Wa Fangdian Bearing Co., Ltd 2018 Annual Report Wafangdian Bearing Company Limited
2018 Annual Report
2019-02
April 26, 2019
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.
TheCompany’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
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 ................................................................... 7ChapterⅤ Significant Events ............................................................................................................... 17ChapterⅥ. Changes in Shares and Particulars about the Shareholders........................................ 26 ChapterⅦ. About the Preferred Shares ............................................................................................. 29 ChapterⅧ. Directors, Supervisors, Senior Management and Staff ................................................ 29ChapterⅨ. Corporate Governance ...................................................................................................... 37ChapterⅩ. Financial Report ............................................................................................................... . 41ChapterⅨ. List of Documents Available for Inspection. .............................................................. . 145 Glossary
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 currentperiod, the current year||Defined as||January 1,2018–December 31,2018||
|Liaozhou Co.,Ltd||Defined as||Wazhou Liaoyang Bearing Manufacture Co.,Ltd||
|Dalian motor||Defined as||Dalian motor Bearing Co.,Ltd||
|The Board of Directors||Defined as||Wafangdian Bearing Company Limited The Board ofDirectors||
|The Supervisory Committee||Defined as||Wafangdian Bearing Company Limited TheSupervisory Committee||
|Wafangdian Bearing CompanyLimited||Defined as||Wafangdian Bearing Company Limited TheShareholders’Meeting||
|Shen Jiao Suo||Defined as||Shen Zhen Stock Exchange||
|SRC||Defined as||China Securities Regulatory Commission||

Chapter II. Company Profile and Financial Highlights
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 theCompany’s
operation on a continuous basis:
[] Applicable[V] Not applicable
Wa Fangdian Bearing Co., Ltd 2018 Annual Report Financial consultancy institution hired by the Company, which is responsible to overseeing theCompany’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|10,632,169.84||10,182,949.16||||
|shareholders of the listed||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|228,603,893.98||-2,124,819.67||||
|||||-10,858.74|||
|by business operation||-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|1,380,023,044.55||1,385,494,874.71||||
|toShareholders of Listed||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 standardenterprise‘s financial statementsformat‖(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 in2018‖ was announced on September 7, 2018. Handling charge of personal income tax shall be clearly presented under―otherincome‖, 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
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
||||||
|-|-|-|-|-|
||1s Quarter|2nd Quarter|3rd Quarter|4th 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|1,714,192.31||||
|(includes the neutralized part of the asset||-728,247.65|51,018,264.75||
|impairment provision drawn already)|||||
|Gains and losses included in the current period|8,337,141.38||||
|of government subsidies, excluding those|||||
|government grants which are closely related to|||||
|||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 theCompany‘s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on Information Disclosure for Companies Offering their Securities to thePublic–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 thePublic–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.
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 productr&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
Wa Fangdian Bearing Co., Ltd 2018 Annual Report1.00% lower than the previous year. Realized net profit of 10.63 million yuan, an increase of4.41% over the previous year; The net profit attributable to the owner of the parent company was 10.63 million yuan, an increase of4.41% over the previous year. By the end of 2018, the company's total assets are 3.3 billion yuan, an increase of2.63% 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 of0.39% 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||2,190,412,052.05|||
|||100%||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 over10% 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|||||||

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 over30%
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||Proportioninoperatingcosts||
|||||||Year-on-year|
|based on|Item||in||||
|||Amount||Amount||increase/decease|
|products|||operating||||
||||costs||||
|Bearing|Materials|1,132,132,253.41|59.87%|1,108,764,315.9|0 59.06%|0.81%|
||Artificial||||||
|Bearing||151,567,145.25|8.02%|153,602,024.3|1 8.49%|-0.47%|
||compensation||||||
|Bearing|Depreciation|94,453,784.05|4.99%|98,002,793.9|1 4.72%|0.27%|
|Bearing|Energy|54,600,153.05|2.89%|52,449,481.6|9 2.42%|0.47%|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||||||
|-|-|-|-|-|-|-|
|earing|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 theCompany’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
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
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||82,860,774.83||||
|||7.50%||2.58%|4.92%||
|capital|||||||
||1,141,632,991.76||1,128,338,013.69||||
|Account|||||||
|||34.61%||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||136,874,108.05||||
|||3.92%||4.26%|-0.34%||
|property|||||||
|Fixed assets||0.00%|||||
|Construction in|661,598,663.85||710,247,969.72||||
|||20.06%||22.10%|-2.04%||
|process|||||||
||48,159,927.20||82,689,318.94||||
|Short term loan||1.46%||2.57%|-1.11%||
||620,000,000.00||648,000,000.00||||
|||18.80%||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
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-raised/bank loan|||||||
|||||22,860,0|22,860,0|||300,000,|300,000,||||
|railway|other|Yes|manufac|||||||None|||
|||||00.00|00.00|||000.00|000.00||||
|road,|||tory||||||||||
|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 theCompany’s net profit by over10%.
||||||||||
|-|-|-|-|-|-|-|-|-|
||||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
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
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 than30%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 dividendpayable|RMB0.4(tax ncluded)ofcash for each 10shares|RMB0.4(tax included)ofcash for each 10 shares|RMB0.1(tax included)ofcash for each 10 shares|
|Common share dividendtransferred to capitalshare|0|0|0|

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|

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 theCompany’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 theCompany’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 “QualifiedAuditor’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 standardenterprise‘s financial statementsformat‖(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 in2018‖ was announced on September 7, 2018. Handling charge of personal income tax shall be clearly presented under―otherincome‖, the actual government received shall be presented under operating cashflow column when preparing the cashflow statement regardless of asset related or income related.
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 toDecember31,2017|Effect on amount|Restated figureon January1,2018|
|209,923,835.91|-209,923,835.91|-re|
|1,128,338,013.69|-1,128,338,013.69|-|
||1,338,261,849.60|1,338,261,849.60|
|21,895,381.98|-|21,895,381.98|
|299,483,279.00|-299,483,279.00|-|
|630,832,287.45|-630,832,287.45|-|
||930,315,566.45|930,315,566.45|
|1,190,100.00|-1,190,100.00|-|
|92,123,093.92|1,190,100.00|93,313,193.92|
|296,698.98|-296,698.98||
|1,597,305.72|296,698.98|1,894,004.70|
|61,410,304.53|-4,065,054.17|57,345,250.36|
||4,065,054.17|4,065,054.17|

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|

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 theCompany’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
Wa Fangdian Bearing Co., Ltd 2018 Annual Report The company has associated lease please refer to the company in April 30, 2019 athttp：//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 theCompany’s Subsidiaries
Inapplicable
Wa Fangdian Bearing Co., Ltd 2018 Annual Report ChapterⅥ 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||||Totalpreferenceshareholderswiththe voting2powerrecoveredat theend ofthe reportingperiod (if any)|||||e0|
|||||||||||Total preference|||
||||shareholders||||||||||
|||||||||||shareholders with|||
||||at||||||||||
|Total common||||||||||the voting power|||
||||the end of the||||||||||
|shareholders in||||||||||not recovered at th|||
||6,543||month before||6,55||||0||||
|the reporting||||||||||end of the month|||
||||before the date||||||||||
|period||||||||||before the day of|||
||||of disclosing||||||||||
|||||||||||disclosingthe|||
||||the annual||||||||||
|||||||||||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|

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||||
|||(%)||thereportingperiod|||||
|Wafangdian BearingGroup Corporation|State-ownedshareholder|60.61%|244,000,000||244,000,000||||
|AKTIEBOLAGET SKF|Foreignshareholder|19.70%|79,300,000|||79,300,000|||
|BOCI SECURITIESLIMITED|Foreignshareholder|1.74%|7,020,138|||7,020,138|||
|Huang Junyue|Domesticshareholder|1.53%|6,176,158|||6,176,158|||
|Hu Xiaofeng|Domesticshareholder|0.47%|1,879,277|||1,879,277|||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|Foreignshareholder|0.36%|1,441,206|||1,441,206|||
|Jin Yunhua|Domesticshareholder|0.33%|1,311,256|||1,311,256|||
|Chen Haitao|Domesticshareholder|0.19%|750,896|||750,896|||
|MAN,KWAI WING|Foreign privateshareholder|0.18%|713,101|||713,101|||
|Meng Qingliang|Domesticshareholder|0.15%|587,584|||587,584|||
|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 heldat the end of thereporting period|||Share type||||
|Shareholder’s Name|||||||||
||||||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)|||||||||

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
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 than10% 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
ChapterⅦ. About the Preferred Shares
Inapplicable
ChapterⅧ 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|||||||||||

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 T|ype|Date|Cause|
|Zhang Shiyin|Vice-GM r|esignment|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.
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
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 legalcounsel，office director, ministerassistant，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.
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 inShareholder’s Company
√Applicable□Inapplicable
|||||||
|-|-|-|-|-|-|
||||||Whether receiving|
||||Starting|Expiry||
|Name|Company Name||||remuneration|
|||Position|Date|Date||
||||||from other|
||||of Tenure|of Tenure||
||||||companies|
||Wafangdian Bearing Group Corporation|Chairman of Board ofDirector|2016.04.11||Y|
|Meng Wei||||||
|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 ofCommunist Party of WBGC,the union president,|2017.12.20||Y|
|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 Dateof Tenure||
|Name|Other Company Name|Position|Date of||remuneration|
||||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|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||||
|-|-|-|-|-|
||Dalian Wazhou Fengyuan Machinery Co.,||||
|Zhao Yang||C|hairman|N|
||Ltd.||||
|Zhang|||||
||Wazhou Group Wind Power Bearing Co.,LTD|C|hairman|N|
|Xinghai|||||
|Zhang|||||
||Wazhou Group (USA) Bearing Co., LTD|s|upervisor|N|
|Xinghai|||||
|Zhang|Liaoning northern metal supply chain||||
|||C|hairman|N|
|Xinghai|company.||||
|Zhang||MD|anagement||
||Wazhou Europe Investment Holdings Co. LTD|||N|
|Xinghai|||irector||
|Chen Jiajun|Dalian Di Ye Ji Kai Wazhou Industry Co. LTD|d|irector|N|
||Dalian Guangyang Wazhou Auto Bearing||||
|Chen Jiajun||d|irector|N|
||Co., Ltd.||||
|Chen Jiajun|Wazhou group (USA) bearing co., LTD|d|irector|N|
||Shanghai Aimuyi ElectroMechanical Equipment||||
|Sun Najuan||d|irector|N|
||Co., LTD||||
||Wafangdian Bearing Group National Bearing||||
|Li Xiumin||s|upervisor|N|
||Engineering Technology Research Center Co. LTD||||
|Li Xiumin|Wazhou Group Precision Forging Co.,LTD|s|upervisor|N|
||Liaoning northern metal supply chain||||
|Wang Fuxing||d|irector|N|
||company.||||
|Wang Fuxing|Wazhou Group Wind Power Bearing Co.,LTD|s|upervisor|N|
|Sun|||||
||Wazhou Group Wind Power Bearing Co.,LTD|d|irector|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||the end of the|
||||||Company||
|||||||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|

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|5|N|
|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
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.
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.
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report III. Horizontal Competitions
Inapplicable
IV. Annual General Meeting and ExtraordinaryShareholders’ 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 AnnualGeneral Meeting|Annual General||||http://www.cninfo.com.|
|||80.36%|2018.05.18|2018.05.19||
||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 andShareholders’ 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 independentdirector‘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
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 disclosure of 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,|

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 qualifiedauditor’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
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 asCompany’s balance sheet as at 31 December 2018, theCompany’s and the consolidated income statement, cash flow statement and statement of changes inshareholders’ 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, theCompany’s and the consolidated financial position as at 31 December 2018, theCompany’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, asmentioned in notes VI.6to theconsolidated financialstatements of WafangdianBearing Co.,LTD, the bookbalance of inventory is766,633,8 00yuan, the amountof inventory depreciationreserve is 19.1227 millionyuan, and the depreciationreserve is 18.0533 millionyuan less than the previousyear. It is an important|The main audit procedures carried out for addressing the keyaudit matters are as follows:1. Evaluate the design of internal control of the procurementand payment cycle, determine whether it is implemented, identifymajor internal control defects, and conduct operationaleffectiveness tests;2. Combined with inventory monitoring, inspect the appearanceand shape of inventory to know whether its physical shape isnormal;3. Check whether the basis and method of the provision forinventory depreciation are consistent in the earlier and laterperiods;4. According to the valuation method of the lower of cost and|

WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
||||
|-|-|-|
|factor affecting the totalprofit and has a significantimpact on the financialstatements. To this end, weidentified inventoryimpairment as a key auditmatter.|net realizable value, evaluate the data, assumptions andaccounting methods based on the inventory depreciation reserve,and consider whether there is conclusive evidence to calculateand determine the net realizable value of inventory and checkits rationality;5. Considering the determination principle of the net realizablevalue of inventory, check the correctness of the calculation ofnet realizable value (sufficient but not excessive);6. Check the changes in the inventory depreciation provision ofprevious years for the current period, check whether thecalculation and accounting treatment of inventory depreciationprovision for resale are correct, and whether they areconsistent 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 profitto profit impact. Therecognition of revenue dependson whether the product sales canproperly evaluate whether theymeet the risk reward transferconditions in the salescontract. Due to the complexityof commercial agreements,important judgments need to bemade respectively. To this end,we identified revenue as a keyaudit matter.||The main audit procedures carried out for addressing the keyaudit matters are as follows:1. Evaluated and tested the management's internal controlof sales and collection;2. Perform the analytical review procedure and analyzewhether the changes of income and gross profit rate arereasonable;3. Select sales contract samples and check the consistencybetween the contract price and the actual settlement price;4. Select samples of income transactions recorded in thisyear, check the consistency of book income, sales invoiceand confirmation sheet to customers, and evaluate whetherrelevant income confirmation conforms to the incomeconfirmation accounting policy of the company;5. Selected samples to confirm transactions with majorcustomers and verify the authenticity and accuracy of sales;6. Select samples for the delivery records before and afterthe balance sheet date, check the delivery records, customerconfirmation forms and other supporting documents, andevaluate whether the revenue is included in the appropriateperiod.|
|3. Land acquisition and storage of the old factory area of the subsidiary company, wa shaftliaoyang bearing manufacturing co., LTD|||
|Key Audit Matter||How the matter was addressed in the audit|
|The land in the old site ofLiaoyang Bearing Company, asubsidiary of Wafangdian BearingCo.,LTD, was successfullyacquired and saved this year. Thenet income was confirmed as RMB4,387,500 after deducting RMB31,202,900 as liquidated damagesfor the land replacementcontract in 2009 from thetransfer income of RMB35,590,400. As this business isan unconventional transactionand involves a large amount ofmoney, we determine thistransaction as a key audit item.||The main audit procedures carried out for addressing the keyaudit matters are as follows:1. Obtain the acquisition contract of state-owned land useright of liaoyang city signed by the audited unit andliaoyang land reserve center, and check the accuracy of therecorded amount of creditor's rights.2. Checked the land listing announcement and personally wentto liaoyang land reserve center to interview the acquisitionand storage issues and check the collection situation afterthe period to confirm the authenticity of the transaction.3. Check the book balance of the newly built factory land andplant purchase expenditure on the acquisition and storagedate during the relocation, and confirm the authenticity ofthe income generated from the acquisition and storage.4. Obtain the arbitration result of compensation for landreplacement breach with Baolin Company, and confirm thebreach loss according to the result.|

4.Other Information
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 ourauditor’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 BearingCompany’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 BearingCompany’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 anauditor’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.
WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report (4) Conclude on the appropriateness of theManagement’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 BearingCompany’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in ourauditor’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 ourauditor’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 ourauditor’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.
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|||

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||

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||

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||

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
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|

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|

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|

WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
7. Consolidated Sheet Of Changes InShareholder’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|402,600,000.00|485,691,050.47||134,278,527.26||||||
|||||||362,925,296.98|||1,385,494,874.71|
|last year||||||||||
|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||||||||||

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 inaccounting policies||||||||||
|Changes in previouserrors||||||||||
|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 thisyear（decrease with“-”）||||2,835,618.15||||||
|||||||-4,026,000.00|||-1,190,381.85|

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|||||

WafangWa Fangdian Bearing Co., Ltd 2018 Annual Report
8. Sheet Of Changes InShareholder’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||||||||

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|

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 thePeople‘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(―WazhouGroup‖).
TheCompany‘s B shares have been listed on the Shenzhen Stock Exchange since 19February, 1997.
The parent company is Wazhou Group. General shareholders meeting is thecompany‘s authority and have the resolution power overcompany‘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 thecompany‘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(―LiaoyangBearing‖), Dalian Wazhou Precision Electric Motor Car Bearing(―DalianElectrical Motor‖),and Wazhou Precision of Spherical Roller Bearings(Wafangdian)Co.,Ltd(―SphericalBearings‖).
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
TheGroup‘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 consolidationscope‖ and―VIII. Equity within otherentity‖ in the Note to the financial statements.
III. Financial Statements Preparation Basis
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
（1） Basis of preparation
TheCompany‘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 BusinessEnterprises‘ and relevant regulations, and also based on the note IV―Significant Accounting Policies, AccountingEstimates‖.
（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 andFA‘s depreciation, intangibleasset‘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
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 thesubsidiary‘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 ofequity‖,‖minority interest of profit andloss‖,―other comprehensive income attributed to minorityinterest‖ and―total comprehensive income attributed to minorityinterest‖ 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 theGroup‘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.
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 tosubsidiary‘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
TheGroup‘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
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 otherparties‘ 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 byPeople‘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 theower‘s equity items except―undistributedprofit‖, 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
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 inshareholders‘ 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‗Investmentincome‘. Cash dividends declared by the investee company relating to available-for-sale equity instruments are charged to profit or loss for the period as‗Investmentincome‘. 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 theasset‘s carrying amount and the
present value of estimated future cash flows (excluding future credit losses that have not been
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 orloss‖ and―other financialliabilities‖ 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 initialrecognition（relevant basis for classification shall be disclosed by reference to financialassets）. 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
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
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
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 orparticipants‘ 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 owned20% or more but less than50% shares with voting rights in the investee company.If holding less than20% 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, andit‘s a bundled transaction, the entity shall regard all transactions as a one for accounting. Ifit‘s not a bundled transaction, the carrying amount presented in the
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, andit‘s a bundled transaction, the entity shall regard all transactions as a one for accounting. Ifit‘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.
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
The entity shall recognize its share of theinvestee‘s net profits or losses based on the fair value of theinvestee‘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 ofshareholder‘s equity, other than the net profit or loss, of the investee company, previously recorded in theshareholder‘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 andit‘s not a bundled transaction, the entity shall account for all transactions separately. Ifit‘s a bundled transaction, the entity shall regard all transactions as one disposal of subsidiary by losing
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
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 inprogress‘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
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.
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-termemployee‘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 inP&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 anentity‘s decision to terminate anemployee‘s employment before the contract due date or anemployee‘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
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 theemployee‘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
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
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 whichhasn‘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
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
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Errors
(1) Effect of change on accounting policy
―The Notice of amendment to the standardenterprise‘s financial statementsformat‖(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 in2018‖ was announced on September 7, 2018. Handling charge of personal income tax shall be clearly presented under―otherincome‖, 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:
||||
|-|-|-|
|Figure prior toDecember31,2017|Effect onamount|Restated figureon January1,2018|
|209,923,835.91|-209,923,835.91|re-|
|1,128,338,013.69|-1,128,338,013.69|-|
||1,338,261,849.60|1,338,261,849.60|
|21,895,381.98|-|21,895,381.98|
|299,483,279.00|-299,483,279.00|-|
|630,832,287.45|-630,832,287.45|-|
||930,315,566.45|930,315,566.45|
|1,190,100.00|-1,190,100.00|-|
|92,123,093.92|1,190,100.00|93,313,193.92|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||
|-|-|-|
|Figure prior toDecember31,2017|Effect onamount|Restated figureon January1,2018|
|296,698.98|-296,698.98|re|
|1,597,305.72|296,698.98|1,8 94,004.70|
|61,410,304.53|-4,065,054.17|57,345,250.36|
||4,065,054.17|4,065,054.17|

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% or12%
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
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 of15% 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;―currentperiod‖ refers to the period from January 1, 2018 to December 31, 2018; and―lastperiod‖ refers to the period from January 1, 201 7 to December 31, 2017; with the currency unit RMB.
1. Cash and cash in bank
||
|-|
|Closing Balance|
|55,974.98|
|188,375,830.25|
|58,798,055.76|
|247,229,860.99|
|-|

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
||
|-|
|Closing Balance|
|298,925.16|
|298,925.16|
|298,925.16|

3. Notes receivable and account receivable
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
||
|-|
|Closing amountderecognized|
|643,048,794.20|
|182,134,807.41|
|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
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
|||
|-|-|
|Closing Balance|Proportion|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||
|-|-|-|
|Accountsreceivable|Provisionfor baddebts|(%)|
|5,092,669.00|5,092,669.00|100.00|

2) Accounts receivable with the bad debt provisions under accounting aging analysis method Closing Balance
|||
|-|-|
|Accountsreceivable|Provision forbad debts|
|705,997,799.29|7,059,977.98|
|120,928,440.41|6,046,422.02|
|32,853,053.62|6,570,610.73|
|40,511,097.74|20,255,548.87|
|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
|||||
|-|-|-|-|
|Nature ofreceivable|amount|reason|Procedure tobe performed|
|trade|88,183.57|Agreement toexemption|Internalapproval|

(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, representing22.45% of the closing balance of accounts receivable. The
bad debt provision of 468,310.23 Yuan is provided respectively.
4. Advances to suppliers
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, representing65.32% 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
||
|-|
|Closing Balance|
|1,250,000.00|
|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
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
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
1) Other receivables accrued the bad debt provisions under accounting aging analysis method Closing Balance
|||
|-|-|
|Other receivables|Provision for bad debts|
|7,196,270.61|71,962.71|
|922,327.08|46,116.35|
|1,014,525.40|202,905.08|
|2,006,980.30|1,003,490.16|
|11,140,103.39|1,324,474.30|

2) Risk–free portfolio of other receivable has not been accrued for bad debts
Closing Balance
|||
|-|-|
|Other receivables|Provision forbad debts|
|4,233,192.02||
|6,000.00||
|76,950,915.03||
|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
||
|-|
|Closing Balance|
|5,289,305.79|
|289,925.00|
|1,060,998.27|
|92,479,217.53|
|99,119,446.59|

(5)Other receivables from the top 5 debtors
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
|||||
|-|-|-|-|
|Category|ClosingBalance|Aging|% ofthe totalOR|
|Compensationfor plantmoving|76,063,710.00|Within 1 year|76.74|
|Electricity bill|4,180,470.47|Within 1 year|4.22|
|Materialspayments|2,341,773.02|Over 3 years|2.36|
|Heating fees|726,061.48|Within 1 year|0.73|
|Materialspayments|490,288.89|Over 3 years|0.49|
|——|83,802,303.86|—|84.54|

 6. Inventories
(1) Categories of inventories
Closing Balance
Item
|||
|-|-|
|Book value|Provision for decline|
|84,610,034.58||
|524,035,778.65|19,122,663.13|
|149,030,115.58||
|8,957,789.07||
|766,633,717.88|19,122,663.13|

 (Continue)
Opening Balance
Item
|||
|-|-|
|Book value|Provision for decline|
|56,740,605.63|910,648.85|
|512,690,931.09|36,265,289.07|
|155,827,415.78|-|
|5,753,413.97|-|
|731,012,366.47|37,175,937.92|

(2) Provision for decline in the value of inventories
||||||
|-|-|-|-|-|
|OpeningBalance|Increase||Decrease||
||Accrual|Other|Reverse/Written- off|Otherstransferred|
|910,648.85|-|-|910,648.85|-|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||||
|-|-|-|-|-|
|OpeningBalance|Increase||Decrease||
||Accrual|Other|Reverse/Written- off|Otherstransferred|
|36,265,289.07|3,150,916.16|-|20,293,542.10|-|
|37,175,937.92|3,150,916.16|-|21,204,190.95|-|

 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
||||||
|-|-|-|-|-|
|Closing Balance|||||
|Bookingbalance|Provision|Book value|Bookingbalance|Provision|
|2,000,000.00|-|2,000,000.00|2,000,000.00|-|
|2,000,000.00|-|2,000,000.00|2,000,000.00|-|
|2,000,000.00|-|2,000,000.00|2,000,000.00|-|

(2) Available-for-sale financial assets measured at cost method
||||||||||
|-|-|-|-|-|-|-|-|-|
|Booking Balance||||Provision||||Proportion(%)|
|OpeningBalance|Increase|Decrease|ClosingBalance|OpeningBalance|Increase|Decrease|ClosingBalance||
|2,000,000.00||-|2,000,000.00|-|-|-|-|4.76|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Booking Balance||||Provision||||Proportion(%)|
|OpeningBalance|Increase|Decrease|ClosingBalance|OpeningBalance|Increase|Decrease|ClosingBalance||
|2,000,000.00||-|2,000,000.00|-|-|-|-|4.76|

 (3)Provision for available for sale asset impairment: None
9. Investment property
(1) Investment property measured as cost method
|||
|-|-|
|Property|Land use right|
|173,119,534.89|51,969,186.22|
|216,974.45||
|216,974.45||
|173,336,509.34|51,969,186.22|
|75,125,524.13|13,089,088.93|
|5,222,156.17|2,598,427.67|
|5,222,156.17|2,598,427.67|
|80,347,680.30|15,687,516.60|
|92,988,829.04|36,281,669.62|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
|||
|-|-|
|Property|Land use right|
|97,994,010.76|38,880,097.29|

(2) Investment property withoutowner‘s certificates
||
|-|
|Book value|
|34,429,644.71|
|17,975,430.55|
|6,345,870.41|
|912,351.32|

10. Fixed assets
||
|-|
|Closing Balance|
|661,598,663.85|
|661,598,663.85|

 10.1 Fixed assets
(1) Fixed assets detail
||||||
|-|-|-|-|-|
|Property|MachineryEquipment|TransportationEquipment|ElectronicDevice|OtherEquipment|
|——|——|——|——|——|
|253,663,547.33|1,164,347,666.68|17,533,982.52|72,037,141.35|199,245,477.06|
|768,735.93|26,196,893.39|520,887.16|2,925,231.55|18,008,741.87|
|31,263.25|1,490,261.69|63,491.34|665,534.23|21,764.10|
|737,472.68|24,706,631.70|457,395.82|2,259,697.32|17,986,977.77|
|863,221.00|1,528,338.12|323,582.96|3,093,227.26|1,269,230.77|
|863,221.00|1,528,338.12|323,582.96|3,093,227.26|1,269,230.77|
|253,569,062.26|1,189,016,221.95|17,731,286.72|71,869,145.64|215,984,988.16|
|——|——|——|——|——|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||||
|-|-|-|-|-|
|Property|MachineryEquipment|TransportationEquipment|ElectronicDevice|OtherEquipment|
|146,076,825.72|644,284,826.15|13,394,879.03|53,181,861.81|139,385,508.19|
|8,571,552.88|67,202,511.06|1,128,225.06|4,031,375.07|13,520,119.98|
|8,571,552.88|67,202,511.06|1,128,225.06|4,031,375.07|13,520,119.98|
|660,500.52|1,369,133.95|296,777.11|865,946.04|1,269,230.77|
|660,500.52|1,369,133.95|296,777.11|865,946.04|1,269,230.77|
|153,987,878.08|710,118,203.26|14,226,326.98|56,347,290.84|151,636,397.40|
|——|——|——|——|——|
|-|255,944.32|-|-|-|
||255,944.32|-|-|-|
|——|——|——|——|——|
|99,581,184.18|478,642,074.37|3,504,959.74|15,521,854.80|64,348,590.76|
|107,586,721.61|519,806,896.21|4,139,103.49|18,855,279.54|59,859,968.87|

 (2) Temporary idle fixed assets
|||||
|-|-|-|-|
|Initial Cost|AccumulatedDeprecation|Provision|BookValue|
|9,932,063.10|9,401,856.17|229,671.00|300,535.93|
|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|
|37,961,095.4|
|8,980,164.03|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||
|-|
|Book value|
|37,961,095.4|
|3,467,892.31|
|1,321,869.07|
|892,486.21|

11. Construction-in-progress
||
|-|
|Closing Balance|
|48,159,927.20|
|48,159,927.20|

 11.1 Construction-in-progress
(1) Construction in progress details
||||||
|-|-|-|-|-|
|Closing Balance|||||
|BookBalance|Provision|Book Value|BookBalance|Provision|
|10,922,235.97|-|10,922,235.97|10,195,223.88|-|
|7,193,865.18|-|7,193,865.18|30,689,629.52|-|
|7,028,576.54|-|7,028,576.54|11,340,473.99|-|
|3,960,724.13|-|3,960,724.13|||
|2,553,930.59|-|2,553,930.59|3,703,419.57|-|
|1,922,211.42|-|1,922,211.42|1,922,211.42|-|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||||
|-|-|-|-|-|
|Closing Balance|||||
|BookBalance|Provision|Book Value|BookBalance|Provision|
|1,807,569.95|-|1,807,569.95|1,960,571.95|-|
|832,500.00|-|832,500.00|832,500.00|-|
|802,912.80|-|802,912.80|1,291,421.97|-|
|376,403.13|-|376,403.13|414,391.36|-|
|331,423.18|-|331,423.18|2,734,957.91|-|
|321,293.28|-|321,293.28|2,081,977.04|-|
|277,094.01|-|277,094.01|1,483,761.06|-|
|236,621.46|-|236,621.46|1,016,610.51|-|
|225,772.70|-|225,772.70|472,585.86|-|
|194,358.80|-|194,358.80|||
|153,153.15|-|153,153.15|153,153.15|-|
|145,299.15|-|145,299.15|-|-|
|130,630.63|-|130,630.63|130,630.63|-|
|112,644.05|-|112,644.05|2,220,662.31|-|
|94,017.09|-|94,017.09|94,017.09|-|
|38,578.50|-|38,578.50|92,820.85|-|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||||
|-|-|-|-|-|
|Closing Balance|||||
|BookBalance|Provision|Book Value|BookBalance|Provision|
|31,384.62|-|31,384.62|31,384.62|-|
|5,862.07|-|5,862.07|||
|-|-|-|160,551.84|-|
|-|-|-|7,863.25|-|
|-|-|-|192,307.70|-|
|-|-|-|59,829.06|-|
|-|-|-|846,153.80|-|
|-|-|-|140,000.00|-|
|8,460,864.80|-|8,460,864.80|8,420,208.60|-|
|48,159,927.20|-|48,159,927.20|82,689,318.94|-|

 (2) Change in the significant construction in progress
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||||Decrease|||
|||Opening|||Transferto fixedassets||Otherdecrease|Closing|
|Name||||Increase|||||
|||Balance||||||Balance|
||10,195,223.88||2,729,429.78||2,002,417.69||||
||30,689,629.52||1,959,730.11||11,590,177.57||13,865,316.88||
||11,340,473.99||||3,593,948.74||717,948.71||
||||3,960,724.13||||||
||3,703,419.57||||692,499.26||456,989.72||
||1,922,211.42||||||||
||1,960,571.95||||153,002.00||||

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||||Decrease|||
|||Opening|||Transferto fixedassets||Otherdecrease|Closing|
|Name||||Increase|||||
|||Balance||||||Balance|
||1,291,421.97||172.72||488,681.89||||
||2,734,957.91||||2,403,534.73||||
||2,081,977.04||||1,760,683.76||||
||1,483,761.06||||1,206,667.05||||
||1,016,610.51||||779,989.05||||
||2,220,662.31||||2,108,018.26||||
||70,640,921.13||8,650,056.74||26,779,620.00||15,040,255.31||

 (Continued)
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||Percent of||||||Including:||Interest||
|||||||||Accumulatedcapitalizedinterest||||||
|||||investment||||||Accumulated||capitaliz|Source of|
|Name||Budget||||progress||||||||
|||||against||||||capitalized||ation|funds|
|||||budget(%)||||||interest||rate (%)||
||14,472,691.67||96.03||96.03||90,837.36||-||-|||
||107,106,101.50||53.82||53.82||656,478.24||-||-|||
||27,209,771.00||50.10||50.10||1,203,099.87||-||-|||
||4,197,044.00||94.37||94.37||-||-||-|||
|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||-||-||
||||||||||||||financing|
|chine||||||||||||||
||3,041,975.00||94.23||94.23||145,031.18||-||-|||
||||||||||||||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||-||-||
||||||||||||||financing|
|products||||||||||||||

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||||
||||||||financing|
|improvemetn||||||||
|Total|264,696,615.48|—|—|3,022,954.85||—||

12. Intangible assets
(1) Intangible assets list
|||
|-|-|
|Land use right|ERP software|
|124,220,541.52|6,272,685.89|
||97,087.38|
||97,087.38|
|-|-|
|-|-|
|124,220,541.52|6,369,773.27|
|36,823,081.84|6,140,023.31|
|1,839,045.41|121,078.37|
|1,839,045.41|121,078.37|
|38,662,127.25|6,261,101.68|
|——|——|
|-|-|
|-|-|
|-|-|
|-|-|
|——|——|
|85,558,414.27|108,671.59|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
|||
|-|-|
|Land use right|ERP software|
|87,397,459.68|132,662.58|

 (2) At the end of reporting period, there is no intangible asset established by internal development.
13. Long-term repayments
|||||
|-|-|-|-|
|OpeningBalance|Increase|Amortization|OtherDecrease|
|700,228.04|197,572.00|133,559.14|-|
|-|456,989.72|12,694.16|-|
|700,228.04|654,561.72|146,253.30|-|

 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
||
|-|
|Closing Balance|
|64,171,626.53|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||
|-|
|Closing Balance|
|459,466,293.85|
|523,637,920.38|

 (4) Unrecognized deductible loss of deferred tax assets expired next period
|||
|-|-|
|Closing Balance|Opening Balance|
||37,140,575.91|
|165,776,239.43|167,843,583.34|
|82,895,762.79|98,073,685.92|
|2,537,711.73|4,295,275.09|
|90,683,086.40|89,839,843.94|
|117,573,493.50||
|459,466,293.85|397,192,964.20|

15. Short-term loan
||
|-|
|Closing Balance|
|620,000,000.00|
|620,000,000.00|

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
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
||
|-|
|Closing Balance|
|14,227,757.35|
|14,192,759.85|
|11,637,409.03|
|9,946,862.07|
|4,934,492.85|
|54,939,281.15|

17. Received in advance
||
|-|
|Closing Balance|
|21,286,971.52|
|21,286,971.52|

18.Employee‘s payable
(1) Category ofemployee‘s payables
||||
|-|-|-|
|OpeningBalance|Increase|Decrease|
|7,313,818.35|211,684,701.71|212,854,406.70|
|9,346,330.29|28,020,734.18|31,262,849.90|
|16,660,148.64|239,705,435.89|244,117,256.60|

 (2) Short-termemployee‘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
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
||||
|-|-|-|
|OpeningBalance|Increase|Decrease|
|9,010,407.61|27,449,670.72|30,425,917.38|
|335,922.68|571,063.46|836,932.52|
|9,346,330.29|28,020,734.18|31,262,849.90|

 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
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
||
|-|
|Closing Balance|
|748,135.28|
|748,135.28|

 (2) Significant overdue unsettled interest:None
20.2 Dividend payable
||
|-|
|Closing Balance|
|360,000.00|
|360,000.00|

20.3 Other accounts payable
(1) Other payables categorized by payments nature
||
|-|
|Closing Balance|
|1,205,409.62|
|259,777.75|
|16,552,853.80|
|112,728,477.94|
|130,746,519.11|

 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
||
|-|
|ClosingBalance|
|32,000,000.00|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||
|-|
|ClosingBalance|
|2,869,025.48|
|952,000.00|
|788,057.42|
|735,916.46|
|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
||
|-|
|Closing Balance|
|3,967,022.53|
|953,225.59|
|4,920,248.12|

 (2) Government subsidy
||||||
|-|-|-|-|-|
|OpeningBalance|Increase|Recordedinto non-operationincome|OtherChange|ClosingBalance|
|2,704,235.83|-|2,704,235.83|2,704,235.83|2,704,235.83|
|472,320.00|-|472,320.00|472,320.00|472,320.00|
|400,000.00|-|400,000.00|400,000.00|400,000.00|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||||
|-|-|-|-|-|
|OpeningBalance|Increase|Recordedinto non-operationincome|OtherChange|ClosingBalance|
|240,000.00||240,000.00|240,000.00|240,000.00|
|97,548.00|-|97,548.00|97,548.00|97,548.00|
|52,918.70||52,918.70|52,918.70|52,918.70|
|3,967,022.53|-|3,967,022.53|3,967,022.53|3,967,022.53|

―OtherChange‖: 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
||
|-|
|Closing Balance|
|100,000.00|
|100,000.0|

 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 QiNo.[2004]217‖
Informatization Dalian Financial Bureau and
75,000.00 - - 75,000.00
Construction Municipal Office of
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
|||||
|-|-|-|-|
|OpeningBalance|Increase|Decrease|ClosingBalance|
|37,754,771.56|-|3,985,797.79|33,768,973.77|
|-|28,468,902.56|953,225.59|27,515,676.97|
|37,754,771.56|28,468,902.56|4,939,023.38|61,284,650.74|

(2) Government subsidy project
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Recorded Related Opening
Government into non Other Closing with
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 RMB11,143,755.05；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 developmentsubsidies‖ 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.
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 processingdigitalization‖. 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 equipmentsector‖ 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 railwaycarriages‖ 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 railwaycarriages‖. 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 BalanceShareholders’ Issuing Transferring
Distributing
name/category 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 60.61 person shares
Total shares
under restriction 244,000,000.00 60.61 - - - - - 244,000,000.00 60.61 for sale
Shares without
—— —— —— —— —— — — —— —— restriction for sale
Domestically listed
158,600,000.00 39.39 - - - - - 158,600,000.00 39.39 foreign shares
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Total shares
without restriction 158,600,000.00 39.39 - - - - - 158,600,000.00 39.39 for sale
Total shares 402,600,000.00 100.00 - - - - - 402,600,000.00 100.00 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
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
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
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
||
|-|
|current year|
|2,704,235.83|
|2,000,000.00|
|1,062,193.38|
|600,000.00|
|472,320.00|
|400,000.00|
|300,000.00|
|300,000.00|
|240,000.00|
|97,548.00|
|71,693.91|
|50,000.00|
|20,550.21|
|18,600.00|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||
|-|
|8,337,141.38|

 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
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 -
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
AcceleratedR&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
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 listedwith‖-‖)
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 listedwith‖-‖) 44,990,727.08 45,754,969.49 Investment loss (income listedwith‖-‖) -1,250,000.00 -500,000.00 Decrease of deferred tax assets(increase listed
-13,308.84 3,161.15with‖-‖)
Increase of deferred tax liabilities(decrease
-51,211.91 -51,211.90 listedwith‖-‖)
Decrease of inventories (increase listedwith‖-‖) -54,562,502.07 132,973,248.94
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
Decrease of operating receivables (increase listed
-323,850,128.27 -18,431,088.69with‖-‖)
Increase of operating payables (decrease listed
444,964,277.27 -305,945,642.74with‖-‖)
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
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
|||
|-|-|
|Closing Balance(foreign currency)|ExchangeRate|
|1,174,794.45|6.6832|
|191,273.84|7.8473|
|0.03|0.88|
|8,312,973.09|6.6832|
|8,312,973.09|7.8473|
|379,965.85|6.6832|
|375,851.60|7.8473|

 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
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
||||||
|-|-|-|-|-|
|Location|Registered Location|Nature ofoperation|Share（%）||
||||Direct|Indirect|
|Wafangdian|Liaoyang BaitaDistrict Weiguo RdNo.61|Manufacturingand sellingbearing andmachines|100||
|Wafangdian|Dalian Free TradeZoneSanshiliYongsheng RdNo.12|Manufacturingand sellingbearing andmachines|100||
|Wafangdian|Wafangdian BeigongjiSt No.1|Manufacturingand sellingbearing andmachines|100||

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
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 theshareholders‘ and otherinvestors‘ 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, theGroup‘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 ofcompany‘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 expiredcreditor‘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
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, theGroup‘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 ofGroup‘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.
TheGroup‘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
||||
|-|-|-|
|1st Level FVMeasurement|2nd Level FVMeasurement|3rd Level FVMeasurement|

statement
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
FV at the year end
||||
|-|-|-|
|1st Level FVMeasurement|2nd Level FVMeasurement|3rd Level FVMeasurement|
|298,925.16|||
|298,925.16|||

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
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
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
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
|||
|-|-|
|Content|current year|
|Purchase ofgoods|223,976,694.85|
|Purchase ofgoods|154,114,836.97|
|Purchase ofgoods|107,781,617.92|
|Purchase ofgoods|103,961,684.96|
|Purchase ofgoods|101,590,110.70|
|Purchase ofgoods|94,789,155.63|
|Purchase ofgoods|79,242,605.07|
|Purchase ofgoods|53,443,678.69|
|Purchase ofgoods|21,849,487.68|
|Purchase ofgoods|19,110,647.52|
|Purchase ofgoods andequipment|14,438,539.83|
|Purchase ofgoods|7,692,902.70|
|Purchase ofgoods|4,121,347.17|
|Purchase ofgoods|3,579,237.62|
|Purchase ofgoods|571,835.10|
|Purchase ofequipments|227,908.56|
|Service accepted|11,239,951.70|
||1,001,732,242.67|

 2) Sales of goods/provide labour services
|||
|-|-|
|Content|current year|
|Sales of goods|92,623,855.69|
|Sales of goods|83,460,631.18|
|Sales of goods|63,616,613.02|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
|||
|-|-|
|Sales of goods|55,065,708.87|
|Sales of goods|45,480,787.08|
|Sales of goods|14,333,650.12|
|Sales of goods|7,273,332.52|
|Sales of goods|4,176,788.39|
|Sales of goods|1,407,222.04|
|Sales of goods|685,932.16|
|Sales of goods|279,573.01|
|Sales of goods|182,692.23|
|Sales of goods|89,336.28|
|Sales of goods|88,890.31|
|Sales of goods|6,223.70|
|provide labourservices|13,459,987.43|
|provide labourservices|1,270,702.50|
|provide labourservices|510,970.30|
|provide labourservices|356,113.62|
|provide labourservices|241,207.61|
|provide labourservices|195,477.99|
|provide labourservices|24,277.47|
|provide labourservices||
|provide labourservices||
||384,829,973.52|

(2) Assets rent
Wa Fangdian Bearing Co., Ltd 2018 Annual Report
1) Assets rent out
||||
|-|-|-|
|Lessee|Category of assetsrent out|current yearProfits|
|Wazhou Exact ForgeLtd.|Land (located inNo.1, Phrase1,North Gongji Street,with area of48,220.82 m²).|434,000.00|
|Wazhou GroupPrecision RetainerLimited Company|Land (located inNo.1, Phrase1,North Gongji Street,with area of17,543.33m²)|263,925.00|
|Wazhou Exact ForgeLtd.|Land located inNo.1, Phrase1,North Gongji Street,steel warehouse|206,670.00|
|Wazhou GroupPrecision RollerLimited Company|Land (located inNo.1, Phrase1,North Gongji Street,with area of13,712.49m²)|205,687.00|
|Wazhou PrecisionSteel Ball Company|Land (located inNo.1, Phrase1,North Gongji Street,with area of 13,171m²).|197,565.00|
|Wazhou Exact ForgeLtd.|Land (located inNo.1, Phrase1,North Gongji Street,with area of 7,881m²).|118,215.00|
|Wazhou Group SpecialPrecision Bearing Co.,Ltd|Land (located inNo.1, Phrase1,North Gongji Street,with area of5,864 .40m²).|88,000.00|
|Wazhou Grouphigh-end auto bearinglimited company|Buildings|6,179,851.20|
|Wazhou Exact ForgeLtd.|Buildings|1,035,620.00|
|Dalian WazhouJinzhou MachineryCo., Ltd|Buildings|803,160.00|
|Wazhou GroupPrecision Retainer|Buildings|768,500.00|
|Wazhou Group SpecialPrecision Bearing Co.,Ltd|Buildings|514,300.00|
|Wazhou Group|Buildings|490,313.00|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||
|-|-|-|
|Lessee|Category of assetsrent out|current yearProfits|
|Precision RollerLimited Company|||
|DalianWazhouFengyuanMachinery Co., Ltd|Buildings|107,460.00|
|Wazhou Group|Buildings|-|
|Wazhou Grouphigh-end auto bearinglimited company|Equipments|10,223,762.43|
|Wazhou GroupPrecision RollerLimited Company|Equipments|9,836,420.55|
|Wazhou GroupPrecision Retainer|Equipments|2,481,819.35|
|Wazhou Group SpecialPrecision Bearing Co.,Ltd.|Equipments|38,497.13|

2) Assets under lease
||||
|-|-|-|
|Lessee|Category ofassets rent in|current yearLease fees|
|The railway bearingcompany of theCompany|Land (located inNo.3 westindustrial parkwith area of18,185.00 m²).|2,182,200.00|
|Precision bearingbranch of theCompany|Land (located inWazhou Groupindustrial park,with area of30,380.00 m²).|455,700.00|
|The precision rollingcompany(Wafangdian) of theCompany|Land (No.2, WestIndustry Parkwith area of29930m²)|449,000.00|
|Special large branchof the Company|Land (located inwest industrialpark, with area of29,460.00 m²).|441,900.00|
|Dalian WazhouPrecision MotorBering Co.,Ltd|Land (Shishanli,Jinzhou with areaof 28210m²)|404,110.86|
|The railway bearingcompany of theCompany|Land (located inNo.5 westindustrial parkwith area of|389,471.00|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||
|-|-|-|
|Lessee|Category ofassets rent in|current yearLease fees|
||3,245.59 m²).||
|Special large branchof the Company|Land (located inWazhou Groupindustrial park,with area of19,401.24 m²).|291,000.00|
|Two finished branchof the Company|Land (located inWazhou Groupindustrial park,with area of14,112.57 m²).|211,700.00|
|Special large branchof the Company|Land (located inWazhou Groupindustrial park,with area of12,286.33 m²).|184,300.00|
|Wafangdian BearingCo., Ltd(logisticdepartment)|Land (WazhouGroup IndustryPark with area of11637m²)|174,600.00|
|Wafangdian BearingCo.,Ltd spare partmanufacturingbranch|Land (No.2 PlantWest IndustryPark with area of11290m²)|169,400.00|
|Special large branchof the Company|Land (located inNo.5 westindustrial parkwith area of5,610.00 m²).|84,150.00|
|Wafangdian BearingCo., Ltd(logisticdepartment)|Land (WazhouGroup IndustryPark materialwarehouse witharea of4,773.15m²)|17,680.50|
|Wafangdian BearingCo., Ltd|Land(No1-1previous AnjiOffice buildingwith area of331.85m²)|8,759.00|
|Wafangdian BearingCo., Ltd(supplychain managementdepartment)|Land (WazhouGroup IndustryPark with area of250.87m²)|3,763.00|
|Wafangdian BearingCo., Ltd(logisticdepartment)|Land (WazhouGroup IndustryPark with area of187.04m²)|2,800.00|
|Thecompany(logistic|Land (located inNo.1, Phrase1,||

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||
|-|-|-|
|Lessee|Category ofassets rent in|current yearLease fees|
|department )|North GongjiStreet, with areaof 331.84 m²).||
|The precision rollingcompany(Wafangdian) of theCompany|Buildings|2,259,400.00|
|Precision bearingbranch of theCompany|Buildings|2,339,304.00|
|Special large branchof the Company|Buildings|1,653,800.00|
|Two finished branchof the Company|Buildings|1,118,000.00|
|Special large branchof the Company|Buildings|1,006,800.00|
|Wafangdian BearingCo.,Ltd spare partmanufacturingbranch|Buildings|783,700.00|
|Wafangdian BearingCo., Ltd(logisticdepartment)|Building|474,500.00|
|The company|Buildings|173,241.00|
|Wafangdian BearingCo., Ltd(logisticdepartment)|Building|51,973.00|
|Wafangdian BearingCo., Ltd(supplychain managementdepartment)|Buildings|40,246.00|
|Wafangdian BearingCo., Ltd(logisticdepartment)|Building|30,000.00|
|The railway bearingcompany of theCompany|Equipment|970,322.67|
|The precision rollingcompany(Wafangdian) of theCompany|Equipment|949,506.24|
|Special large branchof the Company|Equipment|338,049.37|
|Two finished branchof the Company|Equipment|249,773.89|
|Wafangdian BearingCo.,Ltd spare partmanufacturingbranch|Equipment|121,379.85|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
||||
|-|-|-|
|Lessee|Category ofassets rent in|current yearLease fees|
|Precision bearingbranch of theCompany|Equipment|23,261.52|

(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 theCompany‘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
|||
|-|-|
|Type of transaction|current year|
|Debtor transfer|43,740,529.56|
|Loss on debtrestructuring|663,288.89|
|Loss on debtrestructuring|50,000.00|
|Gain on debtrestructuring|1,350,000.00|
|Gain on debtrestructuring|1,000,000.00|
|Gain on debtrestructuring|360,800.00|
|Gain on debtrestructuring|159,400.00|
|Gain on debtrestructuring|139,667.92|
|Gain on debtrestructuring|79,725.00|
|Gain on debtrestructuring|53,514.18|
|Gain on debt|40,000.00|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
|||
|-|-|
|Type of transaction|current year|
|restructuring||
|Gain on debtrestructuring|20,000.00|
|Gain on debtrestructuring||
|Gain on debtrestructuring||

(5) Management remuneration
||
|-|
|current year|
|735,876.00|

 (6) Use of trademark
According to the‗Trade Mark Licensecontract‘ 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 at0.5% 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
||
|-|
|current year|
|2,260,600.00|
|1,459,652.03|
|3,720,252.03|

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
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
4,786,043.58 - 2,255,928.31
receivable
Limited Company
Wazhou Group Special
Accounts
Precision Bearing Co., 3,861,909.04 - 4,724,144.07 - receivable
Ltd.
Accounts Wazhou Special Steel
2,603,123.42 - 1,127,180.69
receivable
Ball Company
Dalian Wazhou
Accounts
Jinzhou Machinery 1,257,377.62 - 484,891.17
receivable
Co., Ltd
Wazhou Group Exact
Accounts - Transmission Bearing 828,573.88 - 3,714,337.85
receivable
Co., Ltd
Kugel- und
Accounts
Rollenlagerwerk 543,394.31 - 2,843,173.17
receivable
Leipzig GmbH
Wafangdian Tongda
Accounts Bearing
102,449.31 - 149,884.33
receivable
Manufacturing Co.,
Ltd.
Accounts ZWZ Bearing Europe
86,881.32
receivable
GmbH
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
778,950.65 778,950.65
receivable
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
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 RestructuringAgreement‘ with the creditors,
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 RestructuringAgreement‘ 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
||
|-|
|Closing amountderecognized|
|525,058,556.58|
|121,448,526.49|
|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
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
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
|||
|-|-|
|Accounts receivable|Provision for baddebts|
|705,052,118.58|7,050,521.18|
|119,952,373.06|5,997,618.65|
|32,648,109.23|6,529,621.85|
|40,356,174.06|20,178,087.03|
|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:
|||||
|-|-|-|-|
|AccountReceivablefeature|Written-offAmount|Written- offReason|Written- offApplicationProcedure|
|Bearing fund|88,183.57|Exemptionas agreed|The internalapproval|
||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, representing21.77% of the closing balance of accounts receivable. The
bad debt provision of 468,310.23 Yuan is provided respectively.
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
||
|-|
|Closing Balance|
|1,250,000.00|
|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
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
|||
|-|-|
|Other receivables|Provision for bad debts|
|7,190,121.78|71,901.22|
|917,051.68|45,852.58|
|1,011,525.40|202,305.08|
|1,469,434.03|734,717.02|
|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.
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
||
|-|
|Closing Balance|
|5,289,305.79|
|273,925.00|
|930,971.76|
|4,180,470.47|
|10,130,024.89|
|20,804,697.91|

 (5)Other receivables from the top 5 debtors
|||||
|-|-|-|-|
|Category|ClosingBalance|Aging|% ofthe totalOR|
|Electricity bill|4,180,470.47|within 1 year|20.09|
|Materialspayments|2,341,773.02|Over 3 years|11.26|
|Materialspayments|723,598.86|Over 3 years|3.48|
|Materialspayments|319,694.17|Over 3 years|1.54|
|Materialspayments|309,475.10|Over 3 years|1.49|
|——|7,875,011.62|—|37.86|

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
3. Long-term equity investments
(1) Category of long-term equity investments
||||||
|-|-|-|-|-|
|Closing Balance|||||
|Closing Balance|Provision|Book Value|Opening Balance|Provision|
|211,583,897.67|-|211,583,897.67|211,583,897.67||
|-|-|-|-|-|
|211,583,897.67|-|211,583,897.67|211,583,897.67|-|

 (2) Investments into subsidiaries
||||||
|-|-|-|-|-|
|OpeningBalance|Increase|Decrease|Closing Balance|Provision incurrent period|
|17,337,259.95|-|-|17,337,259.95||
|45,478,956.37|-|-|45,478,956.37||
|148,767,681.35|-|-|148,767,681.35||
|211,583,897.67|||211,583,897.67||

Wa Fangdian Bearing Co., Ltd 2018 Annual Report
4. Operating revenue and cost
||||
|-|-|-|
|current year|||
|Revenue|Cost|Revenue|
|1,931,553,277.72|1,678,865,180.88|1,880,857,226.54|
|230,916,268.79|213,962,047.51|257,872,835.30|
|2,162,469,546.51|1,892,827,228.39|2,138,730,061.84|

 (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
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, theGroup‘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
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