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CHANGFENG AXLE (CHINA) COMPANY LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1039) SECOND SUPPLEMENTAL AGREEMENT IN RELATION TO THE MAJOR TRANSACTION (DISPOSAL OF A PRC SUBSIDIARY)

Reference is made to the announcement of Changfeng Axle (China) Company Limited (the "Company")
dated 16 December 2013 in relation to the Disposal and the announcement of the Company dated
15 April 2014 in relation to the postponement of the Completion of the Disposal (collectively, the "Announcements"). Unless otherwise defined herein, capitalised terms in this announcement shall have the same meaning as given to them in the Announcements.
Pursuant to the SPA, the Vendor shall procure its affiliates in the PRC to repay or re-assign the Outstanding Bank Loans and release of the Asset Pledge within four months from the date of the SPA. Given additional time is required for the Vendor to arrange internal funding for the repayment or reassignment of the Outstanding Bank Loans and release of the Asset Pledge, the Purchaser and the Vendor entered into the first supplemental agreement on 15 April 2014 (the "First Supplemental Agreement"), pursuant to which the Vendor had agreed to procure its affiliates in the PRC to repay or re-assign the Outstanding Bank Loans and release of the Asset Pledge on or before 31 July 2014. Since the signing of the First Supplemental Agreement, the Vendor has been exerting tremendous amount of effort in arranging the internal funding for the repayment or re-assignment of the Outstanding Bank Loans and the release of the Asset Pledge, however, an unexpected further delay was encountered by the affiliates of the Vendor when arranging such internal funding due to the complex internal approval procedures of the local banks in the PRC, as such further additional time is required for the Vendor to arrange the necessary funding for the repayment or re-assignment of the Outstanding Bank Loans and the release of the Asset Pledge. Accordingly, the Purchaser and the Vendor entered into a second supplemental agreement on 31 July 2014, pursuant to which the Vendor shall procure its affiliates in the PRC to repay or re-assign the Outstanding Bank Loans and release of the Asset Pledge on or before 31
August 2014. Completion of the Disposal has been further postponed accordingly.
Save as disclosed above, there are no other changes to the SPA and all other terms and conditions of the
SPA remain in full force.
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Shareholders and potential investors should note that completion of the Disposal is subject to the fulfillment of the conditions under the SPA and therefore may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the securities of the Company.

By Order of the Board

Changfeng Axle (China) Company Limited Mr. WONG Kwai Mo

Chairman

Hong Kong, 31 July 2014

As at the date of this announcement, the executive directors of the Company are Mr. Wong Kwai Mo, Ms. Wu Ching and Mr. Lai Fengcai; the non-executive director of the Company is Ms. Dong Ying, Dorothy; and the independent non-executive directors of the Company are Mr. Zhu Weizhou, Dr. Li Xiuqing and Mr. Chong Ching Hei.

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