Short title:WaZhou B                          Code: 200706                                     No.: 2019-07

                              Wafangdian Bearing Company Limited

                                  Accrual of Assets for Impairment


 The Company, all members of the Board of Directors, supervisors and top management hereby guarantee the truth,
accuracy and completeness of the information disclosure, no any false records, misleading statements and major
missing contents.



The 9th session of 7th BOD and 9th session of 7th supervisory committee were held on 26 April 2019 under
the name of Wafangdian Bearing Co., Ltd. (hereinafter referred to as the Company), for deliberated and
approved proposal of Accrual of Assets for Impairment, details of the notice are as:

I. Overview

With representing a faithfulness financial status and assets value of the Company, according to Accounting
Standards for Business Enterprises and relevant rules of accounting policy of the Company, we analyze and
evaluated the recycling possibility for vary receivables and net realizable value of inventories, among the
Company and subsidiaries for year of 2018. Based on principle of prudence, the impairment provision
5,930,000Yuan in total are accrual for potential impairment of account receivable and inventory. Details
are as:
                    Accrual amount (in
   Item                                                             Accrual reasons
                    10 thousand Yuan)

                                          The ending inventory is priced according to the principle of lower
                                          cost than net realizable value. For the unrecoverable part of the
                                          inventory due to damage, all or part of the obsolete or sales price
                                          lower than the cost, etc. The allowance for inventory depreciation
   Inventory        315                   of commodities and bulk raw materials shall be drawn according
                                          to the difference between the cost of a single inventory item and
                                          its net realizable value; For other raw and auxiliary materials with
                                          large quantity and low unit price, the inventory shall be
                                          withdrawn according to the category.
                                          Bad debt losses confirmed standard:Unit of debt cancellation,
                                          bankruptcy, insolvency, shortage of cash flow, lead to serious
                                          natural disaster and so on production and in the foreseeable time
                                          unable to repay debts, etc.;The debt unit fails to fulfill its debt
                                          repayment obligations for more than X years;Other evidence
   Accounts                               suggests that money really can't take back or withdraw is
   Receivables      278                   unlikely.For the possibility of bad debt losses using the allowance
                                          method of accounting, alone or in combination for impairment
                                          test, the end of provision for bad debts preparation, included in the
                                          current profits and losses.As for the receivables which are proved
                                          to be uncollectible by conclusive evidence, they shall be written
                                          off as bad debt losses after being approved by the group in
                                          accordance with the prescribed procedures.
   Total             593

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Short title:WaZhou B                          Code: 200706                                   No.: 2019-07

II. Impact on financial status and operation results


Accrual for impairment amounting to 5.93 million Yuan , it will affect the company's 2018 consolidated
statement of total profit of 5.93 million Yuan.


III. Deliberation procedures on the accrual


The accrual for assets impairment has deliberated and approved by 9th session of 7th BOD and 9th session
of 7th supervisory committee held on 26 April 2019. Independent directors issue independent opinions with
consent. According to regulation of Stock Listing Rules, the proposal shall deliberate in AGM of 2018.


IV. Explanation rationality from the Board


According to Accounting Standards for Business Enterprises and relevant rules of accounting policy of the
Company, The company's 2018 annual provision for receivables and inventory impairment is 5.93 million
yuan in total.which is objectively and fairly reflect a financial status and assets of the Company at
period-end.


V. Supervisory Committee’s opinion


We consider that: the above mentioned resolution has legal procedures and sufficient basis; the accrual is
comply with relevant rules of accounting rules for enterprise, and actual situation of the Company, after
accrual, assets condition of the Company are representing fairly. We agree to accrual the impairment
provision for assets.


VI. Independent opinions


We consider that: the above mentioned accrual has standard decision-making procedures with sufficient
basis, and meets relevant regulation of the Company and Accounting Standards for Business Enterprises.


The accrual is fairly presenting financial status, assets value and operation results of the Company ended as
31 December 2018, and meets overall interest of the Company. And also helping a lot in offering more
truth-ness, reliable and accuracy accounting information for investors, no situation of interest from the
Company and whole shareholders, minority in particular are being damaged. We agree to accrual the
impairment provision for assets.


     Hereby notify
                                                              Board of
                                                  Wafangdian Bearing Co., Ltd.
                                                           29 April 2019

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