BRIEF-Shenji Group Kunming Machine Tool Co updates on suspected breach of financial regulations

March 21 (Reuters) - Shenji Group Kunming Machine Tool Co

Ltd:

* Up to now, it is judged that company will still have a

loss in 2016 and there is no possibility of profit

* If company's audited net profit in 2016 is still negative,

company's a shares will be suspended listing

* Company's a shares will be suspended listing after

disclosure of 2016 annual report

* As at 19 March, company found problem that inventory in

years 2013-2016 was not real which involved a total amount of

about RMB96 million

* Auditors found recognition of sales revenue in 2016 and

previous years existed problems of suspected of breach of

accounting standards

* Company is currently identifying causes of above suspected

of breach of financial regulations

* Company's current production, operation and management are

all normal

* Whether company can disclose annual report on schedule

exists uncertainty

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