Agreement Concerning Matters Relating to the Establishment
of the Financial Accounts for the Joint Venture
(LJ-5-01)
Party A: Liuzhou OVM Joint Stocks Co., Ltd.
Party B: Liuzhou OVM Construction Machinery Co Ltd
On May 10, 1995, Liuzhou OVM Construction Machinery Co Ltd. (the "JV Co.")
was granted approval for incorporation by the Liuzhou Municipal Government.
According to the Joint Venture Contract, the Articles of Association of the JV
Co., and other agreements entered by both parties together with the approval
granted by the Liuzhou Municipal Economic Commission concerning the report on
the commencement date of the financial accounts of the JV Co., and through
friendly consultation, the following matters in relation to the establishment of
the financial accounts for the JV Co. were agreed:
(1) In order to ensure the smooth operation of the JV Co., Party A agrees to
transfer the following assets and liabilities to the JV Co. commencing January
1, 1995. A summary breakdown of the category of assets and liabilities
transfered is set out below:
Assets/(liabilities) Amount
-------------------- ------
(Rmb'000)
Cash and cash equivalent 20,000
Accounts receivable, net 19,493
Inventories 48,546
Prepayments, deposits and other receivables 13,527
Amounts due from subsidaries companies of Party A 17,556
Amounts due from related companies 28,890
Deferred assets 3,150
Short term bank loans (43,650)
Accounts payable (21,929)
Customer deposits (2,553)
Other Payable (27,298)
Amounts due to subsidaries of Party A (8,422)
Amounts due to related companies (5,598)
Long term bank loans (19,360)
------------
22,354
=======
(2) The net value of assets transfered into the JV Co. shall be temporary
treated us advance to the JV Co. by Party A until the issue of the formal
capital verification report.
(3) Party A should possess the sole property rights with respect to the assets
transferred into the JV Co. and these assets should neither be pledged nor
subject to any lease at the date of this Agreement.
(4) Any claims or disputes arising from the assets transferred into the JV Co.
at the tiime these assets were owned by Party A and before the effective date of
this Agreement will be the sole responsibility of Party A.
(5) This Agreement shall come into effect at the date when the corporate
representives of both parties sign and stamp the common seals on the Agreement.
For and on behalf of
Party A: Liuzhou OVM Joint Stock Co., Ltd.
-------------------------------------
(Xx Xxx Xxx)
Corporate Representative
For and on behalf of
Party B: Liuzhou OVM Construction Machinery Co., Ltd.
------------------------------------
(Xxxxx Xxxx Xx)
Corporate representative
DATED June 8, 1995.
