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<SEC-DOCUMENT>0000950123-09-065374.txt : 20100205
<SEC-HEADER>0000950123-09-065374.hdr.sgml : 20100205
<ACCEPTANCE-DATETIME>20091124060449
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-09-065374
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20091124

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA YUCHAI INTERNATIONAL LTD
		CENTRAL INDEX KEY:			0000932695
		STANDARD INDUSTRIAL CLASSIFICATION:	ENGINES & TURBINES [3510]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		16 RAFFLES QUAY #26-00
		STREET 2:		HONG LEONG BUILDING
		CITY:			SINGAPORE
		STATE:			U0
		ZIP:			048581
		BUSINESS PHONE:		0116563226220

	MAIL ADDRESS:	
		STREET 1:		16 RAFFLES QUAY #26-00
		STREET 2:		HONG LEONG BUILDING
		CITY:			SINGAPORE
		STATE:			U0
		ZIP:			048581
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>China Yuchai International Limited</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="justify" style="font-size: 12pt; margin-top: 12pt">November&nbsp;24, 2009
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 6pt">Division of Corporation Finance<BR>
Securities and Exchange Commission<BR>
Washington, D.C. 20549<BR>
United States

</DIV>

<DIV align="left" style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">Attention:</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Gabriel Eckstein<BR>Daniel Morris<BR>Gary Todd</DIV></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Re:</B></TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify"><B>China Yuchai International Limited</B><BR><B>Form&nbsp;20-F for Fiscal Year Ended December&nbsp;31, 2008</B><BR><B>Filed July&nbsp;15, 2009</B><BR><B>File No.&nbsp;001-13522</B></DIV></TD>
</TR>
</TABLE>
</DIV>
<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">This letter sets forth the response of China Yuchai International Limited (&#147;<B>China Yuchai</B>&#148;) to the
comment of the Staff of the Division of Corporation Finance of the Securities and Exchange
Commission (&#147;<B>SEC</B>&#148;) in its letter dated October&nbsp;28, 2009, with respect to the above referenced Form
20-F. For the Staff&#146;s convenience, the Staff&#146;s comment is set forth before China Yuchai&#146;s response.
</DIV>


<DIV align="justify" style="font-size: 12pt; margin-top: 6pt"><I>1.</I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>Comment:</I></U><I> We note that your shares of &#091;Guangxi Yuchai Machinery Company Limited&#093; are your
primary asset. We also note that your plans for expansion and diversification, as described on page
44, appear to emphasize the acquisition of investment securities (for instance, the securities of
TCL and HLGE.) Please provide your analysis as to whether you should be considered an &#147;investment
company&#148; within the meaning of Section&nbsp;3 of the Investment Company Act of 1940.</I>
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 12pt"><U>Response to Comment 1:</U>
</DIV>


<DIV align="left" style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>(a)</B></TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">&nbsp;<U><B>Summary of Requirements
of Rule&nbsp;3a-1 under the 1940 Act.</B></U></DIV></TD>
</TR>
</TABLE>
</DIV>


<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rule&nbsp;3a-1 (the <B>&#147;Rule&#148;</B>) under the Investment Company Act of 1940, as amended (the
<B>&#147;1940 Act&#148;</B>), provides that an issuer meeting the Rule&#146;s requirements will not be deemed to be an
&#147;investment company&#148; under the 1940 Act.
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Rule requires that (i)&nbsp;no more than 45% of the value of the issuer&#146;s total assets
(exclusive of U.S. government securities and cash items) may consist of &#147;securities&#148; and (ii)&nbsp;no
more than 45% of the issuer&#146;s net income after taxes (for the last four fiscal quarters combined)
may be derived from &#147;securities.&#148;
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Excluded from the term &#147;securities,&#148; for purposes of the Rule, are U.S. government securities,
securities issued by employees&#146; securities companies and securities issued (i)&nbsp;by certain
majority-owned subsidiaries of the issuer and (ii)&nbsp;by certain companies &#147;primarily controlled&#148; by
the issuer.
</DIV>

<P align="center" style="font-size: 12pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, to qualify for the exemption provided by the Rule, the issuer cannot be an
investment company as defined in Section&nbsp;3(a)(1)(A) or 3(a)(1)(B) of the 1940 Act. These sections
refer to (i)&nbsp;companies engaged primarily, or proposing to engage primarily, in the business of
investing, reinvesting or trading in securities, or holding themselves out as such, or (ii)
companies in the business of issuing face-amount certificates of the installment type, or with the
intent to issue such certificates.
</DIV>
<DIV align="justify" style="font-size: 12pt; margin-top: 6pt"><B>(b)</B>&nbsp;&nbsp;&nbsp;&nbsp;<U><B>Analysis of Why China Yuchai is Entitled to Rely on the Exemption Provided by Rule
3a-1</B></U><B>.</B>
</DIV>


<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;China Yuchai is entitled to rely on Rule&nbsp;3a-1 and therefore is not an investment company under
the 1940 Act for the following reasons:
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;China Yuchai is not a company engaged primarily, nor does it propose to engage primarily,
in the business of investing, reinvesting or trading in securities, nor does it hold itself out as
such.</B>
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When China Yuchai has invested in companies, its investment has not been for trading or
speculative purposes. It has invested with the intent to hold the investment for a period of time
over the long or medium term, and with the intent, to the extent possible, to participate in
operating the business of the company in which it invests. China Yuchai is not a passive investor,
nor is it an active trader in securities.
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;China Yuchai has owned, since 1993, a majority voting and economic interest in Guangxi Yuchai
Machinery Company Limited (&#147;GYMCL&#148;) which is China Yuchai&#146;s main operating asset, and China
Yuchai&#146;s primary source of cash flow has historically been its share of the dividends, if any, paid
by GYMCL. GYMCL is a diesel engine manufacturer in China and produces diesel power generators and
diesel engine parts and is not engaged in the securities business. As disclosed in the Annual
Report on Form 20-F for the year ended December&nbsp;31, 2008 (the &#147;<B>Annual Report</B>&#148;) on page 27, &#147;Yuchai
&#091;GYMCL&#093; produces light, medium and heavy-duty diesel engines, industrial diesel engines, diesel
powered generators (Genset) and engine parts.&#148; The Annual Report describes the business of GYMCL
in detail on pages 27 through 37.
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;China Yuchai has the right to appoint nine of GYMCL&#146;s 13 directors. China Yuchai provides
certain management, financial planning and other services to GYMCL and, as of June&nbsp;1, 2009, China
Yuchai had seconded six employees to key management positions to work full-time at GYMCL&#146;s
principal manufacturing facilities in China as part of GYMCL&#146;s day-to-day management team.
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of the China Yuchai&#146;s plans for business expansion and diversification, China Yuchai&#146;s
strategy generally is to acquire a significant interest, even if such interest is a
less-than-majority interest, in target entities that permits China Yuchai to influence the
operations and management policies of such target entities and to achieve profit through improved
operations. It is not the China Yuchai&#146;s strategy to make passive investments or to otherwise
trade in the securities of other companies as its primary aim. Pursuant to its business plan,
commencing from 2005, China Yuchai gradually over a period of time acquired a 45.4% interest in HL
Global Enterprises Limited (&#147;<B>HLGE</B>&#148;) and 34.4% interest in Thakral Corporation Ltd (&#147;<B>TCL</B>&#148;). It is
currently the largest shareholder in each of HLGE and TCL.
</DIV>

<P align="center" style="font-size: 12pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">For this reason, it could be maintained that HLGE and TCL are companies meeting the requirements of
paragraph (a)(4) of the Rule and therefore the interests in these companies held by China Yuchai do
not constitute &#147;securities.&#148; China Yuchai has not yet determined whether it will take this
position, given the fact that China Yuchai is so clearly in compliance with the Rule. However, we
note these facts to emphasize that it is China Yuchai&#146;s strategy not to be a passive investor but
to obtain an interest in companies that allow it to actively participate in these companies&#146;
planning, operations, and business.
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As disclosed in the Annual Report on page 39, &#147;The core businesses of the HLGE group are that
of hospitality operations and property development.&#148; HLGE operates hotels primarily in China and
Malaysia. As disclosed in the Annual Report on page 23, &#147;The TCL group primarily conducts
distribution of consumer electronic products with operations mainly in the PRC (including Hong
Kong). TCL also has other business activities relating to contract manufacturing, property
development and investment in the PRC.&#148; Neither HLGE nor TCL is engaged in the securities
business. China Yuchai has four representatives out of eight directors on HLGE&#146;s Board and two
representatives out of nine directors on TCL&#146;s Board. As disclosed in the Annual Report, China
Yuchai had, in 2008, sought to increase its representation on the board of TCL proportionate to its
shareholding in TCL in order to increase its influence and control over TCL&#146;s operations and
business but this attempt was not successful.
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;China Yuchai is not engaged, has never engaged and does not propose to engage in the
business of issuing face-amount certificates of the installment type, nor does it have any such
certificates outstanding.</B>
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See China Yuchai&#146;s balance sheet as of December&nbsp;31, 2007 and 2008 and notes 1 and 3(l) to
China Yuchai&#146;s consolidated financial statements included in the Annual Report, which describe the
issued and outstanding securities of China Yuchai.
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(iii)&nbsp;&nbsp;&nbsp;&nbsp;Calculated in accordance with the requirements of the Rule (which specifically directs
that &#147;value&#148; be determined in accordance with Section&nbsp;</B><B>2(a)(41)</B><B> of the 1940 Act) and applying the
consolidation principles</B><SUP style="font-size: 85%; vertical-align: text-top"><B>1</B></SUP><B> of paragraph (c)&nbsp;of the Rule, securities held by China Yuchai
have a value as of December&nbsp;31, 2008 equal to 24.7% of China Yuchai&#146;s total assets, and 29.6% of
China Yuchai&#146;s net income after taxes (for the last four reported fiscal quarters combined ended
December&nbsp;31, 2008) is derived from securities. These figures are both lower than the 45% permitted
by the Rule.</B>
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In making the calculations in the immediately preceding paragraph in accordance with Section
2(a)(41) of the 1940 Act:
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;securities for which market quotations are available have been valued at the market value
at the end of the last preceding fiscal quarter (to the extent then owned);
</DIV>

<DIV align="justify" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the value of other securities and assets owned at the end of the last preceding fiscal
quarter have been valued at the fair value of such securities and assets, as determined in good
faith by the Board of Directors of China Yuchai; and
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: left">In effecting the consolidation required by paragraph
(c)&nbsp;of the Rule, China Yuchai has consolidated its financial statements with
the financial statements of any wholly-owned subsidiaries. Otherwise, there
has been no consolidation.</DIV></TD>
</TR>

</TABLE>


<P align="center" style="font-size: 12pt"><!-- Folio -->3<!-- /Folio -->
</DIV>






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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">

<TABLE width="94%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt">
<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)</TD>
    <TD>&nbsp;</TD>
    <TD align="justify">securities and assets acquired after the end of the last preceding fiscal quarter have
been valued at the cost thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt">The particulars of these calculations are set forth in the following tables and explanatory notes:
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><U><B>TABLE I:</B></U> <U><B>Balance Sheet of China Yuchai, </B></U>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 8pt"><U><B>Consolidated to the Extent Required by the Rule:</B></U>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 2%; margin-right: 2%" >In effecting the consolidation required by paragraph (c)&nbsp;of the Rule, China Yuchai has
consolidated its financial statements with the financial statements of any wholly-owned
subsidiaries. Otherwise, there has been no consolidation.
</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="94%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 36pt">
    <TD width="1%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>

</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">As of December 31, 2008</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(US dollars in thousands)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 36pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="2"><DIV style="margin-left:15px; text-indent:-15px">Property, plant and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">144</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">Investments in Subsidiaries (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">406,754</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="2"><DIV style="margin-left:15px; text-indent:-15px">Investments in Associated Corporations (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,219</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:15px; text-indent:-15px">Other Investments (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64,433</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="2"><DIV style="margin-left:15px; text-indent:-15px">Current Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:30px; text-indent:-15px">Amounts due from parent (non-trade)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">765</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD colspan="2"><DIV style="margin-left:30px; text-indent:-15px">Other
debtors, deposits &#038; prepayments (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,497</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:30px; text-indent:-15px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,378</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total Assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>542,190</B></TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="center">


<TABLE width="94%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt">

<TR style="font-size: 36pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="95">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents ownership by China Yuchai of 76.4% of GYMCL. GYMCL is thus a
&#147;majority-owned subsidiary of China Yuchai for purposes of the Rule and as determined
under Section&nbsp;2(a)(24) of the 1940 Act. GYMCL is not an investment company under
Section&nbsp;3(b)(3) or Section&nbsp;3(c)(1) of the 1940 Act. (See Annex A).</TD>
</TR>

</TABLE>

</DIV>

<P align="center" style="font-size: 12pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center">


<TABLE width="94%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt">
<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents ownership by China Yuchai of 45.4% of HLGE and 34.4% of TCL. The
following table shows the value attributed to these assets in the above:</TD>
</TR>

</TABLE>

</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="86%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">As of December 31, 2008</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="3">(US dollar in thousands)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">HLGE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,828</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">TCL</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,391</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="center">

<TABLE width="94%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt">
<TR style="font-size: 12pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="95">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents ownership by China Yuchai of preference shares and bonds issued by
HLGE.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes interest receivable of US$8,987 from HLGE.</TD>
</TR>

</TABLE>



<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><U><B>TABLE II: Income Statement of China Yuchai,</B></U></DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 8pt"><U><B>Consolidated to the Extent Required by the Rule:</B></U>
</DIV>




<DIV align="left" style="font-size: 12pt; margin-top: 8pt; margin-left: 2%; margin-right: 2%">In effecting the consolidation required by paragraph (c)&nbsp;of the Rule, China Yuchai has
consolidated its financial statements with the financial statements of any wholly-owned
subsidiaries. Otherwise, there has been no consolidation.
</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="94%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="82%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="4"><U>For the year ended</U></TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="4" style="border-bottom: 0px solid #000000"><U>December 31, 2008</U></TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(US dollars in</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">thousands)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Turnover</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:35px; text-indent:-15px">Related to China Yuchai and GYMCL(1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,339</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:35px; text-indent:-15px">Related to HLGE(1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,471</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Administrative and other operating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:35px; text-indent:-15px">Related to China Yuchai and GYMCL</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-3,185</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:35px; text-indent:-15px">Related to HLGE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-1,241</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Profit from operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>18,434</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest Expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:35px; text-indent:-15px">Related to China Yuchai and GYMCL</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-1,313</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:35px; text-indent:-15px">Related to HLGE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-520</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Profit from operations before tax</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,601</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Taxation charge</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Profit from operations after tax</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,601</B></TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
</DIV>


<P align="center" style="font-size: 12pt"><!-- Folio -->5<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="16%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The breakup of &#147;Other Income&#148;, that includes income
from GYMCL and HLGE, is set forth below. China Yuchai did not derive any
income from TCL during the year ended December&nbsp;31, 2008.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="right">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="82%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><U>For the year ended</U></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 0px solid #000000"><U>December 31, 2008</U></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">(US dollar in&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">thousands)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fixed deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">209</TD>
    <TD>&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividend income (GYMCL)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,811</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gain on transfer of shares (GYMCL)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exchange gain/(loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Related to China Yuchai and GYMCL</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;317</TD>
    <TD>&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Related to HLGE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unsecured bond (HLGE)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,989</TD>
    <TD>&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Revaluation loss of Pref A (HLGE)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(939</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gain on redemption of investment in HLGE: Pref B (HLGE)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">476</TD>
    <TD>&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Impairment loss on Pref B (HLGE)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(310</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gain on redemption of investment in HLGE: Unsecured
bond (HLGE)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,765</TD>
    <TD>&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
    <TD style="background: #ffffff">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>22,810</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left" style="font-size: 12pt; margin-top: 12pt"><B>THE 45% TEST</B>
</DIV>



<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Test</I>:
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No more than 45% of the value of the issuer&#146;s total assets (excluding U.S.
Government securities and cash items) must consist of, and
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No more than 45% of the issuer&#146;s net income after taxes (for the last four
fiscal quarters combined) must be derived from, certain investment securities.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Analysis</I>:
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assuming the equity investments in HLGE and TCL, the preference shares and bonds issued by
HLGE, interest receivable from HLGE and the cash and cash equivalent (i.e., the bank deposits) to
be &#147;securities&#148;, based on the amounts in TABLE I, China Yuchai meets the 45% asset test:
</DIV>

<DIV align="left" style="margin-left: 5%">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Test=
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="margin-left:30px; text-indent:-15px">Securities</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">=
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">49,219 &#043; 64,433 &#043;8,987 &#043; 11,378
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">=
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">134,017
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">=
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">24.7%</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="margin-left:30px; text-indent:-15px">Total assets</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">542,190
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">542,190</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assuming that income derived from HLGE, TCL and the bank deposits is income derived from
&#147;securities&#148;, based on the amounts in TABLE II, China Yuchai meets the 45% net income test:
</DIV>

<DIV align="left" style="margin-left: 5%">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="bottom"><DIV style="margin-left:0px; text-indent:-0px">Test=
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Income from HLGE, TCL and
the<BR>bank deposits <I>minus </I>expenses relating<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to such investments
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">=
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>6,471 &#043; 209<BR>&#150; &#091;1,241 &#043;520&#093;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">=
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">4,919
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">=
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">29.6%</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Total income
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">16,601
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">16,601</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="margin-top: 12pt"><DIV style="width: 40%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV></DIV>
<DIV align="center"><DIV style="width: 40%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV></DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt">For the foregoing reasons, China Yuchai respectfully submits that China Yuchai is entitled to rely
on Rule&nbsp;3a-1 and therefore is not an investment company under the 1940 Act.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt">Please let me know if you have any further questions. I can be contacted at (65)&nbsp;6322 6262 if I
can be of further assistance.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 12pt">
<TR>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<TR>
    <TD colspan="3" align="left">Yours sincerely<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" align="left">&nbsp;</TD>
</TR><TR>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Hoh Weng Ming
&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
</TR><TR>
    <TD colspan="3" align="left">Hoh Weng Ming&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
</TR><TR>
    <TD colspan="3" align="left">Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 12pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 12pt; margin-top: 12pt"><B>ANNEX A</B>
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 6pt"><B>Section&nbsp;3(b)(3) and Section&nbsp;3(c)(1) of the 1940 Act.</B>
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GYMCL does not rely on the exemption provided by Section&nbsp;3(b)(3) or Section&nbsp;3(c)(1) of the
1940 Act. Rather, it is not an investment company because of its compliance with Section
3(a)(1)(c) of the 1940 Act. This is shown by the balance sheet set forth below.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>GYMCL: Unconsolidated balance sheet as of December&nbsp;31, 2008 </U>
</DIV>

<DIV align="center" style="font-family: Helvetica,Arial,sans-serif">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">Neutral</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">Good</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2" style="border-bottom: 0px solid #000000">Assets</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2" style="border-bottom: 0px solid #000000">Securities</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2" style="border-bottom: 0px solid #000000">Assets</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10"><B>(RMB in thousands)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash on Hand and at Bank</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">235,057</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net Trade Debtors</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,751,339</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,906,653</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Prepayment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">506,736</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other Receivables</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,693</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: Provision for other receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-11,196</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,414</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amount due
from YMLC and its subsi &#151; Non Trade</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,660</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amount due from YMLC and its subsi &#151; Trade</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">616</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: Provision for debts due from YMLC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-24,609</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amount due from SHC and related company (Non trade)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,699</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amount due from SHC and related company (Trade)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,982</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amount due from CYI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,306</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Land Use Right</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93,489</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Fixed Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,997,110</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long Term Investment Unquoted Companies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">257,174</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred Income Tax</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119,805</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">235,057</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">304,839</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,421,032</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="53%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Test=
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="margin-left:30px; text-indent:-15px">Securities</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">=
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">304,839
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">=
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.9%</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="margin-left:30px; text-indent:-15px">Total assets &#150; neutral assets</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">7,725,871</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 12pt"><!-- Folio -->7<!-- /Folio -->
</DIV>



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