[1]

Jiulong was established in 1993 and mainly engages in the production of integral power steering gears for heavy-duty vehicles. On August 11, 2014, the Company entered into the Exchange Agreement with Jiulong Machine under which the Company issued 818,000 of its common shares in a private placement for the acquisition of the 19% equity interest in Jiulong held by Jiulong Machine. On September 26, 2014, the Company obtained the 19% equity interest in Jiulong and completed its share registration with the local government administrative bureau. While the Company retained its controlling interest in Jiulong, the Company’s acquisition of the non-controlling interest was accounted for as an equity transaction (See Notes 18 and 22).

[2]

Henglong was established in 1997 and mainly engages in the production of rack and pinion power steering gears for cars and light duty vehicles. On August 11, 2014, the Company entered into a Stock Exchange Agreement, the “Exchange Agreement”, with a third party, Jingzhou City Jiulong Machinery Electricity Manufacturing Co., Ltd., “Jiulong Machine”, under which the Company issued 3,260,000 of its common shares in a private placement for the acquisition of the 20% equity interest in Henglong held by Jiulong Machine. On September 26, 2014, the Company obtained the 20% equity interest in Henglong and completed its share registration with the local government administrative bureau. While the Company retained its controlling interest in Henglong, the Company’s acquisition of the non-controlling interest was accounted for as an equity transaction (See Notes 18 and 22).

[3]

Shenyang was established in 2002 and focuses on power steering parts for light duty vehicles.

[4]

USAI was established in 2005 and mainly engages in the production and sales of sensor modules.

[5]

Jielong was established in 2006 and mainly engages in the production and sales of automobile steering columns.

[6]

Wuhu was established in 2006 and mainly engages in the production and sales of automobile steering systems.

[7]

Beijing Henglong was established in 2010 and mainly engages in the design, development and manufacture of both hydraulic and electric power steering systems and parts. According to the joint venture agreement, the Company does not have voting control of Beijing Henglong. Therefore, the Company’s consolidated financial statements do not include Beijing Henglong, and such investment is accounted for by the equity accounting method.

[8]

On February 21, 2012, Hubei Henglong and SAIC-IVECO Hongyan Company, “SAIC-IVECO,” established a Sino-foreign joint venture company, Chongqing Henglong, to design, develop and manufacture both hydraulic and electric power steering systems and parts.

[9]

On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd.

[10]

On August 21, 2012, Brazil Henglong was established as a Sino-foreign joint venture company by Hubei Henglong and two Brazilian citizens, Ozias Gaia Da Silva and Ademir Dal’ Evedove. Brazil Henglong engages mainly in the import and sale of automotive parts in Brazil.

[11]

In December 2009, Henglong, a subsidiary of Genesis, formed the Testing Center, which mainly engages in the research and development of new products. The registered capital of the Testing Center was RMB30.0 million, equivalent to approximately $4.4 million.

[12]

On May 2014, together with Hubei Wanlong, Jielong formed a subsidiary, Wuhan Chuguanjie Automotive Science and Technology Ltd., “Wuhan Chuguanjie”, which mainly engages in research and development, manufacture and sales of automobile electronic systems and parts. Wuhan Chuguanjie is located in Wuhan, China. The registered capital of Wuhan Chuguanjie is RMB30.0 million, equivalent to approximately $4.9 million. At the date of release of this annual report, Jielong has completed the capital injection of RMB25.0 million, equivalent to approximately $4.1 million.