On 20 Nov 2008, the company signed an agreement on asset acquisition via private placement with China National Machinery Industry Corporation (CNMIC), its controlling shareholder, to acquire a 100% stake in Luoyang Bearing Research Institute Co., Ltd., held by CNMIC.

Beijing Han Ding United Layers issues the following legal opinions on the above mentioned asset acquistion:

1. The qualifications of relevant parties in the above mentioned transaction as well as relevant agreements are lawful and valid. Except awaiting approvals from an extraordinary general meeting of shareholders of the company, the State Owned Assets Supervision and Administration Commission of the PRC, and the China Regulatory Securities Commission as well as the exemption from a tender offer obligation for CNMIC, relevant issues related to the transaction have all been authorized and approved. Related information has been disclosed in a timely manner. The underlying assets of the transaction have a clear ownership and the transfer of ownership sees no legal obstacles.

2. The transaction is in compliance with the Securities Law of the PRC, the Administrative Measures for the Issuance of Securities by Listed Companies, the Administrative Measures for the Merge of the Listed Companies and relevant laws and regulations.

3. The legal opinions quoted by the company in the Asset Acquisition Report and its abstract are proper.

Beijing Han Ding United Layers
Lawyers: Chu Bei and Luo Jianye
20 Nov 2008


Source: Securities Times

Date: 24 Nov 2008

CN01/TW/RL/JW