Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Wafangdian Bearing Company Limited
2018 Annual Report
2019-02
April 26, 2019
1
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Chapter I. Important Prompts, Table of Contents, and Definitions
The Board of Directors, board of supervisors, directors, supervisors, and top management
of the Company hereby guarantee that there are no false record, misleading statements and
important omission of the material in this report, and assume the individual and associated
responsibilities for the truth, accuracy and completeness of the contents.
Chairman Meng Wei , General Accountant Ms. Sun Najuan and accounting charger Ms. Sun Najuan
declare: guarantee the truth and completeness of the financial report in the annual report.
Besides the following directors, all the other directors attended the Board meeting and
discussed the report.
Name Post Reasons Assignee name
Liu Yuping Independent director Busy work Wen BO
Liang Shuang Independent director Busy work SunKun
The company has described detailed description of the possible risks in this report.This
part of the content does not constitute a substantial commitment to investors, investors should
maintain sufficient risk awareness, and understand the differences between planning, forecasting
and commitment.
The Company’s profit distribution preplan upon review and approval of this board meeting:
Based on the total 402,600,000 shares, a cash dividend of RMB 0.4Yuan (tax included) will be
distributed for every 10 shares held by shareholders. No bonus shares will be granted and no
capital reserve will be turned into share capital.
Table of Contents
2
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Chapter I. Important Prompts, Table of Contents, and Definitions ................................................. 2
Chapter II.Company Profile and Financial Highlights ....................................................................... 4
Chapter III Business Summary ............................................................................................................ 6
Chapter IV Discussion and Analysis of the Management................................................................... 7
ChapterⅤ Significant Events ............................................................................................................... 17
ChapterⅥ. Changes in Shares and Particulars about the Shareholders........................................ 26
Chapter Ⅶ. About the Preferred Shares ............................................................................................. 29
Chapter Ⅷ. Directors, Supervisors, Senior Management and Staff ................................................ 29
ChapterⅨ. Corporate Governance ...................................................................................................... 37
ChapterⅩ. Financial Report ............................................................................................................... . 41
ChapterⅨ. List of Documents Available for Inspection. .............................................................. . 145
Glossary
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Terms Defined as Description
Company,the Company Defined as Wafangdian Bearing Company Limited
Wazhou Group Defined as Wafangdian Bearing Group Company
the report period, the current
Defined as January 1,2018–December 31,2018
period, the current year
Liaozhou Co.,Ltd Defined as Wazhou Liaoyang Bearing Manufacture Co.,Ltd
Dalian motor Defined as Dalian motor Bearing Co.,Ltd
Wafangdian Bearing Company Limited The Board of
The Board of Directors Defined as
Directors
Wafangdian Bearing Company Limited The
The Supervisory Committee Defined as
Supervisory Committee
Wafangdian Bearing Company Wafangdian Bearing Company Limited The
Defined as
Limited Shareholders’Meeting
Shen Jiao Suo Defined as Shen Zhen Stock Exchange
SRC Defined as China Securities Regulatory Commission
Chapter II. Company Profile and Financial Highlights
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
I. Company Information
Abbreviated name of the stock Wazhou B Stock code: 200706
Listing location of the
Shenzhen Stock Exchange
Company’s stock:
Chinese name of the Company 瓦房店轴承股份有限公司
Abbreviation of Chinese name 瓦轴股份公司
English name of the Company Wafangdian Bearing Company Limited
Abbreviation of English name WBC
Legal representative of the
Meng Wei
Company
Registered address No. 1 Beigongji Street, Wafangdian City, Liaoning Province, China.
P.C 116300
office address No. 1 Beigongji Street, Wafangdian City, Liaoning Province, China.
office P.C 116300
Website http//www.zwz-200706.com
E-mail zwz2308＠126.com
II.Contacts
Secretary of the Board Representative of StockA ffairs
Name Sun Najuan Ke Xin
No. 1 Beigongji Street, Wafangdian No. 1 Beigongji Street, Wafangdian
Correspondence address
City, Liaoning Province, China. City, Liaoning Province, China.
Consulting telephone 0411-39116369 0411-39116732
Fax 0411-39116738 0411-39116738
E-mail zwz2308＠126.com zwz2308＠126.com
III.Place for information disclosure
Information disclosure newspapers Securities Times and Hong Kong Commercial Newspaper
Web address for the annual report as
http://www.cninfo.com.cn
assigned byCSRC.
Place for inquiry of the annual
Investment and Securities Department of the Company
report
IV.Change of Business Registration
No. of Taxation Registration 912102002423997128
manufacture and sales of bearings, bearing components mechanical
equipment, bearing maintenance and technology service,automobile parts
Change of main business since listed and fittings and other related products, lease of mechanical equipment
and buildings, and inspection of bearings and other related mechanical
equipment and measure instruments.
Change of controlling shareholder all
None
previous(if any)
V. Miscellaneous information
CPA hired by the Company
Name of the CPA Shine wing Certified Public Accountants
Floor 9 of A section of Fu Hua mantion, No. 8, North Street of ChaoYang door,
Address of the CPA
Dong Cheng area, Bei Jing.
The name of accountants Sui Guojun Hui Shikui
Sponsoring institution hired by the Company, which is responsible to overseeing the Company’s
operation on a continuous basis:
[ ] Applicable [V] Not applicable
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Financial consultancy institution hired by the Company, which is responsible to overseeing the
Company’s operation on a continuous basis:
[ ] Applicable [V] Not applicable
VI.Financial Highlights
Are there any retrospective adjustments or restatement of financial information of previous year
due to change of accounting policies or correcting of accounting errors?
[V] Yes [] No
In RMB Yuan
2017 % 2016
2018
Before After
After adjustment Before adjustment After adjustment
adjustment adjustment
Turnover(RMB) 2,168,398,656.83 2,190,412,052.05 2,190,412,052.05 -1.00% 2,493,926,556.67 2,493,926,556.67
Net profit attributable to
shareholders of the listed 10,632,169.84 10,182,949.16 10,182,949.16 4.41% 30,872,950.22 30,872,950.22
company(Yuan)
Net profit attributable to
the shareholders of the
listed company after -8,737,823.23 -13,502,647.08 -13,502,647.08 -35.29% -57,771,828.22 -57,771,828.22
deducting ofnon-recurring
gain/loss(RMB)
Net Cash flow generated
-10,858.74
by business operation 228,603,893.98 -2,124,819.67 -2,124,819.67 20,520,061.16 20,520,061.16
%
(RMB)
Basic earnings per
0.03 0.03 0.03 0.00% 0.08 0.08
share(Yuan/share)
Diluted earnings per
0.03 0.03 0.03 0.00% 0.08 0.08
share(Yuan/share)
Net return on equity(%) 0.77% 0.73% 0.73% 0.04% 2.26% 2.26%
2017 % 2016
2018 Before After Before
After adjustment
adjustment adjustment adjustment
Total Assets (RMB) 3,298,167,332.49 3,213,772,171.61 3,213,772,171.61 2.63% 3,553,947,227.09 3,553,947,227.09
Owner’s Equity Attributed
toShareholders of Listed 1,380,023,044.55 1,385,494,874.71 1,385,494,874.71 -0.39% 1,379,337,925.55 1,379,337,925.55
Company(RMB)
“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.
VII. Differences in accounting information under IAS and domestic accounting standard
1. Differences in net profit and net asset under domestic and international accounting standards
Inapplicable
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
2. Differences in net profit and net asset under domestic and overseas accounting standards
Inapplicable
VIII. Financial Data Summary based on Quarters
In RMB Yuan
s nd rd th
1 Quarter 2 Quarter 3 Quarter 4 Quarter
Operating revenue 486,916,871.06 587,951,110.68 551,110,606.32 542,420,068.77
Net profit attributable to the
1,020,973.46 2,293,006.66 2,064,511.90 5,253,677.82
Company’s shareholders
Net profit attributable to the
Company’s shareholders less
777,477.64 -610,701.80 3,573,120.89 -12,477,719.96
the non-recurring profit and
loss
Net cash flows arising from
60,684,129.17 -16,477,533.94 97,809,675.37 86,587,623.38
operating activities
Does there exist significant difference in the foregoing financial data or their total sum from
the relevant financial data as
disclosed in the quarterly reports and/or semi-annual report.
No
IX. Non-recurring gain/loss items and amounts
In RMB Yuan
Amount of Amount of Amount of
Items Remarks
2018 2017 2016
Gain/loss of non-current assets
(includes the neutralized part of the asset 1,714,192.31 -728,247.65 51,018,264.75
impairment provision drawn already)
Gains and losses included in the current period
of government subsidies, excluding those
government grants which are closely related to
8,337,141.38 7,856,994.07 12,488,720.91
normal business and in line with national
policy, or in accordance with fixed standards or
quantities
Debt restructuring gains and losses 4,178,887.79 5,304,472.04 32,573,379.44
The impairment provision of receivables subject
550,000.00
to a separate impairment test is reversed
Other non-business income and expenditures
8,963,464.52 13,120,938.97 9,557,842.80
other than the above
Influenced amount of income tax 4,373,692.93 1,868,561.19 16,993,429.46
Total 19,369,993.07 23,685,596.24 88,644,778.44 --
For the Company‘s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on Information
Disclosure for Companies Offering their Securities to the Public–Non-recurring Gains and Losses and its
non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on Information Disclosure for
Companies Offering their Securities to the Public–Non-recurring Gains and Losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□Applicable √Inapplicable
Chapter III Business Summary
I Principal Businesses in the Reporting Period
The scope of operation is: manufacture and sales of bearings, bearing components mechanical
equipment, bearing maintenance and technology service, automobile parts and fittings and other
related products, lease of mechanical equipment and buildings, and inspection of bearings and
other related mechanical equipment and measure instruments.
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Company has strong manufacturing capability and quality assurance capabilities, extensive
services in railway, automobile, metallurgy, mining and other industries and fields.
II.Significant Changes in the Prime Assets
Prime Assets Description of major changes
The equity asset There were no major changes during the reporting period
Fixed assets There were no major changes during the reporting period
Intangible assets There were no major changes during the reporting period
Projects under construction Reduction of renovation projects during the reporting period
III.Analysis on Core Competitiveness
As the country's largest bearing technology and product r&d and manufacturing base, company
has accumulated more than seventy years practice experience in the field of bearings and related
areas, set up perfect bearing technology innovation system, maintain close cooperation with
domestic scientific research institutes, colleges and universities. As the main drafter of
bearing industry a number of standard, company control the latest technology development trend
in the industry. In technology research and development, product manufacturing, marketing ,
customer services and other aspects have established a significant advantage.
Company improve responsiveness to the market and customer personalized demand, in line with
customer's personalized design and needs of manufacturing processes balancing cost, delivery
time and customer,
The company has complete product service system and 24-hour dynamic service ability product
operating site. And was praised with a good image of the "ten value-added services" by the majority
customers. Company has strong manufacturing capability and quality assurance capabilities,
extensive services in railway, automobile, metallurgy, mining, and other industries and fields.
Company has established strategic cooperative relations with key customers in domestic
equipment applications, carry out the depth of marketing through involvement in customer value
engineer, set firmly up the company's brand and influence in the domestic bearing market, the
company has won the certification qualification of important target markets in the international
market , the international popularity established preliminary.
Chapter IV Discussion and Analysis of the Management
I General
In 2018, the board of directors of the company carry out the basic requirement of high quality development,
firmly grasp the historical opportunity of change, global market supply and demand in the domestic macroeconomic
uncertainty increased, the market competition is more intense and other adverse factors, adhere to improve
operation quality and product quality as the center, to the users of the products with higher cost performance and
high quality products, the full implementation of "profit growth and profits, with a high turnover efficiency of cash
flow, a reasonable return on assets" business principles, strengthen the management, seizes every market and
various development opportunities and timely adjust management strategy, Adhering to the strategy of "quality
first", the company realized the synchronous growth of scale speed and benefit index, continuously enhanced the
competitiveness of the company during the reporting period, and realized profit.
During the reporting period, the company realized operating income of RMB 2,168.4 million, which was
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
1.00% lower than the previous year. Realized net profit of 10.63 million yuan, an increase of 4.41% over the
previous year; The net profit attributable to the owner of the parent company was 10.63 million yuan, an increase of
4.41% over the previous year. By the end of 2018, the company's total assets are 3.3 billion yuan, an increase of
2.63% over the end of the previous year, and the net assets attributable to shareholders of the listed company are 1.3
billion yuan, a decrease of 0.39% over the end of the previous year.
II Analysis on Principal Businesses
1. General
Refer to “I. General” of “Discussion and Analysis of the Management”
2. Revenue and Costs
(1)Revenue
In RMB Yuan
2018 2017
Year-on-year
Proportion in the Proportion in the
Amount Amount increase/decrease
operating revenue operating revenue
Total operating
2,168,398,656.83 100% 2,190,412,052.05 100% -1.00%
revenue
Classified based on sectors
export 293,027,890.14 13.51% 234,072,205.39 10.69% 25.19%
Civil
Including:
456,109,746.33 21.03% 528,390,448.84 24.12% -13.68%
Traffic Bearing
Special Bearing 451,495,303.58 20.82% 498,257,042.55 22.75% -9.39%
Common Bearing 616,503,171.81 28.43% 563,666,702.05 25.73% 9.37%
Industrial income 120,007,315.73 5.53% 98,092,657.93 4.48% 22.34%
others 231,255,229.24 10.66% 267,932,995.29 12.23% -13.69%
Classified based on product
Bearing 1,817,136,111.86 83.80% 1,824,386,398.83 83.29% -0.40%
Componment 120,007,315.73 5.53% 98,092,657.93 4.48% 22.34%
others 231,255,229.24 10.66% 267,932,995.29 12.23% -13.69%
Classified based on regions
Civil 1,875,370,766.69 86.49% 1,956,339,846.66 89.31% -4.14%
export 293,027,890.14 13.51% 234,072,205.39 10.69% 25.19%
(2) Sector(s), Product(s) or Region(s) Taking over 10% of the Operating Revenue or Operating
Profit
In RMB Yuan
Year-on-year
Year-on-year ear-on-year
increase/decrea
Gross increase/decreas increase/decrea
Operating se of gross
Operating costs profit e of operating se of operating
revenue profit rate over
rate revenue over costs over the
the previous
the previous year previous year
year
Classified based on sectors
export 293,027,890.14 262,654,137.84 10.37% 25.19% 27.83% -1.86%
Civil
Including:
456,109,746.33 412,643,553.04 9.53% -13.68% -8.94% -4.71%
Traffic Bearing
Special Bearing 451,495,303.58 391,695,074.06 13.24% -9.39% -8.77% -0.58%
Common
616,503,171.81 482,782,379.85 21.69% 9.37% 5.99% 2.50%
Bearing
Classified based on product
Bearing 1,817,136,111.86 1,549,775,144.79 14.71% -0.40% 0.41% -0.68%
Classified based on regions
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Civil 1,875,370,766.69 1,628,373,541.69 13.17% -4.14% -3.14% -0.90%
export 293,027,890.14 262,654,137.84 10.37% 25.19% 27.83% -1.86%
While adjustment of the statistical caliber for the principal business data took place in the
reporting period, the principal business data with the statistical caliber adjusted at the end
of the reporting period.
Inapplicable
Whether physical sales revenue is greater than the labor income
[V]Yes [ ] No
unite
Business categories Items 2018 2017 Changed by %YoY
Sales set 14,884,738 20,891,094 -28.75%
Bearing
Output set 9,528,633 11,823,014 -19.41%
Inventory set 8,930,168 8,840,027 1.02%
Causes of the change in the year-on-year data by over 30%
inapplicable
(4) Implementation of Important Sale Contracts Concluded at the End of the Reporting Period
Inapplicable
(5) Composition of Operating Costs
Classified based on sectors and products
In RMB Yuan
2018 2017
Classified
Proportion in Proportion in Year-on-year
based on Items
Amount operating Amount operating increase/decease
sectors
costs costs
export 262,654,137.84 13.89% 205,467,061.62 10.89% 3.00%
Civil
Including:
Traffic 412,643,553.04 21.82% 453,145,292.04 24.02% -2.20%
Bearing
Special
391,695,074.06 20.71% 429,351,698.43 22.76% -2.04%
Bearing
Common
482,782,379.85 25.53% 455,501,119.96 24.14% 1.39%
Bearing
Industrial
126,806,466.76 6.71% 98,510,717.23 5.22% 1.48%
income
others 214,446,067.98 11.34% 244,638,709.17 12.97% -1.63%
In RMB Yuan
2018 2017
Classified Proportion Proportion
Year-on-year
based on Item in in
Amount Amount increase/decease
products operating operating
costs costs
Bearing Materials 1,132,132,253.41 59.87% 1,108,764,315.90 59.06% 0.81%
Artificial
Bearing 151,567,145.25 8.02% 153,602,024.31 8.49% -0.47%
compensation
Bearing Depreciation 94,453,784.05 4.99% 98,002,793.91 4.72% 0.27%
Bearing Energy 54,600,153.05 2.89% 52,449,481.69 2.42% 0.47%
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Bearing Transport 3,697,445.80 0.20% 3,989,683.45 0.46% -0.26%
(6) Is there any change in the consolidation scope in the reporting period
No
(7) Is there any significant change or adjustment related situation take place in the Company’s
business, products or services in the reporting period
Inapplicable
(8) Major trade debtors and major suppliers
Note: The units of above date is Tao
Main Clients
Total Sales Revenue of Top 5 Clients(RMB) 293,102,630.93
Ratio of sales revenue in 2016(%) 13.52%
Sales of the top five customers in the proportion
2.56%
of total annual sales
Information of Top 5 Clients
No. Client Name Sales Revenue(RMB) Ratio of sales revenue(%)
1 Frst 69,854,387.46 3.22%
2 Second 63,117,411.00 2.91%
3 Third 61,226,588.00 2.82%
4 Fourth(related party) 55,559,595.00 2.56%
5 Fifth 43,344,650.00 2.00%
Total —— 293,102,630.93 13.52%
Main Clients
Total purchase from top 5 suppliers(RMB) 842,375,469.34
Percentage of purchases from top 5 suppliers on annual total of
17.77%
purchases (%)
Purchases of the top five suppliers The proportion of related party
13.92
purchases in the total amount of annual purchases
Profiles of top 5 suppliers
Percentage in total purchase of
No. Name of suppliers Amount of purchase(RMB)
year(%)
FIrst （sum of three other Companies
1 controlled by the same controlling 485,873,149.74 10.25%
share holders）
2 Second 104,721,129.20 2.21%
3 Third(other related party) 94,789,155.63 2.00%
4 Fourth(other related party) 79,242,605.07 1.67%
5 Fifth 77,749,429.70 1.64%
Total —— 842,375,469.34 17.77%
3. Expenses
In RMB Yuan
Year-on-year
2018 2017 Note to significant changes
increase/decrease
Sales expenses 165,543,842.56 157,721,750.23 4.96%
Administrative
57,666,053.69 57,345,250.36 0.56%
expenses
Financial expenses 41,027,386.88 50,697,810.00 -19.07%
R&D 5,922,083.68 4,065,054.17 45.68%
4. Investment in R & D
Through the research and development of different areas bearing the project, the company in a host of ancillary
areas made breakthrough progress, to achieve a number of bearing domestic alternative, more research and
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
development in the field of the supporting bearing products technology level is reached or exceeded the
international level of similar products product also gradually to the international market, achieve high-end
enterprise market instead of the increase in demand for imports. Through the integration of the company's technical
strength, for the enterprise to provide the opportunity to quickly break through the key technology. With technical
project work to further promote and realize the rapid transformation of enterprise development mode and the
adjustment of product structure, developed a number of high-end products, formation of a number of high-end
manufacturing, to seize a number of high-end market, cultivate a number of high-end customer strategy,
comprehensive inventory of enterprise resources, effectively enhance the core competitiveness of enterprises.
Information of Investment in R & D
2018 2017 Variable proportion
Number of R & D staff (persons) 1,152 566 103.53%
Proportion of R & D staff intotal employees 45.95% 16.73% 29.22%
Amount of investment in R &D, in CNY 93,066,399.09 94,125,670.89 -1.13%
Proportion of investment in R& D in operating
4.29% 4.30% -0.01%
revenue
Amount of capitalizedinvestment in R & D (in CNY) 0.00 0.00 0.00%
Proportion of capitalizedinvestment in R & D in the
0.00% 0.00% 0.00%
total investment in R & D
5.Cash flow
In RMB Yuan
Year-on-year
Item 2018 2017
increase/decrease
Sub-total of cash flow received from operation
1,150,062,852.27 1,036,265,011.79 10.98%
activities
Subtotal of cash flow paid for
921,458,958.29 1,038,389,831.46 -11.26%
operating activities
Net cash flow arising from
228,603,893.98 -2,124,819.67
operating activities
Sub-total of cash flow-in received from investing
1,604,578.24 2,334,016.25 -31.25%
activities
Sub-total of cash flow paid
5,684,584.60 11,304,923.42 -49.72%
for investment activities
Net cash flow arising from
-4,080,006.36 -8,970,907.17
investment activities
Sub-total cash flow received
1,146,584,751.74 1,306,431,915.89 -12.24%
from financing activities
Sub-total cash flow paid for
1,240,474,392.94 1,377,261,165.73 -9.93%
financing activities
Net cash flow arising from
-93,889,641.20 -70,829,249.84
financing activities
Net increase in cash and
130,388,307.69 -84,189,878.98
cash equivalents
Note to the major influence factors for the significant change in the relevant year-on-year data
1.Net cash flow generated by business activities: it mainly refers to the increase in monetary receipts of goods
sold in 2018, while the decrease in the currency paid for goods and services
4.Subtotal of cash outflow from investment activities: the major reason is that fixed assets, such as instruments,
purchased in 2018 decreased significantly
3.Net cash flow generated by investment activities: the cash recovered from the main disposal of fixed assets is
basically the same as the same period, while the capital for the purchase of fixed assets has declined
4. Net increase in cash and cash equivalents: mainly a substantial increase in net cash generated by operating
activities
Note to the significant difference between cash flow from operating activities and net profit
in the report period.
□Applicable √Inapplicable
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
iii . Analysis on Non-Principal Businesses
In RMB Yuan
Percent in
Item Amount Reason Whether it is sustainable
Total profit
Investment income 1,250,000.00 12.15% No
Gain arising from the
-49,309.20 -0.48%
changes in fair value
Impairment of
5,015,222.16 48.75% No
assets
Non-operating
14,491,888.12 140.86% No
income
Non-operating
1,425,061.85 13.85% No
expenses
IV. Situation of assets and liabilities
1. Major change in asset items
In RMB Yuan
End of 2018 End of 2017
Percentage of Statement on
Percent in Percent in
Amount Amount change(%) major change
total asset total asset
Monetary
247,229,860.99 7.50% 82,860,774.83 2.58% 4.92%
capital
Account
1,141,632,991.76 34.61% 1,128,338,013.69 35.11% -0.50%
receivable
Inventories 747,511,054.75 22.66% 693,836,428.55 21.59% 1.07%
Investment
129,270,498.66 3.92% 136,874,108.05 4.26% -0.34%
property
Fixed assets 0.00%
Construction in
661,598,663.85 20.06% 710,247,969.72 22.10% -2.04%
process
Short term loan 48,159,927.20 1.46% 82,689,318.94 2.57% -1.11%
620,000,000.00 18.80% 648,000,000.00 20.16% -1.36%
2. Assets and liabilities measured at fair value
Changes in
Changes in the
fair value The
cumulative Current Current
Openning of the impairment of
Items fair value purchase sales Ending balance
balance current the current
recorded as amount amount
profit and period
equity
loss
Financial assets
1. Financial assets
measured at fair
value and recorded
in current profits
348,234.36 -49,309.20 0.00 0.00 0.00 0.00 298,925.16
and losses
(excluding
derivative financial
assets)
Investment property 136,874,108.10 0.00 0.00 0.00 0.00 0.00 129,270,498.70
Total 137,222,342.50 -49,309.20 0.00 0.00 0.00 0.00 129,569,423.90
Financial liability 0.00 0.00 0.00 0.00 0.00 0.00 0.00
V. Investment
1. Significant non-equity investment in process in the reporting period
In RMB Yuan
13
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Invesme
Fix Total Reasons of
The nt Accumul
Invest asset Anticip income the
item’s amount ated Capital Progres Disclos Disclose
Item ment investm ated at the dfiirence
industr in the investm source s e Date index
way ent or income end of between
y report ent
not 2016 plan and
peirod
actual
Improve the
quality
assurance
ability of Bearing Self-ra
22,860,0 22,860,0 300,000, 300,000,
000.00 000.00 None
railway other Yes manufac ised/ba
00.00 00.00
road, tory nk loan
automobile
bearing and
spare parts.
22,860,0 22,860,0 300,000, 300,000,
合计 -- -- -- -- -- -- --
00.00 00.00 000.00 000.00
VI. Sales of Significant Assets and Equity
1. Sales of Significant Assets
Inapplicable
2. Sales of Significant Equity
Inapplicable
VII. Analysis on Principal Subsidiaries and Mutual Shareholding Companies
Particulars about the principal subsidiaries and mutual shareholding companies which may affect
the Company’s net profit by over 10%.
Leading
Total Operating Net profit
Principal products Net assets Turnover in
Company name Company type assets, in profit (in (in
business and (CNY) CNY
CNY CNY) CNY)
services
Product and
Sale
Liaoyang
Bearing and 19,350,000.0 178,578,204. -51,529,417. 103,928,038. -3,775,001.3
Bearing Subsidiary 1,156,096.62
machine-el 0 82 53 86 5
company
ectrical
equipment
Dalian Product and
10,000,000.0 153,644,484. 146,484,560. -13,144,168. -10,400,890.
Electrical Subsidiary Sale 9,190,934.34
0 16 70 95 53
Equipment Bearing
Wzhou
precision Product and
spherical Sales
194,000,000. 251,549,722. 207,749,901. 139,307,518. -13,090,180. -5,194,115.7
roller Subsidiary Spherical
00 56 27 64 42 6
bearing(Wafa Roller
ngdian) Bearing
Co.,Ltd.
Viii. Structurized Entities Controlled by the Company
Inapplicable
IX. Development Prospect
1.Status quo and development trend of the industry
In 2018, our country economy to maintain the stabilization in slow, steady to good posture,
the highlight of structural economic growth increased, new and high technology industry continues
to increase, the overall market demand to maintain steady growth, especially as the country to
deepen reform, all the way "area" strategy to promote open a number of key projects, such as
14
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
the construction of China's equipment manufacturing industry ushered in the new development
opportunity. With the economic growth in Europe and the United States, the company's high-end
bearing exports increased opportunities. Foreign bearing import cycle lengthened, China's
bearing industry ushered in a rare domestic alternative market.
2.Industry position of the company and opportunities and challenges it faces
The company is the leading enterprise of bearing manufacturing in China, and has participated
in the formulation of many standards in the industry. In recent years, the products focus on
"high-end" and "professional", breaking through the technical bottleneck of the core bearing
of series of high-end products. The establishment of cooperation with a number of research
institutes and universities adds impetus to the company's realization of intelligent
manufacturing and high-end manufacturing, and forms a new profit growth point of the company.
At the same time, the company also faces new challenges. The supply of middle and high-end
bearings is insufficient, and there is a serious surplus of middle and low-end bearings. The
competitive environment of enterprises becomes hotter. Customer demand is more diversified, which
brings great difficulty to production organization.
3.Future development strategy of the company
Develop high-end products, achieve high-end breakthrough, and drive high-quality growth of
business; The implementation of differentiated management, not only focus on products, technology,
market, but also more focused on the core value of customers, improve the core competitiveness
of enterprises; Adhere to quality first, enhance brand influence; To accelerate the pace of reform
and stimulate new vitality of enterprises; The negative factors of overseas trade war should
be partly digested through this channel. By taking advantage of the difference in market
positioning of the six international brands, the company can fully seize the larger market growth
space and bring new profit growth points for the company.
X. Statement of Such Activities as Reception of Survey, Communications, Interview, etc.
1. Registration Form of the Activities, such as Reception of Survey, Communications,
Interviews,etc. in the Reporting Period
Type of Main content involved and material
Time/date Place Way Visitors
visitors provided
Telephone Private Private The company publishes the performance
2018.03.12 Office
communication investor investor forecast, verify the situation.
Telephone Private Private The company will be able to recover and
2018.03.23 Office
communication investor investor take off the hat.
Telephone Private Private Learn about SKF thawing, the company's
2018.08.15 Office
communication investor investor second largest shareholder.
Telephone Private Private
2018.09.25 Office The general information of the company
communication investor investor
Telephone Private Private Learn about SKF thawing, the company's
2018.10.23 Office
communication investor investor second largest shareholder.
Telephone Private Private
2018.11.20 Office The general information of the company
communication investor investor
times 6
Times for organization investor 0
Times for private investor 8
Times for other investor 0
Whether disclose or reveal any un-publish news No.
ChapterⅤ Significant Events
15
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
I. Profit Distribution for Common Stock and Conversion of Capital Reserve into Share Capital
Preparation, Implementation or Adjustment of the Policy for Common Stock Profit Distribution, Especially the
Policy for Cash Dividend Distribution
1.Profit after tax will be rationed among the shareholders upon their shareholding portion after
making up of previous losses and providing of common reserves.
2.The Company adopts a continuous and stable dividend policy.The dividend accumulated in latest
three years shall not be lower than 30%of the distributable profit in the same three years.
3.The Company distribute dividends once a year except for otherwise decided by the
shareholders’meetings.Dividends are distributed upon finanal settlement of each year.The
dividend plan shall be announced within 4 months upon completion of each fiscal year,and
implemented in the 2nd quarter of the current year.
Cash dividend policy of special statement
Whether compliance with the provisions of the company's articles of association
yes
or resolutions of the shareholders' general meeting requirements:
Whethert he standard of share out bonus and the proportion are clear r: yes
Whether related decision-making process and mechanism are completeness: yes
Whether the independent director takes office responsible and play a proper
yes
role:
Whether the small and medium-sized shareholders the chance to fully express
their views and demands;Whether the legitimate rights and interests were yes
protected fully:
Cash dividend policy to adjust or change，whether Conditions and the program Companies cash dividend policy
are transparent: is not to adjust or change.
Profit distribution or common reserve capitalization in the latest 3 years(including the report
year)
Preplan 2018 Year2017 Year 2016
Common share dividend RMB0.4(tax ncluded)of RMB0.4(tax included)of RMB0.1(tax included)of
payable cash for each 10 cash for each 10 shares cash for each 10 shares
shares
Common share dividend
transferred to capital 0 0 0
share
Dividend distribution scheme in last 3 years.
Net profit
attributable to the Company’s shareholders in
to the Company’s theconsolidated statements of the
Year of Amount of Proportion of the
shareholders in yearof dividend distribution Ratio Amount of cash
Dividen Cash cash
the of the net profit attributable to the dividend
d Dividend dividend
consolidated Company’s distributed in
Distribut (including distributed in
statements of the shareholders taken in the other way(s)
ion tax) other way(s)
year consolidated
of dividend statements
distribution
2018 16,104,000.00 10,632,169.84 151.46% 0.00 0.00%
2017 16,104,000.00 10,182,949.16 158.15% 0.00 0.00%
2016 4,026,000.00 30,872,950.22 13.04% 0.00 0.00%
II. Preplan for Profit Distribution and Conversion of Capital Reserve into Share Capital
in the Reporting Period
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RMB Yuan) (tax included) 0.40
Number of shares per 10 shares (shares) 0
Total shares as the basis for the allocation preplan (share) 402600000
16
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Total cash dividends (RMB Yuan) (tax included) 16,104,000.00
Distributable profit (RMB Yuan) 354,961,603.07
Percentage of the cash bonus of the total profits dividends 100
Cash dividend situation
others
Details about the profit allocation or turning capital reserve into share capital
According to the audit report ShineWing accounting firm, the company 2018 annual net profit attributable to
shareholders of the parent company 10,632,169.84 yuan, With the undistributed profit of 362,925,296.98 yuan
at the beginning of the year, the profit for distribution is 373,557,466.82 yuan.According to the 10% of the
net profit of the parent company, the legal surplus reserve is 2,491,863.75 yuan, and the total profit for
the shareholders is 371,065,603.07 yuan, and the cash dividend paid to the shareholders in 2017 is reduced to
16,104,000.00 yuan.The undistributed profit at the end of the period is 354,961,603.07 yuan.The company decided
to the end of 2018 the total share capital of 402 million 600 thousand shares as the base, each of 10 shares
were distributed 0.4 yuan (including tax), a total of 16,104,000Yuan.
III. Implementation of Commitments
1. Commitments finished in implementation by the Company, shareholders, actual
controller,acquirer, directors, supervisors, senior executives or other related parties in
the reporting period and commitments unfinished in implementation at the end of the reporting
period
Inapplicable
2. There existed profit anticipation for the Company’s assets or projects while the reporting
period was still within the duration of the profit anticipation. The Company made explanation
on whether the assets or projects reached the anticipated profit and the cause
Inapplicable
IV. Non-operational Occupancy of the Company’s Capital by the Controlling Shareholder and
its Related Parties
Inapplicable
V. Explanation of the Board of Directors, the Supervisory Committee and Independent Directors
(if any) on the “Qualified Auditor’s Report” issued by the CPAs in the Reporting Period
Inapplicable
VI. Explanation on the Changes in the Accounting Policy, Accounting Estimate, and Accounting
Method in Comparison with the Financial Report of the Previous Year
―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.
17
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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:
Figure prior to Restated figure
Items December Effect on amount on January memo
31,2017 1,2018
Notes receivable 209,923,835.91 -209,923,835.91 -
re
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
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
VII. Explanation on Serious Accounting Errors Occurred in the Reporting Period Necessary
to be Restated Retrospectively
Inapplicable
VIII. Explanation on the Changes in the Scope of the Consolidated Statements in Comparison
with the Financial Report of the Previous Year.
Inapplicable
IX. Engagement/Disengagement of CPAs
CPAs currently engaged
Names of the Domestic Certified Public
Shine wing Certified Public Accountants
Accountants
Reward for of accountants of the Domestic
53
Certified Public Accountants（RMB’0000）
Successive Years Offering Auditing Services 14Years
Names of accountants of the Domestic Sui Guojun Hui Shikui
18
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Certified Public Accountants
The consecutive years of auditing services of
certified public accountants of domestic 2
accounting firms.
Has the CPAs been changed in the current period?
No
X. Listing Suspension or Delisting Possibly to be Confronted with after Disclosure of
the Annual Report
Inapplicable
XI. Matters concerning Bankruptcy Reorganization
Inapplicable
XII. Significant Lawsuits and Arbitrations
Inapplicable
XIII. Penalty and Rectification
Inapplicable
XIV. Integrity of the Company and its Controlling Shareholder and Actual Controller
Inapplicab
XV. Implementation of the Company’s Equit Incentive Plan, Employee Stock Ownership Plan or
other Employee Incentive Measures
Inapplicab
VII. Important Related Transactions
1、The relate transactions related to the day-to-day operations.
2. Related transactions concerning acquisition and sales of assets or equity
Inapplicable
3. Related transactions concerning joint investment in foreign countries
Inapplicable
4. Current Associated Rights of Credit and Liabilities
Inapplicable
5. Other Major Related Transactions
1, daily related transactions in the company disclosed in the cninfo website on April 30, 2019 "Wafangdian City
bearing Limited by Share Ltd on the 2018 annual daily related transactions and related party transactions daily
in 2019 plan announcement (AUDIT) and the report of eleventh section of the twelfth part" of related party
transactions "(5)" related transactions"
XVII. Important Contracts and Implementation
1. Custody, Contacting and Leases
(1) Custody
Inapplicable
(2) Contracting
Inapplicable
(3) Leases
19
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
The company has associated lease please refer to the company in April 30, 2019 at http：//www.cninfo.com.cn
disclosed the "Wafangdian City bearing Limited by Share Ltd on the 2018 annual daily related transactions and
related party transactions daily in 2019 plan announcement" and the report of the twelfth quarter of 5 (3)
2. Significant Guarantees
Inapplicable
3. Entrusting other Person to Manage the Cash Assets
(1) Finance Management on Commission
Inapplicable
(2) Entrusted Loan
Inapplicable
4. Other Major Contracts
Inapplicable
XVIII. Social Responsibility
1.The situation of fulfilingl the social responsibility
As a large state-owned enterprise, the largest shareholder of the company, vaxi group, accepts
the unified leadership of poverty alleviation work of the governments of liaoning province, dalian
city and wafangdian city, and the company accepts the leadership of poverty alleviation work
of vaxi group.Consider the characteristic of enterprise and "state-owned enterprises" actual
situation, the company's poverty alleviation work in accordance with the unified plan of the
provincial party committee and municipal party committee, the complete, with major shareholders
wazhou group synergy foreign mutual establishing the image of "wazhou person" the unity of social
responsibility, positive response to the provincial, city to carry out the work instructions
for poverty alleviation, a special meeting, the deployment of poverty alleviation measures,
formulate precise poverty alleviation plan, determine the method and the way to work, take
advantage of the existing enterprise implementation of the employment, vocational skills training
for poverty alleviation poverty alleviation, legal aid, medical aid, trade for poverty
alleviation poverty relief, etc. The company regularly visits designated helping units to
understand the situation of poverty alleviation targets, find out the basic number .Affected
by the downward pressure of the economy, the market demand of the tile axis is insufficient and
the efficiency declines. The enterprise has some difficulties in operation. However, the company
still provides poverty alleviation funds in the early stage of the Spring Festival in 2017 and
2018 to help the aided units solve their difficulties.The company has successively implemented
targeted and key poverty alleviation measures for more than 80 poor households, which reflects
the social responsibility and responsibility of a state-owned enterprise. Poverty alleviation
is a long-term work, which cannot be accomplished overnight. The company will continue to
strengthen poverty alleviation work in the future, innovate methods and methods, and make more
contributions to the society with our efforts.
XIX. Notes to Other Signficiant Events
Inapplicable
XX. Significant Events of the Company’s Subsidiaries
Inapplicable
20
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Chapter Ⅵ Change of Shares and Particulars about Shareholders
I. Changes in Capital Stock
Before Changes Changes in Shares After Changes
Conversi
New
Shares Ratio Bonus on of Subtota Ratio
Shares Others Shares
Shares Reserves l
Issued
to Share
1.Non-tradable Shares 244,000,000 60.61% 244,000,000 60.61%
a. Promoters’ Shares 244,000,000 60.61% 244,000,000 60.61%
Including：State-owned
244,000,000 60.61% 244,000,000 60.61%
share
2.Tradable shares 158,600,000 39.39% 158,600,000 39.39%
b.B shares 158,600,000 39.39% 158,600,000 39.39%
3.Total 402,600,000 100% 402,600,000 100%
Reason of Changes of Shares
□Applicable √ Inapplicable
The basic situation of stock change.
□Applicable √ Inapplicable
The transfer of shares of
□Applicable √ Inapplicable
Influence from the shareholding movements upon such financial indicators as earnings per share,
net asset per
share of the latest year and the latest accounting period
□Applicable √ Inapplicable
Other information as the Company considers necessary to be disclosed or demanded by the securities
regulatory
authority for disclosing:
□Applicable √ Inapplicable
II. Issuing and Listing
III. Shareholders and Actual Controlling Shareholder
1. Number of Shareholders and Shares
Unit: Share
Total common
Total Total preference
shareholders
preference shareholders with
at
Total common shareholders the voting power
the end of the
shareholders in withthe voting not recovered at the
6,543 month before 6,552 0 0
the reporting powerrecovered end of the month
before the date
period at theend of before the day of
of disclosing
the reporting disclosingthe
the annual
period (if any) annual report
report
Shares held by the shareholders holding over 5% shares or the top ten shareholders
Shares held by the Shares Quantity the end of Number Number of Pledging or freezing
Shareholder names
top ten held by at the ofthe the Status Quantity
21
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
shareholders the the end of reporting non-res restricte of the
top ten the period tricted d shares shares
sharehold reporting Increase/d shares held
ers period ecrease in held
(%) the
reporting
period
Wafangdian Bearing State-owned 244,000,0 244,000
60.61%
Group Corporation shareholder 00 ,000
Foreign 79,300,00 79,300,00
AKTIEBOLAGET SKF 19.70%
shareholder 0 0
BOCI SECURITIES Foreign
1.74% 7,020,138 7,020,138
LIMITED shareholder
Domestic
Huang Junyue 1.53% 6,176,158 6,176,158
shareholder
Domestic
Hu Xiaofeng 0.47% 1,879,277 1,879,277
shareholder
GUOTAI JUNAN
Foreign
SECURITIES(HONGKONG) 0.36% 1,441,206 1,441,206
shareholder
LIMITED
Domestic
Jin Yunhua 0.33% 1,311,256 1,311,256
shareholder
Domestic
Chen Haitao 0.19% 750,896 750,896
shareholder
Foreign private
MAN,KWAI WING 0.18% 713,101 713,101
shareholder
Domestic
Meng Qingliang 0.15% 587,584 587,584
shareholder
About the fact that a strategic investor or There was no relationship and consistent activities between the first big
ordinary corporate became one of the top shareholder and other shareholders or the top ten common stock holders; The
ten shareholders due to placement of new relationship among other shareholders, top ten circulation shareholders, top
shares (if any) (Refer to Note 3) ten circulation shareholders and other shareholders was not clear.
Explanation on associated relationship or
consistent action of the above
shareholders
Shareholding of top 10 shareholders of unrestricted shares
Quantity of unrestricted shares held Share type
Shareholder’s Name
at the end of thereporting period Share type Quantity
AKTIEBOLAGET SKF 79,300,000 B-shares 79,300,000
BOCI SECURITIES LIMITED 7,020,138 B-shares 7,020,138
Huang Junyue 6,176,158 B-shares 6,176,158
Hu Xiaofeng 1,879,277 B-shares 1,879,277
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 1,441,206 B-shares 1,441,206
Jin Yunhua 1,311,256 B-shares 1,311,256
Chen Haitao 750,896 B-shares 750,896
MAN,KWAI WING 713,101 B-shares 713,101
Meng Qingliang 587,584 B-shares 587,584
Zhou Junlin 575,100 B-shares 575,100
Explanation to the associated relationship
or consistent action among the top 10 There was no relationship and consistent activities between the first big
shareholders of non-restricted negotiable shareholder and other shareholders or the top ten common stock holders; The
shares and that between the top 10 relationship among other shareholders, top ten circulation shareholders, top
shareholders of non-restricted negotiable ten circulation shareholders and other shareholders was not clear.
shares and top 10 shareholders.
Note to the top 10 shareholders involved in
margin financing & securities lending (if
any)
22
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
2. Controlling Shareholder
Nature of the controlling shareholder: State-owned holding directly under the Dalian government
Type of the controlling shareholder: corporate Legal Person
Legal
Name of the Controlling Date of Organizatio
Representat Principal business activities
Shareholder incorporation n code
ive/Leader
Bearing and bearing parts, bearing special tools,
tooling, equipment, machinery and equipment,
abrasive, abrasive, casting, auto parts, motorcycle
Wafangdian Bearing Group 9121020024 parts and related industrial products manufacturing
Mei Wei 1995.10.22
Corporation 2386663D and sales; bearing design, repair, maintenance and
technical services; bearing raw materials and
auxiliary materials procurement and sales; housing
rental, equipment leasing.
Equity in other domestic
and foreign listed
companies held by the
actual controler by means
of control and mutual
shareholding in the
reporting period
Change of Controlling Shareholder in the Report Period
□ Applicable √ Inapplicable
3. Actual Controller
Nature of the actual controller: State-owned assets regulatory agency directly under the Dalian government
Type of the actual controller: corporate
Legal Establishin Organizati Register
Representative g Date on Code Capital
On behalf of the people's
government of dalian, the
people's government
shall perform the
Dalian Municipal Government State-owned
Mei Wei 2004.09.30 No functions and
Assets Supervising and Managing committee
responsibilities of the
state-owned assets, and
supervise and administer
the state-owned assets.
Equity in other domestic and foreign listed
companies held by the actual controler by Dalian Heavy industry（002204）、Dalian Port（601880）、DTPC（600719）、
means of control and mutual shareholding in DA HUA B（900951）
the reporting period
Change of the actual controller in the reporting period
Inapplicable
Block Diagram of the Ownership and Control Relations between the Company and the Actual Controller
23
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Actual Controller controlled the Company by trust or other asset management method.
□ Applicable √ Inapplicable
4. Other shareholders with more than 10% shares
Name
Legal Representative Date of Capital Main Business
establishment
Bearings, seals and relative
AKTIEBOLAGET SKF Alrik Danielson 1907.01.01 1，138，000，000(SKR) products, and relative
services
5. Shareholding Reduction Restriction on the Controlling Shareholder, the Actual Controller,
the Reorganizing Party and other Commiting Party
Inapplicable
Chapter Ⅶ. About the Preferred Shares
Inapplicable
Chapter Ⅷ Directors, Supervisors, Senior Executives and Staff
I. Changes of Shares held by Directors, Supervisors and Senior Management
Name Position Office Shares Name Position
Office Status Starting Date Status Gende Starting Expiry Date SharesHe Held on Office Status
Gender Age r Age Date of Tenure ld on Increa Decrease Dec 31, Gender Age
of Tenure Jan se 2016
1,2016
Meng Wei Chairman Incumbent Male 51 2015.08.25 0 0 0 0
Zhao Yang Director/GM Incumbent Male 54 2017.03.16 0 0 0 0 0
Sun Maolin Director Incumbent Male 55 2015.09.16 0 0 0 0 0
General
Femal
Sun Nanjuan accountant,se Incumbent 51 2013.06.26 0 0 0 0 0
e
crtory of
24
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
board
Zhang Xinghai Director Incumbent Male 51 2015.09.16 0 0 0 0 0
Chen Jiajun Director Incumbent Male 52 2013.06.26 0 0 0 0 0
Tang Yurong Director Incumbent Male 57 2015.09.16 0 0 0 0 0
Femal
Fang Bo Director Incumbent 47 2013.06.26 1,500 0 0 0 1,500
e
Independent
Liu Yuping Incumbent Male 63 2016.05.18 0 0 0 0 0
Director
Independent Resignati Femal
Sun Kun 61 2018.05.18 0 0 0 0 0
Director on e
Independent
Wen Bo Incumbent Male 56 2015.06.18 0 0 0 0 0
Director
Independent Femal
Liang Shuang Incumbent 54 2017.05.18
Director e
President of
Sun Shicheng Supervisory Incumbent Male 55 2015.09.16 0 0 0 0 0
Committee
Femal
Li Xiumin Supervisory Incumbent 56 2013.06.26 0 0 0 0 0
e
Wang Fuxing Supervisory Incumbent Male 47 2016.05.18 0 0 0 0 0
Femal
Sun Yongsheng Supervisory Incumbent 57 2015.03.10 0 0 0 0 0
e
Femal
Wang Lin Supervisory Incumbent 38 2013.06.26 0 0 0 0 0
e
Tan Jianguang Vice-G.M. Incumbent Male 55 2015.01.06 0 0 0 0 0
Wang Jiyuan Vice-G.M. Incumbent Male 53 2018.04.25
Resignati
Zhang Shiyin Vice-G.M. Male 47 2017.02.24 2018.04.20 0 0 0 0 0
on
Total -- -- -- -- -- -- 1,500 0 0 0 1,500
II. Change of Directors, Supervisors and/or Senior Executives
Names Office Taken Type Date Cause
Zhang Shiyin Vice-GM resignment 2018.04.20 Work change
III. Posts Holding
Work Experience of Directors, Supervisors and Senior Management in Current Office.
(1) Director
Mr.Meng Wei, was born in April 1968, Master Degree Candidate, Bachelor's degree of the university,
the master of management, Senior Administration, engineer joined in the work in August, 1990.
He has successively held the posts of deputy general manager of WBC, the general manager, the
labor Union chairman, secretary of the commission for discipline inspection, the deputy secretary
of the party committee and the director of WBGC. Now he work as the secretary of the party committee
and the chairman of the board of WBGC, the chairman of WBC from August, 2015.
Mr. Zhao Yang, born in October 1965. 1989 graduated from the HeFei University of Technology of
mechanical design and manufacturing expertise, university education, to work in 1989 in ZWZ,
senior engineer. Huamei served as quality assurance manager ZWZ bearing company; assistant chief
engineer of ZWZ ZWZ Ag; assistant secretary of Department of technology and quality; quality
assurance department ZWZ Corporation Deputy Minister and the quality of the office director,
general manager of quality assurance department; ZWZ Corporation assistant market sales
department minister; ZWZ group deputy general manager of the company and the market sales
department minister; director and general manager of marketing headquarters ZWZ group company.
25
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Since August 2015, he served as director of ZWZ group company, in charge of the technical quality
of the work. now his is the GM.
Mr. Zhang Xinghai, was born in October 1968, university culture, professor senior accountant.
Since joining Wazhou in 1991, he has successively held the posts of deputy chief accountant and
board secretary of WBC, director, chief accountant and board secretary of WBC, now he is held
the post of the chief accountant of WBGC.
Mr. Sun Maolin, was born in December 1964, university culture, researcher professor level senior
engineer. Joined in work in August, 1988, he has assumed as minister of manufacturing department,
minister of Sales & Marketing Department of WBC, minister of Planning and Development Department,
general-manager assistant and deputy director of the Technology Center of WBGC, deputy
general-manager of WBGC. Now he work as the general manager of WBGC.
Mr. Chen Jiajun, was born in December, 1967, university culture, economic manager and statistician,
joined in work from August, 1990. He worked as section chief, assistant minister deputy minister
and minister of operation and managing department, assistant general manager and charger of
Operation and managing department of WBGC. Now he works as charger of Operation and managing
department and deputy general manager.
Mrs. Sun Najuan, was born in October 1968, professor senior accountant, master degree. joined
in work from September, 1990, she worked as accountant in Financial Division, section leader
of Checking Division of WBGC, general manager assistant of Material Providing Company of WBC,
and the general manager assistant of Sales Company of WBC, the deputy chief accountant of WBGC .
Now she works as chief accountant and the secretary of board of directors of WBC.
Mr. Tang Yurong was born in 1962, junior college degree, electrical engineer. He hold the post
of Dealer network development manager in SKF since 1989, director and general manager from 1996
to 2004 in SKF China, global marketing director of industry department in SKF from 2004 to 2007,
the chairman of arcelor auto in SKF China from 2007 to 2008, the global chairman of one bearing
brand in SKF, the senior deputy chairman in SKF Group and the chairman of special enterprise
department from January of 2015 to now, the chairman of SKF China and industry market from May
of 2015 to now, the chairman of industry market Asia from February, 2016 to now.
Mrs. Fang Bo, was born in June, 1972, bachelor degree. She has served as auditor in PWC Accountant
Firm since 1994. She joined the SKF(China) Co.Ltd in 1997, used to be finance manager in its
subsidiary company, finance director investment company. Now she occupies the finance manager
of SKF(China) Co., Ltd and Consultation Co.Ltd, and capital department manager in SKF China region.
From October 2018, she hold the post of finance manage in SKF China headquarters.
(2)Independent director
Mr.Wen Bo, was born in 1963, granulated the law major in CUPL, he has hold a post in Dalian Justice
Bureau, now he is the initiate partner of Liaoning Huaicheng Law Firm, the local legislation
expert advisor of Dalian municipal people's congress standing committee, the committee member
in expert advisory committee of major issues of the state-owned assets supervision and
administration commission in Dalian.
Ms. Sun kun, born in 1958, Chinese nationality, PhD candidate, professor of accounting, master
tutor. Since 1982, he has been working in dongbei university of finance and economics,
successively serving as teaching assistant, lecturer and associate professor of dongbei
university of finance and economics. He served as deputy to the ninth liaoning provincial people's
congress, deputy secretary-general of liaoning provincial internal audit association, and
director of liaoning provincial audit association. Moderator of the hearing committee on
administrative punishment of certified public accountant industry of the finance department of
26
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
liaoning province. From May 2002 to March 2008, served as the independent director of dalian
dayang trands co., LTD. Currently, he is a member of the academic committee of China internal
audit association and a professor of dongbei university of finance and economics.
Mr. Liu Yuping, was born in August 1956, professor. After graduation, he has been teaching at
Law school of Dongbei University of Finance and Economics. Now he assumed as director of Law
school teaching department of University of Finance and Economics and pluralizes the following
duties: arbitrator of Dalian Arbitration Committee, Lawyer of Liaoning Zhenghe Law Firm; Law
counselor of Liaoning Dafeng Real Estate Company, Liaoning Wuhuan Import and Export Company,
Economic and Technological Development Company founded by Dongbei University of Finance and
Economics; Vice president of Liaoning Institute of Constitutional and Administrative Law. He
has abundant knowledge of law. Now he held the position of the independent director in the Hua
Dong Numerical Control Limited Company.
Mrs .Liang Shuang, Born in 1965, Chinese nationality, Ph.D., professor. Since 1990, at the Dongbei
University of Finance and Economics, the Dongbei University of Finance and Economics as assistant
professor of Materials Department of economic management, lecturer, associate professor, Dongbei
University of Finance and Economics School of accounting, Dongbei University of Finance and
Economics School of accounting training center serves as the financial department minister. From
2003 to 2007 he served as the Tenth CPPCC member of Dalian City, from 2008 to 2012, he served
as the Dalian Municipal Committee of the Eleventh CPPCC, from 2013 to 2017 served as the Dalian
Municipal Committee of the CPPCC National Committee of the twelfth. She still served as Dalian
Sunasia sixth independent directors.
(3)Supervisor
Mr.Sun Shicheng was born in December 1964, university culture, Senior Administration, joined
in work in 1987,he worked as the section chief in organization department and organizer in Party
Committee of WBGC, party branch secretary of Xibei sales company, secretary of Huabei sales
company, deputy general manager, the minister of organization department, and the chairman of
the labor union. Now he work as the labor Union chairman, deputy Secretary of Communist Party
of WBGC, staff director and organization department of WBGC.
Ms. Li Xiumin, was born in May 1962, junior college degree, senior accountant. Joined in work
in November 1980, she has successively held the posts of accountant in financial audit department,
financial inspector, financial section chief, assistant minister, vice minister and so on, now
she is held the post of minister in financial audit department of WBGC.
Mrs. Wang Lin, was born in September 1981, university degree, assistant economist. Joined in
work in July 2004, she has successively held the posts of the legal counsel，office director,
minister assistant，deputy minister and minister in credit management department of WBC. Now
she is held the post of general manager of Import and Export Corporation.
Mr. Sun Yongsheng, wad born on July 1962, university degree, engineer. Joined in work August,1987,
she has successively held the posts of minister assistant, deputy minister of manufacture
engineering department, minister of safety and equipment energy department, the factory manager
of the seventh finished product factory, now he work as the factory manager of the second finished
product factory.
Mr. Wang Fuxing, was born in June, 1972, university degree. Since joined in work in our company
from 1993, has successively held the posts of the minister of financial department of Wazhou
Group equipment manufacturing company, financial manager, Deputy Secretary of Party General
Branch and chairman of the labor union of Wazhou Group Precision turntable company, now he hold
the post of deputy director of general office of WBGC.
27
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
(4) Top management
Mr. Tan Jianguang, born in December, 1964, technical secondary school, assistant engineer. Joined
in work in August 1986, he has successively held the posts of workshop director in cage branch,
salesman, section chief, deputy general manager and genera manager of Marketing Departmen,
general manager assistant of WBC, the general manager of railway department, and the general
manager of railway bearing sales company. Now he hold the post of deputy general manager of WBC.
Mr. Wang jiyuan , was born in December 1966. Graduated from liaoning university industrial
economics major, university degree. Successively served as assistant director of the business
management department, assistant director of the planning and finance department, deputy director
of the business management department, and director of the planning and finance department of
the company. Now he is the deputy general manager of the company.
Posts in Shareholder’s Company
√Applicable □Inapplicable
Whether receiving
Starting Expiry
Name Company Name remuneration
Position Date Date
from other
of Tenure of Tenure
companies
Chairman of Board of
Meng Wei Wafangdian Bearing Group Corporation 2016.04.11 Y
Director
Sun Maolin Wafangdian Bearing Group Corporation Director .GM. 2017.02.24 Y
Zhao Yang Wafangdian Bearing Group Corporation Director N
ZhangXinghai Wafangdian Bearing Group Corporation General accountant Y
Chen Jiajun Wafangdian Bearing Group Corporation VGM Y
Sun Najuan Wafangdian Bearing Group Corporation Director N
Sun Shicheng Wafangdian Bearing Group Corporation deputy Secretary of
Communist Party of W 2017.12.20 Y
BGC,the union president,
Li Xiumin Wafangdian Bearing Group Corporation Minister of auditing Y
Wang Fuxing Wafangdian Bearing Group Corporation Financial Manager Y
Tang Yurong SKF (China) Co,. Ltd.Rgion President 2015.05.01 Y
Fang Bo SKF (China) Co,. Ltd.Rgion Financial Charger 2009.04.01 Y
Other Posts
√Applicable □Inapplicable
Whether
Starting receiving
Expiry Date
Name Other Company Name Position Date of remuneration
of Tenure
Tenure from other
companies
Meng Wei Wazhou group (USA) bearing co., LTD Chairman N
Meng Wei Wazhou group (USA)(USA) R & D Center Co. LTD Chairman N
Meng Wei Leipzig Ball and Roller Bearings Limited (KRW) Chairman N
Management
Meng Wei Wazhou Europe Investment Holdings Co. LTD N
Director
Dalian Guangyang Wazhou Auto Bearing
Meng Wei Chairman N
Co., Ltd.
Meng Wei Dalian Di Ye Ji Kai Wazhou Industry Co. LTD Chairman N
Sun Maolin Wazhou group (USA)(USA) R & D Center Co. LTD director N
Sun Maolin Wazhou group (USA) bearing co., LTD director N
Zhao Yang Leipzig Ball and Roller Bearings Limited (KRW) counselor N
28
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Dalian Wazhou Fengyuan Machinery Co.,
Zhao Yang Chairman N
Ltd.
Zhang
Wazhou Group Wind Power Bearing Co.,LTD Chairman N
Xinghai
Zhang
Wazhou Group (USA) Bearing Co., LTD supervisor N
Xinghai
Zhang Liaoning northern metal supply chain
Chairman N
Xinghai company.
Zhang Management
Wazhou Europe Investment Holdings Co. LTD N
Xinghai Director
Chen Jiajun Dalian Di Ye Ji Kai Wazhou Industry Co. LTD director N
Dalian Guangyang Wazhou Auto Bearing
Chen Jiajun director N
Co., Ltd.
Chen Jiajun Wazhou group (USA) bearing co., LTD director N
Shanghai Aimuyi ElectroMechanical Equipment
Sun Najuan director N
Co., LTD
Wafangdian Bearing Group National Bearing
Li Xiumin supervisor N
Engineering Technology Research Center Co. LTD
Li Xiumin Wazhou Group Precision Forging Co.,LTD supervisor N
Liaoning northern metal supply chain
Wang Fuxing director N
company.
Wang Fuxing Wazhou Group Wind Power Bearing Co.,LTD supervisor N
Sun
Wazhou Group Wind Power Bearing Co.,LTD director N
Yongsheng
III. The Remuneration of Directors, Supervisors and Senior Management
The company shall strictly implement the company's salary assessment system and determine the
salary level according to the salary level of the person in charge of a state-owned enterprise
in dalian and the achievement of the business objectives set by the board of directors at the
beginning of the year.
supervisors and senior management
Unit:0000'Yuan
Remuneration
Total remuneration
Name Position Gender Age Office actually received at
received from the
Status Company
the end of the
reporting period
Meng Wei Chairman Male 51 Incumbent Y
Sun Maolin Director Male 55 Incumbent Y
Zhao Yang Director Male 54 Incumbent 71.53 N
Sun Najuan Director Female 51 Incumbent 68.04 N
Zhang Xinghai Director Male 51 Incumbent Y
Chen Jiajun Director Male 52 Incumbent Y
Tang Yurong Director Male 57 Incumbent Y
FangBo Director Female 47 Incumbent Y
President of
Sun Shicheng Supervisory Male 55 Incumbent Y
Committee
Li Xiumin Supervisory Female 56 Incumbent Y
Wang Fuxing Supervisory Male 47 Incumbent Y
Sun Yongsheng Supervisory Male 57 Incumbent 25.21 N
Wang Lin Supervisory Female 38 Incumbent 18.52 N
29
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Tan Jianguang Vice-G.M. Male 55 Incumbent 68.93 N
Wang Jiyuan Vice-G.M. Male 53 Incumbent 21.95 N
Independent
Liu Yuping Male 63 Incumbent 3.6 N
Director
Independent
Wen Bo Male 56 Incumbent 3.6 N
Director
Independent
Liang Shuang Female 54 Incumbent 3.6 N
Director
Independent
Sun Kun Female 61 Incumbent 3.6 N
Director
Zhang Shiyin Vice-G.M. Male 47 Resignation 5N
Total -- -- -- -- 293.58
VI. About Employees
1. Age Structure
The subject of share 2,462
Sub-company Precision Motor Company 751
Total 3,213
Total staff the company shall pay to 3,213
The number of retired workers need company pay the cost
4,398
is
Professional composition of staff
Type Member
Production staff 2,370
Sale staff 189
Technology staff 135
Financial staff 57
Administrative staf 462
Total 3,213
Education
Type Member
Master’s degree 14
University graduation 399
Junior college graduation 626
below junior college 2,330
Total 3,369
2.Remuneration Policy for Staff
Company based on relevant laws and regulations of the state and the government labor department
a series of related policies, combined with the actual situation of the company, the company
developed the company's salary evaluation system. Bingzhe "adhere to the fair, give consideration
to efficiency, quality of work, the performance of priority" principle, and constantly improve
the salary system, strengthen incentive mechanism, and fully mobilize the enthusiasm of the staff
of the company.
3. Training Program
In the year of 2018, the company continues to strengthen training management, increase training
investment, carefully organize and scientifically plan, and make continuous efforts to build
a learning company and cultivate learning employees, and achieve good results. The company's
30
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
training work this year is summarized as follows.
1. Focus and innovation of training
This year, the company improves the training quality, innovates the training content, raises
the study consciousness, enhances the teaching quality, strengthens the training supervision,
has obtained the big achievement. The company has held key training programs including sending
overseas institutions for training, operating managers to guangyang, THK tile axis company for
training, "double certificates" training for engineering and technical personnel, open class
training for technical experts, specialized classes for workers, and electric-clamp training
for operation managers.
2. Cultivate the awareness of learning
The main problems of the present contingent of skilled workers are the shortage of young technical
workers and the low educational level. In order to improve the learning awareness of technical
workers, the company established a special class for workers based on the training center of
the tile axis, and the class was officially opened in March. A total of 57 people successfully
passed the adult college entrance examination and participated in the study.
3. Improve teaching quality
In terms of teacher arrangement, the company, together with relevant units, employs internal
and external business experts as the teaching teachers. For example, in cooperation with the
import and export company and dalian jiayin English training school, we will offer intensive
English training courses for the project personnel, and employ American foreign teachers to teach
in English, including basic English knowledge, professional English knowledge of bearing,
etiquette and culture of European and American countries.
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
Chapter VIIII. Corporate Governance
I. General
During the report period, the Company had continuously observed Company Law, Securities Law,
and Guidelines of Corporate Governance for Listed Company and relevant regulations to improve
and enhance its corporate governance.
1.1 The holding of the shareholders, board of directors and board of supervisors, the voting
procedures and the formation of the resolutions were totally subject to these regulations.
1.2 The Company has made its internal management systems and regulations for restriction of
budgeting, purchasing, logistics and sale, etc, and executed them strictly.
1.3 The company has separated business, personnel, assets, interior organization and finance
from its holding shareholder:
(1) The Company had independent operations itself, with its business separated from its holding
shareholders;
(2)The Company was independent in terms of its personnel, labor and salary management, and had
its own independent labor and personnel management systems. Except the Chairman of Board of
Directors of the parent company Wafangdian Bearing Group Corporation who occupies as the Chairman
of the Company, the General Manager, Deputy-General Managers and the Finance Controller of the
Company were all independent from the controlling shareholder.
(3)The production system, auxiliary production system and supplementary facilities of the Company
were independent from the controlling shareholder.
(4)The Company has separated the accounting from the controlling shareholder. The Company carried
out independent finance and accounting on its own and paid taxes independently.
(5)The Company has established the organizations independent on the holding shareholder
Does there exist any difference in compliance with the corporate governance, the PRC Company
Law and the relevant provisions of CSRC.
Yes √No
II. Independence in Business, Personnel, Assets, Organization, Finance, etc. from the
Controlling Shareholders
The company has separated business, personnel, assets, interior organization and finance from
its holding shareholder with independent operation ability:(1) The Company had independent
operations itself, with its business separated from its holding shareholders;(2)The Company was
independent in terms of its personnel, labor and salary management, and had its own independent
labor and personnel management systems. Except the Chairman of Board of Directors of the parent
company Wafangdian Bearing Group Corporation who occupies as the Chairman of the Company, the
General Manager, Deputy-General Managers and the Finance Controller of the Company were all
independent from the controlling shareholder. (3)The production system, auxiliary production
system and supplementary facilities of the Company were independent from the controlling
shareholder. (4)The Company has separated the accounting from the controlling shareholder. The
Company carried out independent finance and accounting on its own and paid taxes independently.
(5)The Company has established the organizations independent on the holding shareholder.
32
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
III. Horizontal Competitions
Inapplicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Report Period
1. Annual General Meeting in the Report Period
Proportion of
investors in
Sessions Meeting Types Meeting date Disclosure date Disclosure index
total
participants
2017 Annual Annual General http://www.cninfo.com.
80.36% 2018.05.18 2018.05.19
General Meeting Meeting cn
2. Request by the Preference Shareholders with the Vote Recovered for an Extraordinary General
Meeting
Inapplicable
V. Duty Performance of Independent Directors in the Reporting Period
1. Attendance of Board Meeting and Shareholders’ Meeting
Attendance of Board Meeting
Attendan
The number of Non-attendanc ce at the
Meetings directors to e in person for general
Attendance Attendance by Absence
Name required to attend the two meeting
in person facsimile rate
be present board of consecutive of
directors times sharehol
ders.
Liu Yuping 4 3 1 0 0 N 1
Wen Bo 4 3 1 0 0 N 1
Liang Shuang 4 3 1 0 0 N 1
Sun Kun 2 1 1 0 0 N 0
Notes to Failure to Personally Attend Board Meetings Successively Twice
Inapplicable
2. Objection of independent directors on some relevant issues
Did any of independent directors put forth any objection on some relevant issues
No
3. Other Note to Duty Performance of Independent Directors
Explanation on acceptance of or failure to accept an independent director‘s advice to the Company
According to the relevant regulations and requirements of Company Law and Guideline on
Establishing Independent Director System in Listed Company, Articles of Association, earnestly
fulfilled the obligations of laws and regulations, articles of
association and independent director system, actively attended the board meetings and
shareholders‘ general meetings, examined and guided the production and operation of the Company,
proposed independent opinions on significant events, put forward many valuable and expert advices
33
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
about internal control and daily operation decisions, fulfilled the duties diligently, faithfully,
brought their roles into full play and effectively safeguarded the interests of listed companies
and general shareholders.IV. Performance of Special Committees under the Board of Directors in
the Report Period
VI Duty Performance of Special Committees under the Board of Directors in the Reporting Period
The board of directors of the company under the nomination, remuneration and appraisal, auditing
and strategic committee, the professional committee, according to their respective functions
and duties to the development of the company proposed relevant professional opinions and
suggestions, to promote the normative development of the company. Especially the Board Audit
Committee full participation in the company's annual audit work, including participation in the
formulation of the annual audit plan, audit annual audit report draft and eventually formed the
draft. Board of directors of the audit committee of the company audit reports, periodic reports
for special consideration; the board Nomination Committee for consideration by the company on
the election of chairman of the board, board of directors and the general manager bill, and
recommended to the board.
VII. Work Summary of the Supervisory Committee
Did the Supervisory Committee find any risk existing in performing the supervision activities
in the reporting period
No
VIII. Assessment and Incentive Mechanism for Senior Executives
Company implement "releasing" management approach in which base annual salary plus benefit
annual salary for salary of director (not including the independent director), senior management
personnel (including supervisor). The remuneration and appraisal committee carry out
comprehensive evaluation assessment for performance of the board directors and senior management
personnel, determine the assessment principles according to assessment and procedures, carry
out individually score, evaluation, summary for the directors and senior managers. Directors,
executive officers personal advance monthly salary according to the basic salary, cash out after
annual appraisal. Company's performance assessment and incentive mechanism has played a positive
role in supervision, spur and motivate for directors, senior management.
IX. Internal Control
1. No particular case found involving material defects in the internal control during the
reporting period
No
2. Self-assessment Report of the Internal Control
Date of disclosing the full text of the internal
2019.04.30
control assessment report
Index of disclosureof the full text of the internal
http：//www.cninfo.com.cn
control assessment report
Criteria for affirming the defects
Categories Financial Report Non-financial Report
1. Fraud by senior management, including financial 1. The enterprise lacks democratic
reporting fraud; Improper use of assets; False decision-making procedures;
Qualitative criteria income, expenses and liabilities; Improper 2. Unscientific decision-making
acquisition of assets; Tax evasion and high-level procedures;
fraud; 3. Violating national laws and regulations,
34
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
2. Restatement of financial statements issued to such as environmental pollution;
reflect corrections to misstatements; 4. Frequent occurrence of negative news
3. Certified public accountants find material by media;
misstatement in the current financial report, but the 5. The results of internal control
internal control fails to find such misstatement in the evaluation, especially major or important
operation process; defects, have not been corrected;
4. The internal control and supervision of the 6. Lack of system control or systematic
company's financial reports by the company's audit failure of system in important businesses.
committee is invalid, including that the audit
committee is unable to perform effective supervision
over the internal control of the company's financial
reports or does not have the qualification and ability
to monitor the accuracy of financial reports;
5. The defect that the total amount of related party
transactions exceeds the amount of related party
transactions approved by the general meeting of
shareholders due to the failure to imp
Referring to the quantitative standard of
internal control defects in financial
reports, the quantitative standard for
determining the importance of internal
control defects in non-financial reports is:
Major defects with direct property losses of more
If the amount of direct property loss
than 10 million yuan; 5 million yuan (including)-10
Quantitative criterion caused is more than 500,000 yuan, it shall
million yuan important defect; General defects below
be deemed as a major defect; It is
5 million yuan.
considered as an important defect if the
amount of direct property loss is less than
or equal to RMB 500,000 yuan; Defects
other than major or important defects shall
be deemed as general defects.
Number of material defects in the
0
financial statements
Number of material defects in the
0
non-financial statements
Number of important defects in the
0
financial report
Number of important defects in the
0
non-financial report
X. Internal Control Audit Report
Review Opinions in the Internal Control Audit Report
It is our opinion that,as of December 31,2018,the headquarter of Wafangdian Bearing Co., ltd .has maintained
efficiency of internal control on financial statements in every material aspect.
Disclosure of the internal control audit report Disclosure
Disclosure Date of Internal Control Audit Report 2019.04.30
Disclosure Index of Internal Control Audit Report http://www.cninfo.com.cn
control audit report Standard unqualified auditor’s
Type of the onions in the internal control audit report
report
Are there any material defects in the non-financial report No
Has the CPAs issued a qualified auditor’s report of internal control.
No
Does the internal control audit report issued by the CPAs agree with the self-assessment report
of the Board of Directors
Yes
Chapter X. Corporate Bonds
Inapplicable
35
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
ChapterXI. Financial Report
I.Audit Report
Opinion Type of Audit Report Standard unqualified audit opinion
Date of Audit Report April26,2019
ShineWing Certified Public Accountants Dalian
Name of Audit Organization
Branch
No. of Audit Report XYZH/2019DLA10116
Name of the auditor Sui Guojun Hui Shikui
1. Audit Opinions
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.The Basis of Audit Opinions
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
As of December 31, 2018, as The main audit procedures carried out for addressing the key
mentioned in notes VI.6to the audit matters are as follows:
consolidated financial 1. Evaluate the design of internal control of the procurement
statements of Wafangdian and payment cycle, determine whether it is implemented, identify
Bearing Co.,LTD, the book major internal control defects, and conduct operational
balance of inventory is effectiveness tests;
766,633,8 00yuan, the amount 2. Combined with inventory monitoring, inspect the appearance
of inventory depreciation and shape of inventory to know whether its physical shape is
reserve is 19.1227 million normal;
yuan, and the depreciation 3. Check whether the basis and method of the provision for
reserve is 18.0533 million inventory depreciation are consistent in the earlier and later
yuan less than the previous periods;
year. It is an important 4. According to the valuation method of the lower of cost and
36
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
factor affecting the total net realizable value, evaluate the data, assumptions and
profit and has a significant accounting methods based on the inventory depreciation reserve,
impact on the financial and consider whether there is conclusive evidence to calculate
statements. To this end, we and determine the net realizable value of inventory and check
identified inventory its rationality;
impairment as a key audit 5. Considering the determination principle of the net realizable
matter. value of inventory, check the correctness of the calculation of
net realizable value (sufficient but not excessive);
6. Check the changes in the inventory depreciation provision of
previous years for the current period, check whether the
calculation and accounting treatment of inventory depreciation
provision for resale are correct, and whether they are
consistent with the amount of relevant profit and loss items.
2.Revenue recognition
Key Audit Matter How the matter was addressed in the audit
Bearing sales revenue and profit The main audit procedures carried out for addressing the key
to profit impact. The audit matters are as follows:
recognition of revenue depends 1. Evaluated and tested the management's internal control
on whether the product sales can of sales and collection;
properly evaluate whether they 2. Perform the analytical review procedure and analyze
meet the risk reward transfer whether the changes of income and gross profit rate are
conditions in the sales reasonable;
contract. Due to the complexity 3. Select sales contract samples and check the consistency
of commercial agreements, between the contract price and the actual settlement price;
important judgments need to be 4. Select samples of income transactions recorded in this
made respectively. To this end, year, check the consistency of book income, sales invoice
we identified revenue as a key and confirmation sheet to customers, and evaluate whether
audit matter. relevant income confirmation conforms to the income
confirmation accounting policy of the company;
5. Selected samples to confirm transactions with major
customers and verify the authenticity and accuracy of sales;
6. Select samples for the delivery records before and after
the balance sheet date, check the delivery records, customer
confirmation forms and other supporting documents, and
evaluate whether the revenue is included in the appropriate
period.
3. Land acquisition and storage of the old factory area of the subsidiary company, wa shaft
liaoyang bearing manufacturing co., LTD
Key Audit Matter How the matter was addressed in the audit
The land in the old site of The main audit procedures carried out for addressing the key
Liaoyang Bearing Company, a audit matters are as follows:
subsidiary of Wafangdian Bearing 1. Obtain the acquisition contract of state-owned land use
Co.,LTD, was successfully right of liaoyang city signed by the audited unit and
acquired and saved this year. The liaoyang land reserve center, and check the accuracy of the
net income was confirmed as RMB recorded amount of creditor's rights.
4,387,500 after deducting RMB 2. Checked the land listing announcement and personally went
31,202,900 as liquidated damages to liaoyang land reserve center to interview the acquisition
for the land replacement and storage issues and check the collection situation after
contract in 2009 from the the period to confirm the authenticity of the transaction.
transfer income of RMB 3. Check the book balance of the newly built factory land and
35,590,400. As this business is plant purchase expenditure on the acquisition and storage
an unconventional transaction date during the relocation, and confirm the authenticity of
and involves a large amount of the income generated from the acquisition and storage.
money, we determine this 4. Obtain the arbitration result of compensation for land
transaction as a key audit item. replacement breach with Baolin Company, and confirm the
breach loss according to the result.
4.Other Information
37
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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) Uderstand the internal controls related to the audit to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management.
38
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
(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 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.
39
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
II. Financial Statement
The unit of the financial statements in the financial notes is: RMB yuan
1. Consolidated Balance Sheet.
Preparation unit: wafangdian bearing co., LTD
December31,12
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
40
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
Chairman: Meng Wei General Accountant : Sun Najuan Accounting charger: Sun Najuan
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
41
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
42
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
43
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
Chairman: Meng Wei General Accountant : Sun Najuan Accounting charger: Sun Najuan
44
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
4. Income Sheet of Parent Company.
Unit: RMB Yuan
Account for the current Account for the prior
Item period 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
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
45
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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 1,604,578.24 1,528,671.91
assets and other long-term assets
Proceeds from sale of subsidiaries and other operating units
Other cash received relating to investing activities
Sub-total of cash inflows 1,604,578.24 2,334,016.25
Cash paid to acquire fixed assets, intangible assets and 5,684,584.60 11,304,923.42
other long-term assets
Cash paid to acquire investment
Net cash used in acquiring subsidiaries and other operating
units
Other cash paid relating to investing activities
Sub-total of cash outflows 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
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
6. Cash Flow Statement Of Parent Company.
Unit: RMB yuan
Account for the Account for the
Item
current period prior 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
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
1,604,578.24 1,508,577.31
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 2,313,921.65
Cash paid to acquire fixed assets, intangible assets and other long-term
5,434,940.58 10,716,219.62
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 5,434,940.58 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
47
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 Capital less： General
Capital Surplus public Undistributed shareholders Owner’s equity
public treasure provision for Others
stock reserves profits ’ equity
reserves stock risk
1.Balance at the end of 402,600,000
485,691,050.47 134,278,527.26 362,925,296.98 1,385,494,874.71
last year .00
Add: changes in
accounting policies
Changes in previous
errors
Others
2.Balance at the 402,600,000
485,691,050.47 134,278,527.26 362,925,296.98 1,385,494,874.71
beginning of this year .00
3. The changes in this
2,491,863.75 -7,963,693.91 -5,471,830.16
year（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
2,491,863.75 -2,491,863.75
public reserves
48
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
2)provision for general
risks
3)distribution for
-16,104,000.00 -16,104,000.00
owner(shareholders)
4)others
(5）interior transference
of owner’s equity
1)capital (capital
stock)transferred by the
capital public reserves
2)capital (capital
stock)transferred by the
surplus public reserves
3)loss offset by the
surplus public reserves
4)others
4. Balance at the end of 402,600,000.0
the current period 0
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 Undistributed shareholders’
treasure provision for Others
stock reserves reserves profits equity
stock risk
1.Balance at the end of 402,600,00
485,691,050.47 131,442,909.11 359,603,965.97 1,379,337,925.55
last year 0.00
Add: changes in
accounting policies
Changes in previous
errors
Others
2.Balance at the 402,600,00
485,691,050.47 131,442,909.11 359,603,965.97 1,379,337,925.55
beginning of this year 0.00
3. The changes in this
2,835,618.15 -4,026,000.00 -1,190,381.85
year（decrease with“-”）
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
（1）Total of 2,835,618.15 2,835,618.15
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 2,835,618.15 -6,861,618.15 -4,026,000.00
1)Provision for surplus
2,835,618.15 -2,835,618.15
public 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 402,600,00
485,691,050.47 134,278,527.26 355,577,965.97 1,378,147,543.70
the current period 0.00
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
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
Capital public less：treasure Surplus public General provision for Owner’s equity
Capital stock Undistributed profits
reserves stock reserves risk
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
2,491,863.75 6,322,773.72 8,814,637.47
with“-”）
（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
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WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
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
Capital public less： Surplus public
Capital stock Undistributed profits
reserves treasure stock reserves
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
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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
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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
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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.
23
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
24
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
25
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
26
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.
27
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
28
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
29
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
30
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
31
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
32
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
33
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
34
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
35
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
36
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
37
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
Company2 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
38
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
39
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
40
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
41
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
42
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
43
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
44
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 —— —— —— —— —— ——
45
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
(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
(3) Fixed assets leases out under operating lease
Item Book Value
Machinery 134,403,665.77
Total 134,403,665.77
(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
Liaoyang Bearing‘s Main workshop 8,980,164.03
46
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
protection
In the process of fire
Liaoyang Bearing‘s Office building 3,467,892.31
protection
In the process of fire
Liaoyang Bearing‘s Processing workshop 1,321,869.07
protection
In the process of fire
Liaoyang Bearing‘s Staff canteen 892,486.21
protection
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
11.1 Construction-in-progress
(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 1,922,211.42 - 1,922,211.42 1,922,211.42 - 1,922,211.42
47
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Closing Balance Opening Balance
Item Book Book
Provision Book Value Provision Book Value
Balance Balance
industry park
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
Super
802,912.80 - 802,912.80 1,291,421.97 - 1,291,421.97
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 38,578.50 - 38,578.50 92,820.85 - 92,820.85
48
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Closing Balance Opening Balance
Item Book Book
Provision Book Value Provision Book Value
Balance Balance
of
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
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
49
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Decrease
Opening Transfer Closing
Name Increase Other
Balance to fixed Balance
decrease
assets
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
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
50
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
(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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Item Land use right ERP software Total
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
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Item Closing Balance Opening Balance
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
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Item Closing Balance Opening Balance
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
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Item Opening Increase Decrease Closing
Balance Balance
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
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Items Closing Balance Opening Balance
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
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Name of company Closing Reason of unpaid or
Balance not carried forward
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
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Recorded
Related
Opening into non Other Closing
Project Increase with
Balance -operation Change Balance
asset/equity
income
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.
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 Decre Closing Formation Basis
Balance ase 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‖
Informatization Dalian Financial Bureau and
75,000.00 - - 75,000.00
Construction Municipal Office of
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Economic and Information
Technology Committee with
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
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
Recorded Related
Opening into non Other Closing with
Government
Increase Note
subsidy item Balance -operation Change Balance asset/equ
income ity
Compensation
for plants 27,042,358.18 2,704,235.88 24,338,122.30 asset A
moving
Liaoyang
Bearing
4,194,564.00 97,548.00 4,097,016.00 asset B
Industry
subsidy
Development
of intelligent
manufacturing 2,400,000.00 400,000.00 2,000,000.00 asset C
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
2013. The grant is related to land and amortized over 50 years in accordance with land
amortization criteria.
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
(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 Balance Change for current period Closing Balanc
Shareholders’ Issuing Transferring
name/category Distributing
Amounts % new capital reserves to Others Subtotal Amounts
shares
shares share capital
Shares under
—— —— —— —— —— — — —— —
restriction for sale
Domestically legal
244,000,000.00 60.61 - - - - - 244,000,000.00
person shares
Total shares
under restriction 244,000,000.00 60.61 - - - - - 244,000,000.00
for sale
Shares without
—— —— —— —— —— — — —— —
restriction for sale
Domestically listed
158,600,000.00 39.39 - - - - - 158,600,000.00
foreign shares
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
R&D in technology 5,922,083.68 4,065,054.17
Total 5,922,083.68 4,065,054.17
34. Financial expenses
64
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
65
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
42. Income tax expenses
(1) Income tax expenses
Items current year prior year
Current income tax expenses -279,426.81 -
67
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
68
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
69
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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.
44.Monetary category of foreign currency
(1) Monetary category of foreign currency
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
71
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
amount Presented as Recorded into
Item
income statement
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
manage and monitor these risks exposure and control these risks under certain risk level.
1. Objectives and policies of each risk management
72
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
73
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
（I）financial asset measured
at FV and any change
recognized in income
statement
74
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
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
（II）financial 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
6. Continuously measured at FV, swap between any level
None
75
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
(3).Other related parties
Name of related party Related party relationship
Dalian Wazhou Bearing Manufacturing Other entity controlled by the same parent
76
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Name of related party Related party relationship
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
(1) Purchase of goods, provide, and receive labour services
1) Purchase of goods/receive labour services
77
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
78
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
Wazhou Group Precision Rentainer provide labour
106.28
Limited Company services
Total 384,829,973.52 581,394,470.89
(2) Assets rent
79
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
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
The Wazhou Group Buildings 490,313.00 489,300.00
80
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Category of assets current year prior year
Lessor Lessee
rent out Profits Profits
Company Precision Roller
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).
Dalian Wazhou Land (Shishanli,
Wazhou Group Precision Motor Jinzhou with area 404,110.86 253,900.00
Bering Co.,Ltd of 28210m
Land (located in
The railway bearing
No.5 west
Wazhou Group company of the 389,471.00 389,470.80
industrial park
Company
with area of
81
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Category of current year prior year
Lessor Lessee
assets rent in Lease fees Lease fees
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
Land (Wazhou
Wafangdian Bearing
Group Industry
Wazhou Group Co., Ltd(logistic 2,800.00 32,800.00
Park with area of
department)
187.04m
The Land (located in
Wazhou Group 5,000.00
company(logistic No.1, Phrase1,
82
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Category of current year prior year
Lessor Lessee
assets rent in Lease fees Lease fees
department ) North Gongji
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
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
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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 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
restructuring 79,725.00
Manufacturing Equipment Co., Ltd
Wazhou Group Equipment Gain on debt
restructuring 53,514.18 151,886.78
Technology Project Co., Ltd.
Wazhou Group Exact Transmission Gain on debt 40,000.00
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Related party Type of transaction current year prior year
Bearing Co., Ltd restructuring
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
Wazhou Group
Accounts
high-end auto bearing 87,601,132.04 - 157,299,071.76
receivable
limited company
85
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Closing Balance Opening Balance
Item Related party
Book Balance Provision Book Balance Provision
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
Wafangdian Tongda
Accounts Bearing
receivable 102,449.31 - 149,884.33
Manufacturing Co.,
Ltd.
Accounts ZWZ Bearing Europe
receivable 86,881.32
GmbH
86
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Closing Balance Opening Balance
Item Related party
Book Balance Provision Book Balance Provision
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
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
87
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Item Related party Closing Balance Opening Balance
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
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,
88
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
（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
（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
Closing balance
Items Booking balance Provision
Booking balance
Amount % Amount %
Accounts
receivable with
significant
89
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
with bad debt
provision based on 1,155,247,805.56 98.38 42,129,550.06 3.65 1,113,118,255.50
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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 Exemption The internal
Bearing fund 88,183.57 No
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.
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
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
provision based on the 15,547,554.01 74.73 1,833,726.55 11.79 13,713,827.46
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
(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
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.
93
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
(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 1,250,000.00 500,000.00
assets held
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
96
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Income from long-term equity investments
- -
under cost method
Total 1,250,000.00 500,000.00
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
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Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Chapter XII. List of reference documents
1. Accounting statements with the signatures and seals of the legal representative,
financial controller and the director of the accounting department of the company;
2. The 2018annual audit report and the financial statement with the seal of the
Certified Public Accountants and the personal signature and seal of the certified
public accountant.
3. The documents and notices of the company disclosed in newspapers designated by the
Security Supervisory Committee of China in the report period.
Above documents were kept in the Investment and Securities Department of the company
98
