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:
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|Item|Accrual amount (in10 thousand Yuan)|Accrual reasons|
|Inventory|315|The ending inventory is priced according to the principle of lowercost than net realizable value. For the unrecoverable part of theinventory due to damage, all or part of the obsolete or sales pricelower than the cost, etc. The allowance for inventory depreciationof commodities and bulk raw materials shall be drawn accordingto the difference between the cost of a single inventory item andits net realizable value; For other raw and auxiliary materials withlarge quantity and low unit price, the inventory shall bewithdrawn according to the category.|
|AccountsReceivables|278|Bad debt losses confirmed standard:Unit of debt cancellation,bankruptcy, insolvency, shortage of cash flow, lead to seriousnatural disaster and so on production and in the foreseeable timeunable to repay debts, etc.;The debt unit fails to fulfill its debtrepayment obligations for more than X years;Other evidencesuggests that money really can't take back or withdraw isunlikely.For the possibility of bad debt losses using the allowancemethod of accounting, alone or in combination for impairmenttest, the end of provision for bad debts preparation, included in thecurrent profits and losses.As for the receivables which are provedto be uncollectible by conclusive evidence, they shall be writtenoff as bad debt losses after being approved by the group inaccordance with the prescribed procedures.|
|Total|593||

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. SupervisoryCommittee’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