StockName:*STWazhouB StockCode:200706 No.:2016-30 WafangdianBearingCo.,Ltd. RelatedTransactionofEquityPurchasement TheCompanyandwholemembersoftheBoardherebyensurethattheNoticeisfactual,accurateandcompletewithoutanyfalserecord,misleadingstatementsorimportantomissions. ISummaryofthetransactions 1. WafangdianBearingCompanyLimited(hereinafterreferredtoas"theCompany")intendsto purchaseequipmentsfromWafangdianBearingGroupEquipmentTechnologyEngineeringCo.,Ltd.(hereinafterreferredtoas"EquipmentTechnologyEngineeringCompany"). TheseequipmentsaretheproductionequipmentsinusethecompanyrentingfromWafangdianBearingGroup,inaccordancewiththeunifiedarrangementsofWafangdianBearingGroupCorp.(hereinafterreferredtoas"ZWZ"),shift219equipmentsoriginallyrentedtotheCompanytoitswhollyownedsubsidiary-WafangdianBearingGroupEquipmentTechnologyEngineeringCo.,Ltd.,thecompanyintendstopurchasesomeoftheseequipmentsbyconsideringtheactualoperationanddecreaseofrelatedtransactions. 2.EquipmentTechnologyEngineeringCompanyisawhollyownedsubsidiaryoftheCompany'slargestshareholder-ZWZ,sothispurchaseofequipmentconstitutestherelatedtransaction; 3.Thisrelatedtransactionhasbeendeliberatedandunanimouslyapprovedbythefirstmeetingofthe th Company’s7 sessionofboardofdirectors,therelateddirectorsMengWei,ZhangXinghai,Chen Jiajun,LiShi,SunMaolinandSunNajuanavoidedthedeliberationonthismatter,otherdirectorsallvoted yes for this matter, therewasneithernegativevotenorabstentionvote.Thecompany’sindependent directors have issued the “Prior approval of independent directors" and made"Independentdirectors’opinions"onthismatter; 4.Above-mentionedbusinessdoesnotconstituteamajorassetrestructuring; 5.Thistransactionstillneedstogettheapprovalofshareholdersmeeting,personaffiliatedwiththisrelatedtransactionwilgiveuptherightstovoteforthisproposalattheshareholdersmeeting. IIBasicinformationofthecounterparty CompanyName:WafangdianBearingGroupEquipmentTechnologyEngineeringCo.,Ltd. Registeredcapital:3millionYuan Legalrepresentative:ZhangXinghai Business scope of Equipment Technology EngineeringCompany:electromechanicalengineering StockName:*STWazhouB StockCode:200706 No.:2016-30 installation& construction, purchase, manufacturing, installation, and marketing of mechanical equipmentsandinstruments;purchase,manufacturing,installation,andmarketingofbearingproducts and components&toolandtooling;buyingandsellingandleasingofimmovablepropertyandmechanicalequipments;non-financialassetsmanagement. Auditedfinancialsituationin2015:Totalassetsare45,692,472.27Yuan,netassetsare5,583,145.12Yuan,operatingincomesare93,892,962.11Yuan,andnetprofitsare1,579,051.51Yuan. 3. Abouttheobjectoftransactions 1.Overviewoftheunderlyingassets (1)Theunderlyingassetspurchasedthistimeisthein-useproductionequipmentsoriginallyrentedfromZWZ,mortgage,pledgeorotherthirdpartyrightsdon’texistintherelatedassets,nosignificantdispute,litigationorarbitrationinvolvesintherelatedassets,andneitherjudicialmeasuressuchas closedownandfreezeexist;detailsareasfollows: Project Qty（pcs） OriginalValue（Yuan）NetValue（Yuan） The Company’s super-huge branchofficesareusing 145 4,550.74 3,278.51 The company TheCompany’sbranchfactoryNo. purchases 2offinishedproductsisusing 21 102.42 64.75 equipmentsfrom TheCompany’sprecisionbranch Equipment officesareusing 53 986.46 479.37 Engineering TheCompany’squalityassurance Company departmentisusing 16 20.4 0.92 Total 219 5,660.02 5,660.02 2.TheCompanywillinvitetheassessmentagencieswithprofessionalqualificationforsecurityand futures-related businesses to assess the related objects in accordance with relevant laws and regulations, departmental rules and regulations, and provisions of "Stock ListingRules"oftheShenzhenStockExchange. IIIMaincontentsofthetransactionprotocoldraft 1.Transfertheconsideration BothsidesagreethatthecoststheCompanypaidforpurchasingassetsfromEquipmentTechnologyEngineeringCompanyaresubjecttotheappraisalvalueofunderlyingassets. 2.Paymentmethodsanddeadlines BothsidesnegotiateandagreethatpartyBshouldofferpaymentforthetransferredpriceagreedinarticleIIofthisprotocoltopartyAbycashorinotherwaysbymutualconsentwithinoneyearaftertheprotocolgoingintoeffect StockName:*STWazhouB StockCode:200706 No.:2016-30 3.Thedeliveryofthetransferofassets 1.BothsidesagreethatpartyAtransfersassetstopartyB,thesettlementdayisintendedtobeWithin10workingdaysaftertheprotocolgoingintoeffect 2.PartyAshouldtransfertheassetsunderthepresentcontracttopartyBbeforethesettlementdayappointedbythecontract,andbothpartiesshouldhandletherelevanthand-overprocedures.Afteroneyear,ifpartyBfailstopayasagreed,partyAwillbeentitledtotakebackthispartofthetransactionassets,andpartyBwillneedtobearallcostsforthetransactionandpayone-yearrentalfeestopartyAbasedonthemarketprice. 4.Othermatters (1)Sincetheequipmentspurchasedthistimearethein-useequipmentsoftheCompany'sbranch companies,thereisneitherdisposalofland,buildingsandpersonnelnortransferofcreditor'srightsordebts. (2)Bothsidessigntherelatedtransactionprotocolfortherelatedtransactionsgeneratedbythepurchaseofequipments,andproceednormatively. IVTheimpactofthetransactiononthecompany Thecompanycanreducetherelatedtransactionsinthefutureduetotheneedofproductionandmanagement. VIndependentdirectors’opinions Thecompany’sindependentdirectorshaveissuedthe“Priorapprovalofindependentdirectors"andmade"independentdirectors’opinions"onthismatter,theindependentdirectorsthinkthistransactioncanreduce the company’sfuture related transactions, so itwill neitherdamagethecompany’sinterestsnortherightsandinterestsofminorityshareholders. VIOtherexplanations 1.Thefinalpriceoftransactionissubjecttotheauditandassessmentdata,theCompanywilreportthe assessment results to themembersoftheboardofdirectorsandmakesupplementaryannouncementafterauditingandassessingandbeforeholdingtheshareholdersmeeting. VIIDocumentsavailableforreference th 1.ResolutionoftheFirstMeetingof7 BoardofDirectorsofWafangdianBearingCo.,Ltd.; 2.IndependentOpinions; 3.Priorapprovalofindependentdirectors. Herebynotify BoardofDirectorsof WafangdianBearingCo.,Ltd. 26August2016