china cosco holdings company limited articles...

CHINA COSCO HOLDINGS COMPANY LIMITED

ARTICLES OF ASSOCIATION

First amendment Approved in the First Extraordinary GeneralMeeting in 2005 dated 7 March 2005

Second amendment Approved in the Extraordinary General Meetingdated 20 November 2006 and the Annual GeneralMeeting dated 15 May 2007

Third amendment Approved in the First Extraordinary GeneralMeeting in 2007 dated 23 October 2007

Fourth amendment Approved in the Annual General Meeting for 2008dated 9 June 2009

Fifth amendment Approved in the Annual General Meeting for 2011dated 22 May 2012

(The Articles of Association is made in Chinese and English language, both

versions having equal legal effects. In the event of conflicts or inconsistent

meaning between the versions, the Chinese version shall prevail.)

CONTENTS

Chapter 1 General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Chapter 2 Purpose and Scope of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Chapter 3 Shares and Registered Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Chapter 4 Reduction of Capital and Repurchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Chapter 5 Financial Assistance for the Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Chapter 6 Share Certificates and Register of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Chapter 7 Rights and Obligations of the Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Chapter 8 Shareholders’ General Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Chapter 9 Special Voting Procedures for Class Shareholders . . . . . . . . . . . . . . . . . . . . . . . . 29

Chapter 10 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Chapter 11 Independent Dircetors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Chapter 12 Secretary of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Chapter 13 Supervisory Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Chapter 14 The General Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Chapter 15 Qualifications and Obligations of the Company’s Directors,Supervisors, General Manager, Vice General Manager andOther Senior Management Staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Chapter 16 Financial Accounting System and Profit Distribution and Auditing. . . . . . . . . . . . 56

Chapter 17 Engagement of an Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Chapter 18 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Chapter 19 Labour and Personnel System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Chapter 20 Labour Union Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Chapter 21 Merger and Division of the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Chapter 22 Dissolution and Liquidation of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Chapter 23 Procedures for Amendment of the Company’s Articles of Association . . . . . . . . . 66

Chapter 24 Notice and public announcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Chapter 25 Resolution of Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Chapter 26 Supplementary Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Notes: In the sidenotes of Articles of Association, Company Law refers to the amended Company Law of the People’s Republicof China which came into effect on 1 January 2006. Mandatory Provisions refers to Mandatory Provisions for the Articles ofAssociation of Companies to be Listed Outside the People’s Republic of China jointly issued by former State Council SecuritiesCommission and former State Commission for the Restructuring of the Economy; Listing Rules refers to Rules Governing theListing of Securities on the Stock Exchange of Hong Kong Limited issued by the Stock Exchange of Hong Kong Limited; HongKong Clearing House Advices refers to Advices of Hong Kong Clearing House issued by Hong Kong Securities ClearingCompany Limited; Zheng Jian Hai Han refers to Letter on Supplementary Amendments on Articles of Association of Companiesto be listed in Hong Kong (Zheng-Jian-Hai-Han [1995] No.1) jointly issued by Overseas Listing Department of China SecuritiesRegulatoryCommission and former Productive System Department of State Commission for the Restructuring of the Economy;Advices refers to Advices on Further Promotion for Regularized Operation and Deepening Reform of Overseas ListingCompanies jointly issued by State Economic and Trade Commission and China Securities Regulatory Commission; Guidelinesof Secretary Work refers to Working Guidelines for Secretary of Board of Directors of Overseas Listing Companies issued byChina Securities Regulatory Commission; Guidelines for the Articles, Code of Corporate Governance, General Meeting Rules,Public Shareholders, Independent Directors’ Opinion and Circular on Guarantees refer to, respectively, Guidelines for theArticles of Associations of the Listed Company (Revised in 2006), Code of Corporate Governance for the Listed Company,Rules for General Meetings of Listed Company, Several Provisions on Strenthening the Protection of the Public Shareholders,Guidance on the Establishment of Independent Director System in Listed Company and Circular on Regularizing ExternalGuarantees of Listed Company, which are all issued by China Securities Regulatory Commission.

In the main body of the Articles od Associations, Listing Rules include Rules Governing the Listing of Securities on the StockExchange of Hong Kong Limited issued by the Stock Exchange of Hong Kong Limited and Rules Governing the Listing ofStocks on Shanghai Stock Exchange issued by the Shanghai Stock Exchange.

CHINA COSCO HOLDINGS COMPANY LIMITEDARTICLES OF ASSOCIATION

CHAPTER 1. GENERAL PROVISIONS

Article 1 China COSCO Holdings Company Limited (“Company”) is a joint stocklimited company incorporated in accordance with Company Law of thePeople’s Republic of China (“Company Law”), Special Regulations of StateCouncil Concerning Share Offerings and Listings Outside the People’sRepublic of China of Joint Stock Limited Companies (“SpecialRegulations”) and other relevant state laws and administrative regulations.

Approved by State Council State-owned Assets Supervisory andManagement Commission on 18th February 2005 by (Guo-Zi-Gai-Ge[2005] No.191 Document) Approval Reply on Incorporation of ChinaCOSCO Holdings Company Limited, this Company was incorporated bymeans of promotion and was registered with State Administration forIndustry and Commerce on 3rd March 2005 and obtained a business licenseas a company. The number of Company’s business license is1000001003947.

The promoter of the Company is China Ocean Shipping (Group) Company.

Article 2 Registered name of the Company:Chinese: 中國遠洋控股股份有限公司Chinese abbreviation: 中國遠洋English: China COSCO Holdings Company LimitedEnglish abbreviation: CHINA COSCO

Article 3 Address: Level 3, No. 1 Tongda Square, Tianjin Port Free Trade Zone,TianjinPostal code: 300461Tel: 0086-22-66270898Fax: 0086-22-66270899

Article 4 Legal representative of the Company shall be Chairman of its Board ofDirectors.

Article 5 The Company is a joint stock limited company existing in perpetuity. Thenature of the Company is a foreign investment joint stock company.

All capital of the Company is divided into equal value shares. The liabilityof shareholders of the Company shall be limited to the extent of the sharesthey hold and the Company shall be liable for its indebtedness with all itsassets.

The Company is an independent corporate body governed and protected bylaws and administrative regulations of the People’s Republic of China.

Article 6 Pursuant to The Company Law of the People’s Republic of China, SpecialProvisions, Mandatory Provisions for the Articles of Association ofCompanies to be Listed Outside the People’s Republic of China(“Mandatory Provisions”), Guidelines for the Articles of Association ofListed Companies (“Guidelines for the Articles”), Code of CorporateGovernance for Listed Companies (“Code of Corporate Governance”) andother state laws and administrative regulations, amendments were made to

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Sec. 1 (a) ofAppendix 13dListing Rules

Article 1MandatoryProvisions





Article 3Company Law

the company’s former Articles of Association, and these Articles ofAssociation (the “Articles” or the “Articles of the company”) wereformulated, which had been approved and authorized by the shareholders’meeting for the year 2011.

Article 7 This Articles of Association shall take effect upon special resolutionadopted by Company’s Extraordinary Shareholder General Meeting,approval by the approving department authorized by the State Council andlisting of the Company’s domestic shares on the stock exchange in China.Upon effectiveness of this Articles of Association, the Original Articles ofAssociation shall be superseded thereby.

Since the date when Article of Association is in force, the Article ofAssociation becomes the legally binding document on the Company’sorganization and activity, and on rights and obligations between theCompany and shareholders and among shareholders.

Article 8 The Articles of Association of the Company shall be binding upon theCompany and its shareholders, directors, supervisors, general manager,vice general manager and other senior management staff. All the abovepersons may make claims related to Company matters in accordance withthe Articles of Association.

Subject to Chapter 25 of this Articles of Association, shareholders may suethe Company in accordance with the Articles of Association of Company.The Company may sue shareholders, directors, supervisors, generalmanager, vice general manager and other senior management officers of theCompany in accordance with its Articles of Association. Shareholders maysue other shareholders in accordance with the Articles of Association of theCompany. Shareholders may sue directors, supervisors, general manager,vice general manager and other senior management officers of theCompany in accordance with the Articles of Association of the Company.

For the purposes of the above paragraph, the term “sue” shall include theinitiation of proceedings in a court or the application to an arbitrationinstitution for arbitration.

Article 9 The Company may invest in other limited liability companies and jointstock limited companies. Its liability towards an investee company shall belimited to the extent of the amount of capital contributed thereto.

However, unless otherwise stipulated by law, the Company shall not makecapital contribution to its investee enterprises of which the Company has tobear joint liability on their debts.

Article 10 Subject to Chinese laws, administrative regulations and this Articles ofAssociation the Company is entitled to finance or borrow funds including(but not limited to) issue of company bonds and mortgage or pledge itsproperty.

Article 11 The Company may set up relative organization and assign necessary staffthereto and bring it into enterprise management and personnelestablishment under relative laws and statutes.

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Article 10Guidance for theArticles

Article 8MandatoryProvisionsArticle 15Company Law

CHAPTER 2. PURPOSE AND SCOPE OF BUSINESS

Article 12 The business purpose of the Company is: to observe state laws andadministrative regulations, implement state policies, carry out productionand operation independently in accordance with law, optimize resourcesavailable and sharpen competitive edge both in domestic and overseasmarkets.

Article 13 The business scope of the Company includes: general international oceanfreight, international container shipping, international container linershipping, international shipping agency, ordinary cargo, foreign tradecontainer extension liner shipping along coast of China and middle andlower reaches of the Yangtze River; investment in and management ofindustrial projects, investment in dock construction; international marineand land shipping agency; domestic land cargo shipping agency;production, sales, lease and repair of ship and container; storage, loadingand unloading; shipping planning; information service.

The scope of business of the Company shall be in accordance with the itemsapproved by the company registry.

Article 14 The Company may, for the purpose of its business development, legallyadjust its business scope and operational mode (subject to approval byrelevant government authority if required). And to set up wholly ownedsubsidiary, subsidiary, associate, branch office and representative officeinside or outside of the People’s Republic of China, when it is necessary fordevelopment of its operation.

CHAPTER 3. SHARES AND REGISTERED CAPITAL

Article 15 The Company shall have ordinary shares at all times. The ordinary sharesissued by the Company include domestic capital shares and foreign capitalshares. It may have other kinds of shares according to need, upon approvalby the authorities that are authorized by the State Council to examine andapprove companies.

Article 16 All the shares issued by the Company shall have a par value, which shallbe RMB¥1 for each share.

The above reference of Renminbi means the legal currency in the People’sRepublic of China.

Article 17 The Company may issue shares to investors inside the People’s Republic ofChina and investors outside the People’s Republic of China subject toapproval by China Securities Regulatory Commission (“CSRC”).

For the purpose of the preceding paragraph, the term “investors outside thePeople’s Republic of China” shall mean investors from foreign countries orfrom Hong Kong, Macao or Taiwan that subscribe for shares issued by theCompany, and the term “investors inside the People’s Republic of China”shall mean investors inside the People’s Republic of China, excluding theabove said regions, that subscribe for shares issued by the Company.

Article 18 Shares issued by the Company to investors inside the People’s Republic ofChina and to be subscribed for in Renminbi shall be referred to as“domestic investment shares”. Shares issued by the Company to investors

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Article 11MandatoryProvisions Art.9,Appendix 3Listing Rules




outside the People’s Republic of China and to be subscribed in foreigncurrency shall be referred to as “foreign investment shares”. Foreigninvestment shares listed outside the People’s Republic of China shall bereferred to as “foreign investment shares listed outside the People’sRepublic of China”. Shareholders of domestic investment shares andforeign investment shares listed outside the People’s Republic of China areshareholders of ordinary shares with the same obligations and rights.

The above reference of foreign currency means the legal currencies of othercountries or regions other than Renminbi, accepted by State foreignexchange authority and payable for subscription of shares of the Company.

The Company’s domestic shares are placed under the unified trust of ChinaSecurities Depository and Clearing Corporation Limited Shanghai Branch;the Company’s foreign capital shares listed in Hong Kong are mainlyplaced under the trust of Hong Kong Securities Clearing Company Limited.

Article 19 Foreign investment shares listed in Hong Kong is referred to as H Share.H Share refers to the share listed subject to approval by Stock Exchange ofHong Kong Limited (“HKEX”), indicated in Renminbi for its par value andsubscribed and transacted in Hong Kong dollar.

The domestic shares issued and listed domestically by the Company (“AShares”) refer to the shares that are issued with the approval of ChinaSecurities Regulatory Commission (CSRC) and listed in the domestic stockexchanges, and denominated, purchased and traded in Renminbi.

Article 20 Following approval from the regulatory authorities in charge of securitiesauthorized by the State Council, the total amount of ordinary shares that theCompany may issue is 4,100,000,000 shares. The number of shares issuedto the promoters at the time of establishment is 4,100,000,000 shares,representing 100% of the total number of ordinary shares that may beissued by the Company.

Article 21 The company issued 2,244,000,000 ordinary shares after its establishment,2,040,000,000 of which are new shares; the promoter sold 204,000,000original shares, all of which are H shares.

After the above-mentioned issue, the corporate equity structure is as below:the total number of ordinary shares is 6,140,000,000, of which the promoterChina Ocean Shipping (Group) Company holds 3,896,000,000 shares,accounting for 63.5% of the total shares; H-share shareholders hold2,244,000,000 shares, accounting for 36.5% of the total shares.

After the above-mentioned foreign shares of listing outside PRC wascompleted, China Ocean Shipping (Group) Company’s exclusivelyState-owned capital surplus was turned into capital, which had beenapproved by the interim shareholders’ meeting and the regulatory authority,The corporate equity structure after the above-mentioned capitalreplenishment is as below:

The total number of ordinary shares is 6,204,756,337, of which thepromoter China Ocean Shipping (Group) Company holds 3,960,756,337shares, accounting for 63.83% of the total shares; H-share shareholdershold 2,244,000,000 shares, accounting for 36.17% of the total shares.

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After China Ocean Shipping (Group) Company’s Exclusively State-owned

capital surplus was turned into capital as is mentioned above, the company

made special distribution in the form of stock dividend to China Ocean

Shipping (Group) Company and H-share shareholders, which had been

approved by the shareholders’ meeting with special resolution and certified

by the authorized regulatory and approval body under the State Council.

After above-mentioned special distribution, the corporate equity structure

is as below:

The total number of ordinary shares is 7,135,469,787, of which the

promoter China Ocean Shipping (Group) Company holds 4,554,869,787

shares, accounting for 63.83% of the total shares; H-share shareholders

hold 2,580,600,000 shares, accounting for 36.17% of the total shares.

After the above-mentioned special distribution, the company issued

1,783,867,446 A-shares, which had been approved by the shareholders’

meeting, the shareholders’ meeting of domestic capital stocks, and the

shareholders’ meeting of foreign capital stocks with special resolution

respectively, and certified by the authorized regulatory and approval body

under the State Council. After the above-mentioned capital replenishment

and A-share issue, the corporate equity is as below:

The total number of ordinary shares is 8,919,337,233, of which thepromoter China Ocean Shipping (Group) Company holds 4,554,869,787shares, accounting for 51.07% of the total shares, H-share shareholdershold 2,580,600,000 shares, accounting for 28.93% of the total shares, andA-share shareholders hold 1,783,867,446 shares, accounting for 20.00% ofthe total shares.

After the above-mentioned capital replenishment and A-share issue, thecompany offered 864,270,817 A-shares non-publicly to China OceanShipping (Group) Company at the first time, and offered not more than432,666,307 A-shares to less than 10 specific investors that include ChinaOcean Shipping (Group) Company, both of which had been approved by theshareholders’ meeting, the shareholders’ meeting of domestic capitalstocks, and the shareholders’ meeting of foreign capital stocks with specialresolution respectively, and certified by the authorized regulatory andapproval body under the State Council. After the above-mentionednon-public offering, the corporate structure is as below:

The total number of ordinary shares is 10,216,274,357, of which thepromoter China Ocean Shipping (Group) Company holds 5,472,806,911shares, accounting for 53.57% of the total shares, H-share shareholdershold 2,580,600,000 shares, accounting for 25.26% of the corporate equity,and A-share shareholders hold 2,162,867,446 shares, accounting for21.17% of the total shares.

The share capital of the Company is comprised of 10,216,274,357 ordinaryshares, including 7,635,674,357 domestic shares (or 74.74% of the totalordinary shares) and 2,580,600,000 overseas listed foreign shares (or25.26% of the total ordinary shares). The promoter, China Ocean Shipping(Group) Company, is the controlling shareholder of the Company.

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Article 22 After the plan for issuing foreign investment shares listed outside thePeople’s Republic of China and domestic investment shares has beenapproved by China Securities Regulatory Commission, the board ofdirectors of the Company may arrange for implementation of such plan bymeans of separate issues.

The Company’s plans for separate issuance of foreign investment shareslisted outside the People’s Republic of China and domestic investmentshares in accordance with the preceding paragraph may be implementedseparately within 15 months of the date of approval by China SecuritiesRegulatory Commission.

Article 23 If the Company issues foreign investment shares listed outside the People’sRepublic of China and domestic investment shares separately within thetotal number of shares specified in the issuing plan, each such issue shallbe fully subscribed for in one time. If special circumstances make itimpossible for each such issue to be fully subscribed for in one time, theshares may be issued in installments, subject to the approval of ChinaSecurities Regulatory Commission.

Article 24 The registered capital of the Company is RMB 10,216,274,357.

Article 25 The Company may approve capital increases depending on its business anddevelopment requirements in accordance with the relevant provisions of theArticles of Association of the Company.

The Company may increase its capital by the following methods:

(1) offer of new shares to non-specific investors;

(2) issuance of new shares to existing shareholders;

(3) allotment of new shares to existing shareholders;

(4) capitalizing the common reserve fund; or

(5) other methods permitted by laws and administrative regulations.

If the Company is to increase its capital by issuing new shares, the mattershall be handled in accordance with the procedures provided for in relevantstate laws and administrative regulations after such increase has beenapproved in accordance with the Articles of Association.

Article 26 Save as otherwise provided in laws and administrative regulations, sharesin the Company may be transferred freely and shall be clear of any lien.

CHAPTER 4. REDUCTION OF CAPITAL AND REPURCHASE OF SHARES

Article 27 The Company may reduce its registered capital in accordance with theprovisions of its Articles of Association.

Article 28 If the Company is to reduce its capital, it must prepare a balance sheet andan inventory of assets.

The Company shall notify its creditors within 10 days of the date ofadoption of the resolution to reduce its registered capital and to publish apublic announcement in newspapers for at least three times within 30 days

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Article 19MandatoryProvisionsArticle 20MandatoryProvisions


Article 21MandatoryProvisionsArt.1(2)Appendix 3Listing Rules



of the said date. Creditors shall, within 30 days of receiving written notice,or within 45 days of the date of the first public announcement for those whohave not received written notice, be entitled to request the Company torepay its debts in full or to provide a corresponding guarantee forrepayment.

The reduced registered capital of the Company may not be less than thestatutory minimum.

Article 29 The Company may, in the following circumstances, repurchase its ownissued and outstanding shares following the adoption of a pertinentresolution in accordance with the procedure provided under its Articles ofAssociation, and submission to and approval by the relevant stateauthorities:

(1) cancellation of shares in order to reduce its capital;

(2) merger with other companies holding shares of the Company;

(3) incentive shares granted to staff of the Company;

(4) circumstance where any shareholder holds different opinion withregard to the resolution of the general meeting on merger or divisionof the Company and requests the Company to purchase his shares;

(5) other circumstances where laws or administrative regulations sopermit.

Saving for the foregoing situations, the Company shall not engage in theselling and buying of the Company’s shares.

the Company shall repurchase its own issued and outstanding shares inaccordance with relative laws, statutes and provisions of Article 30 to 33hereof.

Article 30 If the Company is to repurchase its own shares following approval from therelevant state authorities, it may proceed in any of the following manners:

(1) issue a repurchase offer, on a pro rata basis, to all the shareholders ofthe Company;

(2) repurchase through open transactions on a securities exchange;

(3) repurchase by agreement outside a securities exchange;

(4) other manners where laws or administrative regulations or thesecurities administration authority of the State Council so permits.

Article 31 If the Company is to repurchase shares by agreement outside a securitiesexchange, prior approval shall be obtained from the shareholders’ generalmeeting in accordance with the procedure provided for in the Company’sArticles of Association. Upon prior approval by the shareholders’ generalmeeting obtained in the same manner, the Company may rescind or changecontracts concluded in the manner set forth above or waive any of its rightsunder such contracts.

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For the purposes of the above paragraph, contracts for the repurchase ofshares shall include (but not be limited to) agreements wherebyrepurchasing obligations are undertaken and repurchasing rights areacquired.

The Company may not assign contracts for the repurchase of its own sharesor any of its rights thereunder.

Article 32 After the Company repurchases its shares in accordance with the laws, itshall write off or transfer the shares within the period provided by law andadministrative regulations. After the Company purchases the shares inaccordance with laws, it shall write off the shares within ten days after therepurchase if the purchase fulfils the stipulation in Article 29 (1); it shalltransfer or write off the shares within six months if the purchase fulfils thestipulation in Article 29 (2) and (4); it shall transfer to employees withinone year if it fulfils the stipulation in Item (3).

The amount of the Company’s registered capital shall be reduced by thetotal par value of the shares canceled.

Article 33 Unless the Company has already entered the liquidation stage, it mustcomply with the following provisions in repurchasing its issued andoutstanding shares:

(1) If the Company repurchases shares at their par value, the amountthereof shall be deducted from the book balance of distributable profitand/or from the proceeds of a fresh share issue made to repurchase theold shares;

(2) If the Company repurchases shares at a price higher than their parvalue, the portion corresponding to their par value shall be deductedfrom the book balance of distributable profit and/or from the proceedsof a fresh share issue made to repurchase the old shares; and theportion in excess of the par value shall be handled according to thefollowing methods:

(i) if the share repurchased were issued at their par value, theamount shall be deducted from the book balance of distributableprofit;

(ii) if the shares repurchased were issued at a price higher than theirpar value, the amount shall be deducted from the book balanceof distributable profit and/or the proceeds of a fresh share issuemade to repurchase the old shares; however, the amountdeducted from the proceeds of the fresh share issue may notexceed the total premium obtained at the time of issuance of theold shares nor may it exceed the amount on the Company’scapital common reserve account (including the premiums fromthe fresh share issue) at the time of repurchase;

(3) The sums paid by the Company for the purposes set forth below shallbe paid out of the Company’s distributable profits:

(i) acquisition of the right to repurchase its own shares;

(ii) modification of any contract for repurchase of its own shares;

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(iii) release from any of its obligations under any repurchasecontract.

(4) After the par value of the annulled shares has been deducted from theregistered capital of the Company in accordance with relevantregulations, that portion of the amount deducted from thedistributable profit and used to repurchase shares which correspondsto the par value of the repurchased shares shall be included in theCompany’s capital common reserve account.

CHAPTER 5. FINANCIAL ASSISTANCE FOR THE PURCHASE OF SHARES

Article 34 The Company or its subsidiaries shall not at any time provide any financialassistance in any form to purchasers or prospective purchasers of the sharesin the Company. Purchasers of shares in the Company as referred to aboveshall include persons that directly or indirectly undertake obligations forthe purpose of purchasing shares in the Company.

The Company or its subsidiaries shall not at any time provide any financialassistance in any form to the above obligors in order to reduce or dischargetheir obligations.

The provisions of this Article shall not apply to the circumstancesdescribed in Article 36 hereof.

Article 35 For the purposes of this Chapter, the term “financial assistance” shallinclude (but not be limited to) the financial assistance in the forms set outbelow:

(1) gift;

(2) guarantee (including the undertaking of liability or provision ofproperty by the guarantor in order to secure the performance of theobligation by the obligor), indemnity (not including, however,indemnity arising from the Company’s own fault), release or waiverof rights;

(3) provision of a loan or conclusion of a contract under which theobligations of the Company are to be fulfilled before the obligationsof the other party to the contract, or the novation of, or the assignmentof rights under, such loan or contract;

(4) financial assistance in any other form if the Company is insolvent orhas no net assets or if such assistance would lead to a major reductionin the Company’s net assets.

For the purposes of this Chapter, the term “undertake obligations” shallinclude the undertaking of an obligation by the obligor by concluding acontract or making an arrangement (whether or not such contract orarrangement is enforceable, and whether or not such obligation isundertaken by the obligor individually or jointly with any other person) orby changing its financial position in any other way.

Article 36 The acts listed below shall not be regarded as acts prohibited under Article34 hereof:

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(1) where the Company provides the relevant financial assistancegenuinely for the benefit of the Company and the main purpose of thefinancial assistance is not the purchase of shares in the Company, orthe financial assistance is an incidental part of some overall plan ofthe Company;

(2) lawful distribution of the Company’s property in the form ofdividends;

(3) distribution of dividends in the form of shares:

(4) reduction of registered capital, repurchase of shares, adjustment of theshare structure, etc. in accordance with the Articles of Association ofthe Company;

(5) provision of a loan by the Company within its scope of business andin the ordinary course of its business (provided that the same does notlead to a reduction in the net assets of the Company or that if the sameconstitutes a reduction, the financial assistance was paid out of theCompany’s distributable profits);

(6) the provision of money by the Company for an employee shareholdingscheme (provided that the same does not lead to a reduction in the netassets of the Company or that if the same constitutes a reduction, thefinancial assistance was paid out of the Company’s distributableprofits).

CHAPTER 6. SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS

Article 37 The Company’s shares shall be in registered form.

The share certificates of the Company shall clearly state the followingparticulars:

(1) name of the Company;

(2) date of incorporation;

(3) class, par value and share number of the share;

(4) serial number of the share;

(5) such other particulars as are required to be specified by the CompanyLaw, Special Regulations and securities exchange(s) on which theCompany’s shares are listed.

Article 38 The Company’s share certificate may be assigned, donated, inherited andmortgaged in accordance with relative laws, administrative regulations andprovisions hereof.

Assignment and transfer of the share certificates shall be registered at theshare registry appointed by the Company.

Article 39 The share certificates shall be signed by the legal representative. If thesignatures of other senior management staff of the Company are requiredby the securities exchange(s) on which the Company’s shares are listed, theshare certificates shall also be signed by such other senior management

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Art.1(1)Appendix 3Listing Rules

Article 33MandatoryProvisions Art.1,Zheng Jian HaiHan Art.2(1),Appendix 3Listing Rules

staff. The share certificates shall become effective after the Company seal(including the seal of the Company’s securities) is affixed thereto. Affixingthe Company seal (including the seal of Company’s securities) to the sharecertificates shall be authorized by the board of directors. The signature ofthe chairman of the board of directors or of other senior management staffon the share certificates may also be in printed form.

In the event the Company’s shares are issued and traded in scriplessmanner, separate provisions of the securities regulatory authorities at theplace where the shares are listed shall apply.

Article 40 The Company shall not accept its shares being held as security under apledge.

Article 41 During their term of office, the directors, supervisors, general manager,vice general manager and other senior management officers of theCompany shall report regularly to the Company their respectiveshareholdings in the Company and any changes thereto. Transfer of sharesby the aforesaid persons shall be conducted in accordance with theprovisions of laws, regulations and/or relevant listing rules.

Article 42 If the directors, supervisors, the general manager, vicegeneral manager,other senior management officers of the Company, and shareholdersholding more than 5% of the Company’s shares sell its shares held by themwithin six months after buying them, or repurchase the shares within sixmonths after selling them, the proceeds obtained therefrom shall belong tothe Company, and the board of directors of the Company will withdrawsuch proceeds, provided that the security companies that hold more than5% of the shares by underwriting the remaining shares are not subject to theabove-mentioned restriction of 6-month period.

If the board of directors of the Company fails to comply with the provisionsof the first paragraph, the directors liable shall bear joint and severalliabilities.

Article 43 The Company shall keep a register of shareholders, in which the followingparticulars shall be recorded.

(1) the name, address (domicile), profession or nature of eachshareholder;

(2) the class and quantity of shares held by each shareholder;

(3) the amount paid or payable for the shares held by each shareholder:

(4) the serial numbers of the shares held by each shareholder;

(5) the date on which each shareholder is registered as such; and

(6) the date on which each shareholder ceases to be a shareholder.

The register of shareholders shall be ample evidence of the holding ofCompany shares by a shareholder, unless there is evidence to the contrary.

Article 44 The Company may, pursuant to an understanding or agreement reachedbetween the China Securities Regulatory Commission and the securities

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Article 29Guidance for theArticlesArticle 47Security Law



regulatory organization outside the People’s Republic of China, keepoutside the People’s Republic of China its register of holders of foreigninvestment shares listed outside the People’s Republic of China, andentrust the administration hereof to an agent outside the People’s Republicof China. The original of register of holders of foreign investment shareslisted outside the People’s Republic of China shall be kept in Hong Kong.

The Company shall keep at its domicile a duplicate of the register ofholders of foreign investment shares listed outside the People’s Republic ofChina. The appointed agent outside the People’s Republic of China shallensure that the register of holders of foreign investment shares listedoutside the People’s Republic of China and its duplicate are consistent atall times.

If the original and duplicate of the register of holders of foreign investmentshares listed outside the People’s Republic of China and its duplicate areinconsistent, the original shall prevail.

Article 45 The Company shall keep a complete register of shareholders.

The register of shareholders shall include the following parts:

(1) a register kept at the Company’s domicile other than those providedfor under items (2) and (3) of this paragraph;

(2) the register(s) of holders of foreign investment shares listed outsidethe People’s Republic of China kept in the place(s) of the stockexchange(s) outside the People’s Republic of China on which theshares are listed; and

(3) registers of shareholders kept in such other places as the board ofdirectors may decide necessary for listing purposes.

Article 46 The various parts of the register of shareholders shall not overlap. Thetransfer of shares registered in a certain part of the register of shareholdersshall not, during the continuance of the registration of such shares, beregistered in any other part of the register.

Foreign investment shares listed in Hong Kong for which all share capitalis paid in full may be assigned freely under this Articles of Association.Unless it complies with the following conditions the board of directors mayreject to recognize any assignment instrument without giving any reason:

(1) a fee of HK$2.50, or a higher fee as HKEX agrees at the time, hasbeen paid to the Company for register of assignment instrument of theshares and other document in relation to title of the shares or that mayeffect title of the shares;

(2) the assignment instrument only involves in the foreign investmentshare listed in Hong Kong;

(3) stamp tax for the assignment instrument is paid;

(4) relevant shares and any evidence indicating assigner is entitled toassign such shares as the board of directors may reasonably requiredshall be made available;

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Art.2, Zheng JianHai Han

Sec.1 (b),Appendix 13dListing Rules



Art.12, ZhengJian Hai Han

Art.1 (1),Appendix 3Listing Rules

(5) if the shares shall be assigned to a joint holder the number of jointholder shall be no more than 4; and

(6) the relative shares have no additional lien of any company.

In case the Company refuses to register the assigned shares, it shall, withintwo months of the formal submission of the assignment application, issuea notice on the refusal to register the assignment of the shares to theassigner and assignee.

The foreign investment shares listed in Hong Kong shall be assigned in thecommon or usual writing form or other form of assignment instrument asthe board of directors may accept; and the such assignment instrument shallonly be signed by hand or may be signed by hand or printing signature ifthe assignor or the assignee is a clearing institution or its agent. Allassignment instruments must be kept in custody of the legal address of theCompany or other location as the board of directors may designate fromtime to time.

Changes to and corrections of each part of the register of shareholders shallbe carried out in accordance with the laws of its situs.

Article 47 No changes resulting from share transfers may be made to the register ofshareholders within 30 days prior to a shareholders’ general meeting or 5days prior to the reference date set by the Company for the purpose ofdistribution of dividends. Such provisions shall apply to holders of Hshares.

Article 48 When the Company is to convene a shareholders’ general meeting, todistribute dividends, to be liquidated or to carry out other acts requiringconfirmation of equity interests, the board of directors or convener of thegeneral meeting shall decide upon a date as the date for determination(registration) of equity interests. Shareholders whose names appear on theregister at the end of that date of determination (registration) of equityinterests shall be the shareholders of the Company enjoying such interests.

Article 49 Any person that challenges the register of shareholders and requires hisname to be entered into or removed from the register may apply to acompetent People’s Court for rectification of the register.

Article 50 Any shareholder who is registered in the register of shareholders orrequires that his name be entered into the register of shareholders may, ifhis share certificate (the “original share certificate”) is lost, apply to theCompany for issuance of a replacement certificate in respect of such shares(the “relevant shares”).

Applications for the replacement of share certificates from holders ofdomestic investment shares who have lost their certificates shall be dealtwith in accordance with Article 144 of the Company Law.

Applications for the replacement of share certificates from holders ofoverseas listing foreign investment shares who have lost their certificatesmay be dealt with in accordance with the laws, securities exchangeregulations and other relevant regulations of the place where the original ofthe register of holders of overseas listing foreign investment shares is kept.

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Article 39MandatoryProvisionsArticle 31Guidance for theArticles



Where holders of H shares who have lost their share certificates apply forreplacement of their certificates, such replacement shall comply with thefollowing requirements:

(1) The applicant shall submit the application in the form prescribed bythe Company accompanied by a notarial certificate or statutorydeclaration. The notarial certificate or statutory declaration shallinclude the applicant’s reason for the application, the circumstancesand proof of the loss of the share certificate and a declaration that noother person may require registration as a shareholder in respect ofthe Relevant Shares.

(2) The Company shall not have received any declaration requiringregistration as a shareholder in respect of the shares from any personother than the applicant before it decides to issue a replacement sharecertificate.

(3) If the Company decides to issue a replacement share certificate to theapplicant, it shall publish a public announcement of its intention to doso in the newspapers or periodicals designated by the board ofdirectors; the period of the public announcement shall be 90 days,during which its publication shall be repeated at least once every 30days.

(4) Before publishing the public announcement of its intention to issue areplacement share certificate, the Company shall submit a copy of theannouncement to be published to the securities exchange where it islisted and may proceed with publication after having received a replyfrom the securities exchange confirming that the announcement hasbeen displayed in the securities exchange. The Company shall displaythe public announcement in the securities exchange for a period of 90days.

(5) If the application for issuance of a replacement share certificate wasmade without the consent of the registered holder of the RelevantShares, the Company shall mail to such shareholder a photocopy ofthe public announcement that it intends to publish.

(6) If, at the expiration of the 90-day periods provided for in items (3) and(4) hereof, the Company has not received any objection to theissuance of a replacement share certificate from any person, it mayissue a replacement share certificate in accordance with theapplication of the applicant.

(7) When the Company issues a replacement share certificate under thisArticle, it shall immediately cancel the original share certificate andrecord such cancellation and the issuance of the replacement sharecertificate in the register of shareholders.

(8) All expenses of’ the Company for the cancellation of the originalshare certificate and the issuance of a replacement share certificateshall be borne by the applicant. The Company shall be entitled torefuse to take any action until the applicant has provided reasonablesecurity.

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Art.7(1),Appendix 3,Listing Rules

Article 51 After the Company has issued a replacement share certificate in accordancewith its Article of Association, it shall not delete from the register ofshareholders the name of a bona fide purchaser of the replacement sharecertificate mentioned above or of a shareholder that is subsequentlyregistered as the owner of the shares (provided that he is a bona fidepurchaser).

Article 52 The Company shall not be liable for any damages suffered by any personfrom the cancellation of the original share certificate or the issuance of thereplacement share certificate, unless the claimant can prove fraud on thepart of the Company.

CHAPTER 7. RIGHTS AND OBLIGATIONS OF THE SHAREHOLDERS

Article 53 The Company’s shareholders are persons that lawfully hold shares of theCompany and whose names are entered in the register of shareholders.

Shareholders shall enjoy rights and have obligations according to the classand quantity of shares held by them. Holders of shares of the same classshall enjoy equal rights and have equal obligations.

In the event that one of the joint shareholders is deceased, only thesurvivors of joint shareholders shall be deemed as owner of the relatedshares by the Company, however, the board of directors reserves the rightto require for a certificate of death as it may think appropriate for thepurpose of amendment of register of shareholders. In respect of jointshareholders of any shares, only the first shareholder in the name list ofjoint shareholders is entitled to receive relevant share certificate, Companynotice, attend shareholder general meeting of the Company and exercise theright of voting and any notice served to such person shall be deemed asproperly service to the joint shareholders of relative shares.

Article 54 Holders of ordinary shares of the Company shall enjoy the following rights:

(1) to collect dividends and other distributions according to the quantityof shares held by them;

(2) to lawfully request, convene, chair, participate or to appoint proxiesto participate in shareholders’ meetings and to exercise voting rights;

(3) to supervise and control the Company’s business activities, and tomake recommendations or inquiries;

(4) to transfer, bestow or pledge his shares in accordance with laws,administrative regulations and the Company’s Articles of Association;

(5) to obtain relevant information in accordance with the Articles ofAssociation of the Company, which shall include:

(i) obtaining a copy of the Articles of Association of the Companyafter payment of a charge to cover costs;

(ii) being entitled, after payment of reasonable charges, to examineand copy:

(a) all parts of the register of shareholders;

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Art.6, Appendix3 Listing Rules

Hong KongClearing HouseAdvice




(b) personal information of the directors, supervisors, generalmanager, vice general manager and other seniormanagement staff of the Company, including:

(b.1) current and previous names and aliases;

(b.2) main address (domicile);

(b.3) nationality;

(b.4) full-time and all other, part-time occupations andduties;

(b.5) documents of identity and their numbers;

(c) Company’s shareholding status;

(d) reports of the aggregate par value, quantity, and highestand lowest prices of each class of shares repurchased bythe Company since the last fiscal year as well as all theexpenses paid by the Company therefor; and

(e) the minutes of shareholders’ meetings; and

(f) Counterfoils of company debt securities, resolutions ofboard meetings, meetings of supervisory board andfinancial and accounting reports.

(6) upon termination or liquidation of the Company, to distribute, on apro rata basis to its shareholdings, the remaining property of theCompany;

(7) circumstance where any shareholder holds different opinion withregard to the resolution of the general meeting on merger or divisionof the Company and requests the Company to purchase his shares;

(8) the right to initiate legal proceedings to the People’s Court againstacts which are detrimental to company interests or infringe on thelawful interests of shareholders, and to claim the relevant interestspursuant to the Company Law or other laws and administrativeregulations; and

(9) other rights conferred by laws, administrative regulations and theCompany’s Articles of Association.

Article 55 Holders of ordinary shares of the Company shall have the followingobligations:

(1) to abide by the Articles of Association of the Company;

(2) to pay subscription moneys according to its subscribed shares and themethod of capital injection;

(3) Share withdrawal is not allowed unless otherwise stipulated by lawsand regulations.

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Article 22 and152Company LawArticle 4 Codeof CorporateGovernance



(4) It is prohibited to abuse the shareholders’ rights to jeopardize theinterests of the Company or other shareholders; it is prohibited toabuse the Company’s independent legal status and the shareholders’limited liabilities to jeopardize the interests of the Company’screditors; the shareholders of the Company who abuse theshareholders’ rights, thereby causing losses to the Company or othershareholders shall be liable for compensation in accordance with law.Shareholders who abuse the independent status of corporate legalperson and the shareholders’ limited liabilities in order to evadedebts, thereby seriously jeopardizing the creditor’s rights of theCompany, shall bear joint and several liabilities on the Company’sdebts; and

(5) other obligations imposed by laws administrative regulations and theCompany’s Articles of Association.

Shareholders shall not bear any liability for further contribution to sharecapital other than the conditions agreed to by the subscriber of the relevantshares on subscription.

Article 56 Any shareholder holding more than 5% of the voting shares in the Companywho pledge his shares, shall report the fact to the Company in writing onthe same day of such pledge.

Article 57 The controlling shareholder and the actual controlling person of theCompany shall not damage the Company’s interests through connectedrelations. Any such person violating the regulations leading to losses to theCompany shall assume the responsibilities of indemnity accordingly.

The controlling shareholder and the actual controlling person of theCompany shall have fiduciary duty to the Company and the publicshareholders of the Company. The controlling shareholder shall exercise itsright strictly under the law as a capital contributor. The controllingshareholder shall not damage the legal rights of the Company and its publicshareholders through profit distribution, asset restructuring, externalinvestment, fund appropriation and loan guarantee, nor the interests of theCompany and its public shareholders through its controlling position.

Article 58 In addition to obligations imposed by laws, administrative regulations orthe listing rules of the securities exchange(s) on which shares of Companyare listed, controlling shareholders may not, in the exercise of theirshareholders’ powers, make decisions prejudicial to the interests of all orsome of the shareholders due to the exercise of their voting rights on theissues set forth below:

(1) relieving a director or supervisor of the responsibility to act honestlyin the best interest of the Company;

(2) approving that a director or supervisor (for his own or anotherperson’s benefit) deprives the Company of its property in any way,including (but not limited to) any opportunities that are advantageousto the Company; or

(3) approving that a director or supervisor (for his own or anotherperson’s benefit) deprives other shareholders of their rights or

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interests, including (but not limited to) rights to distributions andvoting rights, unless pursuant to a restructuring of the Companysubmitted to and adopted by the shareholders’ general meeting inaccordance with the Articles of Association of the Company.

Article 59 For the purposes of the preceding Article, the term “controllingshareholder” shall mean a person that satisfies one of the followingconditions:

(1) he, acting alone or in concert with others, has the power to elect morethan half of the directors;

(2) he, acting alone or in concert with others, has the power to exerciseor to control the exercise of 30 percent or more of the Company’svoting rights;

(3) he, acting alone or in concert with others, holds 30 percent or more ofthe issued and outstanding shares of the Company; or

(4) he, acting alone or in concert with others, actually controls theCompany in any other manner.

CHAPTER 8. SHAREHOLDERS’ GENERAL MEETINGS

Article 60 The shareholders’ general meeting shall be the organ of authority of theCompany and shall exercise its functions and powers according to law.

Article 61 The shareholders’ general meeting shall exercise the following functionsand powers:

(1) to decide on the business policies of the Company and review andapprove material investment plans required to be submitted to thegeneral meeting for approval;

(2) to elect and replace directors and decide on matters concerning theremuneration of directors;

(3) to elect and replace the supervisors who are to be appointed fromamong the shareholders’ representatives and to decide on mattersconcerning the remuneration of supervisors;

(4) to consider and approve reports of the board of directors;

(5) to consider and approve reports of the Supervisory Board;

(6) to consider and approve the Company’s proposed annual financialbudget and final accounts;

(7) to consider and approve the Company’s profit distribution plans andplans for making up losses;

(8) to pass resolutions concerning the increase or reduction of theCompany’s registered capital;

(9) to pass resolutions on matters such as the merger, division, dissolutionor liquidation of the Company;

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(10) to pass resolutions on the issuance of bonds by the Company;

(11) to pass resolutions on the engagement, dismissal or non-renewal ofengagement of accounting firms by the Company;

(12) to amend the Articles of Association of the Company;

(13) to resolve on the Company’s external guarantees which shall beapproved by a general meeting as provided by Article 63 of Articlesof Associations;

(14) to review the incentive share option scheme;

(15) to review and approve changes to the use of fund raised;

(16) to resolve on other matters which, in accordance with the laws,administrative regulations, listing rules and Articles of Association,must be approved by a general meeting.

Shareholders’ general meeting may authorize or entrust the board ofdirectors to proceed the matters as authorized or entrusted.

Article 62 Without the prior approval of the shareholders’ general meeting, theCompany may not conclude any contract with any person other than adirector, a supervisor, the manager or other senior management staff of theCompany whereby such person is put in charge of the management of thewhole or a substantial part of the Company’s business.

Article 63 Any external guarantee granted by the Company shall be approved by theBoard of Directors.

Guarantee granted under any of the following circumstances shall beapproved by the general meeting after being considered and passed by theboard of directors:

(1) Any provision of guarantee, where the total amount of externalguarantees provided by the Company or its subsidiaries exceeds 50%of the latest audited net assets;

(2) provision of guarantee to anyone whose liability-asset ratio exceeds70%;

(3) provision of a single guarantee whose amount exceeds 10% of thelatest audited net assets;

(4) provision of guarantee to shareholders, actual controllers and theirrelated parties;

(5) any external guarantees of the Company the amount of which reachesor exceeds 30% of latest audited total assets of the Company;

(6) other guarantee matters that shall be approved by the general meetingas stipulated by laws and regulations and the Articles of Association.

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Circular onGuarantees



Circular onGuaranteeArticle 41Guidance for theArticles

If the directors, general manager, vice general manager and other seniorofficers of the Company have committed any violations of the laws,administrative regulations or their authorities of approval and examinationprocedures for the external guarantees prescribed in the Articles ofAssociation, they shall be liable for any losses suffered by the Companyarising therefrom, and the Company may institute legal proceedings againstthem by law.

Article 64 Matters subject to decision by general meetings as required by law,administrative regulations and the Company’s Articles of Association shallbe considered by general meetings for the purpose of protecting the rightof shareholders to decide on such matters. Where necessary and reasonable,any matter which is relevant to matters subject to resolution but unable tobe decided immediately at a general meeting may be, with the authoritygranted by the general meeting, decided by the board of directors within thescope authorized by the general meeting.

Article 65 Where the authority granted by the general meeting to the board ofdirectors is related to a matter subject to an ordinary resolution, suchresolution shall be passed by votes from more than half of the shareholderswith voting rights and who are present at the general meeting (includingproxies); where it is related to a special resolution, such resolution shall bepassed by votes of more than two-thirds of the shareholders with votingrights and who are present at the general meeting (including proxies). Thesubstance of the authorization shall be clear and specific.

Article 66 Shareholders’ general meetings shall be divided into annual shareholders’general meetings and extraordinary shareholders’ general meetings.Shareholders’ general meetings shall be convened by the board of directors.Annual shareholders’ general meetings shall be convened once a year andshall be held within six (6) months of the end of the preceding fiscal year.

Shareholders’ general meetings may be held in person and other manner(other than in person attendance) permitted by laws and regulations.

The board of directors shall convene an extraordinary shareholders’ generalmeeting within two months of the occurrence of any of the followingcircumstances:

(1) the number of directors is less than eight;

(2) the losses of the Company that have not been indemnified reachone-third of the total share capital of the Company;

(3) shareholders individually or jointly holding 10 percent or more of theCompany’s shares request;

(4) the board of directors considers it necessary or the supervisoryboardproposes that such a meeting be held;

(5) two or more independent directors propose such a meeting; or

(6) any other circumstance so specified by laws, administrativeregulations, department rules and regulations or Articles ofAssociation occurs.

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Article 7Code ofCorporateGovernance




Article 43Guidance for theArticlesArticle 101Company Law

Art. 6,Advices

The number of the shares held by the shareholder(s) referred to in thepreceding sub-paragraph (3) shall be calculated as at the date on which therelevant written request is made.

Article 67 When the Company is to hold a shareholders’ general meeting, it shall issuea written notice 45 days prior to the meeting (including the meeting day)informing all the registered shareholders of matters to be considered at thedate and place of the meeting. Shareholders that intend to attend theshareholders’ general meeting shall within 20 days prior the day on whichthe meeting is to be held serve a written reply on the Company stating thatthey will attend the meeting.

However, if the Company has only promoter shareholder(s), the provisionsof the previous clause regarding the notice and reply deadline can bewaived provided agreed in writing by all the promoter shareholder(s).

Article 68 When the Company is to hold an annual shareholders’ general meeting, theboard of directors, the supervisory board, shareholders separately or inaggregate holding more than 3 percent of the shares shall be entitle topropose motions to the Company.

The shareholders separately or in aggregate holding 3 percent or more ofthe Company shares may propose provisional motions, which shall besubmitted or delivered to the convenor in written form twenty days prior tothe date of the shareholders’ general meeting; within two days after thereceipt of the motions and at least ten business days before the date of theshareholder’s general meeting, the convenor shall issue supplementarynotice of the general meeting to announce the contents of the provisionalmotions to the public.

In addition to the provisions of the preceding paragraph, the convenor shallnot, after the issuing of the notice of the general meeting, modify themotions already specified in the notice of the general meeting or add newmotions.

Article 69 Based on the written replies received 20 days before the shareholders’general meeting is to be held, the Company shall calculate the number ofvoting shares represented by the shareholders intending to attend themeeting. If the number of voting shares represented by the shareholdersintending to attend the meeting is more than half of the total number of theCompany’s voting shares, the Company may hold the shareholders’ generalmeeting. If not, the Company shall within five days inform the shareholdersonce again of the matters to be considered on the date and at the place ofthe meeting in the form of a public announcement. After such notificationby public announcement, the Company may hold the shareholders’ generalmeeting.

Article 70 The matters discussed and decided by the shareholders’ general meetingshould be determined under the provisions of Company Law andCompany’s Articles of Association, the shareholders’ general meeting maydecide any matter under the Company’s Articles of Association.

The shareholders’ general meeting may not vote and adopt resolutions onthe matters that are not contained in the shareholders’ notice or the motionsthat do not comply with the provisions of Article 71 of the Original Articlesof Association.

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Article 71 Motions in a general meeting refer to specific motions regarding issueswhich shall be discussed in a general meeting. The motions shall conformto the following conditions:

(1) Contents of motions shall comply with provisions of the laws,regulations and the Articles of Association and shall fall within thescope of business of the Company and terms of reference of a generalmeeting;

(2) Motions shall cover a specific subject with specific issues to beresolved;

(3) Motions shall be submitted or delivered to the convenor in writtenform.

Article 72 The notice of a shareholders’ general meeting shall:

(1) be made in writing;

(2) specify the place, date and time of the meeting;

(3) describe the matters to be discussed at the meeting;

(4) provide to the shareholders the information and explanationsnecessary to make informed decisions on the matters to be discussed;without limiting the generality of the foregoing, when the Companyproposes a merger, repurchase of shares, reorganization of sharecapital or other restructuring, it shall provide the specific conditionsand contract (if any) of the transaction contemplated and earnestlyexplain the cause and effect of the transaction;

(5) contain a disclosure of the nature and extent of the material interests,if any of any director, supervisor, manager or other seniormanagement staff in any matter to be discussed; and an explanation ofthe difference, if any, between the way in which matter to bediscussed would affect such director, supervisor, manager ormanagement staff in his capacity as shareholder and the way in whichsuch matter would affect other shareholders of the same class;

(6) contain the full text of any special resolution proposed to be movedat the meeting;

(7) contain conspicuously a statement that shareholders entitled to attendand vote have the right to entrust one or more proxies to attend andvote on their behalf and that such proxy need not be a shareholder:and

(8) state the time and place for serving the powers of attorney to vote atthe meeting.

Article 73 Notice of a shareholders’ general meeting shall be delivered to theshareholders (whether or not entitled to vote thereat) by personal deliveryor pre-paid mail at the recipient’s address shown in the register ofshareholders. For holders of H shares, such notice of meeting may also begiven by posting on the website of the Company. For holders of domesticinvestment shares, notice of a shareholders’ general meeting may also begiven by public announcement.

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Article 52 and53Guidance for theArticles



The public announcement referred to in the preceding paragraph shall bepublished in one or more newspapers or periodicals designated by ChinaSecurities Regulatory Commission during the period between 45 and 50days before the meeting is to be held. Once the announcement is made, allholders of domestic investment shares shall be deemed to have receivednotice of the relevant shareholders’ meeting.

Article 74 A meeting and the resolutions adopted thereat shall not be invalidated dueto the accidental omission to give notice of the meeting to, or thenon-receipt of notice of the meeting by, a person entitled to receive notice.

Article 75 Any shareholder entitled to attend and vote at a shareholders’ meeting shallhave the right to appoint one or more persons (which need not beshareholders) as his proxies to attend and vote on his behalf. Such proxymay exercise the following rights in accordance with his entrustment by theshareholder:

(1) the shareholder’s right to speak at the shareholders’ general meeting;

(2) the right to demand or join in the demand for a ballot; and

(3) the right to vote by show of hands or by ballot, except that if ashareholder has appointed more than one proxy, such proxies mayonly exercise their voting rights by ballot.

(4) if such shareholder is a recognized clearing house as defined inSecurities and Futures (Clearing Houses) Ordinance (Cap.420) suchshareholder may authorize one or more persons as it thinks fit to beits representative at any shareholders’ general meeting or any kind ofshareholders’ meeting. However, if more than one person isauthorized, the power of attorney shall specify the number and classof shares in relation to the authorization to each of such persons. Theauthorized person may exercise rights on behalf of the recognizedclearing house (or its proxy) as if it is a personal shareholder of theCompany.

Article 76 Shareholders shall entrust their proxies by written instruments, which shallbe under the hand of the appointors or their agents entrusted in writing. Ifthe appointor is a legal person, the instrument shall be under the seal of thelegal person or the hand of its director(s) or duly authorized agent(s). Suchpower of attorney shall specify the share number the proxies shallrepresent. If a number of person are authorized as proxies, the power ofattorney shall specify the share number each proxy shall represent.

Article 77 The instrument appointing a voting proxy shall be deposited at the domicileof the Company or at such other place as specified in the notice of themeeting within 24 hours prior to the meeting at which the proxy isauthorized to vote or 24 hours prior to the specified time of the vote. If theinstrument is signed by another person authorized by the appointor, thepower of attorney or other document authorizing the signature shall benotarized. The notarized power of attorney or other authorizing documentshall be deposited together with the instrument appointing the voting proxyat the domicile of the Company or at such other place as specified in tilenotice of the meeting.

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Hong KongClearing HouseAdvices


Hong KongClearing HouseAdvices


If the entrusting party is a legal person, its legal representative or theperson authorized by resolution of its board of directors or otherdecision-making body shall be entitled to attend the Company’sshareholders’ meetings as the representative of such legal person.

Article 78 Any form issued by the board of directors of the Company to theshareholders for the appointment of proxies shall give the shareholders freechoice to instruct their proxies to cast an affirmative or negative vote andenable the shareholders to give separate instructions on each matter to bevoted on in connection with each point of discussion of the meeting. Theinstrument of appointment shall specify that in the absence of instructionsfrom the shareholder, the proxy may vote as he thinks fit.

Article 79 A vote given in accordance with the terms of an instrument of proxy shallbe valid notwithstanding the previous death or loss of capacity of theprincipal or revocation of the proxy or of the authority under which theproxy was executed, or the transfer of the relevant shares, as long as theCompany did not receive written notice of the event before the relevantmeeting commenced.

Article 80 When the matters relating to the connected transactions are being reviewedat the shareholders’ general meeting, the connected shareholders shall notparticipate in the voting, and the number of voting shares represented bythem will not be counted in the total number of valid votes; announcementof the general meeting resolutions shall fully disclose the voting by thenon-connected shareholders.

The foregoing related-party shareholders are the shareholders of thefollowing situations: related parties or non-related parties who have directrelations with major interest according to the securities rules and itsamendments at any time.

Article 81 Proxies, when attending the general shareholders meeting on behalf of theshareholders, shall show their proof of identity and power of attorneysigned by consigners or legal representatives. The power of attorney shallstipulate the date of issuance. The legal representative of corporate bodyshareholders, when attending the meeting, shall show their ownidentification cards, and proof of legal representative identity such as legalrepresentative ID and shares ownership certificate; the consigned proxies,attending the meeting on behalf of corporate body shareholders, shall showtheir own identification cards, and proof of consigners identity such aspower of attorney signed by legal representative and stamped by thecorporate body shareholder, and shares ownership certificate.

Article 82 The board, independent directors and certain qualified shareholders maycollect voting rights at a general meeting from the shareholders of a listedCompany. The person who publicly collects voting rights of theshareholders of a listed company shall comply with the provisions of therelevant regulatory authorities and the stock exchanges on which theCompany is listed.

Article 83 Resolutions of the shareholders’ general meeting can be ordinaryresolutions or special resolutions.

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Article 1 (3)PublicShareholders


Ordinary resolutions of the shareholders’ general meeting shall be passedby more than half of the voting rights held by the shareholders (includingproxies) present at the meeting.

Special resolutions of the shareholders’ general meeting shall be passed bymore than two- thirds of the voting rights held by the shareholders(including proxies) present at the meeting.

Article 84 When in voting of a general shareholders meeting, a shareholder (includinghis or her proxy) shall exercise his or her voting right by virtue of thenumber of voting shares represented by her/him. Saving for the stipulationsof Article 110 and Article 140 on adopting a cumulative voting system inelecting the directors and supervisors, each share shall entitle the holderthereof to one vote. The shares of the Company held by it shall entitle novote to the company and is not counted in the total of the voting shareswhich enable the holders thereof to attend the general shareholdersmeeting.

In accordance with the Listing Rules，when any shareholder has toabandon voting on any resolution or limit the vote only for or only againstparticular resolutions, any vote cast by the shareholder or her/his proxy inviolation of the regulation or limit shall not be counted.

Article 85 Unless specified by HKEX or any other exchanges from time to time, votesof the shareholders’ general meeting shall be taken by show of hands,unless vote by ballot is demanded before or after any vote by show of handsby:

(1) the chairman of the meeting;

(2) at least two shareholders with voting rights or their proxies; or

(3) one or several shareholders (including proxies) holding, calculatedseparately or in the aggregate, more than10 percent of the sharescarrying the right to vote at the meeting.

Unless otherwise specified by applicable listing rules or other laws orregulations relating to securities or somebody proposes to vote by ballot,the chairman of the meeting shall declare whether the proposal has beenadopted, in accordance with the results of the vote by show of hands, andshall record the same in the minutes of the meeting, which shall beconclusive evidence, without need to certify the number or proportion ofthe votes for or against the resolution adopted at the meeting.

The demand for a vote by ballot may be withdrawn by the person who madeit.

Article 86 If the matter demanded to be voted upon by ballot is the election of thechairman or the adjournment of the meeting, a ballot shall be takenimmediately. If a ballot is demanded for any other matter, such ballot shallbe taken at the time decided upon by the chairman and the meeting mayproceed with the discussion of other matters; the result of the ballot shallstill be regarded as a resolution passed at that meeting.

Article 87 When a ballot is held, shareholders (including proxies) having the right totwo or more votes need not use all of their voting rights in the same way.

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Article 65MandatoryProvisionsArticle 78Guidance ofArticle ofAssociation

Appendix 3Article 14Listing Rules




Article 88 When the numbers of votes for and against a resolution are equal, whetherthe vote is taken by show of’ hands or by ballot, the chairman of themeeting shall be entitled to one additional vote.

Article 89 The following matters shall be resolved by way of an ordinary resolutionof the shareholders’ general meeting:

(1) work reports of the board of directors and the Supervisory Board;

(2) plans for the distribution of profits and making up of losses drafted bythe board of directors;

(3) appointment and replacement of the members of the board and thesupervisory board (excluding staff supervisors), their remunerationand the method of payment thereof;

(4) annual budgets and final accounting scheme;

(5) company annual report;

(6) matters other than those that laws, administrative regulations or theCompany’s Articles of Association require to be passed by way of aspecial resolution.

(7) other matters as required by Listing Rules save and except mattersthat require for special resolution.

Article 90 The following matters shall be resolved by way of a special resolution ofthe shareholders’ general meeting:

(1) increase or reduction of the Company share capital and issuance ofany class of shares, warrants or other, similar securities;

(2) issuance of Company’s bonds;

(3) division, merger, dissolution and liquidation of the Company;

(4) amendment of the Articles of Association of the Company;

(5) approving incentive share option scheme;

(6) other matters that, as resolved by way of an ordinary resolution of theshareholders’ general meeting, may have a significant impact on theCompany and require adoption by way of a special resolution.

(7) other matters that require special resolution as specified in ListingRules.

Article 91 Any resolution adopted by shareholders’ general meeting shall comply withChina’s law, administrative regulations and provisions hereof.

Article 92 In case more than two independent directors, or the supervisory board, orshareholders individually or collectively holding more than 10 percent ofthe Company’s shares request the convening of extraordinary or classifiedshareholders meeting, the following procedures shall be followed:

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Article 72MandatoryProvisionsArticle 6 AdvicesArticle 48Guidance for theArticles

(1) One or several copies of a written proposal of the same format andcontent with clear statement of extraordinary shareholders meetingtopics shall be signed and submitted to the board of directors forconvening an extraordinary shareholders meeting. In line with thelaw, administrative regulations, and the stipulations of the Articles ofAssociation, the board of directors shall give a written feedback as forthe agreement or disagreement for convening an extraordinary orclassified shareholders meeting within ten days after receipt of theabove-mentioned written request.

(2) In case the board agrees to convene an extraordinary shareholdersmeeting, the board of directors shall issue a notice calling for anextraordinary or classified shareholders meeting within five dayssince the relevant board resolution. In case changes are made to theoriginal proposal, agreement on the changes shall be sought from theoriginal proposing party.

(3) In case the board of directors declines proposal, the reasons fordeclining shall be presented and announced.

(4) In case the board of directors disagrees with the supervisory board onconvening an extraordinary or classified shareholders meeting, or itdoes not give any feedback within ten days after receiving theproposal, the action shall be deemed as incapable of performing or notperforming its duty to convene a shareholders meeting. Under thecircumstance, the supervisory board shall convene and chair theshareholders meeting at its discretion. Then the procedures ofconvening, shall, as much as possible, be the same as those adoptedby the board of directors.

(5) In case the board of directors disagrees with a shareholder onconvening an extraordinary or classified shareholders meeting, theshareholder shall propose in writing to the supervisory board forconvening the extraordinary or classified shareholders meeting.

When the supervisory board agrees to convene the extraordinaryshareholders meeting, the supervisory board shall issue a notice calling forthe extraordinary or classified shareholders meeting within five days sincethe receipt of the proposal. In case changes are made to the originalproposal, agreement on the changes shall be sought from the originalproposing party.

In case the supervisory board fails to issue a notice calling for theextraordinary or classified shareholders meeting within the stipulatedperiod, the inaction shall be deemed as not convening and chairing theextraordinary or classified shareholders meeting. Shareholders individuallyor collectively holding more than 10 percent of the Company’s shares formore than 90 days in a row may convene and chair the extraordinary orclassified shareholders meeting. Then the procedures of convening, shall,as much as possible, be the same as those adopted by the board of directors.

When the supervisory board or shareholders convene the meeting in linewith the stipulation of the prior article, the board shall be informed inwriting and the filing procedures shall be filed the competent authority inaccordance with the applicable rules. The board of directors and its

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General MeetingRules

secretary shall stand cooperative for the meeting and provide the

shareholder name list. The Company defrays the reasonable expenses as

they arise and such expenses are deducted by the company from the fund

of the directors whose behavior constituted breach of duty.

Article 93 Shareholders’ general meetings shall be convened and presided over by the

chairman of the board. In the event the chairman of the board cannot or do

not perform such functions and powers, the meeting shall be convened and

presided over by the vice chairman of the board. In the event the vice

chairman of the board cannot or do not perform such functions and powers,a chairman of the meeting shall be elected by over half of the directors topreside over the meeting.

The shareholders meeting convened by the supervisory board shall bechaired by the chairman of the supervisory board. In case the chairman failsor does not perform her/his duty, a supervisor shall be elected by majorityof the supervisors to chair the meeting.

General shareholders meeting convened at shareholders discretion shall behosted by representative recommended by convener. If no chairman of themeeting is elected, the attending shareholders can elect one as chairman; ifshareholders cannot elect chairman due to any reason, the attendingshareholders (including shareholders proxies) who have the most votingshares shall chair the meeting.

If, during the shareholders’ general meeting, the chairman of the meetingviolates the rules of procedures, thereby preventing the proceeding of themeeting, a person may be elected by the general meeting to preside over themeeting by votes representing a majority of the voting rights ofshareholders present at the meeting, and the meeting shall proceed.

Article 94 The chairman of the meeting shall be responsible for deciding whether ornot a resolution of the shareholders’ general meeting has been carried. Hisdecision shall be final and shall he announced at the meeting and recordedin the minutes of the meeting. The Company shall announce theresolution(s) of the general meeting according to applicable laws and therelevant regulations of the stock exchange on which the Company is listed.

Article 95 If the chairman of the meeting has any doubts about the result of aresolution put to the vote, he may count the number of votes cast. If thechairman of the meeting does not count the votes, a shareholder or proxyattending the meeting who challenges the result announced by the chairmanof the meeting shall have the right to request a vote count immediately aftersuch announcement, and the chairman of the meeting shall forthwithconduct such a count.

Article 96 If a vote count is held at a shareholders’ general meeting, the result of thecount shall be recorded in the minutes of the meeting.

Minutes of shareholders’ meeting shall be made by secretary and signed bythe chairman of the meeting, directors present at the meeting, supervisors,secretary to the board, the convenor or their representatives.

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Article 49, 50and 67Guidance for theArticles




Article 108Company LawGeneral MeetingRules

The resolution adopted in a shareholders’ meeting shall be taken asminutes. Minutes of meetings shall be written in Chinese. The minutes ofmeetings and the attendance records signed by the attending shareholdersand proxies shall be kept at the Company’s domicile for at least 10 years.

Article 97 Shareholders may examine photocopies of the minutes of meetings duringthe Company’s office hours without charge. If any shareholder demandsfrom the Company a photocopy of relevant minutes of meetings, theCompany shall send such photocopies within seven days of receivingpayment of reasonable charges.

CHAPTER 9. SPECIAL VOTING PROCEDURES FOR CLASSSHAREHOLDERS

Article 98 Shareholders who hold different classes of shares shall be classshareholders.

Class shareholders have rights and obligations in accordance with the law,administrative regulations, and Articles of Association of the Company.

Article 99 If the Company intends to vary or abrogate the rights of class shareholders,it may do so only after such variation or abrogation has been approved byway of a special resolution of the shareholders’ general meeting and by aseparate shareholders’ meeting convened by the affected class shareholdersin accordance with Articles 101 to 106.

Article 100 The rights of shareholders of a certain class shall be deemed to be variedor abrogated in the following conditions:

(1) the increase or decrease of the number of shares of such class, orincrease or decrease of the number of shares of a class having votingrights, distribution rights or other privileges equal or superior to thoseof the shares of such class;

(2) the change of all or part of the shares of such class into shares ofanother class, or the conversion of all or part of the shares of anotherclass into shares of such class or the grant of the right to such change;

(3) the removal or reduction of rights to accrued dividends or cumulativedividends attached to shares of such class;

(4) the reduction or removal of a dividend preference, or a propertydistribution preference during liquidation of the Company, attached toshares of such class;

(5) the addition, removal or reduction of share conversion rights, options,voting rights, transfer rights, preemptive rights and rights to acquiresecurities of the Company attached to shares of such class;

(6) the removal or reduction of rights to receive amounts payable by theCompany in particular currencies attached to shares of such class;

(7) the creation of a new class of shares with voting rights, distributionrights or other privileges equal or superior to those of the shares ofthat class;

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(8) the imposition of restrictions or additional restrictions on the transferor ownership of shares of such class,

(9) the issuance of rights to subscribe, for, or convert into, shares of suchclass or another class;

(10) the increase of the rights and privileges of shares of another class;

(11) such restructuring of the Company as would cause shareholders ofdifferent classes to bear disproportionate liabilities under therestructuring;

(12) the amendment or cancellation of the provisions hereof.

Article 101 Any class shareholders being affected, whether or not otherwise having theright to vote at shareholders’ general meetings, shall have right to vote atclass shareholders’ meetings in respect of matters referred to in items (2)to (8) or (11) to (12) of Article 100, except that interested shareholdersshall not have the right to vote at class shareholders’ meetings.

For the purposes of the preceding paragraph, the term “interestedshareholders” shall have the following meaning:

(1) if, pursuant to Article 30 of this Articles of Association, the Companyhas issued, on a pro rata basis, a repurchase offer to all shareholdersor has repurchased its own shares through open transactions on asecurities exchange, controlling shareholders as defined in Article 60hereof shall be “interested shareholders”;

(2) if, pursuant to Article 30 of this Articles of Association, the Companyhas repurchased its own shares by agreements outside a securitiesexchange, holders of shares to which such agreements relate shall be“interested shareholders”;

(3) shareholders that, under a proposed restructuring of the Company,would bear liabilities in a proportion smaller than that of theliabilities borne by other shareholders of the same class orshareholders that have an interest in a proposed restructuring of theCompany that is different from the interest in such proposedrestructuring of other shareholders of the same class shall be“interested shareholders”.

Article 102 Resolutions of a class shareholders’ meeting may be passed only by morethan two-thirds of the voting rights of that class represented at the meetingin accordance with Article 101 hereof.

According to applicable securities listing rules (as amended from time totime), when any shareholder shall waive to vote on any specific resolutionof a class shareholders’ meeting or be limited only to vote for or againstany specific resolution of a class shareholders’ meeting, any vote againstthis regulation or restraint by such shareholder or its representative shallnot be counted.

Article 103 When the Company is to hold a class shareholders’ meeting, it shall issuea written notice 45 days prior to the meeting informing all the registered

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Appendix 3Article 14Listing Rules


shareholders of that class of the matters to be considered and the date andplace of the meeting. Shareholders who intend to attend the meeting shallwithin 20 days prior the day on which the meeting is to be held serve awritten reply on the Company stating that they will attend the meeting.

Article 104 If the number of shares carrying the right to vote at the meeting representedby the shareholders intending to attend the meeting is more than half of thetotal number of shares of that class carrying the right to vote at the meeting,the Company may hold the class shareholders’ meeting. If not, theCompany shall within 5 days inform the shareholders once again of thematters to be considered at and the date and place of the meeting in theform of a public announcement. After such notification by publicannouncement, the Company may hold the class shareholders’ meeting.

The quorum required for a class shareholders’ meeting (not includingadjourned meeting) held for the purpose of amending the right to the sharesof any class shall be at least one third of the total shares of this classalready issued.

Article 105 Notice of class shareholders’ meetings need be delivered only to theshareholders entitled to vote thereat.

The procedure according to which class shareholders’ meetings are heldshall, to the extent possible, be identical to the procedure according towhich general shareholders’ meetings are held. Provisions of the Articles ofAssociation of the Company relevant to procedures for the holding ofshareholders’ general meetings shall be applicable to class shareholders’meetings.

Article 106 In addition to holders of other classes of shares, holders of domesticinvestment shares and foreign investment shares listed outside the People’sRepublic of China shall be deemed to be shareholders of different classes.

The special voting procedures for class shareholders shall not apply:

(1) where, as approved by way of a special resolution of the shareholders’general meeting, the Company issues, either separately orconcurrently, domestic investment shares and foreign investmentshares listed outside the People’s Republic of China every 12 months,and the quantity of the domestic investment shares and foreigninvestment shares listed outside the People’s Republic of Chinaintended to be issued does not exceed 20 percent of the issued andoutstanding shares of the respective classes; or

(2) where the plan for issuance of domestic investment shares and foreigninvestment shares listed outside the People’s Republic of China uponthe establishment of the Company is completed within 15 months ofthe date approved by the State Council Securities Commission.

CHAPTER 10. BOARD OF DIRECTORS

Article 107 The Company shall establish a board of directors. The board of directorsshall be composed of 12 directors. External directors (referring to thosewho do not take a post in the Company, the same below) shall account formore than half of the number of directors, independent directors shallaccount for one third of the number of the directors, including 4 or more

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Sec.1f, Appendix13d ListingRules


independent (non-executive) directors (refer to directors who areindependent from the shareholders of the Company and do not take a postin the Company, the same below), and at least one independent directorshall have the proper professional qualification or have proper accountingor financial management skills.

The board of directors shall have one chairman and one vice chairman.

The board of director may set up audit, remuneration and other specialcommittees, each special committee may convene the meetings from timeto time when it is necessary.

Article 108 The directors shall be elected at the shareholders’ meeting. The term ofoffice of each of the Directors is three years. They shall be eligible forre-election upon the end of term. However, the continuing term of office ofindependent directors shall not exceed 6 years.

The list of candidates for directors shall be proposed to the shareholders’meeting for resolution in the form of proposal. The candidates for directorsother than independent directors shall be nominated by Board of Directors,Board of Supervisors, or by shareholder(s) who solely or jointly hold(s) 3%or more of voting rights shares. The candidates for directors exclusive ofindependent directors shall be elected by the shareholders’ meeting.

The written notice of the directors candidacy nomination intent and thecandidates nomination acceptance shall be sent to the company after thecircular of the shareholders’ meeting is released, and no later than 7 daysbefore the meeting.

The candidates for directors of the first Board shall be nominated by thepromoters, and elected during the incorporation meeting. Twelvecandidates shall be elected as directors, and confirmed by the shareholders’meeting in the form of ordinary resolution. In case the number of electedcandidates surpasses the above-stipulated number, the candidates receivingthe greater vote numbers become the directors.

The appointment and removal of the chairman and vice-chairman requireconsent by the majority of all the directors. The term of office of each ofthe chairman and vice-chairman is three years. They are eligible forre-election.

Outside directors shall have adequate time, necessary knowledge andability to perform their duties. When the outside directors perform theirduties, the company should provide with necessary information. Among theoutside directors, the independent (non-executive) directors can report tothe shareholders’ meeting, CSRC, and other relative departments.

The board may legitimately authorize the executive directors (referring tothose who take a post in the Company) or other institutions to deal with therelevant matters.

The directors do not have to hold shares of the company.

Article 109 The following procedures shall be observed in the election ofnon-independent directors:

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Art. 6 AdvicesArticle 1 (3)IndependentDirectors’Opinion

Article 87MandatoryProvisionsArticle 4 (4)IndependentDirectors’OpinionArticle 46Company Law

Art.4 (4) (5),Appendix 3Listing RulesArt. 4, ZhengJian Hai Han

Art. 6 Advices

Article 29, 30and 31Code ofCorporateGovernance

(1) The nomination of any non-independent director candidate shallsubject to the nominee’s prior consent with a view to obtain sufficientinformation of the nominee such as the occupation, education,professional title, detailed work experience and all other part-timeoccupations and duties, and such information shall be furnished to theCompany in writing.The candidate shall make a written commitmentto the Company indicating his consent to the nomination, committingto the truthfulness and completeness of the publicly disclosedmaterials of the candidate and guaranteeing to perform the director’sduties by due diligence.

(2) If the nomination of a non-independent director candidate is madebefore the Company’s board meeting, and the provisions in respecthereof are specified in applicable laws, regulations and/or relevantlisting rules, the written materials carrying the nominee’s informationas mentioned in item (1) above shall be announced together with theboard meeting resolutions in accordance with the said provisions.

(3) If the interim proposal on the election of non-independent directors ismade by the shareholders individually or jointly holding more than3% of the total voting shares of the Company, the written notice onthe intention of the nomination of the director candidates and thenominees’ expression of willingness to accept the nomination, as wellas the written materials and commitments of the nominee mentionedin item (1) of this Article shall be delivered to the Company 20 daysprior to the date of the general meeting. Such notice shall not bedelivered earlier than the day following the day on which the meetingnotice on the election of directors is made, nor later than ten clearbusiness days before the day of the meeting.

Article 110 Cumulative voting system shall be adopted when the shareholders meetingcasts votes on the proposal to elect directors or supervisors, namely, whena general shareholders’ meeting is electing more than two directors orsupervisors, each share held by the voting shareholders is entitled as manyvotes as the number of seats to be elected; the shareholder can cast all votesto elect one candidate or for different candidates.

Article 111 The board of directors shall be accountable to the shareholders’ generalmeeting and shall exercise the following functions and powers:

(1) to be responsible for convening shareholders’ general meetings and toreport on its work to the shareholders’ general meeting;

(2) to implement the resolutions of shareholders’ general meetings;

(3) to decide on the business plans, investment plans (except for thoserequiring approval by the general meeting) and investment schemes ofthe Company;

(4) to formulate the proposed annual financial budgets and final accountsof the Company,

(5) to formulate the profit distribution plans and plans for making uplosses of the Company;

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(6) to formulate plans for the increase or reduction of the registeredcapital of the Company and for the issue of Company bonds or othersecurities and listing;

(7) to draft plans for the merger, division or dissolution or changes to theform of the Company;

(8) to decide on other external guarantees according to provisions oflaws, administrative regulations and the Articles of Association of theCompany except for those requiring approval from the generalmeeting;

(9) to decide on such matters as the Company’s investment, assetacquisition, assets pledged, entrusted wealth management andconnected transactions under the authorization of the general meeting;

(10) to decide on the establishment of the Company’s internal managementorganization;

(11) to engage or dismiss general manager of the Company, to engage ordismiss vice general manager(s) and financial executive, secretary ofboard of directors as proposed by general manager, and to decide ontheir remuneration: to assign or replace member of board of directorsand supervisory board of solely-funded subsidiary, assign and replaceshareholder representative, director, supervisor of holding subsidiaryand share participated subsidiary.

(12) to decide set-up of subsidiary of the Company;

(13) to formulate proposals for amendment of the Articles of Associationof the Company and

(14) to formulate the basic management system of the Company;

(15) to formulate incentive share option scheme and implement incentivemechanism plan (including share options plan permitted by laws andregulations);

(16) to decide other material matters and executive matters and sign otherprincipal agreements save and except those by resolution ofshareholders’ general meeting as specified by Company Law and thisArticles of Association;

(17) other duties as set out by shareholders’ general meeting and herein.

Resolutions by the board of directors on matters referred to in thepreceding paragraph may be passed by the affirmative vote of more thanhalf of the directors with the exception of resolutions on matters referredto in items (6), (7) and (13) and external guarantee, which shall require theaffirmative vote of more than two-thirds of the directors.

Any director of the Company who is related to an enterprise that is involvedin matters to be resolved on by the board of directors shall not exercise hisvoting right on the resolution on his own behalf or on behalf of anotherdirector. The board meeting can be held with the attendance of a majorityof non-related directors, and the resolutions made at the board meeting

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shall be passed by a majority of the non-related directors. Where thenumber of non-related directors present at the board meeting is less thanthree, the matter shall be submitted to the shareholders’ general meeting forreview.

The decision made by the board of directors in relation to connectedtransaction of the Company shall not take effect unless it is signed byindependent (non-executive) director.

Article 112 With the authorization of the board of directors, the chairman of the boardmay exercise part of the functions and powers of the board when themeeting is not in session, and the contents of the authorization shall bespecific and detailed.

Article 113 Upon fixed assets disposal by the board of directors, in case the sum of theexpected value of the fixed assets under disposal and the value of the soldfixed assets disposed within four months prior to current disposal is morethan 33 percent of the value of fixed assets in the latest balance sheetdeliberated by the general shareholders meeting, then the board of directorsshall not dispose or approve the disposal until the disposal of the fixedassets is approved by the general shareholders meeting.

The disposal of fixed assets hereto covers the transfer of certain rights andinterests in the assets; however, it does not include the acts of providingguarantee backed by such fixed assets.

The validity of the transaction involved in the Company’s fixed assetsdisposal shall not be impaired by breach of the first clause of this Article.

In case the board is making decisions on market development, mergers andacquisitions, and investment in new area, if the investment amount or valueof assets involved in merger and acquisition is more than 10 percent of thetotal assets of the Company, the external counseling institutions shall behired for professional opinions, which will be used as the importantdecision basis for the board.

Article 114 The board of directors shall set the limits and establish strict reviewing anddecision-making processes for investment, assets acquisition, assetspledged, external guarantees, entrusted wealth management, connectedtransactions and other affairs of the Company. Major projects shall beassessed by experts and professionals and approved by the shareholders’general meeting.

Article 115 The chairman of the board shall exercise the following functions andpowers:

(1) to preside over shareholders’ general meetings and to convene andpreside over meetings of the board of directors;

(2) to comply with obligations of the board of directors, examine theimplementation of resolutions of the board of directors;

(3) to sign bond certificates issued by the Company; and

(4) other functions and powers granted by the board of directors.

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Article 6Opinion

Article 48 Codeof CorporateGovernance


Art. 4 Advices



If the chairman or the board is unable to perform his functions and powers,he may instruct the vice chairman of the board to exercise such functionsand powers on his behalf. In the event that the deputy chairmen is unableor fails to perform their functions and powers, a director shall be electedjointly by a simple majority of the directors to perform such functions andpowers.

Article 116 Meetings of the board of directors shall be held at least twice every yearand shall be convened by the chairman of the board of directors. All of thedirectors should be notified of the meeting ten (10) days beforehand.

The chairman of the board of directors shall, without being subject to theperiod of notification, convene an extraordinary meeting of the board ofdirectors within ten (10) days in any of the following circumstances:

(1) shareholder(s) representing more than 10% of the voting rights sorequest(s);

(2) the chairman of the board of directors considers necessary;

(3) more than one-third of the directors so jointly request;

(4) more than half of independent directors so jointly request;

(5) the supervisory board so requests;

(6) the general manager so requests.

Meeting of the board of directors shall be held in principal at the placewhere the Company is located or listed.

Meeting of the board of directors shall be held in Chinese language andsimultaneous interpretation of Chinese and English language may beprovided at the site when necessary.

Article 117 Notice of meeting of the board of directors shall be given as follows:

(1) the time and venue of routine meeting of the board of directors shallbe set out by the board in advance and no further notice shall berequired for its convening.

(2) For meetings of the board of directors of which the time and venuehave not been decided by the board of directors beforehand, thechairman of the board of directors shall notify the directors of thetime and venue of such meeting at least 10 days in advance by telex,by telegram, by facsimile, by express service or by registered mail orby hand, unless otherwise provided for in Articles of Association.

(3) Notice shall be made in Chinese, with English when necessary,including agenda of the meeting. Any director may waive demand forthe notice of a meeting of the board of directors.

Article 118 Any material matter subject to decision made by the board of directors mustbe proceeded strictly as specified. Notice shall be given to all executivedirectors and external directors within the time limit as set out in Article117 hereof and sufficient information shall be given at the same time.Directors may request for provision of supplementary information. When a

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Article 111Company LawArticle 5 (1)IndependentDirectors’Opinion

Art. A.1.1,Appendix 14,Listing Rules


Art. 3 Advices

quarter of directors or two or more of external directors think theinformation available are not sufficient or reasoning are not explicit, theymay propose to postpone the meeting or delay the discussion of somematters in the meeting. The board of directors shall adopt the relevantproposal.

When a director has come to a meeting he shall be deemed have been servedwith a notice of the meeting if he fails to state he did not receive the noticeof the meeting before or when attending the meeting.

A routine meeting or extraordinary meeting of the board of directors maybe held in the form of teleconference or by means of telecommunicationsas long as the directors present can clearly hear speech made by otherdirectors and exchange views. All the directors present shall be deemed asattending such meeting in person.

Article 119 A board meeting shall only be convened if more than half of the board ofdirectors are present (including any directors appointed in writing pursuantto Article 120 to attend the meeting as the representatives of otherdirectors). Each director has one vote. Any resolution requires theaffirmative votes of more than half of all the board of directors in order tobe passed. In the case of equal division of votes, the chairman of the boardof directors is entitled to a casting vote.

Article 120 Meetings of the board of directors shall be attended by the directors inperson. If a director cannot attend a meeting for any reason, he mayauthorise in writing another director to attend the meeting on his behalf.The authorisation shall indicate the name of proxy, the matters involved,the scope of authority and valid term.

A director who attends a meeting on behalf of another director shallexercise the rights of a director within the scope of authority granted. If adirector fails to attend a meeting of the board of directors and has notappointed a representative to attend on his behalf, he shall be deemed tohave waived his voting rights in respect of that meeting

In case that a director has failed to be present in person at any twoconsecutive board meetings without authorizing another director to bepresent at the board meeting on his behalf he shall be considered unable tofulfill his responsibilities as a director, and the board of directors shallaccordingly suggest the shareholders’ general meeting to make areplacement.

The expenses incurred fordirectors’ attending meeting of the board ofdirectors shall be on the account of the Company. Such expenses includetransport cost from the address of the directors to the venue of the meetingand accommodation during the meeting. Rental of the venue and localtransport expenses and other miscellaneous expenses shall also be paid bythe Company.

Article 121 The board of directors may accept proposal in writing instead of holding ameeting of the board of directors but draft of such proposal must be sent toeach director by person, mail, cable or facsimile. If the board of directorshas distributed the proposal to all the directors and the number of directorswho agree the proposal by giving their signatures satisfy the quorum

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required for decision making and the proposal is submitted to secretary ofthe board in the above said way it become a resolution of the board ofdirectors. Thus, no further meeting of the board of directors shall berequired.

Article 122 The board of directors shall keep minutes in Chinese of resolutions passedat meetings of the board of directors and meetings of the board of directorsthat have not been convened. Opinions of the independent (non-executive)directors shall be clearly stated in the resolutions of the board of directors.The minutes of each board meeting shall be provided to all the directors toreview promptly. Directors who wish to amend or supplement the minutesshall submit the proposed amendments to the chairman in writing withinone week after receipt of the meeting minutes. The minutes shall be signedby the directors present at the meeting and the person who recorded theminutes after they are finalised. The minutes of board meetings shall bekept at the premises of the Company in the PRC and a complete copy of theminutes shall be sent to each director promptly. The meeting minutes shallbe kept for at least 10 years.

Article 123 The directors shall bear liability for the decisions of the board of directors.If a resolution of the board of directors is in violation of laws,administrative regulations or the Company’s Articles of Association,thereby causing serious losses to the Company, the directors who took partin the resolution shall be liable to the Company for damages. However, ifa director can prove that he expressed his opposition to such resolutionwhen it was put to the vote, and such opposition is recorded in the minutesof the meeting, the director may be relieved from such liability.

Article 124 Subject to laws and regulations, shareholders’ general meeting may removeany director whose term has not expired by an ordinary resolution (withoutprejudice to any claim made under any contract).

Article 125 A director may resign before his term of office expires. Any director whointends to resign shall submit a written letter of resignation to the board ofdirectors. In addition to this, any independent director who intends toresign shall explain the issues and circumstances related to his resignationor any other issues or circumstances that he considers necessary to bebrought to the attention of the Company’s shareholders or creditors.

If a director’s resignation results in the number of members of the board ofdirectors to fall below the minimum required quorum of the board ofdirectors, that director’s resignation shall not come into effect until thevacancy resulting from his resignation is filled by his successor. Otherdirectors shall convene an extraordinary shareholder’s general meeting toelect a new director therefor as soon as possible. Before such ashareholders’ general meeting makes its resolution on the election, thefunctions and the powers of the relevant director who has tendered hisresignation and those of the other members of the board of directors shallbe subject to reasonable restrictions.

If an independent director’s resignation results in the proportion of the thenremaining independent directors to the total number of directors in theboard being less than minimum ratio required by any relevant regulatoryauthorities, that independent director’s resignation shall not come intoeffect until his vacancy is filled by his successor.

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Art. 6 Advices


Appendix 3Article 4 (3)Listing RulesArt. 4, ZhengJian Hai HanArt.4 (3)


Except for such circumstances, the letter of resignation shall take effectwhen the same is served to the board of directors.

CHAPTER 11. INDEPENDENT DIRCETORS

Article 126 An independent director candidate of the Company shall be nominated bythe board of directors, the supervisory board, or shareholder(s) individuallyor jointly holding more than 1% of the total number of shares carrying theright to vote, and shall be elected by a shareholders’ general meeting of theCompany.

(1) The party nominating any independent director candidate shall haveobtained the nominee’s consent prior to the nomination, and shall befully aware of such particulars of the nominee in terms of hisoccupation, academic background, professional title, detailed workexperience and all information regarding his positions heldconcurrently and be responsible for providing to the Company writtenmaterials in relation to such particulars. The candidate shall undertaketo the Company in writing that he agrees to accept the nomination,and that the disclosed information about him is true and complete. Heshall also undertake to conscientiously perform his responsibilities asa director upon being elected;

(2) The party nominating any independent director shall give his opinionsas to the nominee’s qualification and independency as an independentdirector. If required under any applicable laws, regulations and/or theapplicable listing rules, the nominee shall make a publicannouncement in accordance with such requirements stating that thereexists no relationship between the Company and him that affects hisindependent and objective judgment;

(3) If the nomination of an independent director candidate occurs beforethe meeting of the board of directors, the written materials pertainingto the particulars of the nominee described in sub-paragraphs (1) and(2) of this Article shall, if required under applicable laws, regulationsand/or relevant listing rules, be announced together with theresolution of the board of directors in accordance with suchrequirements;

(4) If an extempore motion proposed at a general meeting for the electionof any independent director is put forward by shareholder(s) who,individually or jointly, hold(s) more than 3% of the total number ofshares of the Company carrying the voting right, or by the supervisoryboard, the following documents shall be submitted to the Companyten (10) days before the annual general meeting: the intent tonominate a director candidate , the written notice of the nomineeexpressing his willingness to accept the nomination, and the writtenmaterials pertaining to the particulars of the nominee and thenominee’s undertakings as mentioned in the preceding sub-paragraphs(1) and (2) of this Article;

(5) Before the shareholders’ general meeting for the election of theindependent director, if required under any applicable laws,regulations and/or the relevant listing rules, the Company shall submitthe relevant materials concerning the nominee to the securitiesregulatory authority of the State Council, relevant local official

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IndependentDirectors’Opinion

agencies of the securities regulatory authority of the State Counciland the stock exchanges on which the Company’s shares are listed. Ifthe board of directors disputes the particulars pertaining to thenominee, it shall also submit its written opinions to the board ofdirectors. If the securities regulatory authority of the State Councilobjects to a nominee, such person may not be an independent directorcandidate. When the shareholders’ general meeting is convened forthe election of the independent director, the board of directors of theCompany shall explain whether the securities regulatory authority ofthe State Council objects to the relevant nominee.

Article 127 The independent director shall meet the following basic requirements:

(1) He shall be qualified to take the position of a director in accordancewith the law, administrative regulations and other relevantrequirements;

(2) He shall be independent as is required by applicable laws,administrative regulations, departmental provisions and the relevantlisting rules;

(3) He shall have basic knowledge of the operation of a listed company,and is familiar with relevant laws, administrative regulations,provisions and rules (including but not limited to accountingprinciples);

(4) He shall have more than five (5) years’ legal or economic workingexperience or other working experience necessary for the discharge ofthe duties of an independent director;

(5) He shall meet other conditions provided for under the Company’sArticles of Association.

Article 128 The independent director shall be independent. Unless otherwise providedfor under applicable laws, regulations and/or the relevant listing rules, thefollowing persons shall not be the Company’s independent directors:

(1) Staff of the Company or its subsidiaries, their lineal relatives orpersons who have a significant social relationship with any of them(lineal relatives referring to persons being spouse, parents andchildren; and significant social relationship being relationship ofbrothers and sisters, parents-in-law, children-in-law, spouse ofbrothers and sisters, and the spouse’s brothers and sisters);

(2) Any natural person who directly or indirectly holds more than 1% ofthe Company’s shares in issue, or any natural person shareholder whois among the ten largest shareholders of the Company, and his linealrelatives;

(3) Any employee of any corporate shareholder that directly or indirectlyholds more than 5% of the Company’s shares in issue, or anyemployee of any of the five largest corporate shareholders of theCompany, and his lineal relatives;

(4) Any person who was a person mentioned in any of the aforesaid threecategories during the last one year;

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(5) Any person who provides financial, legal or advisory services to theCompany or to its subsidiaries;

(6) Any person who has been determined as being improper to serve as anindependent director by the securities regulatory authority of the StateCouncil.

Article 129 The board of directors shall propose to the shareholders’ general meetingto dismiss or replace the independent director who has failed to attend theboard meeting in person for twice consecutively without authorizinganother director to attend on his behalf, or has failed to attend the boardmeeting in person three times consecutively. Except for the personsmentioned above and those stipulated under the Company Law as beingimproper to serve as an independent director, the independent director shallnot be dismissed until the expiry of his term of office without reason. TheCompany shall disclose the early dismissal as a matter of special disclosureitem, while the independent director concerned who believes that hisdismissal has been unreasonably made may make a public announcement.

Article 130 In addition to the functions and powers stipulated by the Company Law,other relevant laws, administrative regulations and the Articles ofAssociation, the independent directors shall have the following specificfunctions and powers:

(1) In respect of major connected transactions (as determined by thecriteria announced by the competent regulatory authority from time totime) that shall be considered at the shareholders’ general meeting asrequired by the law, regulations and/or applicable listing rules, and inrespect of appointment and removal of the Company’s accountingfirm (if required under applicable laws, regulations and/or applicablelisting rules), the relevant requirements shall be observed; and if morethan half of the independent directors approve the relevant matters, itshall be put forward to the board of directors for review. Theresolution of the board of directors in respect of the Company’sconnected transactions shall not become effective until eachindependent director has signed for the resolution. Before anyindependent director arrives at his decision, he may employ agencyfirms to provide an independent financial report as the basis of hisdecision;

(2) Independent directors shall propose to the board of directors inrespect of proposals to retain or dismiss an accounting firm;

(3) Independent directors may request to convene extraordinaryshareholders’ general meetings;

(4) Independent directors shall propose to convene board meetings;

(5) Independent directors shall appoint external auditors and consultingadvisors;

(6) Independent directors may publicly canvass for votes fromshareholders prior to shareholders’ general meetings;

(7) Independent directors may directly report to the shareholders’ generalmeeting, the securities regulatory authority of the State Council, andother relevant authorities.

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Independent directors shall obtain the consent from more than half of thetotal number of independent directors in the exercise of their functions andpowers provided for under sub-paragraphs (2), (4), (6) and (7) of thisArticle; Two or more independent directors may exercise their functionsand powers provided for under sub-paragraph (3) and the exercise offunctions and powers provided for under sub-paragraph (5) of this Articleshall have obtained consents from all the independent directors.

Article 131 In addition to exercising the above-mentioned functions and powers, theindependent directors shall provide independent opinions to the board ofdirectors or the shareholders’ general meetings concerning the followingissues:

(1) Nomination, appointment and dismissal of directors;

(2) Appointment or dismissal of any member of the Company’s seniormanagement;

(3) Remuneration of directors and members of the Company’s seniormanagement;

(4) Issues that the independent directors consider possible to impair onthe rights and interests of minority shareholders;

(5) Important capital transfers between the Company and the shareholdersor between the Company and its connected enterprises;

(6) Distribution plans of the cash profits that the board of directors hasnot made;

(7) Other issues regulated by applicable laws, regulations and the Articlesof Association.

Each of the independent directors shall provide his comments on the aboveissues by way of: either agreeing to the relevant proposal; reserving hisopinion with reasons; objecting to the relevant proposal with reasons; orexpressing his view as not being able to provide his comments and hisdifficulties thereof.

Article 132 The independent directors shall submit their annual report of the workundertaken to the shareholders’ general meeting of the Companyaccounting for their performance of duties.

CHAPTER 12. SECRETARY OF THE BOARD OF DIRECTORS

Article 133 The Company shall have a secretary of the board of directors. The secretaryof the board of directors shall be a member of the senior management staffof the Company.

The board of directors may set up a secretariat for the board when it isnecessary.

Article 134 The secretary of the board of directors shall be a natural person with thenecessary professional knowledge and experience. He shall be appointed bythe board of directors.

The main tasks of the secretary to the board include:

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Article 6 Advices

PublicShareholders


Article 97MandatoryProvisionsChapter 1 and 2Guidelines ofSecretary Work

(1) assisting the directors in handling the daily affairs of the board andkeep the directors informed and updated on and ensure they are fullyaware of the regulations, policies and requirements of domesticregulatory authorities on corporate operations; assisting directors andthe president in duly implementing the domestic and foreign laws,regulations, the Articles of Association and other related provisionsduring exercising their functions and powers;

(2) organizing and preparing the documents of boards of directors andshareholders’ general meetings, keeping meeting minutes, ensuringthe compliance of meeting resolutions with legal procedures, andunderstanding the implementation of the board resolutions;

(3) Organizing and coordinating disclosure of information, coordinatingrelationship with investors and enhance the Company’s transparency;

(4) Participating in the organization of financing on the capital market;

(5) Handling relationships with intermediary organizations, regulatoryauthorities and the media and promoting public relations;

(6) Implementing other tasks assigned by the board and the chairman.

The main duties of the secretary to the board include:

(1) organizing and arranging for the board meetings and shareholders’general meetings; preparing meeting materials, handling relevantmeeting affairs; making minutes of the meetings and ensuring theiraccuracy; keeping meeting documents and minutes; taking initiativeto monitor the progress of the implementation of relevant resolutions;reporting any important issues occurring during the implementation tothe board and giving relevant advice to the board.

(2) ensuring the material matters decided by the board of the Company tobe carried out strictly in accordance with the procedures stipulated; atrequest of the board, participating in the arrangement of consultationon and analysis of the matters to be decided by the board and offeringrelevant opinions and suggestions; handling the day-to-day affairs ofthe board and its committees as entrusted.

(3) acting as the liaison officer of the Company with the regulatorysecurities authorities, responsible for organizing, preparation andtimely submission of the documents required by the regulatoryauthorities as well as accepting and organizing the implementation ofany assignment from the regulatory authorities.

(4) coordinating and organizing the Company’s disclosure of information;establishing and improving the information disclosure system;participating in all of the Company’s meetings involving thedisclosure of information; and keeping informed of the Company’smaterial operation decisions and related information in a timelymanner.

(5) keeping the Company’s price-sensitive information confidential andestablishing effective confidentiality systems and measures; in case ofany of the Company’s price-sensitive information divulged due to any

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reason, taking necessary remedial measures, timely explaining andclarifying it, and making relevant reports to the regulatory authoritiesin overseas jurisdictions where the shares of the Company are listedand the CSRC.

(6) coordinating and organizing marketing activities; coordinatingreception of visitors, handling the investor relations; keeping in touchwith investors, intermediaries and news media; coordinating replies toinquiries from the public; and ensuring investors to obtain theinformation disclosed by the Company in a timely manner; organizingand preparation of the Company’s domestic and overseas marketingand promotion activities; preparing conclusive reports on marketingand important visits; and organizing matters about the submission ofthe reports to the CSRC.

(7) handling and keeping the materials in relation to information onshareholders register, directors register, amount of shares held bymajor shareholders and records of directors’ shares, and the list ofbeneficiaries of outstanding bonds of the Company.

(8) assisting directors and the president in duly implementing thedomestic and foreign laws, regulations, the Articles of Associationand other related provisions during exercising their functions andpowers; upon becoming aware that the Company has passed or maypass resolutions which may breach the relevant provisions, beingliable for immediately reminding the board and being entitled toreport such facts to the CSRC and other regulatory authorities.

(9) coordinating the provision of relevant information necessary for theCompany’s supervisory board and other regulatory authorities todischarge their duties; assisting in carrying out due diligence on thechief financial officer, directors and the general manager of theCompany of their fiduciary duties.

(10) Exercising other functions and powers as conferred by the board, aswell as other functions and powers as required by laws in anyjurisdiction where the shares of the Company are listed and the stockexchanges.

Article 135 Directors or other senior management staff of the Company mayconcurrently hold the office of secretary of the board of directors. Noaccountant of the accounting firm engaged by the Company mayconcurrently hold the office of secretary of the board of directors.

If the office of secretary of the board of directors is held by a director ofthe Company and a certain act is to be done by a director and the secretaryof the board of directors separately, the person who concurrently holds theoffices of director and secretary of the board of directors may not performthe act in both capacities.

Article 136 Secretary of the board of directors shall diligently fulfill his duties incompliance with this Articles of Association and Guidelines of SecretaryWork.

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Secretary of the board of director shall assist the Company in compliancewith relative Chinese laws and regulations in respect of listing stock of theCompany set out by securities exchange.

CHAPTER 13. SUPERVISORY BOARD

Article 137 The Company shall have a supervisory board. Supervisory board is apermanent supervisory body of the Company, responsible for supervisionof the board of directors and its members and general manager, vice generalmanager, financial executive and other senior management staff to preventthem from abuse of their power and infringement of legal interests ofshareholders, the Company and its employees.

Article 138 The supervisory board shall compose of six (6) supervisors includingexternal supervisors (hereinafter meaning supervisors who do not holdoffice in the Company) who shall constitute more than half of thesupervisory board. The number of supervisors who are employeerepresentatives shall constitute no less than one-third of the members of thesupervisory board. The supervisory board shall have one (1) chairman.Each supervisor shall serve for a term of three (3) years, which isrenewable upon re-election and re-appointment.

Appointment and dismissal of the chairman of the supervisory board shallbe made by a resolution adopted by two thirds of the members of the board.

The chairman of the supervisory board shall organize and implement theduties of the supervisory board.

The duties of chairman of the supervisory board shall be:

(1) responsible for convening and presiding meeting of the supervisoryboard;

(2) responsible for organization for performance of the duties of thesupervisory board;

(3) exercise of other rights authorized by the supervisory board.

Article 139 The supervisory board shall be composed of 2 independent supervisors, 2shareholders’ representative supervisors and 2 employee representatives ofthe Company. The shareholders’ representative supervisors andindependent supervisors shall be elected and removed by the shareholders’general meeting, and the employee representatives of the Company shall bedemocratically elected and removed by employees of the Company.

Shareholders’ representative supervisor refers to a supervisor who isnominated and appointed by shareholders of the Company and who takes nopost in the Company. Independent supervisor refers to a supervisor who isindependent from shareholders and takes no post in the Company.

The supervisory board shall set up an office responsible for the routinework of the supervisory board as it is required. The office of thesupervisory board shall be accountable to the supervisory board and reportits work to the supervisory board as required.

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Article 104MandatoryProvisionsArticle 7OpinionArticle 143Guidance for theArticles

Art. 5, ZhengJian Hai Han

Sec.1, d(I),Appendix 13d,Listing Rules

Article 105MandatoryProvisionsArt. 7 Advices

Article 140 The list of candidates for the supervisory directors who representshareholders shall be submitted to the general shareholders meeting forapproval. The candidates in question shall be nominated by the board ofdirectors, the supervisory board, and the shareholders individually orcollectively holding more than 3 percent of the Company’s shares and areelected and recalled by the general shareholders meeting.

The supervisory directors election by the general shareholders meetingadopts cumulative voting system, which is stipulated in Article 110 indetails.

Article 141 The Company’s directors, general manager, vice general manager, financialexecutive and other senior management staff may not serve concurrently assupervisors.

Article 142 Meetings of the supervisory board shall be held at least twice a year.

Meetings of the supervisory board shall be convened and chaired by thechairman of the supervisory board; if the chairman of the supervisory boardis unable or has failed to perform his duties, a supervisor shall be electedby a simple majority of supervisors to convene and chair meetings of thesupervisory board. Notices convening meetings of the supervisory boardshall be delivered to all supervisors no less than 10 days before the meetingis convened. The meeting notice shall include the following:

(1) the time, venue and the duration of the meeting;

(2) relevant subject matters and agenda;

(3) the date of the notice.

Article 143 If any supervisor fails to attend meetings of the supervisory board in persontwice consecutively, nor appoints another supervisors to be present on hisbehalf, he shall be deemed incapable of performing his responsibilities andthe shareholders’ general meeting or the employee representatives’ meetingshall remove that supervisor.

Article 144 If supervisors have not been re-elected in time when the terms of serviceof the current supervisors have expired, or any supervisor’s resignationbefore his term of service expires causes the number of supervisors to beless than the required quorum, the supervisors whose terms have justexpired shall continue to perform their duties in accordance with theprovisions of the laws, administrative regulations and Articles ofAssociation until the vacancy has been filled by another elected supervisor.

Article 145 The supervisory board shall be accountable to the shareholders’ generalmeeting and exercise the following functions and powers according to law:

(1) to examine the Company’s financial undertakings;

(2) to review the regular company reports compiled by the board ofdirectors and give written opinions accordingly;

(3) to oversee the Company’s directors, general manager, vice generalmanager and other officers during the discharge of their duties to theCompany, and to propose the removal of the directors, generalmanager, vice general manager and other senior officers for anyviolations of the laws, administrative regulations, Articles ofAssociation or any resolutions of shareholders’ general meeting;

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Article 107MandatoryProvisionsArticle 143 and148Guidance for theArticles



(4) if an act of a director, general manager, vice general manager or othersenior management staff of the Company is harmful to the Company’sinterests, to require him to correct such act;

(5) to verify financial information such as financial reports, businessreports, profit distribution plans, etc. that the board of directorsintends to submit to the shareholders’ general meeting and, if indoubt, to be able to appoint, in the name of the Company, a registeredaccountant or practicing auditor to assistance in reviewing suchinformation;

(6) to propose the convening of extraordinary general meetings and, incase the board of directors does not perform the obligations toconvene and chair the shareholders’ general meetings in accordancewith the requirements of the Company Law, to convene and chair theshareholders’ general meetings;

(7) to propose motions to the general meeting;

(8) to take an action against the director and senior management staffaccording to the regulations of the Company Law;

(9) to propose to convene an extraordinary board meeting;

(10) to represent the Company in negotiation with or taking an actionagainst a director or senior management staff;

(11) to exercise such other functions and powers as delegated by the laws,administrative regulations, Articles of Association and shareholders’general meeting.

The supervisory board may make proposal for engagement of certifiedpublic accountant firm by the Company and may authorize a certifiedpublic accountant firm in the name of the Company to conduct anindependent audit of the finance of the Company and may report directly toChina Securities Regulatory Commission and other departments concerned.

External supervisor shall make an independent report on performance ofsenior management staff in respect of integrity and diligence toshareholders’ general meeting.

Supervisors shall attend meetings of the board of directors as non-votingattendees, and make enquiries or suggestions on matters involved in theresolutions of the board of directors.

Article 146 The supervisory board shall have the right to require the directors,managers and other senior management, internal and external auditors toattend the meeting of the supervisory board, and to answer the concernedquestions.

Article 147 The supervisory board shall record the decisions of the meeting topics intominutes, and the attending supervisory directors shall countersign theminutes. The supervisor shall have the right to write certain explanatorynotes to his or her statement or speech at the session as additionalstatements in the minutes. The minutes of the supervisory board meetingshall be stored for at least ten years.

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Art. 7Advices

Article 140Guidance for theArticlesArticle 109MandatoryProvisions

Article 67 and147Code ofCorporateGovernance

Article 148 A resolution of the supervisory board shall be adopted by votes of twothirds or more of the supervisory board members.

Article 149 The reasonable expenses incurred by the supervisory board in theengagement of professional personnel such as lawyers, registeredaccountants, practicing auditors, etc. in the exercise of its functions andpowers shall be borne by the Company.

Article 150 Supervisors shall faithfully perform their supervisory duties in accordancewith laws, administrative regulations and the Company’s Articles ofAssociation.

CHAPTER 14. COMPANY GENERAL MANAGER

Article 151 The Company shall have one general manager, who shall be appointed ordismissed by the board of directors.

The Company shall have a number of vice general managers, one financialexecutive to assist the general manager in work. Vice general managers andfinancial executive shall be nominated by the general manager andappointed or dismissed by the board of directors. Senior management staffhereunder include without limitation the secretary to the board, generalmanager, vice general manager and financial executive.

The controlling shareholders of the Company and actual controllers whohold positions other than directors shall not serve as a member of theCompany’s senior management staff.

Article 152 The Company general manager shall be accountable to the board ofdirectors and shall exercise the following functions and powers:

(1) to be in charge of the production, operation and management of theCompany and to organize the implementation of the resolutions of theboard of directors, to carry out economic activities related to board ofdirectors’ resolutions such as assets disposal and investment and toreport to the board of directors;

(2) to organize the implementation of the Company’s annual businessplans and investment plans;

(3) to draft the plan for establishment of the Company’s internalmanagement organization;

(4) to draft the plan for establishment of subsidiaries of the Company;

(5) to draft the Company’s basic management system;

(6) to formulate the basic rules and regulations of the Company;

(7) to request the engagement and dismissal of the vice general manager(or vice general managers) of the Company and financial executive;

(8) to engage or dismiss management personnel other than those to beengaged or dismissed by the board of directors; and

(9) other functions and powers granted by the Company’s Articles ofAssociation and the board of directors.

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Art.6, Zheng JianHai HanSec.1d(ii),Appendix 13dListing RulesArticle 110MandatoryProvisions




Article 153 A non-director general manager shall attend meetings of the board ofdirectors and is entitled to receive notice and relevant documents of themeeting; a non-director general manager shall have no right to vote at suchmeetings.

Article 154 General manager, vice general manger and financial executive shall notchange any resolution adopted by shareholders’ general meeting and theboard of directors or go beyond their authority in performance of theirfunctions and powers.

Article 155 In the exercise of his functions and powers, general manager, vice generalmanager and financial executive shall perform his duties of good faith anddiligence in accordance with laws, administrative regulations and theCompany’s Articles of Association.

Article 156 When general manager, vice general manager, financial executive or othersenior management staff resigns he shall give a 3 month notice in writingto the board of directors. When a department manager resigns he shall givea 2-month notice in writing to general manager.

Article 157 The general manager shall formulate the detailed work rules, which shall beimplemented upon approval by the board of directors.

CHAPTER 15. QUALIFICATIONS AND OBLIGATIONS OF THE COMPANY’SDIRECTORS, SUPERVISORS, GENERAL MANACGER, VICE GENERAL

MANAGER AND OTHER SENIOR MANAGEMENT STAFF

Article 158 None of the following persons may serve as a director, supervisor, generalmanager, vice general manager or other senior management staff of theCompany:

(1) persons without ‘capacity or with limited capacity for civil acts;

(2) persons who were sentenced to criminal punishment for the crime ofcorruption, bribery, seizure of property or misappropriation ofproperty or for disrupting the social and economic order, where notmore than five years have elapsed since the expiration of the periodof punishment; or persons who were deprived of their political rightsfor committing a crime, where not more than five years have elapsedsince the expiration of the period of deprivation;

(3) directors, or factory directors or managers, who bear personal liabilityfor the bankruptcy liquidation of their companies or enterprises,where not more than three years have elapsed since the date ofcompletion of the bankruptcy liquidation;

(4) the legal representatives of companies or enterprises that had theirbusiness licenses revoked for breaking the law, where suchrepresentatives bear individual liability therefor and not more thanthree years have elapsed since the date of revocation of the businesslicense;

(5) persons with comparatively large individual debts that have fallen duebut have not been settled;

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(6) persons whose cases have been placed on the docket and are beinginvestigated by the judicial authorities because they violated thecriminal law, where the cases have not been closed;

(7) persons who may not serve as leaders of enterprises by virtue of lawsand administrative regulations;

(8) non-natural persons: and

(9) persons ruled by a relevant organization in charge to have violatedsecurities-related regulations, where such violation involvedfraudulent or dishonest acts and not more than five years have elapsedsince the date of the ruling.

(10) Receives a ban on the access to the securities market from CSRC andwhere the term has not expired.

In case of the above circumstances, the board of directors shall, from theday on which it is aware of the occurrence of the circumstance,immediately suspend the duties of the directors, supervisors, generalmanager, vice general manager or other senior management staffconcerned, and adopt relevant procedures to replace such personnel.

Article 159 Unless otherwise stipulated under Articles of Association or legallyauthorized by the board of directors, any director shall not act on behalf ofthe Company or the board of directors in his own name. When a directoracts in his own name, a third party could reasonably believe that he isacting on behalf of the Company or the board of directors. Thus he shallfirst declare his position and status.

Article 160 The validity of an act of a director, a supervisor, the manager or othersenior management staff of the Company on behalf of the Company shallnot, vis-a-vis a bona fide third party, be affected by any irregularity in hisholding of such office, election or qualifications.

Article 161 In addition to obligations imposed by laws, administrative regulations orlisting rules of the securities exchange(s) on which shares of the Companyare listed, the Company’s directors, supervisors, general manager, vicegeneral manager and other senior management staff shall owe eachshareholder the following obligations in the exercise of the functions andpowers granted to them by the Company:

(1) not to cause the Company to exceed the scope of business stipulatedin its business license;

(2) to act honestly in the best interest of the Company;

(3) not to deprive the Company of its properly in any way, including (butnot limited to) any opportunities that are advantageous to theCompany; and

(4) not to deprive shareholders of their individual rights or interests,including (but not limited to) rights to distributions and voting rights,unless pursuant to a restructuring of the Company submitted to andadopted by the shareholders’ general meeting in accordance with theArticles of Association of the Company.

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Article 162 The Company’s directors, supervisors, general manager, vice generalmanager and other senior management staff shall have an obligation, in theexercise of their rights or discharge of their obligations, to perform theirdue acts with the care, diligence and skill that a reasonably prudent personshould exercise in comparable circumstances.

Article 163 The Company’s directors, supervisors, general manager, vice generalmanager and other senior management staff must, in the exercise of theirduties, abide by the fiduciary principle and shall not place themselves in aposition where their personal interests and their duties may conflict. Thisprinciple shall include (but not limited to) the fulfillment of the followingobligations:

(1) to act honestly in the best interest of the Company;

(2) to exercise powers within the scope of their functions and powers andnot to exceed such powers;

(3) to personally exercise the discretion vested in him and not allowhimself to be manipulated by another person and, unless permitted bylaws and administrative regulations or with the informed consent ofthe shareholders’ general meeting, not to delegate the exercise of hisdiscretion;

(4) to afford equal treatment to shareholders of the same class and fairtreatment to shareholders of different classes;

(5) not to conclude a contract or enter into a transaction or arrangementwith the Company except as otherwise provided in the Articles ofAssociation of the Company or with the informed consent of theshareholders’ general meeting;

(6) not to use Company property for his own benefit in any way withoutthe informed consent of the shareholders’ general meeting;

(7) not to use his functions and powers as a means to accept bribes orother forms of illegal income, and not to illegally appropriateCompany property in any way, including (but not limited to) anyopportunities that are advantageous to the Company;

(8) not to accept commissions in connection with Company transactionswithout the informed consent of the shareholders’ general meeting;

(9) to abide by the Articles of Association of the Company, to perform hisduties faithfully, to protect the interests of the Company, and not touse his position, functions and powers in the Company to seekpersonal gain;

(10) not to compete with the Company in any way without the informedconsent of the shareholders’ general meeting;

(11) not to misappropriate Company funds or lend them to others, not todeposit Company assets in accounts opened in his own or in anothername, and not to use Company assets as security for the debts ofCompany shareholders or other individuals; and

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(12) without the informed consent of the shareholders’ general meeting,not to disclose confidential information relating to the Company thatwas acquired by him during his tenure; and not to use suchinformation except in the furtherance of the interests of the Company;however, such information may be disclosed to the court or othergovernment authorities if:

(a) provided for by law;

(b) required in the public interest;

(c) required in the own interest of such director, supervisor,manager or other senior management staff of the Company.

Incomes obtained in violation of the provisions of this Article by anydirector, general manager, vice general manager and other seniormanagement staff shall belong to the Company; and losses thus caused tothe Company shall be subject to compensation.

Article 164 When the class meeting or general meeting requires the directors,supervisors, general manager, vice general manager or other seniormanagement staff to attend the meeting, the directors, supervisors, generalmanager, vice general manager or other senior management staff shall soattend and answer shareholders’ questions. The directors, president, deputypresidents and other senior management staff shall provide the supervisoryboard of true and relevant information and shall not hamper the supervisoryboard’s performance of duties.

Article 165 A director, a supervisor, general manager, vice general manager or othersenior management staff of the Company may not incite the followingpersons or organizations (“related persons”) to do what such director,supervisor, manager or other senior management staff may not do:

(1) the spouse or a minor child of such director, supervisor, generalmanager, vice general manager or other senior management staff ofthe Company;

(2) a trustee of such director, supervisor, general manager, vice generalmanager or other senior management staff of the Company or of anyperson referred in item (1) hereof:

(3) a partner of such director, supervisor, general manager, vice generalmanager or other senior management staff of the Company or of anyperson referred in items (1) and (2) hereof;

(4) a company over which such director, supervisor, general manager,vice general manager or other senior management staff of theCompany, alone or jointly with any person referred to in items (1), (2)and (3) hereof or any other director, supervisor, manager or othersenior management staff of the Company, has de facto control;

(5) a director, a supervisor, general manager, vice general manager orother senior management staff of a company being controlled asreferred to in item (4) hereof; and

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(6) any person deemed as associate with a director, a supervisor, generalmanager, vice general manager or other senior management staffunder Listing Rules.

Article 166 The fiduciary obligation of the Company’s directors, supervisors, generalmanager, vice general manager and other senior management staff do notnecessarily cease with the termination of their tenure. Their confidentialityobligation in relation to the Company’s trade secrets shall survive thetermination of their tenure. The terms for which other obligations shallcontinue shall be decided upon in accordance with the principle of fairness,depending on the time lapse between the termination and the occurrence ofthe matter and the circumstances conditions under which the relationshipwith the Company terminated.

Article 167 Any director, supervisor, general manager, vice general manager and othersenior management staff who violate the provisions of laws, administrativeregulations, department rules or the present Articles of Association in hisdischarge of the Company duties, thus causing losses to the Company, shallbe liable for compensation. Any director, supervisor, general manager andother senior management staff of the Company who has left his officewithout authorization before his term of office expires and thereby causedthe Company to incur a loss shall be liable to the Company forcompensation.

Article 168 A director, a supervisor, general manager, vice general manager or othersenior management staff of the Company may, by informed decision of theshareholders’ general meeting, be relieved from liability for a specificbreach of obligations, except in circumstances as specified in Article 59hereof.

Article 169 If a director, a supervisor, general manager, vice general manager or othersenior management staff of the Company is, directly or indirectly,materially interested in a contract, transaction or arrangement concluded orplanned by the Company (excluding his contract of service with theCompany), he shall disclose the nature and extent of his interest to theboard of directors at the earliest opportunity, whether or not the matter isnormally subject to the approval of the board of directors.

A director shall not vote for any contract, transaction or arrangement inwhich he or his associate (as defined as associate in Listing Rules) hasmaterial interest nor be counted in the quorum of a meeting.

Unless the interested director, supervisor, general manager, vice generalmanager or other senior management staff of the Company has disclosedsuch interest to the board of directors as required under the precedingparagraph hereof and the matter has been approved by the board ofdirectors at a meeting in which he was not counted in the quorum and hadrefrained from voting, the Company shall have the right to void thecontract, transaction or arrangement, unless the other party is a bona fideparty acting without knowledge of the breach of obligation by the director,supervisor, manager or other senior management staff concerned.

A director, a supervisor, general manager, vice general manager or othersenior management staff of the Company shall be deemed to be interestedin any contract, transaction or arrangement in which a related person of thatdirector, supervisor, general manager, vice general manager or other seniormanagement staff is interested.

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Art.4(1),Appendix 3Listing Rules

Article 170 If a director, a supervisor, general manager, vice general manager or othersenior management staff of the Company gives a written notice to the boardof directors before the conclusion of the contract, transaction orarrangement is first considered by the Company stating that, by reason ofthe contents of the notice, he is interested in the contract, transaction orarrangement that may subsequently be made by the Company, such director,supervisor, manager or other senior management staff of the Company shallbe deemed for the purposes of the preceding Article of this Chapter to havedeclared his interest, insofar as attributable to the scope stated in thenotice.

Article 171 The Company may not in any manner pay tax on behalf of its directors,supervisors, general manager, vice general manager and other seniormanagement staff.

Article 172 The Company may not directly or indirectly provide a loan to, or loanguarantees for, its directors, supervisors, general manager, vice generalmanager and other senior management staff or those of its parent company,or provide loans to or loan guarantees for the related persons of theabove-mentioned persons.

The provisions of the preceding paragraph shall not apply to the followingcircumstances:

(1) the provision by the Company of a loan to or a loan guarantee for asubsidiary of the Company;

(2) the provision by the Company of a loan, loan guarantee or othermoneys to a director, a supervisor, general manager, vice generalmanager or other senior management staff of the Company under anemployment contract approved by the shareholders’ general meeting,so as to enable him to meet the expenditure incurred for the purposesof the Company or for the performance of his Company duties;

(3) the provision by the Company of a loan or a loan guarantee to arelevant director, supervisor, general manager, vice general manageror other senior management staff of the Company or to a relatedperson thereof on normal commercial terms, if the ordinary scope ofbusiness of the Company includes the lending of money or theprovision of loan guarantees.

Article 173 A loan provided by the Company in violation of the preceding Article shallbe immediately repayable by the recipient of the loan, regardless of theterms of the loan.

Article 174 A loan guarantee provided by the Company in violation of the firstparagraph of Article 172 shall be unenforceable against the Company,unless:

(1) the loan was provided to a related person of a director, a supervisor,general manager, vice general manager or other senior managementstaff of the Company or of its parent company, and at the time the loanwas advanced the lender did not know the relevant circumstances;

(2) the collateral provided by the Company has been lawfully sold by thelender to a bona fide purchaser.

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Article 175 For the purposes of the preceding Article of this Chapter, the term“guarantee” shall include an act whereby the guarantor assumes liability orprovides property to guarantee or secure the performance of obligations bythe obligor.

Article 176 Subject to the approval of the shareholders’ general meeting, the listedCompany may purchase liability insurance for its directors and supervisors,except for liabilities arising from the violation of laws, administrativeregulations or the Articles of Association of the Company by directors orsupervisors.

Article 177 If a director, a supervisor, general manager, vice general manager or othersenior management staff of the Company breaches his obligations to theCompany, the Company shall, in addition to any rights and remediesprovided by laws and administrative regulations, have a right to:

(1) require the relevant director, supervisor, general manager, vicegeneral manager or other senior management staff to compensate forthe losses sustained by the Company as a consequence of hisdereliction of duty;

(2) rescind any contract or transaction concluded by the Company withthe relevant director, supervisor, manager or other senior managementstaff and contracts or transactions with a third party (where such thirdparty knows well or should know that the director, supervisor, generalmanager, vice general manager or other senior management staffrepresenting the Company was in breach of his obligations to theCompany);

(3) require the relevant director, supervisor, general manager, vicegeneral manager or other senior management staff to surrender thegains derived from the breach of his obligations;

(4) recover any moneys received by the relevant director, supervisor,general manager, vice general manager or other senior managementstaff that should have been received by the Company, including (butnot limited to) commissions; and

(5) require the relevant director, supervisor, general manager, vicegeneral manager or other senior management staff to return theinterest earned or possibly earned on the moneys that should havebeen given to the Company.

Article 178 The Company shall conclude written contracts with each director andsupervisor of the Company concerning his emoluments. Such contractsshall be approved by the shareholders’ general meeting before they areentered into. The above-mentioned emoluments shall include:

(1) emoluments in respect of his service as a director, supervisor or seniormanagement staff of the Company;

(2) emoluments in respect of his service as a director, supervisor or seniormanagement staff of a subsidiary of the Company;

(3) emoluments otherwise in connection with the management of theCompany or any subsidiary thereof;

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Article 39Code ofCorporateGovernance



(4) the payment by way of compensation for his loss of office orretirement to the aforementioned directors and supervisors in respectof redundancy or retirement.

A director or supervisor may not sue the Company for benefits due to himon the basis of the above-mentioned matters, except under a contract asmentioned above.

Article 179 The Company shall specify in the contract concluded with a director orsupervisor of the Company concerning his emoluments that in the event ofa takeover of the Company, directors or supervisors of the Company shall,subject to prior approval of the shareholders’ general meeting, have theright to receive the compensation or other moneys obtainable for loss ofoffice or retirement.

For the purposes of the preceding paragraph, the term “a takeover of theCompany” shall mean either of the following:

(1) anyone making a purchase offer to the whole body of shareholders;

(2) anyone making a purchase offer with a view to the offeror becominga controlling shareholder as defined in Article 60 hereof.

If the relevant director or supervisor has failed to comply with this Article,any sums received by him shall belong to those persons that have sold theirshares as a result of their acceptance of the above-mentioned offer, and theexpenses incurred in the pro rata distribution of such sums shall be borneby the relevant director or supervisor and may not be paid out of such sums.

CHAPTER 16. FINANCIAL ACCOUNTING SYSTEM ANDPROFIT DISTRIBUTION AND AUDITING

Article 180 The Company shall formulate its own financial and accounting systems inaccordance with laws, administrative regulations and China’s accountingstandards formulated by the State Council’s department in charge offinance.

Article 181 Calendar year shall be used in fiscal year of the Company, i.e. the fiscalyear commences from 1st January of a calendar year and ends on 31stDecember of the year.

Renminbi is used as standard money in accounting by the Company andaccounts shall be written in Chinese.

The Company shall prepare financial reports at the end of each fiscal year.Such reports shall be examined and verified according to law.

Article 182 The board of directors of the Company shall place before the shareholdersat each annual shareholders’ meeting such financial reports as relevantlaws, administrative regulations and normative documents promulgated bythe local government and the authorities-in-charge require the Company toprepare, subject to verification.

Article 183 The financial reports of the Company shall be made available for inspectionby shareholders 20 days prior to an annual shareholders’ meeting. Eachshareholder of the Company shall have the right to obtain a copy of thefinancial reports referred to in this Chapter.

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Article 129MandatoryProvision



Article 132MandatoryProvisionsArt.5, Appendix3 Listing Rules


The Company shall send copies of the said reports to each holder of foreigninvestment shares listed outside the People’s Republic of China at least 21days prior to the day of an annual shareholders’ general meeting by prepaidmail at the recipient’s address shown in the register of shareholders.

Article 184 The financial statements of the Company shall be prepared not only inaccordance with China’s accounting standards, laws and regulations butalso in accordance with international accounting standards or theaccounting standards of the place(s) outside the People’s Republic of Chinawhere shares of the Company are listed. If there are material differences inthe financial statements prepared in accordance with these two sets ofaccounting standards, such differences shall be stated in notes appended tosuch financial statements. For purposes of the Company’s distribution ofafter-tax profits of a given fiscal year, the lesser of the amounts of after-laxprofits shown in the above-mentioned two kinds of financial statementshall govern.

Article 185 Interim results or financial information published or disclosed by theCompany shall be prepared in accordance with China’s accountingstandards, laws and regulations as well as international standards or theaccounting standards of the place(s) outside the People’s Republic of Chinawhere shares of the Company are listed.

Article 186 The Company shall publish its financial reports four times every fiscalyear, that is, the first quarterly financial report shall be published withinthirty (30) days after the expiration of the first three (3) months of eachfiscal year; the interim financial report shall be published within sixty (60)days after the expiration of the first six (6) months of each fiscal year; thethird quarterly financial report shall be published within thirty (30) daysafter the expiration of the first nine (9) months of each fiscal year; theannual financial report shall be published within one hundred and twenty(120) days after the expiration of each fiscal year.

The Company shall make the financial reports available at other dates or inother manners as provided for by the laws, regulations or regulatoryauthorities.

Article 187 The Company’s financial and accounting statements shall be preparedpursuant to the provisions of relevant laws, administrative regulations anddepartment rules.

Article 188 The Company may not establish any account books other than statutoryaccount books.

Article 189 When distributing its after-tax profits in a given year, the Company shallcontribute 10% of the profits to the Company’s statutory common reservefund. Where the accumulated amount of the statutory common reserve fundreaches 50% or more of the registered capital of the Company, no furthercontribution is required.

When the statutory common reserve of the Company is insufficient to coverthe loss of the last year of the Company the loss shall first be covered withthe profit of the current year before withholding the statutory commonreserve and public welfare fund as specified above.

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After making contribution to the statutory common reserve fund from itsafter-tax profits, the Company may, subject to resolutions adopted at ageneral meeting, make contributions to discretionary common reservefunds.

After making up for the losses and making contributions to the commonreserve fund, any remaining profits shall be distributed to the shareholdersin proportion to their respective shareholdings.

Article 190 No distribution of dividend or other distribution in form of dividend shallbe made before the Company covers any loss and withhold the statutorycommon reserve fund. The company’s dividends do not bear interest unlessthey are not duly distributed to the shareholders by the Company on thepayment date.

Article 191 The capital common reserve shall include the following funds:

(1) the premiums obtained from the issue of shares above par;

(2) other revenue required by the State Council’s department in charge offinance to be included in the capital common reserve.

Article 192 The common reserve funds (including the statutory common reserve fund,discretionary common reserve fund and capital surplus fund) of theCompany may be used to make up for losses, expanding the Company’sproduction and operation or capitalization. However, the capital surplusfund may not be applied for making up for losses.

When the Company transfers some common reserve into capital pursuant toa resolution adopted by shareholders’ general meeting, placement of newshares or increase of par value of each share shall be made in the proportionof the original shares. However, the balance of such common reserve shallbe remained no less than 25% of the registered capital when transferringthe statutory common reserve into capital.

Article 193 The Company should implement initiative methods of profit distributionand pay attention to investors’ reasonable investment return and theCompany’s continuous development, to maintain the continuity andstabiility of profit distribution policy. The Company’s board of directorsmust complete the distribution of dividends (in cash or in kind in the formof shares) within two months after the shareholders’ meeting resolutionapproving the relevant profit distribution proposal.

Article 194 The statutory public welfare fund withheld by the Company shall be usedfor the collective welfare of employees of the Company.

Article 195 The Company may distribute dividends in the following forms:

(1) cash;

(2) shares.

Article 196 The Company shall pay dividend and other money in cash to domesticinvestment shareholders in Renminbi and payment for dividend and othermoney in cash to shareholders of foreign investment shares listed overseasshall be calculated and declared in Renminbi but effected in Hong Kong

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dollar. The foreign currency for payment for dividend in cash and othermoney to shareholders of foreign investment shares listed overseas shall bedisposed of under the relevant provisions of foreign exchange managementof the State.

Article 197 Unless otherwise specified by law, administrative regulations in relation topayment for dividend in cash and other money in HK dollar the exchangerate shall be the average mid-point rate between the relative foreignexchanges published by People’s Bank of China last calendar week beforethe day of declaration of such dividend and other money distribution.

Article 198 Staying consistent with the Article of Association herein, the board maydecide the distributing of the interim or special dividend upon approval orauthorization by the shareholders’ general meeting.

Article 199 When distributing dividend to shareholders the Company shall withhold thepayable tax of the dividend income for the shareholders based on theamount distributed under provisions of China’s tax law.

Save and except the rights attached with any share or issuance provisions,dividend shall be declared and placed based on the paid shares of the sharesto be given with dividend. In this respect any payment for the share madebefore calling of payment shall not be deemed as paid shares.

Article 200 The Company shall appoint receiving agents for holders of foreigninvestment shares listed outside the People’s Republic of China to collecton behalf of the relevant shareholders the dividends distributed and othermoneys payable in respect of foreign investment shares listed outside thePeople’s Republic of China.

The receiving agents appointed by the Company shall meet therequirements of the laws of the place(s), or the relevant regulations of thesecurities exchange(s), where the shares are listed.

The receiving agent for shareholders of overseas listing foreign investmentshares listed in Hong Kong appointed by the Company shall be a trustcompany incorporated under Trustees Ordinance of Hong Kong.

Subject to China’s relevant laws and statutes the Company may exercise theright of confiscation to the dividend that no one come to claim but suchright shall not be exercised before expiry of the relative time limitapplicable.

Article 201 The Company shall implement an internal audit system and appoint fulltime auditors to carry out internal auditing and supervision of theCompany’s financial income and expenses and economic activities.

Article 202 The Company’s internal auditing system and the responsibilities of theauditing personnel should be carried out after obtaining approval by theboard of directors. The auditor-in-chief shall be responsible to report to theboard of directors in respect of their work.

CHAPTER 17. ENGAGEMENT OF AN ACCOUNTING FIRM

Article 203 The Company shall engage an independent accounting firm that complieswith relevant state regulations to audit the annual financial reports andother financial reports of the Company.

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Sec.1,Appendix.13d,Listing Rules





The first accounting firm of the Company may be engaged by the inauguralmeeting prior to the first annual shareholders’ meeting. Such accountingfirm shall hold office until the conclusion of the first annual shareholders’meeting.

If the inaugural meeting does not exercise its power under the precedingparagraph, the board of directors shall exercise such power.

Article 204 The accounting firm appointed by the Company shall hold office from theconclusion of the annual general meeting of shareholders at which theywere appointed until the conclusion of the next annual general meeting ofshareholders. At the expiry of such term, the relevant accounting firm maybe re-appointed.

Article 205 An accounting firm engaged by the Company shall have the followingrights:

(1) the right of access at all times to the account books, records orvouchers of the Company and the right to require directors, themanager and other senior management staff of the Company toprovide relevant information and explanations;

(2) the right to require the Company to take all reasonable measures toobtain from its subsidiaries the information and explanationsnecessary for the accounting firm to perform its duties: and

(3) the right to attend shareholders’ meetings, to receive notice of or otherinformation concerning any meetings of or concerning whichshareholders have a right to receive notice or other information, andto be heard at any shareholders’ meetings on any matter which relatesto it as the accounting firm of the Company.

Article 206 If the position of accounting firm becomes vacant, the board of directorsmay appoint an accounting firm to fill such vacancy before a shareholders’general meeting is held. However, if there are other accounting firmsholding the position of accounting firm of the Company while such vacancycontinues, such accounting firm may continue to act.

Article 207 The shareholders’ general meeting may by ordinary resolution dismiss anyaccounting firm prior to the expiration of its term of engagement,notwithstanding anything in the contract between the accounting firm andthe Company, but without prejudice to such accounting firm’s right, if any,to claim damages from the Company in respect of such dismissal.

Article 208 The remuneration or method of remuneration of an accounting firm shall bedecided upon by the shareholders’ general meeting. The remuneration of anaccounting firm engaged by the board of directors shall be determined bythe board of directors.

Article 209 The engagement, dismissal or non-renewal of engagement of an accountingfirm shall be decided upon by the shareholders’ general meeting and bereported to the State Council authorities in charge of securities for therecord.

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When shareholders’ general meeting proposes to pass a resolution toengage a new accounting firm to fill the vacancy of accounting firm, orrenew an accounting firm that was engaged by the board of directors to fillthe vacancy or dismiss an accounting firm before expiry of its term thefollowing provisions shall be complied with:

(1) the proposal of engagement or dismissal shall be delivered to theaccounting firm to be engaged or that is to leave or has left in thefiscal year before service of notice of the shareholders’ generalmeeting. Leaving includes dismissal, resignation and recall.

(2) If the leaving accounting firm makes a presentation in writing anddemands the Company to inform the shareholders of the presentation,unless the Company received the presentation in writing too late thefollowing steps shall be taken:

(a) to state the leaving accounting firm made a presentation on thenotice given for a resolution;

(b) to attach a copy of the presentation to the notice and deliver toshareholders in the form as required herein.

(3) If the Company fails to deliver the presentation of the relativeaccounting firm as specified above (2) the relative accounting firmmay request for reading of the presentation at the shareholders’general meeting and make further claim;

(4) The leaving accounting firm is entitled to attend the followingmeetings:

(a) shareholders’ general meeting before expiry of its term;

(b) shareholders’ general meeting for filling the vacancy left for itsdismissal;

(c) shareholders’ general meeting held for its resignation.

The leaving accounting firm is entitled to receive all the notices for theabove said meetings or other information related to the meetings anddeliver speech on matters in relation to it as the previous accounting firmof the Company at the above said meetings.

Article 210 When the Company dismisses or does not renew the engagement of anaccounting firm, it shall give advance notice to the accounting firm. Theaccounting firm shall have the right to present its views before theshareholders’ general meeting. If an accounting firm resigns, it shall informthe shareholders’ general meeting as to whether or not there is anyirregularity in the Company.

Accounting firm may resign by delivering its resignation notice in writingto the address of the Company. The notice shall take effect on the later datewhen it is delivered at the address of the Company or the date indicatedtherein. The notice shall include the following statements:

(1) its resignation does not involve in any statement to be made toshareholders of the Company or creditor; or

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Sec.1, Appendix13d, ListingRules



Sec.1, Appendix13d, ListingRules

(2) any such presentation to be made.

14 days upon receipt of the above said notice in writing the Company shallsubmit the copy of the notice to the relevant authority. If the notice containsthe presentation referred to in the above 2 items the Company shall makethe copy of the presentation available at the Company for the reference ofthe shareholders and send the copy to each shareholder of foreigninvestment shares listed overseas at the recipient’s address shown in theregister of shareholders by prepaid mail.

If the resignation notice of accounting firm contains any statement to bemade to the Company the accounting firm may request the board ofdirectors to hold an extraordinary shareholders’ general meeting for itsexplanation in relation to its resignation.

CHAPTER 18. INSURANCE

Article 211 The Company shall purchase various insurances in the specified form andfrom designated institution under the regulations set out by relativeauthorities in China, including purchasing insurance with insurancecompanies that registered in China and permitted to provide insuranceservice to companies in China by China’s law.

CHAPTER 19. LABOUR AND PERSONNEL SYSTEM

Article 212 Pursuant to provisions of Labour Law of the People’s Republic of China theCompany formulates its labour and personnel system applicable to thespecific conditions of the Company.

Article 213 The Company shall employ and dismiss its employees and exercisecontractual system under the relevant state laws and statutes according tothe development of its business.

Article 214 The Company shall decide labour and remuneration system and way ofpayment according to the relative regulations of the State and economicreturns of the Company.

The Company shall make efforts to improve benefits of the employees andcontinuously improve the working and living conditions for the employees.

The Company shall adopt relative incentive mechanism to sharpen thecompetitive edge of the Company in accordance with the related laws of theState.

Article 215 The Company shall withhold funds for medical care, retirement,unemployment, industrial injury insurance for employees, set up labour andinsurance system and deposit housing reserve for employees under relativelaws and statutes of the State.

Chapter 20. LABOUR UNION ORGANIZATION

Article 216 Employees of the Company are entitled to organize labour union and carryout labour union’s activity to safeguard the legitimate rights and interestsof the employees in accordance with Labour Union Law of the People’sRepublic of China and relevant laws and statutes. The Company shallsupport the labour union’s work in the Company and set up necessary

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establishment and assign staff for the union work, provide necessary spaceand facilities for its office work, meeting, collective welfare, culture andsports activities under provisions of Labour Union Law of the People’sRepublic of China.

Article 217 The Company shall establish a collective contractual system on an equaland consultative basis pursuant to relative laws and statutes of the state.The Company shall consult with labour union in advance and inviterepresentative of the union to present at relative meeting when makingdecision in relation to salary, welfare, safety in production and labourprotection, labour insurance of employees and other issues involved withvital interest of employees.

Article 218 After employees of the Company set up labour union the Company shallallocate a sum of labour union fund every month at the rate of 2% of thetotal salary of employees of the Company for use by the labour union of theCompany in accordance with Use Method of Grass-root Labour Union Fundissued by All China Federation of Labour Unions.

Article 219 The Company shall listen to comments and suggestions of labour union ofthe Company when making decision in relation to major issues ofproduction and operation and formulating principal regulations andsystems.

CHAPTER 21. MERGER AND DIVISION OF THE COMPANY

Article 220 The Company shall be merged or divided in accordance with the law.

The merger or division of the Company shall require the preparation of aproposal by the board of directors. After such proposal has been adopted inaccordance with the procedures specified in the Articles of Association ofthe Company, relevant examination and approval procedures shall becarried out according to law. Shareholders that oppose the proposal for themerger or division of the Company shall have the right to require theCompany or shareholders that are in favor of such proposal to purchasetheir shares at a fair price.

The contents of resolutions approving the merger or division of theCompany shall be compiled in a special document for inspection byshareholders. Holders of foreign investment shares listed overseas shall beserved copies of the above-mentioned document by mail.

Article 221 Merger of the Company may take the form of merger by absorption andmerger by new establishment.

If the Company is to merge, the parties to the merger shall enter into amerger agreement and prepare balance sheets and property lists. TheCompany shall notify its creditors within a period of 10 days from the dateon which the merger resolution is passed and make at least three newspaperannouncements of the merger within 30 days of that date.

After the merger, the surviving company or the newly established companyshall succeed to the claims and debts of the parties to the merger.

Article 222 If the Company is to be divided, its property shall be divided accordingly.

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If the Company is to be divided, the parties to the division shall enter intoa division agreement and prepare balance sheets and asset lists. TheCompany shall notify its creditors within a period of 10 days from the dateon which the division resolution is passed and make at least threenewspaper announcements of the division within 30 days of that date.

Debts of the Company prior to the division shall be assumed by theCompany after the division, except there exists any agreement between thecompanies and the creditors prior to the division.

Article 223 If the merger or division of the Company involves changes in registeredparticulars, such changes shall be registered with the company registryaccording to law. If the Company is dissolved, it shall cancel itsregistration according to law. If a new company is established, itsestablishment shall be registered according to law.

CHAPTER 22. DISSOLUTION AND LIQUIDATIONOF THE COMPANY

Article 224 The Company shall be dissolved and liquidated according to law:

(1) if the shareholders’ general meeting resolves to dissolve theCompany;

(2) if dissolution is necessary as a result of the merger or division of theCompany;

(3) if the Company is declared bankrupt according to law because it isunable to pay its debts as they fall due; or

(4) the Company is ordered to close down, suspended or revoked thebusiness licence pursuant to laws because of its violation of laws andadministrative regulations.

(5) there is severe difficulty in the operation and management of theCompany, and the subsisting of the Company will incur substantialdamage to the shareholders’ interests. Such severe difficulty may notbe solved by other means, and shareholders holding over 10% of thetotal voting rights of shareholders of the Company request thePeople’s Court to dissolve the company, and the People’s Courtdissolves the Company according to laws.

Article 225 A liquidation committee shall be set up within fifteen (15) days of theCompany being dissolved pursuant to sub-paragraph (1), (3), (4) and (5) ofthe preceding Article, and the composition of the liquidation committee ofthe Company shall be determined by an ordinary resolution of shareholdersin a general meeting. If the Company fails to set up the liquidationcommittee within the time limit, the creditors may apply to the People’sCourt for appointment of relevant persons to form a liquidation committeeand carry out liquidation.

If the Company is to be dissolved pursuant to item (3) of the precedingArticle, the People’s Court shall, in accordance with relevant laws, arrangefor the shareholders, relevant authorities and relevant professionals toestablish a liquidation committee to carry out liquidation.

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Article 181 and183 CompanyLaw


If the Company is to be dissolved pursuant to item (4) of the precedingArticle, the relevant authorities in charge shall arrange for theshareholders, relevant authorities and relevant professionals to establish aliquidation committee to carry out liquidation.

Article 226 If the board of directors decides that the Company should be liquidated(otherwise than because of a declaration of bankruptcy), the notice of theshareholders’ general meeting convened for such purpose shall include astatement to the effect that the board of directors has made full inquiry intothe position of the Company and that the board is of the opinion that theCompany can pay its debts in full within 12 months after thecommencement of liquidation.

The functions and powers of the board of directors shall terminateimmediately after the shareholders’ general meeting has adopted aresolution to carry out liquidation.

The liquidation committee shall take instructions from the shareholders’general meeting, and make a report to the shareholders general meeting atleast once a year on the committee’s receipts and payments, the business ofthe Company and the progress of the liquidation. It shall make a final reportto the shareholders’ general meeting when the liquidation is completed.

Article 227 The liquidation committee shall, within ten (10) days of its establishment,send notices to creditors and shall, within sixty (60) days of itsestablishment, publish a public announcement in a newspaper. Theliquidation committee shall conduct the registration of creditors’ rights.During the period of the claim for creditors’ rights, the liquidationcommittee shall not repay the creditors.

Article 228 The liquidation committee shall exercise the following functions andpowers during liquidation:

(1) thoroughly to examine the property of the Company and prepare,respectively, a balance sheet and properly list;

(2) to notify creditors by notice or public announcement;

(3) to dispose of and liquidate relevant unfinished business of theCompany;

(4) to pay all outstanding taxes in full;

(5) to clear up claims and debts;

(6) to dispose of the property remaining after full payment of theCompany’s debts; and

(7) to participate in civil litigation activities on behalf of the Company.

Article 229 After the liquidation committee has thoroughly examined the Company’sproperty and prepared a balance sheet and property list, it shall formulatea liquidation plan and submit such plan to the shareholders’ generalmeeting or relevant authorities in charge for confirmation.

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After payment for cost of liquidation first payment of debts out ofCompany property shall be made in the following order of priority: (i)salary of employees and costs for labour insurance; (ii) outstanding taxes;(iii) loan due to bank, company bond and other company indebtedness.

Company property remaining after full payment in accordance with theprovisions of the preceding paragraph shall be distributed to the Company’sshareholders according to the class and proportion of their shareholdings inthe following order:

(1) if there are preference shares distribution shall be made to preferenceshareholders on the par value of preference shares; if it is notsufficient to pay the preference shares distribution shall be made inthe proportion of the shares held by preference shareholdersrespectively;

(2) distribution shall be made in the proportion of shares held by ordinaryshareholders, respectively.

During the liquidation period, the Company shall not commence any newbusiness activities not related to liquidation.

Article 230 If the Company is liquidated by reason of dissolution and the liquidationcommittee, having thoroughly examined the Company’s properly andprepared a balance sheet and property list, discovers that the Company’sproperty is insufficient to pay its debts in full, it shall immediately applyto the People’s Court for a declaration of bankruptcy.

After the People’s Court has ruled to declare the Company bankrupt, theCompany’s liquidation committee shall turn over the liquidation matters tothe People’s Court.

Article 231 Following the completion of liquidation, the liquidation committee shallformulate a liquidation report, as well as a revenue and expenditurestatement and financial account books in respect of the liquidation period,and, after verification thereof by an accountant registered in China, submitthe same to the shareholders’ general meeting or the relevant authorities incharge for confirmation.

Within 30 days from the date of confirmation of the above-mentioneddocuments by the shareholders’ general meeting or the relevant authoritiesin charge, the liquidation committee shall deliver the same to the companyregistry, apply for cancellation of the Company’s registration and publiclyannounce the Company’s termination.

CHAPTER 23. PROCEDURES FOR AMENDMENTOF THE COMPANY’S ARTICLES OF ASSOCIATION

Article 232 The Company may amend its Articles of Association in accordance withlaws, administrative regulations and its Articles of Association.

Article 233 Amendment of Articles of Association of the Company shall be made in thefollowing procedures:

(1) the board of directors shall resolve and prepare a plan for amendmentof Articles of Association under this Articles of Association;

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(2) the amendment proposal shall be notified to shareholders andshareholders’ general meeting shall be held to vote for theamendment;

(3) a special resolution shall be adopted in relation to the amendment byshareholders’ general meeting.

Article 234 The Articles of Association of the Company shall be amended upon theoccurrence of any of the following events:

(1) After any amendment to the Company Law of the People’s Republicof China or other relevant laws and administrative regulations, anyprovision under the Articles of Association conflicts with theprovisions of the amended law or regulations;

(2) A change occurs to the Company resulting in an inconsistency withthe Articles of Association;

(3) The Company’s shareholders in general meetings decide to amend theArticles of Association of the Company.

Article 235 If an amendment lo the Company’s Articles of Association involves mattersprovided for in the Mandatory Provisions for the Articles of Association ofCompanies To Be Listed Outside The People’s Republic of China (the“Mandatory Provisions”), it shall become effective after examination andapproval by the authorities that are authorized by the State Council toexamine and approve companies.

Article 236 If an amendment to the Company’s Articles of Association involves mattersof company registration, the registration shall be amended according lolaw.

CHAPTER 24. NOTICE AND PUBLIC ANNOUNCEMENT

Article 237 The Company’s notices shall be delivered by the following means:

(1) by designated person;

(2) by mail;

(3) by way of public announcement;

(4) by electronic means or by posting on the website of the Company; and

(5) by other means in accordance with the Articles of Association.

Article 238 Corporate communication refers to any documents issued or to be issued bythe Company for the information or action of any holders of its securities,including but not limited to:

(1) the directors’ report, its annual accounts together with a copy of theauditors’ report and, where applicable, its summary financial report;

(2) the interim report and, where applicable, its summary interim report;

(3) a notice of meeting;

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(4) a listing document;

(5) a circular; and

(6) a proxy form.

Unless otherwise specified herein notice, information or statement inwriting to shareholders of foreign investment shares listed overseas must besent by person or by prepaid mail to the registered address of eachshareholder of foreign investment shares listed overseas or by electronicmeans or by posting on the website of the Company.

Article 239 Unless otherwise provided, any notice or report that is required orpermitted to be issued by the Company by way of public announcementunder the Articles of Association must be published in at least onenewspaper with national circulation designated by the securities regulatoryauthority of the State Council and in other newspapers in China designatedby the board of directors, and must simultaneously be published on thesame day in the English and Chinese languages, respectively, in at least onemajor English newspaper and one major Chinese newspaper in Hong Kong,or by electronic means or by posting on the website of the Company asstipulated by this Articles of Asscoiation or other means as stipulated bythe Hong Kong Listing Rules.

Article 240 When notice is served by mail as long as the address is made clear, postageis prepaid, the notice is put into the envelop and the envelop containing thenotice is put into mailbox, it is deemed as delivered and it shall be deemedhave been received 48 hours after delivery.

CHAPTER 25. RESOLUTION OF DISPUTES

Article 241 The Company shall comply with the following rules for solution ofdisputes:

(1) If any dispute or claim that concerns the Company’s business and isbased on rights or obligations provided for in the Articles ofAssociation of the Company or in the Company Law or other relevantlaws or administrative regulations arises between a holder of foreigninvestment shares listed outside the People’s Republic of China andthe Company, between a holder of foreign investment shares listedoutside the People’s Republic of China and a director, a supervisor,the manager or other senior management staff of the Company orbetween a holder of foreign investment shares listed outside thePeople’s Republic of China and a holder of domestic investmentshares, the parties concerned shall submit the dispute or claim toarbitration.

When a dispute or claim as described above is submitted toarbitration, the dispute or claim shall be submitted in its entirety, andall persons (being the Company or shareholders, directors,supervisors, the manager or other senior management staff of theCompany) that have a cause of action due to the same facts or whoseparticipation is necessary for the resolution of such dispute or claimshall submit to arbitration. Disputes regarding the definition ofshareholders and the register of shareholders shall not be required tobe settled through arbitration.

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(2) A dispute or claim submitted to arbitration may be arbitrated, at the

option of the arbitration applicant, by either the China International

Economic and Trade Arbitration Commission in accordance with its

arbitration rules or the Hong Kong International Arbitration Centre in

accordance with its securities arbitration rules. After the arbitration

applicant has submitted the dispute or claim to arbitration, the other

party must submit to the arbitration institution selected by the

applicant.

(3) If the arbitration applicant opts for arbitration by the Hong Kong

International Arbitration Centre, either party may request arbitration

to be conducted in Shenzhen in accordance with the securities

arbitration rules of the Hong Kong International Arbitration Centre.

(4) Unless otherwise provided by laws or administrative regulations, the

laws of the People’s Republic of China shall apply to the resolution

by arbitration of disputes or claims referred to in item (1).

(5) The award of the arbitration institution shall be final and binding

upon each party.

CHAPTER 26. SUPPLEMENTARY PROVISIONS

Article 242 This Articles of Association is made in Chinese and English language, both

versions having equal legal effects. In the event of conflicts or inconsistent

meaning between the versions, the Chinese version shall prevail.

Article 243 The right of interpretation of this Articles of Association is attributed to the

board of directors of the Company and the right of amendment is attributed

to shareholders’ general meeting. Any matter uncovered herein shall be

submitted by the board of directors to shareholders’ general meeting for

resolution.

Article 244 “Accounting firm” referred to herein shall have the same meaning as

“auditor”. The phrases “more than”, “within” and “below” herein for the

numbers include the numbers indicated themselves, while the phrases “fall

short”, “beyond” , “exceed”, “less than” and “in excess” exclude the

numbers indicated themselves.”

Article 245 The appendix to the Articles of Association includes Rules and Procedures

for General Meetings, Rules and Procedures for the board of directors and

Rules and Procedures for the supervisory board.

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