influence to
operating performance.
2) Interest risk
The main potential interest risk which is caused by the fluctuation of the cash flow of
financial instruments is related to the floating rate of bank loan. The policy that adopted by
the Group is to maintain the floating rate of loan.
(2) Credit risk
On 31 December, 2018, the Group’s most probable credit risk exposure is from the financial
loss primarily due to the failure of fulfilling the obligation by one party of the contract. The
impairment losses of company’s financial assets are including:
Among the book value of recognized financial assets in the consolidated statement of
financial position, for the financial instruments measured at fair value, their book values
reflect the risk exposure, however, not maximum risk level; the level is changing along with
the fair value.
As the aim to reduce the credit risk, the Group sets up the credit department to ensure the
credit limit, to examine and approve the credit application, and to carry out monitor
procedures to claim expired creditor’s right. In addition, at each of balance sheet date, the
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Group checks with every single process of receipt of receivable to ensure the sufficiency of
provision of bad debt. Therefore, the management of the Group believed the credit risk had
been minimized significantly.
The working capital has low level of credit risk since the cash is deposited in the banks with
high credit reputation.
(3) Liquidity risk
As the management of liquidity risk, the Group’s policy is to regularly monitor the
sufficiency of cash and cash equivalent, the liquidity requirements to ensure the normal
operations, and the fluctuation of cash flow. The bank loan activities are under monitoring by
management to make sure to comply with the loan agreement.
The liquidity risk is referred as the Group failed to fulfil its financial obligations by the due
date. The Group manages the liquidity risk by the maintain sufficiency of working capital to
cover the expired debt to avoid the unacceptable losses or the damage of Group’s reputation.
The Group analyses the debt structure and due time periodically to ensure the sufficiency of
available cash flow. The bank loan activities are under monitoring by management to make
sure to comply with the loan agreement. At the same, the Group has consultation with
financial organizations about the financing activities to maintain the credit level and to
reduce the credit risk.
The Group’s main financial resources come from bank loan. By the date of 31 December,
2018, the unencumbered bank loan credit is 1.336 billion Yuan.
X. Disclosure of Fair Value
1. There is no asset or liability measured by fair value at the end of report period.
FV at the year end
Items 1st Level FV
2nd Level FV 3rd Level FV Total
Measuremen
Measurement Measurement
t
I、Continuously measured at
FV
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
FV at the year end
Items 1st Level FV
2nd Level FV 3rd Level FV Total
Measuremen
Measurement Measurement
t
（I）financial asset measured
at FV and any change
recognized in income
statement
1.tradable financial asset
(1) equity instrument 298,925.16 298,925.16
investment
2.assigned as financial asset
measured at FV and any
change recognized in income
statement asset available
for sale
Total of continuously 298,925.16 298,925.16
measured at FV
2. Market value determination for 1st Level FV Measurement item
The group measured the part of equity instrument investment included in the tradable
financial asset at unadjusted closing price in the open market on December 28th,2018.
3. Qualitative and quantitative information on the valuation techniques and important
parameters used for 2nd Level FV Measurement
None
4. Qualitative and quantitative information on the valuation techniques and important
parameters used for 3rd Level FV Measurement
None
5. Adjustment information and sensitivity analysis of unobservable parameters
between the fair value at the beginning of the year and the end of the year for 3rd Level
continuously measured at FV Measurement
None
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
6. Continuously measured at FV, swap between any level
None
7. Valuation techniques change and reason for change
None
8. Asset and liability not measured at FV but disclosed as FV
None
XI. Related Parties Relationship and Transactions
1. Related parties relationship
(1) Parent company and ultimate controller
1) Parent company and ultimate controller
Parent Registered Business Registered Shareholding Voting
company address nature capital percentage power
(%) percentage
(%)
Manufacture
No. 1 North
and sales of
Wazhou Gongji Street,
bearing and 47,025,7400.00 60.61 60.61
Group Wafangdian
other
City, Dalian
equipments
2) Registered capital and its movement of parent company
Parent Opening Balance Increase Decrease Closing Balance
company
Wazhou Group 413,793,100.00 56,464,300.00 - 47,025,7400.00
3) Share held and its movement of parent company
Parent company Amount Share holding
(%)
Closing Balance Opening Balance Closing Opening
Balance Balance
Wazhou Group 244,000,000.00 244,000,000.00 60.61 60.61
(2). Subsidiaries
Referring to the content in NoteVIII. 1. (1) Organization structure of group company
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
(3).Other related parties
Name of related party Related party relationship
Dalian Wazhou Bearing Manufacturing Other entity controlled by the same parent
Equipment Co., Ltd company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Precision Steel Ball Company
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Exact Forge Ltd.,
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group Precision Turnplate Bearing Ltd
company and ultimate controlling party
Wazhou Group Exact Transmission Bearing Other entity controlled by the same parent
Co., Ltd company and ultimate controlling party
Wazhou Group Equipment Technology Project Other entity controlled by the same parent
Co., Ltd. company and ultimate controlling party
Wazhou Group Special Precision Bearing Co., Other entity controlled by the same parent
Ltd. company and ultimate controlling party
Dalian North Metal Materials Supply Chain Other entity controlled by the same parent
Co., Ltd company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group (USA) Bearing CO., Ltd.
company and ultimate controlling party
Wazhou Group high-end auto bearing limited Other entity controlled by the same parent
company company and ultimate controlling party
Wazhou Group Precision Roller limited Other entity controlled by the same parent
companu company and ultimate controlling party
Wazhou Group Precision Retainer Limited Other entity controlled by the same parent
Company company and ultimate controlling party
Other entity controlled by the same parent
Kugel- und Rollenlagerwerk Leipzig GmbH
company and ultimate controlling party
Other entity controlled by the same parent
Wafangdian bearing Power Limited Company
company and ultimate controlling party
Wazhou Group National Bearing Engineering Other entity controlled by the same parent
Technology Research Centre limited company company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group Special Steel limited Company
company and ultimate controlling party
Wazhou Group Precision turntable bearing Other entity controlled by the same parent
limited Company company and ultimate controlling party
Other entity controlled by the same parent
Dalian North Metal materials trading center
company and ultimate controlling party
Dalian GONA Wazhou Auto Bearings Co., Ltd Other related party
Dalian Wazhou Jinzhou Machinery Co., Ltd Other related party
Wafangdian Tongda Bearing Manufacturing Other related party
Co., Ltd
Dalian WazhouFengyuan Machinery Co., Ltd Other related party
Wafangdian Bearing Products Co.,Ltd Other related party
ZWZ Bearing Europe GmbH Other related party
2. Related party transactions
83
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
(1) Purchase of goods, provide, and receive labour services
1) Purchase of goods/receive labour services
Related party Content current year prior year
Purchase of
Wazhou Exact Forge Ltd. 223,976,694.85 187,065,639.93
goods
Wazhou Group Precision Roller Purchase of
154,114,836.97 90,287,076.68
limited company goods
Wazhou Group Exact Transmission Purchase of
107,781,617.92 81,440,723.44
Bearing Co., Ltd goods
Purchase of
Wazhou Group 103,961,684.96 266,779.20
goods
Wazhou Group high-end auto bearing Purchase of
101,590,110.70 118,758,305.88
limited company goods
Wafangdian Tongda Bearing Purchase of
94,789,155.63 68,696,140.50
Manufacturing Co., Ltd. goods
Dalian Wazhou Fengyuan Machinery Purchase of
79,242,605.07 86,387,591.06
Co., Ltd goods
Wazhou Group Precision Retainer Purchase of
53,443,678.69 55,705,613.57
Limited Company goods
Dalian Wazhou Jinzhou Machinery Purchase of
21,849,487.68 47,867,435.30
Co., Ltd goods
Wafangdian bearing Power Limited Purchase of
19,110,647.52 19,006,483.17
Company goods
Purchase of
Dalian Wazhou Bearing
goods and 14,438,539.83 27,596,614.20
Manufacturing Equipment Co., Ltd equipment
Wazhou Group Precision Turnplate Purchase of
7,692,902.70 122,374,845.58
Bearing Ltd goods
Wazhou Precision Steel Ball Purchase of
4,121,347.17 3,988,012.34
Company goods
Wazhou Group Equipment Purchase of
3,579,237.62 8,132,974.32
Technology Project Co., Ltd. goods
Wazhou Group Special Precision Purchase of
571,835.10 413,100.98
Bearing Co., Ltd. goods
Wafangdian bearing Power Limited Purchase of
227,908.56
Company equipments
Wazhou Group National Bearing
Engineering Technology Research Service accepted 11,239,951.70 1,683,511.01
Centre limited company
Total 1,001,732,242.67 919,670,847.16
2) Sales of goods/provide labour services
Related party Content current year prior year
Wazhou Exact Forge Ltd., Sales of goods 92,623,855.69 121,857,408.99
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Wazhou Group Precision Roller limited
Sales of goods 83,460,631.18 27,233,293.73
company
Wazhou Group high-end auto bearing
Sales of goods 63,616,613.02 232,661,648.00
limited company
Wazhou Group (USA) Bearing CO., Ltd. Sales of goods 55,065,708.87 61,217,743.01
Wazhou Group Exact Transmission
Sales of goods 45,480,787.08 39,309,590.59
Bearing Co., Ltd
Wazhou Group Precision Turnplate
Sales of goods 14,333,650.12 42,871,375.77
Bearing Ltd
Kugel- und Rollenlagerwerk Leipzig
Sales of goods 7,273,332.52 5,146,019.15
GmbH
Wazhou Group Sales of goods 4,176,788.39 165,924.39
Wafangdian Tongda Bearing
Sales of goods 1,407,222.04 8,985,145.59
Manufacturing Co., Ltd.
Wazhou Group Special Precision
Sales of goods 685,932.16 783,624.25
Bearing Co., Ltd.
zwz Bearing Europe GmbH Sales of goods 279,573.01
Dalian Wazhou Manufacturing
Sales of goods 182,692.23 661,678.65
Equipment Co., Ltd
Wazhou Group Precision Retainer
Sales of goods 89,336.28 17,742,369.18
Limited Company
Wazhou Precision Steel Ball Company Sales of goods 88,890.31 1,115,473.34
Dalian Wazhou Jinzhou Machinery Co.,
Sales of goods 6,223.70 45,941.56
Ltd
Wazhou Group Precision Roller limited provide labour
13,459,987.43 14,380,398.00
company services
provide labour
Wazhou Precision Steel Ball Company 1,270,702.50 1,322,406.71
services
Wazhou Group Special Precision provide labour
510,970.30 688,836.19
Bearing Co., Ltd. services
Dalian Wazhou Bearing Manufacturing provide labour
356,113.62 507,477.05
Equipment Co., Ltd services
Dalian Wazhou Jinzhou Machinery Co., provide labour
241,207.61 132,357.19
Ltd services
Wazhou Group high-end auto bearing provide labour
195,477.99 4,446,741.5
limited company-Liaoyang subsidiary services
Wafangdian Tongda Bearing provide labour
24,277.47 49,991.80
Manufacturing Co., Ltd. services
Wazhou Group Exact Transmission provide labour
68,919.97
Bearing Co., Ltd services
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Wazhou Group Precision Rentainer provide labour
106.28
Limited Company services
Total 384,829,973.52 581,394,470.89
(2) Assets rent
1) Assets rent out
Category of assets current year prior year
Lessor Lessee
rent out Profits Profits
Land (located in
No.1, Phrase1,
The Wazhou Exact Forge
North Gongji Street, 434,000.00 433,987.38
Company Ltd.
with area of
48,220.82 m).
The Wazhou Group Land (located in
Company Precision Retainer No.1, Phrase1,
Limited Company North Gongji Street, 263,925.00 263,148.30
with area of
17,543.33m
Land located in
The Wazhou Exact Forge No.1, Phrase1,
206,670.00 206,670.00
Company Ltd. North Gongji Street,
steel warehouse
The Wazhou Group Land (located in
Company Precision Roller No.1, Phrase1,
Limited Company North Gongji Street, 205,687.00 205,700.00
with area of
13,712.49m
Land (located in
No.1, Phrase1,
The Wazhou Precision
North Gongji Street, 197,565.00 197,565.00
Company Steel Ball Company
with area of 13,171
m).
Land (located in
No.1, Phrase1,
The Wazhou Exact Forge
North Gongji Street, 118,215.00 118,215.00
Company Ltd.
with area of 7,881
m).
Land (located in
Wazhou Group Special No.1, Phrase1,
The
Precision Bearing Co., North Gongji Street, 88,000.00 87,966.00
Company
Ltd with area of
5,864 .40m).
Wazhou Group
The
high-end auto bearing Buildings 6,179,851.20 5,579,451.20
Company
limited company
The Wazhou Exact Forge
Buildings 1,035,620.00 1,035,620.00
Company Ltd.
Dalian Wazhou
The
Jinzhou Machinery Buildings 803,160.00 803,160.00
Company
Co., Ltd
86
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Category of assets current year prior year
Lessor Lessee
rent out Profits Profits
The Wazhou Group
Buildings 768,500.00 764,023.20
Company Precision Retainer
Wazhou Group Special
The
Precision Bearing Co., Buildings 514,300.00 514,300.00
Company
Ltd
Wazhou Group
The
Precision Roller Buildings 490,313.00 489,300.00
Company
Limited Company
Dalian
The
WazhouFengyuan Buildings 107,460.00 107,460.00
Company
Machinery Co., Ltd
The Wazhou Group
Buildings - 600,400.00
Company
Wazhou Group
The
high-end auto bearing Equipments 10,223,762.43 9,436,439.09
Company
limited company
Wazhou Group
The
Precision Roller Equipments 9,836,420.55 9,836,420.55
Company
Limited Company
The Wazhou Group
Equipments 2,481,819.35 2,374,585.77
Company Precision Retainer
Wazhou Group Special
The
Precision Bearing Co., Equipments 38,497.13 30,011.97
Company
Ltd.
2) Assets under lease
Category of current year prior year
Lessor Lessee
assets rent in Lease fees Lease fees
Land (located in
The railway bearing No.3 west
Wazhou Group company of the industrial park 2,182,200.00 2,182,200.00
Company with area of
18,185.00 m).
Land (located in
Precision bearing Wazhou Group
Wazhou Group branch of the industrial park, 455,700.00 455,700.00
Company with area of
30,380.00 m).
The precision rolling Land (No.2, West
company Industry Park
Wazhou Group 449,000.00 449,000.00
(Wafangdian) of the with area of
Company 29930m
Land (located in
Special large branch west industrial
Wazhou Group 441,900.00 441,900.00
of the Company park, with area of
29,460.00 m).
Wazhou Group Dalian Wazhou Land (Shishanli, 404,110.86 253,900.00
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Category of current year prior year
Lessor Lessee
assets rent in Lease fees Lease fees
Precision Motor Jinzhou with area
Bering Co.,Ltd of 28210m
Land (located in
The railway bearing No.5 west
Wazhou Group company of the industrial park 389,471.00 389,470.80
Company with area of
3,245.59 m).
Land (located in
Wazhou Group
Special large branch
Wazhou Group industrial park, 291,000.00 291,000.00
of the Company
with area of
19,401.24 m).
Land (located in
Wazhou Group
Two finished branch
Wazhou Group industrial park, 211,700.00 211,700.00
of the Company
with area of
14,112.57 m).
Land (located in
Wazhou Group
Special large branch
Wazhou Group industrial park, 184,300.00 184,300.00
of the Company
with area of
12,286.33 m).
Land (Wazhou
Wafangdian Bearing
Group Industry
Wazhou Group Co., Ltd(logistic 174,600.00 174,600.00
Park with area of
department)
11637m
Wafangdian Bearing Land (No.2 Plant
Co.,Ltd spare part West Industry
Wazhou Group 169,400.00 169,400.00
manufacturing Park with area of
branch 11290m
Land (located in
No.5 west
Special large branch
Wazhou Group industrial park 84,150.00 84,150.00
of the Company
with area of
5,610.00 m).
Land (Wazhou
Group Industry
Wafangdian Bearing
Park material
Wazhou Group Co., Ltd(logistic 17,680.50 17,899.00
warehouse with
department)
area of
4,773.15m
Land(No1-1
previous Anji
Wafangdian Bearing
Wazhou Group Office building 8,759.00
Co., Ltd
with area of
331.85m
Wafangdian Bearing Land (Wazhou
Co., Ltd(supply Group Industry
Wazhou Group 3,763.00 3,763.05
chain management Park with area of
department) 250.87m
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Category of current year prior year
Lessor Lessee
assets rent in Lease fees Lease fees
Land (Wazhou
Wafangdian Bearing
Group Industry
Wazhou Group Co., Ltd(logistic 2,800.00 32,800.00
Park with area of
department)
187.04m
Land (located in
The No.1, Phrase1,
Wazhou Group company(logistic North Gongji 5,000.00
department ) Street, with area
of 331.84 m).
The precision rolling
company
Wazhou Group Buildings 2,259,400.00 2,259,400.00
(Wafangdian) of the
Company
Precision bearing
Wazhou Group branch of the Buildings 2,339,304.00 2,339,300.00
Company
Special large branch
Wazhou Group Buildings 1,653,800.00 1,653,800.00
of the Company
Two finished branch
Wazhou Group Buildings 1,118,000.00 1,118,000.00
of the Company
Special large branch
Wazhou Group Buildings 1,006,800.00 1,006,800.00
of the Company
Wafangdian Bearing
Co.,Ltd spare part
Wazhou Group Buildings 783,700.00 783,700.00
manufacturing
branch
Wafangdian Bearing
Wazhou Group Co., Ltd(logistic Building 474,500.00 474,500.00
department)
Wazhou Group The company Buildings 173,241.00 119,400.00
Wafangdian Bearing
Wazhou Group Co., Ltd(logistic Building 51,973.00 25,190.00
department)
Wafangdian Bearing
Co., Ltd(supply
Wazhou Group Buildings 40,246.00 400,245.60
chain management
department)
Wafangdian Bearing
Wazhou Group Co., Ltd(logistic Building 30,000.00 30,000.00
department)
The railway bearing
Wazhou Group company of the Equipment 970,322.67 930,088.50
Company
The precision rolling
company
Wazhou Group Equipment 949,506.24 962,882.89
(Wafangdian) of the
Company
Special large branch
Wazhou Group Equipment 338,049.37 338,049.44
of the Company
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Category of current year prior year
Lessor Lessee
assets rent in Lease fees Lease fees
Two finished branch
Wazhou Group Equipment 249,773.89 225,773.68
of the Company
Wafangdian Bearing
Co.,Ltd spare part
Wazhou Group Equipment 121,379.85 123,752.25
manufacturing
branch
Precision bearing
Wazhou Group branch of the Equipment 23,261.52 -
Company
(3) Warranty provided by related parties
Whether the
Amounts Inception of Maturity of warranty
Warrantor Warrantee
warranted warranty warranty finished
(Y or N)
Wazhou
The Company 50,000,000.00 17 Mar,2016 17 Mar, 2018 Y
Group
The warranty is Wazhou Group guarantying for the Company’s loan from Import and Export
Bank with the amount of zero until Dec 31, 2018.
(4) Related party assets transfer and debt structure reconstruction
Related party Type of transaction current year prior year
Wazhou Group Precision Turnplate
Debtor transfer 43,740,529.56
Bearing Ltd
Loss on debt
Wazhou Exact Forge Ltd., restructuring 663,288.89
Wazhou Group high-end auto Loss on debt
bearing limited company restructuring 50,000.00
Gain on debt
Wazhou Exact Forge Ltd., restructuring 1,350,000.00
Wafangdian Tongda Bearing Gain on debt
restructuring 1,000,000.00
Manufacturing Co., Ltd.
Wazhou Group Precision Turnplate Gain on debt
restructuring 360,800.00
Bearing Ltd
Wazhou Group Precision Roller Gain on debt
restructuring 159,400.00 529,396.22
Limited Company
Wazhou Group Precision Retainer Gain on debt
restructuring 139,667.92 617,641.50
Limited Company
Dalian Wazhou Bearing Gain on debt 79,725.00
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Related party Type of transaction current year prior year
Manufacturing Equipment Co., Ltd restructuring
Wazhou Group Equipment Gain on debt
restructuring 53,514.18 151,886.78
Technology Project Co., Ltd.
Wazhou Group Exact Transmission Gain on debt
restructuring 40,000.00
Bearing Co., Ltd
National Bearing Engineering
Gain on debt
Technology Research Centre of 20,000.00
restructuring
Wazhou Group
Wazhou Group high-end auto Gain on debt
restructuring 106,075.91
bearing limited company
Dalian Wazhou Jinzhou Machinery Gain on debt
restructuring 7,478.33
Co., Ltd
(5) Management remuneration
Item current year prior year
Total 735,876.00 618,000.00
(6) Use of trademark
According to the ‘Trade Mark License contract’ signed between the Company and the
Group on January 1, 2018, within the valid period up to December 31, 2018, the Company
shall pay license fees to the Group at 0.5% of net sales by using the trade mark of Wazhou
Group for self-manufactured stock. In 2018, the Company shall pay license fees of
8,159,058.01Yuan (excl VAT).
(7) Acceptance of comprehensive service
Other expenses paid to the Group and overseas subsidiary during the year
Item current year prior year
Firelight and security 2,260,600.00 2,260,600.00
Technology development 1,459,652.03 3,611,000.00
Total 3,720,252.03 5,871,600.00
R&D paid to Kugel- und Rollenlagerwerk Leipzig GmbH is 1,222,187.72Yuan and to ZWZ
Bearing Europe GmbH is 237,464.31Yuan.
3. Balances with related parties
(1) Accounts receivable due from related parties
Closing Balance Opening Balance
Item Related party
Book Balance Provision Book Balance Provision
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Closing Balance Opening Balance
Item Related party
Book Balance Provision Book Balance Provision
Wazhou Group
Accounts
high-end auto bearing 87,601,132.04 - 157,299,071.76
receivable
limited company
Wazhou Group
Accounts
Precision Roller 72,177,772.27 - 68,353,382.34 -
receivable
Limited Company
Accounts Wazhou Exact Forge
38,273,870.86 - 9,357,030.29 -
receivable Ltd.,
Wazhou Group
Accounts
Precision Turnplate 32,125,382.52
receivable
Bearing Ltd
Wazhou Group
Accounts
Precision Retainer 20,041,392.01 - 24,191,042.68 -
receivable
Limited Company
Accounts Wazhou Group (USA)
16,435,858.12 - 13,686,294.41 -
receivable Bearing CO., Ltd.
-
Accounts Wazhou Group
receivable 4,786,043.58 - 2,255,928.31
Limited Company
Wazhou Group Special
Accounts
Precision Bearing Co., 3,861,909.04 - 4,724,144.07 -
receivable
Ltd.
Accounts Wazhou Special Steel
receivable 2,603,123.42 - 1,127,180.69
Ball Company
Dalian Wazhou
Accounts
receivable Jinzhou Machinery 1,257,377.62 - 484,891.17
Co., Ltd
Wazhou Group Exact
Accounts -
Transmission Bearing 828,573.88 - 3,714,337.85
receivable
Co., Ltd
Kugel- und
Accounts
receivable Rollenlagerwerk 543,394.31 - 2,843,173.17
Leipzig GmbH
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Closing Balance Opening Balance
Item Related party
Book Balance Provision Book Balance Provision
Wafangdian Tongda
Accounts Bearing
receivable 102,449.31 - 149,884.33
Manufacturing Co.,
Ltd.
Accounts ZWZ Bearing Europe
receivable 86,881.32
GmbH
Kugel- und
Prepaid Rollenlagerwerk 3,027,719.30 - 3,368,086.16
Leipzig GmbH
Wazhou bearing Power
Prepaid 1,257,851.50 - 1,340,370.00
limited Company
Dalian Wazhou
Bearing
Prepaid 850,000.00
Manufacturing
Equipment Co., Ltd
Other Wazhou Group
receivable 778,950.65 778,950.65
Lanzhou sales office
(1) Accounts payable due from related parties
Item Related party Closing Balance Opening Balance
Accounts payable Wazhou Group limited company 144,902,525.95 3,552,228.26
Accounts payable Wazhou Exact Forge Ltd., 87,613,324.79 12,760,327.17
Wafangdian Tongda Bearing
Accounts payable 41,300,178.91 20,874,853.98
Manufacturing Co., Ltd.
Wazhou Group Exact
Accounts payable 18,557,702.42 21,020,328.46
Transmission Bearing Co., Ltd
Wazhou Group Equipment
Accounts payable 14,135,406.77 17,010,528.77
Technology Project Co., Ltd.
Dalian Wazhou Fengyuan
Accounts payable 13,017,152.89 25,856,222.75
Machinery Co., Ltd
Wazhou Precision Steel Ball
Accounts payable 6,933,550.63 3,486,892.33
Company
Dalian Wazhou Bearing
Accounts payable Manufacturing Equipment Co., 6,279,078.46 8,447,383.10
Ltd
93
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Item Related party Closing Balance Opening Balance
Wazhou Group Precision Retainer
Accounts payable 4,981,390.50 6,692,821.86
Limited Company
Dalian Wazhou Jinzhou
Accounts payable 4,545,696.39 6,757,162.31
Machinery Co., Ltd
Wazhou Group Precision Roller
Accounts payable 3,744,410.46 3,403,327.15
Limited Company
National Bearing Engineering
Accounts payable Technology Research Centre of 3,736,023.76 2,833,243.49
Wazhou Group
Kugel- und Rollenlagerwerk
Accounts payable 3,031,293.47
Leipzig GmbH
Wazhou Group high-end auto
Accounts payable bearing limited company 2,373,049.93
Liaoyang branch
Wazhou Group Special Precision
Accounts payable 799,055.87
Bearing Co., Ltd.
Wazhou bearing power limited
Accounts payable 326,838.97 311,333.62
company
Wazhou Group Precision
Accounts payable 11,000.00 56,086,707.09
Turnplate Bearing Ltd
Wazhou Group (USA) Bearing
Accounts payable - 147,968.25
CO., Ltd.
Other payables Wazhou Group limited company 26,070,866.05 12,295,652.49
Wazhou Group Equipment
Other payables 952,000.00 953,000.00
Technology Project Co., Ltd.
Dalian Wazhou Bearing
Other payables Manufacturing Equipment Co., 431,088.45 431,088.45
Ltd
Wazhou bearing power limited
Prepaid 157,745.89
company
XII. Contingency
There is no contingency occurred in the report period.
.XIII.Commitment
Until 31 December, 2018, the Group does not have any other significant commitments.
XIV. Events after the Balance Sheet Date
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Until the financial report date, there is no significant post balance sheet event for disclosure.
XV. Other Significant Events
Debt restructuring
In 2018, the Company has signed the ‘Debt Restructuring Agreement’ with the creditors,
through cash or bank notes settlement below the debt carrying value, and implemented the
restructuring, which results in the debt restructuring income RMB 5,473,572.92 Yuan and were
recognized as non-operating revenue.
In 2018, the Company gave up some of receivables and has signed the ‘Debt Restructuring
Agreement’ with the debtors, through cash or bank notes settlement below the debt carrying
value, and implemented the restructuring, which results in the debt restructuring income RMB
1,294,685.13 Yuan and were recognized as non-operating expense.
XVI. Notes to the Main Items of the Financial Statements of Parent Company
1. Notes receivable and account receivable
Items Closing Balance Opening Balance
Notes receivable 89,620,372.80 203,511,631.58
Account receivable 1,209,757,673.66 1,113,118,255.50
Total 1,299,378,046.46 1,316,629,887.08
1.1 Notes receivable
第十六章 （1）Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 17,871,594.58 107,184,667.03
Trade acceptance notes 71,748,778.22 96,326,964.55
Total 89,620,372.80 203,511,631.58
第十七章 （2）Notes receivable endorsed or discounted but not mature at the end of
year
Item Closing amount Closing amount still
derecognized recognized
Bank acceptance notes 525,058,556.58
Trade acceptance notes 121,448,526.49
Total 646,507,083.07
1.2Accounts receivable
(1) Category of accounts receivable
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Closing balance
Items Booking balance Provision
Booking balance
Amount % Amount %
Accounts
receivable with
significant
individual amount
and separate bad
debt provision
Accounts
receivable with bad
debt provision
1,248,963,522.37 98.24 39,755,848.71 3.18 1,209,207,673.66
based on the
characters of credit
risk portfolio
Accounting
receivable age 898,008,774.93 70.63 39,755,848.71 4.43 858,252,926.22
recombination
Related party 350,954,747.44 27.60 350,954,747.44
Accounts
receivable with
insignificant
22,419,373.94 1.76 21,869,373.94 97.55 550,000.00
individual amount
and separate bad
debt provision
Total 1,271,382,896.31 100.00 61,625,222.65 - 1,209,757,673.66
(Continued)
Opening Balance
Items Booking balance Provision
Booking balance
Amount % Amount %
Accounts receivable
with significant
individual amount
and separate bad
debt provision
Accounts receivable
1,155,247,805.56 98.38 42,129,550.06 3.65 1,113,118,255.50
with bad debt
96
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
provision based on
the characters of
credit risk portfolio
Accounting
receivable age 877,541,532.36 74.73 42,129,550.06 4.80 835,411,982.30
recombination
Related party 277,706,273.20 23.65 277,706,273.20
Accounts receivable
with insignificant
individual amount 19,049,504.15 1.62 19,049,504.15 100.00
and separate bad
debt provision
Total 1,174,297,309.71 100.00 61,179,054.21 - 1,113,118,255.50
Accounts receivable in the portfolio as the bad debt provisions accrued under accounting aging
analysis method
Closing Balance
Aging Provision for bad Proportion
Accounts receivable
debts (%)
Within 1 year 705,052,118.58 7,050,521.18 1.00
1-2 years 119,952,373.06 5,997,618.65 5.00
2-3 years 32,648,109.23 6,529,621.85 20.00
Over 3 years 40,356,174.06 20,178,087.03 50.00
Total 898,008,774.93 39,755,848.71
(2) Bad debt provision accrued and reversed (withdraw)
The bad debt provision has been accrued at the amount of 1,282,440.96 Yuan and during the
report period bad debt provision of 12,786.85Yuan is reversed or withdrawn.
(3) Accounts receivable written off in current period
Item Written-off Amount
Accounts receivable written off 162,813.26
Important Account Receivables accrued written down situations:
Does the account
Account Written- off
Debtor Written-off Written- off receivable occurs
Receivable Application
name Amount Reason from related-party
feature Procedure
transaction
Company 2 Bearing fund 88,183.57 Exemption The internal No
97
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Does the account
Account Written- off
Debtor Written-off Written- off receivable occurs
Receivable Application
name Amount Reason from related-party
feature Procedure
transaction
as agreed approval
Total 88,183.57
(4) The top five significant accounts receivable categorized by debtors
The total amount of top five significant accounts receivable categorized by debtors is
276,781,471.79Yuan, representing 21.77% of the closing balance of accounts receivable. The
bad debt provision of 468,310.23 Yuan is provided respectively.
2. Other receivables
Items Closing Balance Opening Balance
Interest receivable
Dividend receivable 1,250,000.00
Other receivable 13,713,827.46 20,605,278.47
Total 14,963,827.46 20,605,278.47
2. 1 Dividend receivable
Company Closing Balance Opening Balance
Shanghai ME Mechanical &
Electrical Equipment Chain Co., 1,250,000.00
Ltd
Total 1,250,000.00
2. 2Other receivables
(1) The categories of other receivable
Closing Balance
Items
Booking balance Provision
Booking balance
Amount % Amount %
Other receivables with
significant individual
amount and separate
bad debt provision
Other receivables
identified bad debt 15,547,554.01 74.73 1,833,726.55 11.79 13,713,827.46
provision based on the
98
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
characters of credit risk
portfolio
Account receivable age
10,588,132.89 50.89 1,054,775.90 9.96 9,533,356.99
combination
Risk-free portfolio 4,180,470.47 20.09 4,180,470.47
Related party 778,950.65 3.74 778,950.65 100.00
Other receivables with
significant individual
5,257,143.90 25.27 5,257,143.90 100.00
amount and separate
bad debt provision
Total 20,804,697.91 100.00 7,090,870.45 - 13,713,827.46
(Continued)
Opening Balance
Items Booking balance Provision
Booking balance
Amount % Amount %
Other receivables
with significant
individual amount
and separate bad
debt provision
Other receivables
identified bad debt
provision based on 21,605,385.47 81.06 1,000,107.00 4.63 20,605,278.47
the characters of
credit risk portfolio
Account receivable
13,075,665.23 49.06 1,000,107.00 7.65 12,075,558.23
age combination
Risk-free portfolio
Related party 8,529,720.24 32.00 8,529,720.24
Other receivables
with significant
individual amount 5,048,580.92 18.94 5,048,580.92 100.00
and separate bad
debt provision
Total 26,653,966.39 100.00 6,048,687.92 - 20,605,278.47
1) Other receivables accrued the bad debt provisions under accounting aging analysis method
99
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Closing Balance
Aging Proportion
Other receivables Provision for bad debts
(%)
Within 1 year 7,190,121.78 71,901.22 1.00
1-2 years 917,051.68 45,852.58 5.00
2-3 years 1,011,525.40 202,305.08 20.00
Over 3 years 1,469,434.03 734,717.02 50.00
Total 10,588,132.89 1,054,775.90
(2) Bad debt provision accrued or reversed
During the report period, bad debts are accrued at amounts of 1,042,182.53 Yuan and no bad
debt reversal or withdrawn incurred.
(3) No other receivables were actually written off for the year
(4) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Security deposit 5,289,305.79 4,226,867.84
Deposit 273,925.00 196,163.75
Personal petty cash 930,971.76 1,553,070.20
Electricity bill 4,180,470.47 5,309,720.24
Others 10,130,024.89 15,368,144.36
Total 20,804,697.91 26,653,966.39
(5)Other receivables from the top 5 debtors
% of Closing
Closing
Name Category Aging the total Balance of
Balance
OR Provision
company F Electricity bill 4,180,470.47 within 1 year 20.09
Materials
company G 2,341,773.02 Over 3 years 11.26 2,341,773.02
payments
Materials
company H 723,598.86 Over 3 years 3.48 723,598.86
payments
Materials
company I 319,694.17 Over 3 years 1.54 319,694.17
payments
Materials
company G 309,475.10 Over 3 years 1.49 309,475.10
payments
Total —— 7,875,011.62 — 37.86 3,694,541.15
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
3. Long-term equity investments
(1) Category of long-term equity investments
Closing Balance Opening Balance
Item
Closing Balance Provision Book Value Opening Balance Provision Book Value
Investment into
211,583,897.67 - 211,583,897.67 211,583,897.67 211,583,897.67
subsidiaries
Investment into associates - - - - -
Total 211,583,897.67 - 211,583,897.67 211,583,897.67 - 211,583,897.67
(2) Investments into subsidiaries
Opening Provision in Closing Balance
Subsidiaries names Increase Decrease Closing Balance
Balance current period of provision
Wazhou Liaoyang Bearing
17,337,259.95 - - 17,337,259.95
Construction Co.,Ltd
Dalian Wazhou Precision Motor Car
45,478,956.37 - - 45,478,956.37
Bearing Company Limited
Wazhou Precision of Spherical Roller
148,767,681.35 - - 148,767,681.35
Bearings(Wafangdian)Co., Ltd
Total 211,583,897.67 211,583,897.67
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
4. Operating revenue and cost
Item current year prior year
Revenue Cost Revenue Cost
Revenue from main operation 1,931,553,277.72 1,678,865,180.88 1,880,857,226.54 1,611,146,405.62
Revenue from other operation 230,916,268.79 213,962,047.51 257,872,835.30 236,818,779.21
Total 2,162,469,546.51 1,892,827,228.39 2,138,730,061.84 1,847,965,184.83
(1) Principle operation - classified according to Industries
current year prior year
Industries
Sales revenue Cost of sales Sales revenue Cost of sales
Export 293,027,890.14 262,654,137.84 234,072,205.39 206,078,255.48
Domestic 1,480,629,207.08 1,244,304,960.98 1,501,752,983.50 1,259,973,052.58
Including:
Transportation 426,181,770.86 378,388,432.62 462,480,458.33 396,526,944.14
vehicle bearings
Special use
bearings 448,582,621.17 389,579,949.20 498,257,042.55 429,351,698.43
General usese
605,864,815.05 476,336,579.16 541,015,482.62 434,094,410.01
bearings
Industrial
157,896,180.50 171,906,082.06 145,032,037.65 145,095,097.56
Operations
Total 1,931,553,277.72 1,678,865,180.88 1,880,857,226.54 1,611,146,405.62
5. Investment income
Items current year prior year
Income from long-term equity investments under equity
- -
method
Income from disposal long-term share equity investments - -
Income occurred since the change of value when holding
- -
financial assets investments measured by fair value
Income from disposal financial assets investments
- -
measured by fair value
Income from holding the held-to-maturity assets - -
Income from the available-for-sale financial assets held 1,250,000.00 500,000.00
Income from disposal of available-for-sale financial assets - -
Income from the recalculation of remain equity capital
- -
measured by fair value when losing control right
Income from long-term equity investments under cost
- -
method
Total 1,250,000.00 500,000.00
XVII.Approval of Financial Statements
The parent and consolidated financial statements of the Company were approved by the Board
of Directors of the Group on April 26, 2019.
102
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Supplementary Information to the Financial Statements
1. Non-operating profit or loss
Based on No.1 on Non-operating Profit or Loss (2008) of Explanation and Announcement of
Information Disclosure and Presentation Rules for Companies Making Public Offering issued
by China Securities Regulatory Commission, the Group’s Non-operating profit or loss in
2018 is as follows:
Items current year Notes
Gain or loss from disposal of See the note to the financial
1,714,192.31
non-current assets statements VI. 39
Government grants recorded into profit See the note to the financial
8,337,141.38
or loss during current period statements VI. 36
See the note to the financial
Profit or loss from debts restructuring 4,178,887.79
statements VI. 40. 41
Reversal of provision for impairment See the note to the financial
550,000.00
of receivable separately tested statements VI. 3.2
Others non-operating revenue and See the note to the financial
8,963,464.52
expense besides the above items statements VI. 40. 41
Subtotal 23,743,686.00
Effect on income tax 4,373,692.93
Total 19,369,993.07
2. Return on equity and earnings per share
Pursuant to Information Disclosure and Presentation Rules for Companies Making Public
Offering No.9 computation and disclosure of Return on net assets and earnings per share
(revised in 2010) issued by China Securities Regulatory Commission, the weighted average
return on net assets, basic earnings per share and diluted earnings per share of the Group for the
financial year of 2018 are as follows:
Weighted Earnings per share
average (EPS)
Profit of report period return on Basic Diluted
net assets EPS EPS
(%)
Net profit attributable to shareholders of parent company 0.76 0.0264 0.0264
Net profit after deducting non-recurring gains and losses
-0.63 -0.0217 -0.0217
attributable to shareholders of parent company
Wafangdian Bearing Co., Ltd
April 26, 2019
103
