Stock:WazhouB Code：200706 No.：2017-41 WafangdianBearingCompanyLimitedSupplementalRelated AnnouncementofTransactioninRelationtoAssetsDisposal TheCompanyandallmembersoftheBoardofDirectorsguaranteethatthecontentsoftheannouncementaretrue, accurateandcomplete,andtherearenofalserecords,misleadingstatementsormaterialomissions. Referenceismadetothe“AnnouncementofRelatedTransactioninRelationtoAssetsDisposal” byWafangdianBearingCompanyLimited(the“Company”)on22August2017.Duetotherequirement bySZSE,nowmakethefurthersupplementalinformation. 1.ReviewprocedureoftheTransaction WafangdianBearingCompanyLimited(the“Company”)recordedanauditednetprofitofRMB30.87 million for the year 2016, and the total income from land recall of Wazhou Liaoyang Bearing ManufacturingCompanyLimited(“LiaoyangBearing”)wascarriedforwardintonon-operatingincomeof theCompanyduringtheperiodafterdeductionofthecostsincurredforreconstructingrelevantassetsof thenewplantandrelevantexpenses.AccordingtothereviewresultsissuedbyShineWingAccountant Firm,theCompanyisnotrequiredtosubmittheTransactiontothegeneralmeetingforconsideration sincetheaforesaidincomedoesnotreach50%ofthenetprofitfor2016andotherindexdon’ttouchthe leastlevelforgeneralmeetingeither. 2.Thereasonofremovalandsufficiencyofinformationdisclosure DuetothatthesurroundingregionsoftheoriginalplantofLiaoyangBearinghavebeendevelopedinto commercialandresidentialpropertiesinsuccession,disputeswiththelocalcitizensareincreasingyear byyearwithregardtonoiseandwaterpollution.Inthiscase,Liaoyanggovernmentauthoritiesactedas representativeofthelocalcitizenstoconsoleLiaoyangBearingtorelocatefromtheoriginalplantand encourageLiaoyangBearingtoapplythepreferentialpolicyof “refundfor twoandrelieffor three” releasedbythegovernment.LiaoyangBearingisqualifiedfortherelevantpreferentialpolicysinceits productsanddevelopmentpolicycomplywithsuchproductpositioningassetbyLiaoyangEconomic DevelopmentZone. In orderto solvetheabove operatingdifficulties andtaking into accountthe insufficientworkingspaceintheoriginalplantwhichimpairsthefurtherdevelopment,LiaoyangBearing agreedtorelocatefromtheoriginalplant. Though LiaoyangBearing hasmade repeatednegotiation with competent authoritiesof Liaoyang Governmentinrespectofthelandrecalloftheoriginalplant,norelativelymaturedconclusionhasbeen reachedforthisissue.Althoughthetimeperiodfrom2011to2017isnotshort,evenalongperiod,no substantialconclusionandtransactionismadeandnomaterialprogressisrecordedduetovarious objectivereasons.Besides,thetransactionamountcapsexpectedatthetimebeingdidnotreachsuch limitsasrequiredtobedisclosedundertheListingRules,sonoinformationdisclosurewasmadebythe Company.However,theCompanystartedtoperformitsobligationofinformationdisclosureandreview Stock:WazhouB Code：200706 No.：2017-41 procedures when it obtained the relatively matured plan of intention in June 2017, and further implemented the relevant review and information disclosure procedures upon execution of the agreement. 3.Reasonablenessofthevaluationonbuildingserectedontheland Forthewholecontentofthevaluationreport,pleaserefertoattachmentNo.1. 1)InrespectofthebuildingsintheoriginalplantofLiaoyangBearing,theoriginalvalueandthenet valueofthebuildingsasof31July2017isRMB9,151,839.00andRMB2,726,211.43,respectively.After deductionoftheamountofRMB2,000,000.00receivedfromLiaoyangBaolinRealEstateDevelopment Co., Ltd for disposal of the assets erected on theland, the Company recorded actual loss of RMB726,211.43.2)BasedontheaccountingrecordofLiaoyangBearing,thecompanyhasrelocatedatotalof45setsofequipmentswhichwereregardedasuselessduetothelandacquisitionasof31July2017.TheoriginalvalueandthenetvalueoftheequipmentsisRMB3,023,964.85andRMB409,936.86,respectively.,sotheCompanyrecordedactuallossofRMB409,936.86.3)ThereconstructioncostsincurredbyLiaoyangBearingfortherelevantassetsofthenewplantasof31July2017totaledtoRMB19,370,196.28,amongwhich,thenetvalueofthenewofficebuildingwhichwas putinto operationinDecember 2011 is RMB3,898,002.18 afterdeductionof depreciationofRMB696,250.60basedontheconstructioncostofRMB4,594,252.78;thenetvalueoftheprincipalplantinthenewplantwhichwasputintooperationinDecember2011isRMB14,128,792.53afterdeductionofdepreciationof RMB2,974,189.72basedontheconstructioncostofRMB17,102,982.25;thenetvalueofthemachineworkshopinthenewplantwhichwasputintooperationinDecember2011isRMB1,343,401.57afterdeductionofdepreciationofRMB288,535.50basedontheconstructioncostofRMB1,631,937.07. LiaoyangBearingwasdismantledattheendofOctober2013,priortowhich,theappraisalinstitutionhadcompleted allthenecessaryevidentialinvestigation.TheappraisalinstitutionbelievedthatthevaluationreportwaspreparedunderthecompensationstandardsassetoutintherelevantdocumentsapplicableinLiaoyangandthereportwasobjectiveandfair.4.ReasonablenessoftheassessedlandvalueAsadvisedbyLiaoningTianyiAssetAppraisalCompanythatwhenitassessedthepropertiesownedbyLiaoyangBearingin2013,itadoptedthebenchmarklandpriceaspricingreferencesaccordingtothecompensationstandards undertheCircularNo.65[LSKFB[2011]]. Asat theexecutiondateof theacquisitionagreement,sinceLiaoyangMunicipalGovernmenthasnotissuednewdocumentin2017andlandtransactionsinLiaoyangarestillpricedbyreferencetotheCircularNo.29[LSZF[2016]],Liaoyang Bearing considers that the market price of land transaction under this document isapproximatetothepricedeterminedinthevaluationreport,whichprovesthatthelandrecallpriceisfair,soLiaoyangBearingandLiaoyangMunicipalGovernmentagreetoconductthelandrecallbasedonthevaluationprice.Stock:WazhouB Code：200706 No.：2017-41 LiaoyangBearinghadentrustedLiaoningTianyiAssetAppraisalCompanyinAugust2013topre-assess thecompensationvalueoftheassetsownedbyLiaoyangBearingpriortoexpropriationandcollect completeinformationforassessment.TheoriginalplantwasdismantledbytheendofOctober2013. However,thelandrecallwasputoniceduetovariousfactors,andnovaluationreportwasissued accordingly(alltheworkswerecompletedandthevaluationdatewas31August2013).Whentheland recallwasrecommencedin2015wherethebuildingserectedonthelandweredismantledleadingto failureofreassessment,LiaoyangMunicipalGovernment thusagreedtoissueanofficialvaluation reportbasedonthevaluationreportdraftedbyreferencetothevaluationdateof31August2013.This valuationreportservedasreferencestakenbyLiaoyangMunicipalGovernmenttocertainextentto determinethetransactionprice. Priorto1997,LiaoyangBearingwasownedbyWafangdianBearingGroupCorporation.Whilein1997 whentheorganizationwasmade,duetothatthestate-ownedlandwasnotallowedfortransfer,theland remainedtobeownedbyWafangdianBearingGroupCorporationwithnosubstantialtransferfiledwith therelevantauthorities.Underthisbackground,thelandusecertificatewasregisteredunderthename ofLiaoyangBearingwhichkeptuseoftheland.Inrespectofthistransaction,asdiscussedbyLiaoyang BearingandWafangdianBearingGroupCorporation,itisagreedthatLiaoyangMunicipalGovernment paysLiaoyangBearingthelandcompensationvalueandLiaoyangBearingshalltransfersuchvalueto Wafangdian BearingGroup Corporation later. Basedon the above,therelevant partieshave no disagreementonownershipofthelanduseright. 5.Fairnessofpricedeterminationforthistransaction Asnotedabove,thetransactionpriceisdetermined byLiaoyangBearing(also underthetrustof Wafangdian Bearing Group Corporation) and Liaoyang Municipal Government according to the valuationreportandtherelevantlandmarketpriceguidelinedocumentsissuedbyLiaoyangMunicipal Government,whichissufficienttoprovethefairnessofthelandprice.Transactionoftherelevant buildingsand equipmentsispricedatsuch levelas generallyacceptedby LiaoyangBearingand LiaoyangMunicipalGovernmentaftervariousnegotiationand communication.Wafangdian Bearing GroupCorporationhasalsoconfirmedinwrittenthetransactionpriceofthelandownedbyitand considersthatthepriceisfair.Therefore,thereexistsnointerestproppingamongLiaoyangBearing,the CompanyandWafangdianBearingGroupCorporation. Herebynotify BoardofDirectorsof WafangdianBearingCompanyLimited September6,2017