Agreement dated July 19, 2003



 





Exhibit 4.11




Agreement




	 	 	 
	Party A:

	 	Guanguxi Yuchai Machinery Company Limited
	Party B:

	 	China Yuchai International Limited







     From July 18 to 19, 2003, a meeting in respect of certain matters between
China Yuchai International (hereinafter referred to as “Yuchai International”)
and Guangxi Yuchai Machinery Company Limited (hereinafter referred to as
“Guangxi Yuchai”) was held in the Conference Center of Yulin Municipality,
Guangxi Zhuang Autonomous Region. Through consultations, the two parties have
reached the following agreement:




	 	1.	 	After this Agreement becomes effective, Guangxi Yuchai shall
immediately pay its foreign shareholders the distribution of dividends
for 2001 and the interim distribution of dividends for 2002.
	 
	 	2.	 	After this Agreement becomes effective, Guangxi Yuchai shall
immediately allow the financial personnel delegated by Yuchai
International to return to their post at Guangxi Yuchai, and such
financial personnel shall then be replaced by financial personnel
reporting to the Board of Directors of Yuchai International.
	 
	 	3.	 	After this Agreement becomes effective, relevant parties shall
immediately cancel arbitration and litigation procedures against the
other relevant parties.
	 
	 	4.	 	The three above-mentioned matters shall occur simultaneously within
7 business days beginning from the date when this Agreement becomes
effective.
	 
	 	5.	 	Guangxi Yuchai shall immediately adopt an appropriate structure for
corporate management so as to make it conform to the requirements of
the Law of China on Corporation and international practice.
	 
	 	6.	 	Based on the actual situation, the two parties shall jointly
promote the following plan: (1) The rights and interests of Yuchai
International in Guangxi Yuchai shall be assigned to a new company
listed in Hong Kong Stock Exchange or other international capital and
stock market (the “New Company”) in accordance with laws and
regulations. Shares of the New Company shall be held by the existing
shareholders of Yuchai International in accordance with their equity
proportions in Yuchai International, but without the arrangement of
gold shares (also referred to as “special shares”). The New Company
shall increase issuance of new shares not exceeding 30% of the total
equity at a fair price of the market. At the same time, the Board of
Directors of the New Company shall consist of directors appointed by
the shareholders and international independent directors, of which
directors appointed by the shareholders shall be allocated in
accordance with their proportions of equity. If this plan is difficult
to prepare and realize, other plans acceptable by the parties may be
jointly prepared otherwise. Neither of the above-mentioned plans shall
set up gold shares. Both aim at eliminating the actual control of
Guangxi Yuchai by the foreign




 









 






	 	 	 	party. (2) Hong Leong shall be responsible for the restructuring of the
assets and capital of Yuchai International. The original shareholders of
Yuchai International and Party A shall fully cooperate with Hong Leong.
(3) The above (1) and (2) shall be mutually related and shall be
conditions for each other.
	 
	 	7.	 	Through the consent of both parties, an independent third party
appointed by the Chinese party shall handle matters in relation to the
listing of the New Company, and shall consistently support this work.
	 
	 	8.	 	After this Agreement is reached, the parties shall further make
joint efforts and cooperate closely, so as to promote the
communications between the parties, and to minimize misunderstandings
that may occur in the future. After matters under the above (1), (2)
and (3) are completed, the two parties shall immediately make a public
announcement jointly, announcing that relevant matters have been
resolved appropriately.
	 
	 	9.	 	This Agreement is signed in Yulin Municipality, Guangxi, on July
19, 2003, and it shall become effective from the date when Yuchai
International signs and delivers to Guangxi Yuchai the letter in
respect of the principle reached between the two parties when this
Agreement is signed (attached please find the form of the letter). The
contents of the letter include: (1) Yuchai International commits to
distribute 90% of the above-mentioned distributed dividends to the
shareholders of Yuchai International within one month after it receives
the distributed dividends as stated in the above Article 1; (2) Yuchai
International recommends 7 directors to Guangxi Yuchai.




     This Agreement is reached in the Conference Center of Yulin Municipality,
Guangxi Zhuang Autonomous Region.




	 	 	 	Party A

Guangxi Yuchai Machinery Company Limited
	 
	 	 	 	Wang Jianming     July 19, 2003
	 
	 	 	 	Party B

China Yuchai International Limited
	 
	 	 	 	Wong Hong Ren     July 19, 2003