Wafangdian Bearing Company Limited 2018Annual Report Abstract Stock code:200706 Stock ID:Wazhou B Announcement No.2019-01 Wafangdian Bearing Company Limited 2018Annual Report Abstract 1. Important Notes This abstract was derived from the annual report, the annual report issued on the Shenzhen Stock Exchange web or other web appointed by and CSRC; details please refer to the whole annual report. The board of directors, board of supervisors, directors, supervisors and the top management guarantee there is no false record, misleading statement or major omission in the report, and take responsibilities for the truth, accuracy and completeness of the contents. Besides the following directors, all the other directors attended the Board meeting and discussed the report. Name Post Reasons Assignee name LiangShuang Independent director Busy work Sun Kun Liu Yuping Independent director Busy work Wen Bo Reminder of the qualified auditor’s opinions Inapplicable Preplan of Profit Distribution for Common Stock or Preplan for Capitalization of the Reserves in theReporting Period Reviewed by the Board Meeting 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 0.4 (tax included) will be distributed for every 10 shares held by shareholders. Preplan of Profit Distribution for Preferred Shares in the Reporting Period Approved by the Resolution of the Board Meeting Inapplicable (2) Brief Information of the listed company (i) Brief Information of the company Secretary of the Board Representative of StockA ffairs Name Sun Najuan Ke Xin No. 1 Beigongji Street, Wafangdian City, No. 1 Beigongji Street, Wafangdian City, Correspondence address Liaoning Province, China. Liaoning Province, China. Consulting telephone 0411-39116369 0411-39116732 Fax 0411-39116738 0411-39116738 E-mail zwz2308@126.com zwz2308@126.com (ii). 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. Company has strong manufacturing capability and quality assurance capabilities, extensive services in railway, automobile, 1 Wafangdian Bearing Company Limited 2018Annual Report Abstract metallurgy, mining and other industries and fields. (iii).Main accounting date (1) Main accounting date in the near three years 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 After Before adjustment After adjustment Before adjustment After 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 by business operation 228,603,893.98 -2,124,819.67 -2,124,819.67 -10,858.74% 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 After Before Before adjustment After 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 to Shareholders 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. (2)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 2 Wafangdian Bearing Company Limited 2018Annual Report Abstract 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 Whether the financial indicators or the total number of company has disclose quarterly reports, semi-annual report related financial indicators exist significant differences no (iv) Shareholders and shares (1) Information on the top 10 shareholders Total common Total Total preference shareholders at preference shareholders with Total common the end of the shareholders the voting power shareholders in withthe voting not recovered at the 6,543 month before 6,552 0 0 the reporting before the date powerrecovere end of the month period of disclosing d at theend of before the day of the annual the reporting disclosingthe annual report period (if any) report Shares held by the shareholders holding over 5% shares or the top ten shareholders Quantity at Pledging or freezing Shares held by the Sharesheld by the the end of Number of the Shareholder names top ten top tensharehold the non-restricted shares Status of shareholders ers(%) reporting held the Quantity period shares Wafangdian Bearing State-owned 60.61% 244,000,000 244,000,000 Group Corporation shareholder AKTIEBOLAGET SKF Foreign shareholder 19.70% 79,300,000 BOCI SECURITIES Foreign shareholder 1.74% 7,020,138 LIMITED Domestic Huang Junyue 1.53% 6,176,158 shareholder Domestic Hu Xiaofeng 0.47% 1,879,277 shareholder GUOTAI JUNAN SECURITIES(HONGK Foreign shareholder 0.36% 1,441,206 ONG) LIMITED Domestic Jin Yunhua 0.33% 1,311,256 shareholder Domestic Chen Haitao 0.19% 750,896 shareholder Foreign private MAN,KWAI WING 0.18% 713,101 shareholder Domestic Meng Qingliang 0.15% 587,584 shareholder About the fact that a strategic investor or There was no relationship and consistent activities between the first big shareholder ordinary corporate became one of the top and other shareholders or the top ten common stock holders; The relationship among ten shareholders due to placement of new other shareholders, top ten circulation shareholders, top ten circulation shareholders shares (if any) (Refer to Note 3) and other shareholders was not clear. Explanation on associated relationship or consistent action of the above shareholders 3 Wafangdian Bearing Company Limited 2018Annual Report Abstract (2) Total Preference Shareholders and the Shares Held by the Top 10 Preference Shareholders Inapplicable (3)Relationship of the property right and controlling between the Company and actual controller: 3.Discussion and analysis (1)general information in the report peiord 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 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. (2) Did there exist any significant change in the principal business in the reporting period No (3) Products taking over 10% of the Operating Revenue or Operating Profit Year-on-year year-on-year Year-on-year Operating Operating Gross increase/decrease of increase/decrease of increase/decrease revenue profit profit rate operating revenue operating profit over of gross profit rate over the previous the previous year over the previous 4 Wafangdian Bearing Company Limited 2018Annual Report Abstract year year Export 293,027,890.14 30,373,752.30 10.37% 25.19% 6.18% -1.86% 1,524,108,221.7 Domestic 236,987,214.80 15.55% -4.16% -6.08% -0.32% 2 Among them:traffi 456,109,746.33 43,466,193.30 9.53% -13.68% -42.23% -4.71% c bearing specialbea 451,495,303.58 59,800,229.50 13.24% -9.39% -13.21% -0.58% ring General 616,503,171.81 133,720,792.00 21.69% 9.37% 23.63% 2.50% bearing (4)Did there exist seasonal or periodic characteristics necessary to pay special attention to No. (5)Note to operating revenue, operation cost or total profit attributable to the Company’s common shareholders in the reporting period or composition of significant change in the previous reporting period Inapplicable (6)Potential suspension and delisting Inapplicable (7). Matters concerning the Financial Report (i) Note to the change in the accounting policy, accounting estimate and accounting method in comparison with the financial report of the previous year Important accounting policy changes On June 15, 2018, the ministry of finance issued the "notice on the revision and issuance of the format of general corporate financial statements for 2018" (No. [2018] 15), which revised the format of general corporate financial statements, merged some balance sheet items and split some income statement items. And on September 7, 2018, issued a "about the 2018 annual general interpretation of corporate financial statements format concerned issue", definitely require withholding individual income tax return fees in the "other income" presentation, actually received government subsidies, both related to assets and related to earnings, are when prepare a statement of cash flows as operating activities generated cash flow statements, etc. The group has prepared financial statements in accordance with the requirements of the new corporate financial statement format. If the items listed in the financial statements are changed as a result, the group has adjusted the comparative data during the comparable period in accordance with the relevant provisions of accounting standards for business enterprises no. 30 - presentation of financial statements. The impact on items and amounts presented in the financial statements during the comparable period is as follows: Items Figure prior to Effect on amount Restated figure on memo December 31,2017 January 1,2018 Notes receivable 209,923,835.91 -209,923,835.91 - 1,128,338,013.6 Accounts receivable -1,128,338,013.69 - 9 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 - 5 Wafangdian Bearing Company Limited 2018Annual Report Abstract Accounts payable 630,832,287.45 -630,832,287.45 - Notes payable &Accounts 930,315,566.45 930,315,566.45 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 4,065,054.17 -4,065,054.17 R&D expense 4,065,054.17 4,065,054.17 (ii) Note to the situation that it is necessary to make retrospective restatement to order to correct the serious accounting errors in the reporting period Inapplicable (iii) Note to the change of the scope of the consolidated statements in comparison with the previous year. Inapplicable 6