Changchun Yidong Clutch Co., Ltd.

Announcement on the increase of business license scope

Changchun Yidong Clutch Co., Ltd. (hereinafter referred to as the "Company") has increased the business scope of the company's business license due to business needs, which has been reviewed and approved by the second interim meeting of the sixth session of the company's sixth board of directors in 2016. details as following:

1. The business scope of business license is increased by "lease of real estate"

The company's existing plant No. 103D has been leased to the subsidiary Changchun Yidong Auto Parts Manufacturing Co., Ltd. since its new plant was built, which is used for production and operation and belongs to operating real estate. The company thus generates rental income and pays business tax according to the type of business.

Since the reform of the tax system on May 1, 2016 (increasing the reform of the camp), the State Administration of Taxation of Jilin Province has stipulated that VAT invoices should not be issued for general taxpayers, and enterprises must issue special VAT invoices themselves. According to the type of business (lease of real estate), the company should issue a VAT invoice with a tax rate of 5%, so the scope of the business license should add a "lease of real estate".

Second, the business scope of business license increases "R&D and technical services"

According to the company's business needs, the company needs to issue a value-added tax invoice named R&D fee, but the business scope of the business license does not have this item, so the scope of the business license should add "R&D and technical services".

This proposal must be submitted to the company's 2016 second extraordinary general meeting for consideration and approval.

Changchun Yidong Clutch Co., Ltd.

Board of Directors

October 13, 2016