I. Background and Purpose of the Transaction

(A) Background

1. The State’s support for enterprises to go overseas

2. The Polish Government is actively promoting the privatization of state-owned enterprises

3. The company intends to achieve development through endogenous and external combination

4. The Polish Government is actively promoting the privatization of state-owned enterprises

(B) Purpose of the Transaction

1. Speed up the process of internationalization

2. Expand the company’s product lines

3. Integrate the supply chains, clients, technologies, technical and other resources of both the company and the target company

II. Overview of the Transaction

     

Xiangyang Automobile Bearing Co. (ZXY) intended, through ZXY Luxembourg Investment S.à.r.l., a wholly-owned subsidiary of ZXY Hong Kong Bearing Investment Company (ZXY HK) which is a wholly owned subsidiary of ZXY, to buy 89.15% of the stake (6,445,500 shares) that the Polish Industrial Development Agency holds in Fabryka?o?yskTocznych - Kra?nikSpó?kaAkcyjna (the target company).

III. Profile of the Target Company being Evaluated

    

Company Name: Fabryka?o?yskTocznych - Kra?nikSpó?kaAkcyjna

     

Company Type: Share Limited

    

Registered Address: ul. Fabryczna 6 Street  23-210 Kra?nik  Poland

    

Registered capital: 72,300,000 PLN

       

Business Scope: R&D, production and sales of a variety of ball bearings, tapered roller bearings and cylindrical roller bearings; spindle and pipe fittings, forgings, cold stamping and pressing products, as well as a wide range of services provided by the production and auxiliary departments.

IV. Evaluation Methods

     

To conduct evaluation in accordance with the relevant requirements and conditions such as the evaluation purposes, the valuation subjects, types of value, and data collection, as well as the applicable conditions to the three basic methods of assessment. The evaluation approaches chosen are: the income approach and the market approach.

 

Vice President of the Company, Mr. YAN Zhehe, was conducting onsite investigations and taking pictures

Raw material processing plant

Plant of the Fabryka?o?yskTocznych