NOTES TO THE CONSOLIDATED FINANCIAL  STATEMENTS  (RMB AND US$ AMOUNTS EXPRESSED IN THOUSANDS, EXCEPT PER SHARE DATA)  1.  Corporate information (cont’d) 1.2  Investment in Guangxi Yuchai Machinery Company Limited (cont’d) (c)  Cooperation with Chery Automobile Co., Ltd. (d)  Cooperation with Guangxi Skylink Software Technology Co., Ltd. 1.3  Investment in Thakral Corporation Ltd. China Yuchai International Limited | Annual Report 2013 35 On December 1, 2009, TCL announced its plan to return surplus capital of approximately S$130.6 million to  shareholders by way of the Capital Reduction Exercise. Concurrently with the Capital Reduction Exercise, Venture Delta  and Grace Star intend to appoint a broker to sell 550,000,000 shares out of their 898,990,352 shares in TCL at a price of  S$0.03 per share on an ex-distribution basis (“Placement”). As of December 1, 2009, from the date that an associate is  classified as disposal group held for sale, the Group ceased to apply the equity method and the investment in TCL was  measured at the lower of the carrying amount and fair value less cost to sell and classified as held for sale. On August 15, 2006, the Group exercised its right to convert all of its 52,933,440 convertible bonds into 529,334,400  new ordinary shares in the capital of TCL. Upon the issue of the new shares, the Group’s interest in TCL has increased  to 36.6% of the total issued and outstanding ordinary shares. During the year ended December 31, 2007, the Group  did not acquire new shares in TCL. However, as a result of conversion of convertible bonds into new ordinary shares by  TCL’s third party bondholders, the Group’s interest in TCL was diluted to 34.4%. On September 2, 2008, Venture Delta  transferred 1,000,000 ordinary shares, representing 0.04% interest in TCL to Grace Star. In March 2005, the Company through Venture Delta Limited (“Venture Delta”) and Grace Star Services Ltd. (“Grace Star”)  held 14.99% of the ordinary shares of Thakral Corporation Ltd. (“TCL”). TCL is a company listed on the main board of  the Singapore Exchange Securities Trading Limited (the “Singapore Exchange”) and is involved in the manufacture,  assembly and distribution of high-end consumer electronic products and home entertainment products in the PRC.  Three directors out of eleven directors on the board of TCL were appointed by the Group. Based on the Group’s  shareholdings and representation in the board of directors of TCL, management concluded that the Group had the  ability to exercise significant influence over the operating and financial policies of TCL. Consequently, the Company’s  consolidated financial statements include the Group’s share of the results of TCL, accounted for under the equity  method. The Group acquired an additional 1% of the ordinary shares of TCL in September 2005. As a result of the rights  issue of 87,260,288 rights shares on February 16, 2006, the Group’s equity interest in TCL increased to 19.4%. On February 8, 2013, Yuchai, pursuant to a joint venture agreement entered into with Guangxi Skylink Software  Technology Co., Ltd. (“Guangxi Skylink”), incorporated Guangxi Yineng IOT Science & Technology Co., Ltd.  (“Yineng”) in Nanning, Guangxi province to design, develop, manage and market an Electronic Operations  Management Platform. The registered share capital of Yineng is Rmb 36 million. Yuchai holds 40% and  Guangxi Skylink holds the remaining 60% in the joint venture. Yuchai and Guangxi Skylink hold joint control in  governing the financial and operating policies of the joint venture. On August 11, 2009, Yuchai, pursuant to a Framework Agreement entered into with Jirui United Heavy Industry  Co., Ltd. (“Jirui United”), a company jointly established by China International Marine Containers Group Ltd.,  Chery Automobile Co., Ltd. and Shenzhen City Jiusi Investment Management Co., Ltd. (“Jiusi”), incorporated  Y & C Engine Co., Ltd. (“Y & C”) in Wuhu, Anhui province to produce heavy duty vehicle engines with the  displacement range from 10.5L to 14L including the engines of YC6K series. The registered capital of the Y & C  is Rmb 500 million. Yuchai and Jirui United each hold 45% in the joint venture with Jiusi holding the remaining  10%.