Notice on the Implementation of Essential Clauses in Articles of Association of Companies Listed Overseas

Zhengweifa (1994) Document No 21 Promulgated 27 August 1994 by the Securities Committee of the State Council and the State Commission for Restructuring the Economic System.

TO: The various provincial, autonomous regional and directly administered municipal people's governments, the people's governments of municipalities subject to independent planning, the various ministries and commissions of the State Council and departments directly under the State Council:

"Essential Clauses in Articles of Association of Companies Listed Overseas" (hereinafter referred to as "Essential Clauses") are formulated by the Securities Committee of the State Council and the State Article 13 of the Special Regulations of the State Council concerning Floating and Listing of Shares Overseas by Companies Limited by Shares, in order to meet the requirements of floating and listing of shares overseas by companies limited by shares and to standardise activities involving the listing of shares overseas by companies limited by shares. The Essential Clauses are hereby issued for implementation.

Companies limited by shares which are seeking to list shares overseas (hereinafter referred to as "companies listed overseas") shall record clearly the contents as required in the Essential Clauses in their articles of association and shall not be permitted to alter or delete the content of the Essential Clauses without authorisation. In addition to the contents of its articles of association as required in the Essential Clauses, a company listed overseas may, in accordance with its specific circumstances, stipulate other contents in order to meet the actual requirements of the company and may, without changing the meaning of the provisions of the Essential Clauses, make some changes to the order of wording and/or articles of the Essential Clauses. The contents which shall be included in the articles of association of companies limited by shares listed in Hong Kong, as clearly stipulated in the Essential Clauses, need not be included in the articles of association of companies limited by shares listed in other countries or regions other than Hong Kong.

The Essential Clauses shall take effect from the date of promulgation of this Notice. In the event of the articles of association of companies listed overseas which have been approved prior to the implementation of the Essential Clauses not meeting the requirements as stipulated in the Essential Clauses, the companies concerned shall make corresponding amendments to their articles of association at the first annual shareholders' meeting held after the issue of this Notice.

Appendix: Essential Clauses in Articles of Association of Companies Listed Overseas.

Essential Clauses in Articles of Association of Companies Listed Overseas

Chapter I — General Principles

Chapter II — Purpose and Scope of Business

Chapter III — Shares and Registered Capital

Chapter IV — Reduction of Capital and Buy Back of Shares

Chapter V — Financial Aid for the Purchase of the Company's Shares

Chapter VI — Share Certificates and Share Ledger

Chapter VII — Rights and Obligations of a Shareholder

Chapter VIII — Shareholders' Meetings

Chapter IX — Special Procedures for Voting by Categories of Shareholders

Chapter X — The Board of Directors

Chapter XI — Secretary of the Board of Directors

Chapter XII — The Company Manager

Chapter XIII — Supervisory Committee

Chapter XIV — Qualifications and Obligations of Company Directors, Supervisors, Managers and Other Serior Managerment Personnel

Chapter XV — Financial and Accounting System and Distribution of Profits

Chapter XVI — Appointment of an Accounting Firm

Chapter XVII — Company Merger and Division

Chapter XVIII — Company Dissolution and Liquidation

Chapter XIX — Procedures for Amendment of the Articles of Association

Chapter XX — Resolution of Disputes

Chapter XXI — Supplementary Principles

CHAPTER I — GENERAL PRINCIPLES

^Article_1

“The company” shall refer to a company limited by shares established in accordance with the Company Law of the People's Republic of China (hereinafter referred to as the Company Law), the Special Regulations of the State Council concerning Floating and Listing of Sahres Overseas by Companies Limited by Shares (hereinafter referred to as the Special Regulations) and other State laws and statutory regulations.

Subject to approval by [name of approving authority and documents of approval], the company is established on [date of establishment] through the promoter method [or share float method] and registered with [name of the place where the company registration authority is located] administration for industry and commerce on [date of registration], and has obtained a business licence. The number of the company's business licence is: [number].

The promoters of the company are: [full names of the promoters].

^Article_1

Registered name of the company: [full name in Chinese] and [full name in English].

^Article_3

The company's address: [full details of the company address, postcode, telephone number(s) and telex number].

^Article_4

The legal representative of the company is the chairman of the board of directors of the company.

^Article_5

The duration of operations of the company is [number] of years, [or the company is a perpetual company limited by shares].

^Article_6

The articles of association of the company shall take effect from the date of the company's establishment.

Once the articles of association have taken effect, it shall become a legally binding document to standardise the organisation and activities of the company, the rights and obligations between the company and its shareholders, and among its shareholders.

^Article_7

The articles of association of the company shall have binding force on the company and its shareholders, directors, supervisors, managers and other senior management personnel, and the aforesaid personnel shall be entitled to assert their rights on matters in relation to the company in accordance with the articles of association of the company.

A shareholder may take legal action against the company in accordance with the articles of association of the company; the company may take legal action against a shareholder in accordance with the articles of association of the company; a shareholder may take legal action against other shareholders in accordance with the articles of association of the company; a shareholder may take legal action against a director, supervisor, manager or other senior management personnel in accordance with the articles of association of the company.

“Take legal action” as mentioned in the preceding paragraph shall include the filing of a suit in the court or application to an arbitral body for arbitration.

^Article_8

The company may invest in other limited liability companies or companies limited by shares and shall assume an amount of liability toward the invested company equal to the amount of the investment.

Subject to approval by the company examination and approval department authorised by the State Council, the company may, in accordance with operation and management requirements, operate as a holding company as stated in paragraph 2 of Article 12 of the Company Law.

CHAPTER II — PURPOSE AND SCOPE OF BUSINESS

^Article_9

The company's business purpose is: [details of the purpose].

^Article_10

The scope of business of the company shall be based on the projects examined and approved by the company registration authority.

The scope of business operations primarily engaged in by the company shall include [projects examined and approved by the company registration authority].

The scope of business operations which are concurrently engaged in by the company shall include [projects examined and approved by the company registration authority].

CHAPTER III — SHARES AND REGISTERED CAPITAL

^Article_11

The company may, at any time, issue ordinary shares; the company may, in accordance with requirements and subject to approval by the company examination and approval department authorised by the State Council, issue other classes of shares.

^Article_12

Shares issued by the company shall have a face value. The face value of each share shall be RMB1 yuan.

^Article_13

Subject to approval by the competent securities department of the State Council, the company may issue shares to domestic and overseas investors.

“Overseas investors’ as mentioned in the preceding paragraph shall refer to investors from foreign countries or from Hong Kong, Macao and Taiwan who purchase shares issued by the company; “domestic investors” shall refer to investors within the territory of the People's Republic of China other than the aforesaid regions who purchase shares issued by the company.

^Article_14

Shares issued by the company in renminbi to domestic investors shall be called domestic capital shares. Shares issued by the company in foreign currency to overseas investors shall be called foreign capital shares. Foreign capital shares which are listed overseas shall be called foreign capital shares listed overseas.

^Article_15

Subject to approval by the company examination and approval department authorised by the State Council, the company may issue a total number of [number of shares] ordinary shares, with [number of shares] shares already issued to promoters at the time of the company's establishment, which constitutes [percentage]% of the total ordinary shares to be issued by the company.

^Article_16

After its establishment, the company will issue [number of shares] ordinary shares, including no less than [number of shares] and no more than [number of shares] foreign capital shares listed overseas, and which constitutes a total of [percentage]% of shares to be issued as ordinary shares by the company and [number of shares] domestic capital shares to be issued to the general public.

The share capital structure of the company is: [number of shares] ordinary shares, of which [number of shares] are held by the promoters [name and title of each promoter], [number of shares] held by other domestic capital shareholders and [number of shares] held by holders of foreign capital shares listed overseas.

^Article_17

Where the company has a scheme approved by the competent securities department of the State Council to issue foreign capital shares listed overseas and domestic capital shares, the board of directors of the company may implement arrangements to make separate issue.

A scheme for the separate issue of foreign capital shares listed overseas and domestic capital shares prepared by the company in accordance with the preceding paragraph may be implemented separately within fifteen (15) months from the date on which the issue scheme is approved by the Securities Committee of the State Council.

^Article_18

If a company separately issues foreign capital shares listed overseas and domestic capital shares within the total amount of shares fixed in the company's issue scheme, foreign capital shares listed overseas and domestic capital shares shall separately be floated in full at the one time. Under special circumstances, where the total amount of shares in each issue cannot be entirely floated in full at the one time, such shares may, subject to approval by the Securities Committee of the State Council, be issued in instalments.

^Article_19

The registered capital of the company is RMB [amount of capital] yuan.

^Article_20

The company may, in accordance with the requirements of its business operations and development, increase its capital with approval as stipulated in the company's articles of association.

The company may adopt the following methods to increase its capital:

(1) float new shares to non-designated investors;

(2) conduct a rights issue of new shares to existing shareholders;

(3) conduct a bonus issue of new shares to existing shareholders;

(4) other methods as approved by laws and statutory regulations.

Where a company has increased its capital through a new share issue with approval as stipulated in the company's articles of association, the matter shall be handled in accordance with the procedures as stipulated in relevant State laws and statutory regulations.

^Article_21

Except if laws and statutory regulations stipulate otherwise, shares of a company may be subject to free assignment and shall have no lien attached.

CHAPTER IV — REDUCTION OF CAPITAL AND BUY BACK OF SHARES

^Article_22

In accordance with the provisions of its articles of association, the company may reduce its registered capital.

^Article_23

When reducing its registered capital, the company must prepare a balance sheet and inventory of property.

Within ten (10) days of the resolution proposing a reduction of registered capital, the creditors shall be notified by the company and a public announcement shall be made in the press three (3) times within thirty (30) days. A creditor shall, within thirty (30) days of receipt of such a notice or within ninety (90) days of the first public announcement where the creditor has not received notice, have the right to request that the company settle its claim or provide a relevant debt redemption guarantee.

The registered capital after its reduction shall not be less than the statutory minimum amount.

^Article_24

In the following circumstances the company may buy back issued shares in accordance with procedures stipulated in the company's articles of association and following approval by the State department in charge:

(1) when cancelling shares in order to reduce its capital;

(2) when merging with other companies which hold the company's shares;

(3) in other circumstances as stipulated in laws and statutory regulations.

^Article_25

Subject to approval by the State department in charge, the following methods may be adopted to buy back shares:

(1) issue of a buy back offer to all shareholders according to an equal percentage;

(2) through means of open trading at the stock exchange;

(3) through means of an agreement outside the Stock Exchange.

^Article_26

When a company buys back shares by means of an agreement outside the stock exchange, the approval of a meeting of shareholders must be obtained in advance in accordance with the provisions of the company's articles of association. Subject to advance approval by the meeting of shareholders to buy back shares through means of an agreement, the company may dissolve or alter the contracts which have already been concluded after having undergone the procedure described above or many renounce any rights stipulated in those contracts.

The aforesaid share buy back contract shall include (but not be limited to) agreements to bear the obligation of buying back shares and to obtain share buy back rights.

The company shall not be permitted to transfer a contract for the buy back of its salaries nor to assign any rights stipulated in the contract.

^Article_27

After buying back shares in accordance with the law, the company shall, within the period of time stipulated by laws and statutory regulations, cancel that portion of shares and shall apply to the original company registration authority to register the amendment.

The total face value of the cancelled shares shall be offset against the registered capital of the company.

^Article_28

For companies listed in Hong Kong, the following contents shall be included in the company's articles of association.

Unless the company has already entered into liquidation, the company shall abide by the following provisions when buying back its issued shares:

1. Where the company buys back its shares at face value, the funds expended shall be deducted from the book balance of the distributable profits and from proceeds derived from the issue of new shares for the buy back of old shares.

2. Where the company buys back shares at a price in excess of their face value, that portion of funds equal to the face value shall be deducted from the book balance of distributable profits and proceeds derived from the issue of new shares for the buy back of old shares; that portion of funds in excess of the face value shall be handled pursuant to the following measures:

(1) where bought back shares are issued at face value, the funds shall be deducted from the book balance of the distributable profits;

(2) where bought back shares are issued at a price in excess of their face value, the funds expended shall be deducted from the book balance of distributable profits and proceeds derived from the issue of new shares for the buy back of old shares; however, the amount deducted from the proceeds derived from the issue of new shares shall not exceed the total premium on the bought back old shares at the time when those shares were issued, and shall not exceed the amount (including the premium on the issue of new shares) in the premium account [or capital accumulation fund account] at the time of buying back of those shares.

3. Funds used for expenditure on the following shall be made from distributable profits of the company:

(1) obtaining buy back rights for the buying back of shares;

(2) amending the share buy back contract;

(3) dissolving the obligations in the share buy back contract.

4. After the total face value of cancelled shares has been offset against the registered capital of the company pursuant to relevant regulations, the amount spent on buying back the face value of shares which can be deducted from the distributable profits shall be charged to the premium account [or capital accumulation fund account] of the company.

CHAPTER V — FINANCIAL AID FOR THE PURCHASE OF THE COMPANY’S SHARES

^Article_29

The company or its subsidiaries shall not be permitted at any time or use any means to provide any financial aid to parties buying or intending to buy the company's shares. The aforesaid parties buying the company's shares shall include parties directly or indirectly bearing obligations because of the purchase of the company's shares.

The company or its subsidiaries shall not be permitted at any time or use any means to provide financial aid to the aforesaid obligated parties in order to reduce or dissolve their obligations.

The provisions of this Article shall not apply in the circumstances described in Article 31 of this Chapter.

^Article_30

For the purposes of this Chapter, financial aid shall include (but not be limited to) the following:

(1) making of a gift;

(2) providing a guarantee (including an undertaking by the guarantor to bear liability or the guarantor providing property as a means of ensuring that the obligor fulfils an obligation), compensation (but not including such compensation made due to the company's own fault), dissolving or renouncing of rights;

(3) providing loans or concluding a contract which stipulates that the company assumes obligations ahead of another party, changing the parties to these loans or contracts, or assigning rights pertaining to these loans or contracts;

(4) providing financial aid through any other means when the company is unable to repay its debts, has no net assets or in circumstances likely to lead to a heavy reduction in net assets.

For the purposes of this Chapter, “assumes obligations” shall include an act whereby the obligor assuems obligations as a result of entering into a contract or making an arrangement (regardless of whether that contract or arrangement can be compulsorily enforced or not, or regardless of whether the obligor assumes obligations itself or jointly with others), or changing its financial position through any other means.

^Article_31

The following actions shall not be regarded as actions prohibited by Article 29 of this Chapter:

(1) financial aid honestly provided by the company for the company's interests and where the main aim of such financial aid is not the purchase of the company's shares, or where the said financial aid is an incidental part of a certain overall plan of the company;

(2) the company using its property as dividends for distribution in accordance with the law;

(3) dividends distributed in the form of shares;

(4) reducing registered capital, buying back shares or adjusting stock equity structure in accordance with the company's articles of association;

(5) providing loans for its normal business operations within the scope of the company's business (however, this must not result in a reduction of the company's net assets, or, where there is a reduction in its net assets, the financial aid is sourced from the company's distributable profits);

(6) providing loans to enable employees to hold shares (however, this must not result in a reduction of the net assets of the company, or, where there is a reduction in its net assets, the financial aid is sourced from the company's distributable profits).

CHAPTER VI — SHARE CERTIFICATES AND SHARE LEDGER

^Article_32

The share certificates of the company shall adopt the form of registered share certificates.

In addition to the items which should be specified on a share certificate of the company as stipulated in the Company Law, other items as required by the stock exchange where the company's shares are listed shall also be included.

^Article_33

A share certificate shall be signed by the chairman of the board of directors. If the stock exchange listing the company's shares requests that other senior management personnel shall sign the share certificates, a share certificate shall also be signed by those senior management personnel as requested. A share certificate shall only become valid after it is affixed with the company seal or with the company seal in a printed format. Printed format may also be adopted for the signature of the chairman of the board of directors or other senior management personnel on a share certificate.

^Article_34

A share ledger shall be established by the company to record the following items:

(1) the name (or title), address (or residence) and occupation or nature of each shareholder;

(2) the type and amount of shares held by each shareholder;

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

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

(5) the date on which the party registered as a shareholder;

(6) the date on which the party ceased to be a shareholder.

The share ledger shall be sufficient evidence to verify that a shareholder holds company shares, except where evidence to the contrary exists.

^Article_35

In accordance with the mutual understanding and agreement reached between the competent securities department of the State Council and an overseas stock exchange supervision and management authority, the original copy of a company's share ledger of foreign capital shares listed overseas may be kept overseas and managed by an overseas agency entrusted by the company. A duplicate copy of the company's share ledger of foreign capital shares listed overseas shall be kept at the business premises of the company as backup. The entrusted overseas agency shall ensure the consistency of the original and duplicate copies of the share ledger of capital shares listed overseas at all times.

In the event of a duplicate copy not being consistent with the original of a share ledger of foreign capital shares listed overseas, the original copy shall prevail.

^Article_36

The company shall maintain a complete share ledger.

A share ledger shall consist of the following:

(1) the share ledger other than those stipulated in items (2) and (3) of this paragraph to be kept at the business premises of the company;

(2) a company's share ledger of foreign capital shares listed overseas to be kept at the location of the overseas stock exchange which lists the company's foreign capital shares;

(3) a share ledger to be kept in another place designated by the board of directors so as to meet the requirements for listing of the company's shares.

^Article_37

There shall be no overlap between the various parts of the share ledger. In the event of assignment of shares registered in a certain part of the share ledger, those shares shall not be permitted to be registered in another part of the share ledger during the period of time in which their registration is maintained in the other part of the ledger.

Alteration or correction of any part of a share ledger shall be carried out in accordance with the law prevailing in the places at which those parts of the share ledger are kept.

^Article_38

The procedures to register amendments to a share ledger resulting from an assignment of shares shall not be carried out within thirty (30) days of the commencement of a shareholders' meeting or within five (5) days of the date on which dividends are to be distributed as decided by the company.

^Article_39

When convening a shareholders' meeting, distributing dividends, in liquidation or conducting other activities involving the confirmation of stock equity, the board of directors of the company shall fix a certain date as the stock equity confirmation date. At the end of the stock equity confirmation date, shareholders registered in the share ledger shall be the company's shareholders.

^Article_40

Any party which raises objection to a share ledger and requests its name (or title) to be registered in the share ledger or requests that its name (or title) be deleted from the share of ledger may apply to the court having jurisdiction to amend that share ledger.

^Article_41

Any shareholder registered in the share ledger or any party who requests that its name (or title) be registered in the share ledger may apply to the company for supplementary issue of replacement certificates (ie “corresponding certificates” if its share certificates (ie “original share certificates”) have been lost.

In the case of a domestic capital shareholder losing its share certificate and applying for supplementary issue of a replacement certificate, this shall be handled in accordance with the provisions of Article 150 of the Company Law.

In the case of a holder of foreign capital shares listed overseas losing its share certificate and applying for supplementary issue of a replacement certificate, this shall be handled in accordance with the law of the place where the original ledger of foreign capital shareholders is kept with the rules of the stock exchange or other relevant regulations.

If a holder of foreign capital shares listed in Hong Kong has lost its share certificate and applies for supplementary issue of a replacement certificate, the supplementary issue of a replacement certificate shall be in compliance with the following requirements:

1. The applicant shall lodge an application according to the standard format designated by the company and shall attach a notarial certificate or document of legal declaration. The contents of the notarial certificate or legal declaration shall include reasons for the application, details and evidence of the loss of the share certificate and a declaration that no other party can request the registration of such shares as a shareholder.

2. No declaration has been made by any party other than the applicant requesting the registration of those shares as a shareholder before the company makes a decision on supplementary issue of a replacement certificate.

3. Where the company decides to make supplementary issue of a replacement certificate, a public announcement of the intended supplementary issue of the replacement certificate shall be published in the newspaper(s) designated by the board of directors; the period for a public announcement shall be ninety (90) days and the public announcement shall be published at least once every thirty (30) days.

4. Before publication of a public announcement of the intended supplementary issue of a replacement share certificate, a duplicate copy of the public announcement to be published shall be submitted to the stock exchange which lists the company's shares. The public announcement may then be published after receipt of a reply from the stock exchange confirming the display of the public announcement in the stock exchange has occurred. The period for display of a public announcement in the stock exchange shall be ninety (90) days.

If an application for the supplementary issue of a replacement share certificate is made without the consent of a shareholder registered in the share ledger who holds the relevant shares, the company shall post a copy of the public announcement to be published to the shareholder concerned.

5. Upon the expiration of the ninety (90) day period for a public announcement or display as stipulated in items 3 and 4 of this Article and where no objection against supplementary issue of a replacement share certificate has been raised by any party, the replacement share certificate may be issued pursuant to the application.

6. When making supplementary issue of a replacement share certificate pursuant to the provisions of this Article, the company shall promptly cancel the original share certificate and shall record such cancellation and supplementary issue of the replacement share certificate on the share ledger.

7. All expenses incurred by the company in the cancellation of the original share certificate and the supplementary issue of the replacement share certificate shall be borne by the applicant. The company shall have the right to refuse to undertake any action before an applicant provides a reasonable guarantee.

^Article_42

After a replacement share certificate has been issued by the company in accordance with the provisions of the articles of association, a bona fide purchaser who obtains the said new shares or a shareholder (if a bona fide purchaser) who later registers as owners of the said shares shall not be permitted to have its name (or title) deleted from the share ledger.

^Article_43

The company shall not bear liability to compensate for any loss incurred by any party as a result of cancellation of the original share certificate or issue of the replacement share certificate unless the party concerned can prove that the company has committed fraud.

CHAPTER VII — RIGHTS AND OBLIGATIONS OF A SHAREHOLDER

^Article_44

The shareholders of the company shall be the parties who legally hold the company's shares and whose names (or titles) have been registered on the share ledger.

A shareholder shall enjoy rights and assume obligations pursuant to the class and quantity of shares held; holders of the same type of share shall enjoy equal rights and assume equal obligations.

^Article_45

A holder of ordinary shares of the company shall have the following rights:

(1) to receive dividends and beneficial distributions in other forms according to the quantity of shares held;

(2) to attend or entrust an agent to attend shareholders' meetings and to execute voting rights;

(3) to supervise and manage business operations of the company and to raise proposals or address inquiries accordingly;

(4) to assign shares pursuant to the provisions of laws, statutory regulations and the company's articles of association;

(5) to obtain information pursuant to the provisions of the company's articles of association including:

(i) obtain a copy of the company's articles of association after payment of a charge;

(ii) the right to consult or copy the following after reasonable fees have been paid:

A. all parts of the share ledger;

B. personal information concerning directors, supervisors and other senior management personnel of the company, including:

(a) current and previous names and/or alternative names;

(b) principal address (residence);

(c) nationality;

(d) full-time position and/or other concurrent positions and posts;

(e) ID documentation and numbers.

C. company share capital position;

D. reports on the total face value and quantity of each type of share bought back by the company since the last financial year, the highest buying price and the lowest buying price for such shares, and the total expenses incurred thereon;

E. minutes of shareholders' meetings.

(6) to participate in, upon the company's termination or liquidation, the distribution of the company's remaining assets according to the quantity of shares held;

(7) other rights as stipulated in laws, statutory regulations and the company's articles of association.

^Article_46

A holder of ordinary shares of the company shall assume the following obligations:

(1) to abide by the company's articles of association.

(2) to pay funds pursuant to the quantity of subscribed shares and the method of subscription;

(3) other obligations as stipulated in laws, statutory regulations and the company's articles of association.

Apart from the conditions accepted at the time of subscribing to shares, a shareholder shall not bear liability for any additional share capital.

^Article_47

In addition to obligations as required by laws, statutory regulations or the listing rules of the stock exchange which lists the company's shares, a controlling shareholder when executing its shareholding rights shall not be permitted to exercise its voting rights to make decisions on the following matters which harm the interests of all or some shareholders:

(1) to relieve a director or supervisor from his/her responsibility on the basis that this is in the best interests of the company;

(2) to approve that a director or supervisor (for his/her own interests or another's interests) expropriate company property using any means including (but not limited to) any opportunity which is beneficial to the company;

(3) to approve that a director or supervisor (for his/her own interests or another's interests) divest other shareholders of individual rights and interests including (but not limited to) any distribution rights and voting rights, but not including where the matter is submitted to the shareholders' meeting for adoption in accordance with the company's articles of association that there be reorganisation of the company.

^Article_48

A controlling shareholder as stated in the preceding Article shall be a person who meets the following requirements:

(1) when taking independent action or acting in unison with others, that shareholder can elect a majority of directors;

(2) when taking independent action or acting in unison with others, that shareholder executes more than 30% (including 30%) of the company's voting rights or executes more than 30% (including 30%) control over the company's voting rights;

(3) when taking independent action or acting in unison with others, that shareholder holds more than 30% (including 30%) of the company's issued shares;

(4) when taking independent action or acting in unison with others, that shareholder has actual control of the company in other ways.

CHAPTER VIII — SHAREHOLDERS’ MEETINGS

^Article_49

Shareholders' meetings shall be a company's most powerful authority and shall exercise its powers of office in accordance with the law.

^Article_50

A shareholders' meeting shall exercise the following powers of office:

(1) determining the company's business policies and investment plans;

(2) election and replacement of directors and determining matters concerning the remuneration of directors;

(3) election and replacement of supervisors who are representatives of shareholders and determining the remuneration of those supervisors;

(4) discussion and approval of reports compiled by the board of directors;

(5) discussion and approval of reports compiled by the supervisory committee;

(6) discussion and approval of the company's annual budget and final accounting plans;

(7) discussion and approval of the company's profit distribution and loss recovery plans;

(8) passing resolutions on matters such as increase or reductions of the company's registered capital;

(9) passing resolutions on matters such as company merger, division, dissolution or liquidation;

(10) passing resolutions on the issue of corporate bonds;

(11) passing resolutions on matters such as engagement, dismissal or non-renewal of engagement of the accounting firm;

(12) amending the company's articles of association;

(13) discussing proposals raised by the shareholders who represent more than 5% (including 5%) of the company's shareholders with voting rights;

(14) other matters on which the shareholders meeting shall make resolutions as stipulated in laws, statutory regulations and the company's articles of association.

^Article_51

Without the advance approval of a shareholders' meeting, a company shall not be permitted to enter into a contract with a person other than a director, supervisor, manager or other senior management personnel where such contract grants responsibility to that person for the management or major business activities of the company.

^Article_52

Shareholders' meetings shall be separated into annual and interim meetings. A shareholders' meeting shall be convened by the board of directors. Annual shareholders' meetings shall be convened once each year within six (6) months after the end of the previous fiscal year.

The board of directors shall convene an interim shareholders' meeting within two (2) months in any of the following circumstances:

(1) where the number of directors does not meet the number stipulated in the Company Law or is less than two-thirds of the number required in the articles of association of the company;

(2) where the company's losses which have not yet been offset account for one-third of the total amount of actual share capital;

(3) where shareholders holding more than 10% (including 10%) of the issued shares of the company with voting rights make written request for the convening of an interim shareholders' meeting;

(4) the board of directors believes it necessary or the supervisory committee proposes that an interim shareholders' meeting be convened.

^Article_53

When convening a shareholders' meeting, written notification shall be made to the shareholders registered in the share ledger forty-five (45) days before the convening of the meeting of those matters to be discussed at the meeting and the date and location of the meeting. Shareholders intending to attend the shareholders' meeting shall send their written acknowledgments to the company twenty (20) days before the convening of the meeting.

^Article_54

When convening an annual shareholders' meeting, shareholders with title to more than 5% (including 5%) of the company's total shares with voting rights shall be entitled to raise new proposals in writing to the company. Matters raised in proposals which are within the scope of the powers of office of the shareholders' meeting shall be listed in the meeting agenda.

^Article_55

The company shall, based on the written replies received twenty (20) days before the commencement of the shareholders' meeting, calculate the shares with voting rights held by those shareholders intending to attend the meeting. A shareholders' meeting may be convened if those shareholders intending to attend have title to more than half of the company's shares with voting rights; if not, the company shall, within five (5) days, notify the shareholders once again through public announcement of those matters to be discussed at the meeting, and the date and location of the meeting. The company may convene the shareholders' meeting only after such public announcement has been made.

An interim shareholders' meeting shall not be permitted to propose resolutions on matters which were not included in the notice.

^Article_56

The notice for a shareholders' meeting shall meet the following requirements:

(1) be in writing;

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

(3) state those matters to be discussed at the meeting;

(4) provide the shareholders with data and explanations necessary in order to make informed decisions on those matters to be discussed; this shall include (but not be restricted to) providing detailed conditions and contracts (if such exist) on deals to be conducted and proper explanation of consequences where the company proposes a merger, buy back of shares, share capital restructure or other reorganisation;

(5) if a certain director, supervisor, manager or other senior management personnel is an interested party to a matter to be discussed at the meeting, the nature and degree of that interest shall be disclosed; if a matter to be discussed impacts upon such a director, supervisor, manager or other senior management personnel in their capacity as shareholders and such impact differs to the impact on other shareholders holding the same classes of shares, such difference shall be explained;

(6) include the full text of any special resolution to be passed at the meeting;

(7) unequivocally state in clear language that a shareholder with the right to attend the meeting and to vote shall be entitled to entrust one or more agents to attend the meeting and to vote on behalf of that shareholder, and that the agent(s) of that shareholder need not necessarily be shareholder(s);

(8) state clearly the place and date by which a letter of proxy for voting shall be received.

^Article_57

A notice of a shareholders' meeting shall be sent to shareholders (regardless of whether they have voting rights) by special delivery or pre-paid post.

The addresses registered in the share ledger shall be the addresses used. For domestic capital shareholders, a notice of a shareholders' meeting may be made through public announcement.

The aforesaid public announcement shall, within forty-five (45) to fifty (50) days before the commencement of the meeting, be published in one or several newspapers designated by the competent securities department of the State Council. Once a public announcement has been made, this shall be regarded as notice received by all domestic capital shareholders.

^Article_58

In the event of failure to send notice due to accidental omission to a certain person who has the right to obtain notice or where that person failed to receive notice, the meeting and resolutions passed at that meeting shall not become invalid as a result.

^Article_59

Any shareholder who has the right to attend a shareholders' meeting and the right to vote shall have the right to entrust one or several persons (such persons need not be shareholders) as agent(s) to attend the meeting and to exercise voting rights. An agent of a shareholder may exercise the following rights according to the scope of authority entrusted by the shareholder:

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

(2) the right to request, alone or in conjunction with others, that a matter be decided upon through a ballot vote;

(3) the right to vote by a show of hands or by ballot; however, if more than one person has been entrusted as agent, such agents shall only be permitted to exercise the right to vote by ballot.

^Article_60

A shareholder shall use written form when entrusting an agent. The letter of proxy shall be signed by the principal or the agent entrusted by the principal in writing. If a principal is a corporation, the letter of proxy shall be affixed with the seal of the corporation or shall be signed by its director or officially entrusted agent.

^Article_61

A letter of proxy for voting shall be received and kept at the company's premises or at another place designated in the notice of the meeting at least twenty-four (24) hours prior to commencement of the relevant meeting or before the designated time of voting. If a letter of proxy is signed by another party as authorised by the principal, a power of attorney to sign the letter of proxy or other document of authorisation shall be subject to notarisation. The notarised power of attorney or other authorisation document shall be kept with the letter of proxy at the company's premises or other place as stipulated in the notice of meeting.

If the principal is a corporation, its legal representative or person authorised by its board of directors or other decision-making department shall be the representative to attend shareholders' meetings of the company.

^Article_62

Any format of a letter of proxy issued by the board of directors used in appointing an agent on behalf of a shareholder shall allow the shareholder to freely choose to instruct that agent as to whether to make an affirmative or negative vote and to give instructions respectively on matters to be decided by vote at the meeting. A letter of proxy shall note that if a shareholder does not give instructions, the agent may vote according to his/her judgement.

^Article_63

Where the principal dies before voting, loses the capacity to act, withdraws a letter of proxy, withdraws the power of attorney to sign a letter of proxy or if the relevant shares have been assigned, and if the company has not received written notice concerning this matter prior to commencement of the relevant meeting, a vote made by the shareholder's agent according to the letter of proxy shall remain valid.

^Article_64

Resolutions of shareholders' meetings shall be divided into ordinary and special resolutions.

An ordinary resolution at a shareholders' meeting shall require the approval of a majority of the voting rights of shareholders (including their agents) who are present at the meeting in order to be valid.

A special resolution at a shareholders' meeting shall require the approval of a two-thirds majority of the voting rights of shareholders (including their agents) who are present at the meeting in order to be valid.

^Article_65

When voting at a shareholders' meeting, a shareholder (including the agent of a shareholder) shall exercise voting rights according to the number of shares held. Each share held shall represent the equivalent of one voting right.

^Article_66

A shareholders' meeting shall propose resolutions through a vote by a show of hands except where it is requested, either before or after the vote by show of hands, by the following personnel that a resolution be passed through a ballot vote:

(1) the chairman of the meeting;

(2) at least two (2) shareholders with voting rights or two (2) agents of shareholders with voting rights;

(3) one or several shareholders (including agents of shareholders) with title or combined title amounting to more than 10% (including 10%) of shares with voting rights present at the meeting.

Unless a party requests that a resolution on a matter be passed through vote by ballot, the chairman of the meeting shall, based on the result of a vote by a show of hands, declare the result of the vote on a proposal and this shall be recorded in the minutes of the meeting as final. It shall not be necessary to certify the number of affirmative or negative votes nor the percentages of each.

A request for a ballot vote may be withdrawn by the party which raised that request.

^Article_67

If it has been requested that a decision to elect the chairman of the meeting or to stop the meeting be made through a ballot vote, the ballot vote shall be promptly conducted. In relation to other matters to be decided through vote by ballot as requested, the chairman shall decide when the ballot vote shall be conducted. The meeting may then be continued and other matters discussed. The results of the vote shall be regarded as a resolution passed by the meeting.

^Article_68

When voting by ballot, a shareholder (including the agent of a shareholder) with two (2) or more voting rights need not cast all of their voting rights as affirmative or negative votes.

^Article_69

Should there be a tie between negative and affirmative votes on a matter, the chairman of the meeting shall have the casting vote whether or not it is a vote by show of hands or by ballot.

^Article_70

Ordinary resolutions shall be proposed on the following matters at a shareholders' meeting:

(1) work reports of the board of directors and supervisory committee;

(2) profit distribution plan and loss recovery plan prepared by the board of directors;

(3) dismissal of members of the board of directors and supervisory committee and forms of their remuneration and payment methods;

(4) the company's annual budget and financial accounting reports, balance sheets, profit and loss statements and other financial statements;

(5) matters other than those on which special resolutions shall be proposed as stipulated in laws, statutory regulations or the company's articles of association.

^Article_71

Special resolutions shall be proposed on the following matters at a shareholders' meeting:

(1) company share capital expansion and reduction, and the issue of any types of share, share certificate subscription and other similar securities;

(2) the issue of corporate bonds;

(3) company division, merger, dissolution and liquidation;

(4) amendments to the company's articles of association;

(5) other matters which are deemed by the shareholders' meeting to have a major impact on the company and where it is passed by ordinary resolution at the shareholders' meeting that the matter be resolved by special resolution.

^Article_72

Shareholders who request the convening of an interim shareholders' meeting or a meeting of a certain category of shareholders shall do so in accordance with the following procedures:

1. Two (2) or more shareholders with combined title to more than 10% (including 10%) of shares with voting rights at the meeting to be convened may sign one or several written requests in the same format and with the same contents to the board of directors to convene an interim shareholders' meeting or category shareholders' meeting and which shall also specify the meeting's agenda. After receiving the aforesaid written request, the board of directors shall promptly convene an interim shareholders' meeting or category shareholders' meeting. The aforesaid number of shares held by shareholders shall be calculated as at the date of the written request.

2. If the board of directors fails to issue notification convening a meeting within thirty (30) days after receiving the aforesaid written request, the shareholder who raised the request may convene the meeting within four (4) months after the board of directors received that request. The procedures for convening such a meeting shall be, as much as possible, the same as the procedures for convening a shareholders' meeting by the board of directors.

In the case of shareholders organising the convening of a meeting as a result of the failure of the board of directors to convene a meeting as requested above, reasonable expenses incurred on the meeting shall be borne by the company and shall be deducted from the bank funds of those directors who were negligent in the performance of their duties.

^Article_73

A shareholders' meeting shall be convened by the chairman of the board of directors who shall be the chairman of the meeting. If the board chairman is unable to attend the meeting, the vice-chairman of the board of directors shall convene the meeting and shall be the chairman of the meeting. If, for some reason, both the chairman and the vice-chairman are unable to attend the meeting, the board of directors may designate a director of the company to convene the meeting and to chair the meeting on its behalf. If no chairman of the meeting is designated, shareholders at the meeting may elect a chairman. In a case where shareholders are unable, for any reason, to elect a chairman of the meeting, that shareholder who holds the most number of shares with voting rights shall be the chairman of the meeting (including an agent of a shareholder).

^Article_74

The chairman of a meeting shall be responsible for making decisions regarding the adoption of resolutions at the meeting. Decisions made shall be final and shall be declared at the meeting and recorded in the minutes of the meeting.

^Article_75

If the chairman of a meeting has any doubts as to the results of a resolution proposed at a meeting, the chairman may count the number of the votes; if the chairman of the meeting has not tallied the votes and a shareholder or an agent of a shareholder attending the meeting objects to a result declared by the chairman of the meeting, the shareholder or agent shall have the right to request a re-count of votes followed by an immediate declaration; the chairman of the meeting shall promptly count the votes.

^Article_76

The result of vote counting at a shareholders' meeting shall be recorded in the minutes of the meeting.

Minutes of a shareholders' meeting and the registry of shareholders attending the meeting and letters of proxy shall be kept at the company's premises.

^Article_77

A shareholder may consult the copy of the minutes of a shareholders' meeting free of charge during company business hours. If a shareholder asks for a copy of the minutes of a shareholders' meeting from the company, the company shall send a copy to that shareholder within seven (7) days after receipt of a reasonable fee.

CHAPTER IX — SPECIAL PROCEDURES FOR VOTING BY CATEGORIES OF SHAREHOLDERS

^Article_78

Shareholders holding different classes of shares shall be regarded as different categories of shareholders.

The various categories of shareholders shall enjoy rights and assume obligations in accordance with laws, statutory regulations and the company's articles of association.

^Article_79

If a company intends to change or abolish the rights of a category of shareholder, this shall be subject to adoption of a special resolution proposed at a shareholders' meeting and at a meeting of that category of shareholder concerned, according to the provisions of Articles 81to 85 respectively.

^Article_80

In the following situations the rights of a certain category of shareholder shall be regarded as having been changed or abolished:

(1) increase or reduction of the number of shares of that class, or increase or reduction of the number of that class of shares which have equal or greater voting rights, distribution rights and other rights to the said class of shares;

(2) change to all or part of the said category of shares to another class, change to all or part of another class of shares to the said class, or grant equal conversation rights between the said class and another class of shares;

(3) cancellation or reduction of the rights of a said class of shares to obtain dividends which have been gained or accumulated;

(4) reduction or cancellation of the priority right of a said class of shares to obtain dividends or to obtain distributed property during the company's liquidation;

(5) increase, cancellation or reduction of the conversion rights, options, voting rights, assignment rights, allocate priority rights or rights to obtain company securities pertaining to the said category of shares;

(6) cancellation or reduction of the right of the said class of shares to use a specific currency to collect the company's funds payable;

(7) establishment of a new class of shares which have voting rights, distribution rights or other rights equivalent or greater than the said class of shares;

(8) restriction of assignment of or ownership rights to a said class of shares or the addition of further restrictions;

(9) issue of the right to subscribe to the said class or to another class of shares or the right to convert shares;

(10) increase of the rights and privileges of other classes of shares;

(11) where the company's restructuring plan results in different categories of shareholders assuming disproportionate liabilities during the restructuring ;

(12) amendment or abolition of articles stipulated in this Chapter.

^Article_81

Regardless of whether an affected category of shareholders originally has voting rights or not, concerned shareholders shall have voting rights at a category shareholders' meeting on those matters mentioned in items (2) to (8) and items (11) and (12) of Article 80; however, if a shareholder is an interested party, he/she shall not have voting rights at a category shareholders' meeting.

The aforesaid interested shareholder shall include the following meanings:

1. In circumstances where, pursuant to the provisions of Article 25 of these Articles of Association, a company issues a buy back offer to all shareholders or buys back its own shares through open transactions at the stock exchange, “an interested shareholder” shall refer to ta controlling shareholder as in Article 48 of these Articles of Association.

2. In circumstances whereby a company, pursuant to the provisions of Article 25 of these Articles of Association, buys back its own shares through means of an agreement outside of the stock exchange, “an interested shareholder” shall refer to a shareholder related to such an agreement.

3. Where a company is undergoing restructuring, “an interested shareholder” shall refer to a shareholder who assumes liability less than the proportion assumed by shareholders of the same category or who has interests different to other shareholders in the same category.

^Article_82

A resolution at a category shareholders' meeting may be proposed only after obtaining approval of a two-thirds majority of that category of shareholders with voting rights present at the meeting, in accordance with the provisions of Article 81 of these Articles of Association.

^Article_83

When convening a category shareholders' meeting, the company shall issue a written notice forty-five (45) days in advance of the meeting to notify that category of registered shareholders of those matters to be discussed at the meeting and of the date and location of the meeting. A shareholder who intends to attend the meeting shall send a written reply to the company twenty (20) days before the commencement of the meeting.

If the amount of shares with voting rights represented by shareholders intending to attend the meeting is more than half of the total amount of the said category of shares with voting rights, the company may convene the category shareholders' meeting. If not, the company shall, within five (5) days, make further notice on those matters to be discussed at the meeting and the date and location of the meeting, to shareholders through a public announcement. After this public announcement is made, the company may convene a category shareholders' meeting.

^Article_84

The notice of a category shareholders' meeting shall only be to those shareholders who have the right to vote at the meeting.

The procedures to be followed at a category shareholders' meeting shall be, as far as possible, the same as the procedures to be followed at a shareholders' meeting. The articles in the company's articles of association dealing with the procedures to be followed at a shareholders' meeting shall apply to a category shareholders' meeting.

^Article_85

If the rules of the stock exchange which lists the company's shares so require, the company's articles of association shall include “apart from shareholders with other classes of shares, holders of domestic capital shares and holders of foreign capital shares listed overseas shall be recognised as different categories of shareholder” as part of its content.

Articles of association which include the content stipulated in the preceding paragraph shall also provide that “the special procedures for voting by a category of shareholders shall not be applied in the following circumstances: (1) subject to approval by a special resolution of a shareholders' meeting, the company issues domestic capital shares and/or foreign capital shares listed overseas independently or simultaneously once every tweleve (12) months, and each of the amounts of domestic capital shares and foreign capital shares listed overseas to be issued does not exceed 20% of the shares of this class already issued; (2) the scheme for the issue of domestic capital shares and/or foreign capital shares listed overseas when establishing the company has been fulfilled within fifteen (15) months from the date of approval from the Securities Committee of the State Council”.

CHAPTER X — THE BOARD OF DIRECTORS

^Article_86

The company shall establish a board of directors which shall consist of [number] directors and have one chairman, [number] vice-chairmen and [number] directors.

^Article_87

Directors shall be elected by a shareholders' meeting. The term of appointment of a director shall be [number] years. If the term of appointment of a director expires and he/she is re-elected, that director may be reappointed for consecutive terms.

A chairman and vice-chairman shall be elected or recalled by the board of directors with approval of a majority of all the directors. The term of appointment of a chairman and vice-chairman shall be [number] of years and they may be reappointed for consecutive terms if re-elected.

A director shall not be required to hold the company's shares.

^Article_88

The board of directors shall be responsible to the shareholders' meeting and shall exercise the following powers of office:

(1) responsibility for convening shareholders' meetings and to report to those meetings on work matters;

(2) implementation of resolutions of a shareholders' meeting;

(3) determination of the company's business plans and investment plans;

(4) formulation of the company's annual budget and final accounting plan;

(5) formulation of the company's profit distribution and loss recovery plans;

(6) formulation of the company's registered capital expansion or reduction plans and corporate bond issue plans;

(7) drafting of plans on such matters as company merger, division or dissolution;

(8) determination of the internal administrative's structure of the company;

(9) appointment of and dismissal of the company's manager and, based on candidates proposed by the manager, appointment and dismissal of the company's deputy manager and chief financial personnel and determination of their remuneration;

(10) formulation of the company's general management system;

(11) formulation of a plan for the amendment of the company's articles of association.

When the board of directors proposes resolutions on the aforesaid matters, apart from resolutions on matters in items (6), (7) and (11) which must be approved by a two-thirds majority of the directors, resolutions on other matters may be approved by a majority of directors.

^Article_89

In the event of the board of directors disposing of a fixed asset, if the sum of the anticipated value of the fixed asset to be disposed of and the value of fixed assets already disposed of within four (4) months prior to this proposed disposal exceeds 33% of the value of fixed assets in the balance sheet most recently examined at the shareholders' meeting, the board of directors shall not be permitted to dispose of or to consent to the disposal of that fixed asset before the approval of the shareholders' meeting.

For the purposes of this Article, disposal of a fixed asset shall include assignment of certain assets and interests, but shall not include the use of the fixed asset to provide a guarantee.

The validity of a transaction to dispose of a fixed asset shall not be affected by violation of the provisions of paragraph 1 of this Article.

^Article_90

The chairman of the board of directors shall exercise the following powers of office:

(1) to preside over shareholders' meetings and convene and preside over meetings of the board of directors;

(2) to examine the implementation of resolutions of the board of directors;

(3) to sign securities issued by the company;

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

When the chairman of the board of directors is unable to exercise his/her powers of office, he/shall appoint a vice-chairman to act on his/her behalf.

^Article_91

Meetings of the board of directors shall be convened at least twice each year by the chairman of the board. When convening a meeting of the board of directors, all the directors shall be notified [number] days in advance. When urgent matters arise, subject to a proposal by more than [number] directors or the company manager, an interim meeting of the board of directors may be convened.

^Article_92

The method of notification for convening a meeting or interim meeting of the board of directors is: [specific method of notification] and the notice period is [specific notice period].

^Article_93

A meeting of the board of directors shall require a majority of the directors to be present in order to be convened.

Each director shall have one voting right. Resolutions proposed by the board of directors shall require the approval of a majority of all the directors in order to be valid.

Should there be a tie between negative and affirmative votes on a matter, the chairman of the board of directors shall have the casting vote.

^Article_94

A director shall attend meetings of the board of directors in person. Where a director is unable to attend a board meeting due to special circumstances, he/she may entrust, in writing, another director to act as his/her representative at the meeting and the letter of proxy shall stipulate the scope of authority.

The entrusted director shall exercise the right of the entrusting director within the designated scope of authority. If a director did not attend a certain meeting of the board of directors and failed to entrust another director as his/her representative at that meeting, this shall be regarded as a renunciation of his/her voting rights at that meeting.

^Article_95

Minutes of meetings of the board of directors shall be kept to record decisions on matters discussed at those meetings and shall be signed by the directors and minutes takers present. Directors shall assume responsibility for decisions adopted by the board of directors. If a decision of the board of directors is in violation of the law, statutory regulations or the company's articles of association so as to result in the company incurring serious losses, those directors who participated in making those decisions shall bear liability for compensation towards the company. However, if a director is able to prove his/her objection to that decision, and such objection has been recorded in the minutes of the meeting, that director may be exempt from liability.

CHAPTER XI — SECRETARY OF THE BOARD OF DIRECTORS

^Article_96

The board of directors of the company shall have a secretary. The secretary of the board of directors shall be the company's senior management office.

^Article_97

The secretary of the board of directors shall be a natural person who has the necessary professional knowledge and experience and shall be appointed by the board of directors. The main duties of the secretary are:

(1) to guarantee that the company maintains complete organisational documents and records;

(2) to ensure the company, in accordance with the law, prepares and submits required reports and documents to competent authorities;

(3) to ensure the company's share ledger is properly established and to ensure that those who have the right to obtain relevant records and documents of the company are able to obtain them promptly.

^Article_98

A director or other senior management personnel of the company may hold the post of secretary of the board of directors concurrently. An accountant of the accounting firm engaged by the company shall not be permitted to hold the post of secretary of the board of directors concurrently.

Where the post of secretary of the board of directors is concurrently held by a director and if a certain action requires separate conduct by the director and the secretary of the board of directors, that director holding the post of secretary shall not be permitted to act with dual capacity.

CHAPTER XII — THE COMPANY MANAGER

^Article_99

The company shall have one manager who shall be appointed and dimissed by the board of directors.

^Article_100

The company's manager shall be responsible to the board of directors and shall have the following powers of the office:

(1) to be in charge of the management of the company's production and operations and to organise the implementation of resolutions of the board of directors;

(2) to organise the implementation of the company's annual business plan and investment plan;

(3) to draft the company's internal administrative structure plan;

(4) to draft the company's fundamental management system;

(5) to formulate fundamental rules and regulations of the company;

(6) to propose the appointment and dismissal of the company's deputy managers and chief financial personnel;

(7) to appoint or dismiss management personnel other than those appointed and dismissed by the board of directors;

(8) other powers of office stipulated in the company's articles of association or authorised by the board of directors.

^Article_101

The manager may attend meetings of the board of directors as a non-voting delegate. If the manager is not a director, he/she shall have no voting rights at meetings of the board of directors.

^Article_102

When exercising powers of office, the company's manager shall abide by laws, statutory regulations and the company's articles of association and shall assume obligations of sincerity and diligence towards the company.

CHAPTER XIII — SUPERVISORY COMMITTEE

^Article_103

The company shall establish a supervisory committee.

^Article_104

The supervisory committee shall consist of [number] members of which one member shall be appointed as chairman of the supervisory committee. The term of office of a supervisor shall be [number] years. After the term of office of a supervisor has expired, the supervisor, if re-elected, may be reappointed for consecutive terms.

^Article_105

The members of the supervisory committee shall consist of [number] shareholder representatives and [number] employee representatives. The shareholder representatives shall be elected and recalled by the shareholders' meeting, and employee representatives shall be elected and recalled democratically by the company employees.

^Article_106

A director, manager or chied financial officer of the company shall be prohibited from concurrently holding the position of supervisor.

^Article_107

Meetings of the supervisory committee shall be convened at least [number] times a year and the chairman of the supervisory committee shall be responsible for the convening of the meeting.

^Article_108

The supervisory committee shall be responsible to the shareholders' meeting and shall exercise the following powers of office:

(1) to investigate the company's financial affairs;

(2) the supervise acts conducted by the company's directors, managers and other senior management personnel during the performance of their duties which are in violation of the law, statutory regulations or the company's articles of association;

(3) the request the company's directors, managers and other senior management personnel to rectify the situation if their acts are harmful to the interests of the company;

(4) the check financial reports, business reports, profit distribution plans and other financial documents to be submitted to shareholders' meetings by the board of directors and, if questions are raised concerning such documents, to commission certified public accountants and certified practising auditors in the company's name to assist in verification of doubtful documents;

(5) to propose the convening of interim shareholders' meetings;

(6) to represent the company in negotiations with directors or in initiating legal proceedings against a director;

(7) other powers of office as stipulated in the company's articles of association.

Supervisors shall attend meetings of the board of directors as non-voting delegates.

^Article_109

The forms of procedure of the supervisory committee are: [specific forms of procedure] and voting procedures are: [specific voting procedures]

^Article_110

If, when exercising its powers of office, a supervisory committee needs to employ a lawyer, certified public accountant, certified practising auditor or other professional, reasonable fees incurred in so doing shall be borne by the company.

^Article_111

A supervisor shall faithfully perform his/her duties of supervision in accordance with the law, statutory regulations and the company's articles of association.

CHAPTER XIV — QUALIFICATIONS AND OBLIGATIONS OF COMPANY DIRECTORS, SUPERVISORS, MANAGERS AND OTHER SENIOR MAANGEMENT PERSONNEL

^Article_112

A person may not hold the position of company director, supervisor, manager or other senior management personnel in any of the following circumstances:

(1) the person has no civil capacity or has restricted civil capacity;

(2) a period of less than five (5) years has elapsed since the person was released after serving the ful term of a sentence for corruption, bribery, seizure, embezzlement of property or crimes of disruption to the social economic order; or if a period of less than five (5) years has elapsed since the person has resumed his/her political rights which were forfeited due to a criminal offence;

(3) when the person has held the post of director, factory superintendent or manager of a company or enterprise which became bankrupt and was liquated as a result of unsound business management and where that person has held personal responsiblity for such and where a period of less than three (3) years has elapsed since the date of the conclusion of the liqudation.

(4) a period of less than three (3) years has elapsed since the date of the imposition of a decision to revoke the business licence of the company or enterprise of which the person was legal representative and who bears personal responsibility for such revocation where its business licence was revoked due to illegal business operations;

(5) personal debts of relatively large amounts have not been repaid on time;

(6) the person has been involved in illegal activities which are subject to investigation by the judicial authorities and the case has yet to be settled;

(7) provisions of laws and statutory regulations stipulate that the person is not permitted to assume the position of leader of an enterprise;

(8) the person is not a natural person;

(9) a period of less than five (5) years has elapsed since the date the person was found to be in violation of the provisions of relevant securities regulations and was involved in deceitful or dishonest activities as ruled by the competent authority.

^Article_113

The validity of actions of the company director, manager or senior management personnel when acting as representatives of the company on bona fide third parties shall not be affected as a result of those representatives not conforming to the rules pertaining to the holding of their posts, their election or qualifications.

^Article_114

Apart from obligations as stipulated in laws, statutory regulations or the listing rules of stock exchanges which list the company's shares, a company director, supervisor or other senior management personnel shall, in addition, when exercising his/her powers of office as stipulated by the company, assume the following obligations towards the shareholders:

(1) shall not allow the company to exceed the scope of its business operations as stipulated in its business licence;

(2) shall sincerely take the best interests of the company as fundamental when conducting business activities;

(3) shall not be permitted to expropriate the company's property using any means, including (but not limited to) when this involves opportunities beneficial to the company;

(4) shall not infringe upon the individual rights and interests of shareholders, including (but not limited to) distribution rights and voting rights; however, this shall not include the situation where a company restructure is proposed for adoption by the shareholders' meeting in accordance with the company's articles of association.

^Article_115

Directors, supervisors, managers and other senior management personnel of the company shall all have responsibility, when exercising their rights and performing their obligations, to adopt the prudence, diligence and skill which would be displayed by a reasonably prudent person in similar circumstances.

^Article_116

When performing their duties, directors, supervisors, managers and other senior management personnel of the company must abide by the principle of sincerity and shall not place themselves in unfavourable situations in which their interests may conflict with their obligations. this principle shall include (but not limited to) performing the following obligations:

(1) to sincerely take the best interests of the company as fundamental in their actions;

(2) to exercise authority within their powers of office and not exceed that power of authority;

(3) to personally exercise the authorised right to handle matters according to one's own judgement and not to be manipulated by others; the right to handle matters according to one's own judgement shall not be passed on to others without the authority of laws and statutory regulations or without the informed consent of the shareholders' meeting;

(4) to treat the same categories of shareholders equally and to treat different categories of shareholders fairly;

(5) the entering into contacts, deals or arrangements with the company unless it is stipulated otherwise in the company's articles of association or without the informed approval of the shareholders' meeting shall be prohibited;

(6) the use of the company's property to seek personal gains through any means without the informed consent of the shareholders' meeting shall be prohibited;

(7) the use of powers of office to receive bribes or other illicit gains and the swizure of the company's property through any means, including (but not limited to) opportunities which are beneficial to the company shall be prohibited;

(8) the receiving of commissions from company transactions without the informed consent of the shareholders' meeting shall be prohibited;

(9) to honour the company's articles of association, to faithfully perform one's duties and to safeguard the company's interests, and it shall be prohibited to use the position and powers of office to seek personal gains;

(10) without the informed consent of the shareholders' meeting, it shall be prohibited to engage in any activities which are in competition with the company;

(11) it shall be prohibited to embezzle company funds or to lend company funds to others, and it shall be prohibited to use company funds to open bank accounts in one's own name or using another's name or to use company assets to provide guarantees for debts of company shareholders or other persons;

(12) without the informed consent of the shareholders' meeting, it shall be prohibited to disclose confidential information concerning the company which became known in the course of holding the position; unless it be in the company's interests, such information shall not be used. However, such information may be disclosed to the court or other competent government organs in the following circumstances:

(i) where it is so provided in the law;

(ii) where the public interest so requires;

(iii) where the interests of such a director, supervisor, manager or other senior management personnel themselves so require.

^Article_117

A director, supervisor, manager and other senior management personnel shall not be permitted to incite the following persons or organisations (“related parties”) to do things which the director, supervisor, manager and other senior management personnel cannot do:

(1) the spouse or under age children of the director, supervisor, manager and other senior management personnel;

(2) the trustee of that director, supervisor, manager and other senior management personnel or of those mentioned in item (1) of this Article;

(3) the partner(s) of that director, supervisor, manager and other senior management personnel or of those mentioned in item (1) of this Article;

(4) the company, where it is in reality independently controlled by that director, supervisor, manager and other senior management personnel or, in reality, jointly controlled by that director, supervisor, manager and other senior management personnel together with those mentioned in items (1), (2) or (3) of this Article, or jointly controlled with another director, supervisor, manager and other senior management personnel;

(5) the directors, supervisors, managers and other senior management personnel of that controlled company as mentioned in item (4) of this Article.

^Article_118

The obligations assumed in good faith by a company director, supervisor, manager or other senior management personnel are not necessarily terminated at the conclusion of his/her post and the obligations of maintaining confidential information concerning the company's business shall remain valid after the conclusion of his/her post. The periods of validity for other obligations shall be determined in accordance with the principle of fairness and shall depend on the length of time intervening between the occurrence of an event and the time of vacating the post and on the circumstances under which that director, supervisor, manager and other senior management personnel ended his/her relationship with the company.

^Article_119

The responsibility borne by a director, supervisor, manager and other senior management personnel due to violation of a specific obligation may be relieved by an informed meeting of shareholders except in those circumstances stipulated in Article 47 of these articles of association.

^Article_120

When a company director, supervisor, manager or other senior management personnel has significant direct or indirect interests in a contract, deal or arrangement concluded by or intended to be concluded by the company (apart from contracts of appointment concluded between the company and director, supervisor, manager or other senior management personnel), regardless of whether the matter is required to be approved by the board of directors under normal circimstances, the nature and degree of interest shall be promptly disclosed to the board of directors.

Unless the interested director, supervisor, manager or other senior management personnel has disclosed his/her interest to the board of directors according to provisions of the preceding paragraph of this Article, and the board of directors has approved the matter in a vote in which that director, supervisor, manager and other senior management personnel has not been included, the company shall have the right to cancel that contract, deal or arrangement. However, exception shall be made if the other party is a bona fide party which did not know that the actions of the director, supervisor, manager and other senior management personnel were in violation of his/her obligations.

If a party related to a company director, supervisor, manager and other senior management personnel has an interest in a contract, deal or arrangement, that director, supervisor, manager and other senior management personnel shall also be regarded as an interested party.

^Article_121

If a company director, supervisor, manager or other senior management personnel has, before the company considers for the first time to conclude a contract, deal or arrangement, notified the board of directors in writing declaring the nature of his/her interest in that contract, deal or arrangement, that director, supervisor, manager and other senior management personnel shall be regarded as having made disclosure as stipulated in the preceding Article in this Chapter of those matters in the notification.

^Article_122

The company shall not be permitted to pay, using any means, the taxes of its directors, supervisors, managers and other senior management personnel

^Article_123

The company shall not be permitted to, directly or indirectly, provide loans to or loan guarantees for directors, supervisors, managers and other senior management personnel of the company or its parent company and the company shall also not be permitted to provide loans to or loan guarantees for parties related to the aforesaid persons.

The provisions of the preceding paragraph shall not apply in the following circumstances:

(1) where the company provides loans to its subsidiaries or provides loan guarantees for its subsidiaries;

(2) where the company, in accordance with the contract of appointment approved by the shareholders' meeting, provides a company director, supervisor, manager and other senior management personnel with loans, loan guarantees or other funds for payments made on behalf of the company or for payments or expenses incurred in the performance of their duties;

(3) if the scope of the company's normal business operations includes provision of loans and loan guarantees, the company may provide loans to or provide loan guarantees for its directors, supervisors, managers and other senior management personnel and to thier related parties; however, the conditions for the provision of such loans and loan guarantees shall be normal business conditions.

^Article_124

In the event of the company providing a loan in violation of the provisions of the preceding Article, regardless of the conditions of provision of that loan, the party receiving the loan shall make prompt repayment.

^Article_125

In the event of the company having provided a loan guarantee in violation of the provisions of paragraph 1 of Article 123, the company shall not be forced to implement that guarantee except in the following circumstances:

(1) when providing a loan to a related party of a director, supervisor, manager and other senior management personnel of the company or its parent company, the loan provider was unaware of the facts;

(2) the collateral security provided by the company has been legally sold to a bona fide purchaser.

^Article_126

Guarantee as mentioned in the preceding articles of this Chapter shall include an act whereby the guarantor assumes liability or provides property to ensure that the obligor performs its obligations.

^Article_127

Where a company director, supervisor, manager or other senior management personnel is found to have violated obligations to the company, apart from the various rights and remedial measures stipulated in laws and statutory regulations, the company has the power to adopt the following measures:

(1) to request that the director, supervisor, manager and other senior management personnel compensate for losses incurred by the company due to their negligence in the performance of thier duties;

(2) to cancel any contract or deal concluded between the company and that director, supervisor, manager and other senior management personnel, and cancel any contract or deal concluded between the company and a third party (if the third party knew or should have known that the director, supervisor, manager and other senior management personnel was representing the company in violation of obligations to the company);

(3) to request that the director, supervisor, manager and other senior management personnel hand over any gains derived in violation of his/her obligations;

(4) to recover funds including (but not limited to) commissions received by that director, supervisor, manager and other senior management personnel which should have been collected by the company;

(5) to request that the director, supervisor, manager and other senior management personnel return any interests gained or which may be gained from any funds which should be handed over to the company.

^Article_128

The company shall enter into a written contract on remuneration matters with the company director or supervisor which shall be approved by the shareholders' meeting in advance. The aforesaid remuneration matters shall include:

(1) remuneration of company director, supervisor or senior management personnel;

(2) remuneration of directors, supervisors or senior management personnel of subsidiaries of the company;

(3) remuneration for the provision of other management services to the company and its subsidiaries;

(4) compensatory payments to directorss or supervisors in case of retirement or loss of position.

Unless in accordance with the aforesaid contract, a director or supervisor shall not be permitted to initiate legal proceedings against the company based on benefits receivable for the aforesaid matters.

^Article_129

A contract on remuneration matters concluded between the company and a company director or supervisor shall stipulate that upon purchase of the company, the company director or supervisor shall, under conditions of approval granted in advance by the shareholders' meeting, be entited to obtain compensation or other payments as a result of loss of post or retirement. Purchase of the company as referred to in the preceding paragraph shall refer to any of the following instances:

(1) a purchase offer made to all shareholders by any party;

(2) a purchase offer made by any party intending to become a controlling shareholder. The definition of a controlling shareholder shall be the same as that defined in Article 48 of these Articles of Association.

If a director or supervisor is in violation of the provisions of this Article, any funds received by the director or supervisor shall be owned by those who accepted such offer and who sold their shares, expenses incurred on pro rata distribution of sich funds shall be borne by that director or supervisor and expenses shall not be deducted from those funds.

CHAPTER XV — FINANCIAL AND ACCOUNTING SYSTEM AND DISTRIBUTION OF PROFITS

^Article_130

The company shall establish a financial and accounting system in accordance with the law, statutory regulations and the China accounting code formulated by the financial department in charge under the State Council.

^Article_131

The company shall produce financial reports at the end of each fiscal year which shall be subject to examination and verification in accordance with the law.

^Article_132

The board of directors of the company shall, at each annual shareholders' meeting, submit to the shareholders a financial report prepared by the company in accordance with the provisions of laws, statutory regulations and regulatory documents promulgated by the local government and departments in charge.

^Article_133

The company shall make its financial report available for inspection by the shareholders of the company twenty (20) days before the convening of its annual shareholders' meeting. Every shareholder of the company shall have the right to obtain the financial reports as mentioned in this Chapter.

Companies listed in Hong Kong shall send financial reports to each holder of foreign capital shares listed overseas by pre-paid mail. The addresses of addresses shall be those registered in the share ledger.

^Article_134

Financial statements of the company shall be prepared in accordance with the China accounting code and relevant regulations and, in addition, shall also be prepared in accordance with the international accounting code or the accounting code of the country or region where the company is listed. If there are significant discrepancies between the financial statements prepared according to two different accounting codes, such discrepancies shall be clearly indicated in the notes attached to the financial statements. When distributing post-tax profits in a fiscal year, the lesser amount of post-tax profits in the two financial statements shall be used as the standard amount.

^Article_135

Reports on mid-term business results or financial information published or disclosed by the company shall be prepared in accordance with the China accounting code and relevant regulations and, simultaneously, shall also be prepared in accordance with the international accounting code or the accounting code of the country or region where the company is listed.

^Article_136

The company shall publish its financial reports twice each fiscal year, ie a mid-term financial report shall be published within sixty (60) days of the end of the first six (6) months of that fiscal year and an annual financial report shall be published within 120 days after the end of the fiscal year.

^Article_137

The company shall not be permitted to establish account books other than statutory account books.

^Article_138

The capital accumulation fund shall include the following items:

(1) premiums gained on shared issued for more than their face value;

(2) other revenue to be charged to the capital accumulation fund as stipulated by the financial department in charge under the State Council.

^Article_139

The company may use the following for distribution of dividends:

(1) cash;

(2) share certificates.

^Article_140

The company shall commission a collecting agent for holders of foreign shares listed overseas.

A collecting agent shall collect dividends on foreign capital shares and other payable items from the company on behalf or relevant shareholders.

A collecting agent commissioned by the company shall meet the requirements of the law in the place where the company is listed or relevant regulations of the stock exchange.

CHAPTER XVI — APPOINTMENT OF AN ACCOUNTING FIRM

^Article_141

The company shall appoint a State qualified independent accounting firm to audit the company's annual financial reports and to examine and verify other financial reports.

The company's first accounting firm may be appointed by the founding meeting before he first shareholders' meeting. The term of appointment of the first accounting firm shall terminate at the conclusion of the first shareholders' meeting.

Where the founding meeting does not exercise the powers of office stipulated in the preceding paragraph, the board of directors shall exercise the said powers of office.

^Article_142

The term of appointment of an accounting firm shall commence from the date of conclusion of the current shareholders' meeting and end at the date of conclusion of the subsequent shareholders' meeting.

^Article_143

An accounting firm appointed by the company shall have the following rights:

(1) to consult, at any time, the company's account books, records or vouchers, and shall have the right to request company directors, managers or other senior management personnel to provide relevant data and explanations;

(2) to request that the company adopt all reasonable measures to obtain from its subsidiaries data and explanations which the accounting firm requires for the performance of its duties;

(3) to attend shareholders' meetings and to obtain information which is available to any shareholder who has the right to receive notice of a meeting or on other matters related to the meeting, and to speak at any shareholders' meeting about matters related to its functions as accounting firm to the company.

^Article_144

If the position of the accounting firm falls vacant, the board of directors may, before convening a shareholders' meeting, appoint an accounting firm to fill the vacancy. However, if, during the period of the vacancy, the company has other appointed accounting firms, those firms may continue to handle matters.

^Article_145

Regardless of what is stipulated in a contract concluded between an accounting firm and the company, the shareholders' meeting may, before the duration of appointment of any accounting firm expires, decide to dismiss that firm through the adoption of an ordinary resolution. If such an accounting firm has the right to claim compensation from the company for reason of such dismissal, that right shall not be affected.

^Article_146

The remuneration of an accounting firm or methods for determining remuneration shall be decided at a shareholders' meeting. The remuneration of an accounting firm appointed by the board of directors shall be determined by the board of directors.

^Article_147

Decisions on matters relating to the appointment, removal or non-reappointment of an accounting firm shall be taken at shareholders' meetings and such decisions shall be reported to the competent securities department of the State Council for the record.

^Article_148

The company shall advise the accounting firm in advance if it is to be dismissed or not to be reappointed. The accounting firm shall have the right to make a statement in respect of its dismissal or non-reappointment at the shareholders' meeting. If an accounting firm resigns, it shall explain to the shareholders' meeting whether or not the company has been involved in any improper dealings.

CHAPTER XVII — COMPANY MERGER AND DIVISION

^Article_149

In the case of company merger or division, a merger or division plan shall be drafted by the board of directors and after the plan is adopted according to the procedures stipulated in the company's articles of association, the relevant procedures for examination and approval shall then be carried out in accordance with the law. If a shareholder objects to a merger or division plan, that shareholder shall have the right to request the company or those shareholders who approve the merger or division plan to purchase his/her shares at a fair price. The content of a resolution on company merger or division shall be made into a special document to be available for inspection by shareholders.

For holders of foreign capital shares of the company listed in Hong Kong the aforesaid document shall be delivered by post.

^Article_150

A company merger may be made by the consolidation by merger method or by the new establishment merger method.

When the company is undergoing a merger, the various parties to the merger shall sign a merger agreement and a balance sheet and property inventory shall be drawn up. Within ten (10) days of the proposal of a resolution on a company merger, the company shall notify the various creditors and a public announcement shall be made in the press at least three (3) times within thirty (30) days.

Following amerger, a takeover company or a company newly established as the result of a merger shall assume the debts receivable and debts payabel of the parties to the merger.

^Article_151

If a company is to be divided, its assets shall be divided accordingly.

When embarking on a division, the parties to the division shall sign a division agreement and a balance sheet and property inventory shall be drawn up.

Within ten (10) days of the proposal of a resolution on a company division, the company shall notify the various creditors and a public announcement shall be made in the press at least three (3) times in thirty (30) days.

The debts payable by a company before its division shall be assumed by the companies divided in accordance with the concluded agreement.

^Article_152

Where registered items are changed as a result of a company merger or division, application shall be made to the company registration authority to register the amendment in accordance with the law. Where the company is dissolved, application shall be made to register the cancellation in accordance with the law; where a company is newly established, application shall be made to register the establishment.

CHAPTER XVIII — COMPANY DISSOLUTION AND LIQUIDATION

^Article_153

The company shall terminate its operation and enter into liquidation in accordance with the law in any of the following circumstances:

(1) expiry of the company's term of business operations;

(2) a shareholders' meeting resolves that there shall be a dissolution;

(3) dissolution becomes necessary because of company merger or division;

(4) the company is declared bankrupt in accordance with the law due to inability to discharge its debts;

(5) the company has been ordered to close down in accordance with the law as a result of violations of the law and statutory regulations.

^Article_154

In the case of the company being dissolved in accordance with the provisions of items (1) and (2) of the preceding Article, the company shall, within fifteen (15) days, establish a liquidation committee, the members of which shall be determined by the shareholders' meeting through an ordinary resolution.

In the case of the company being dissolved in accordance with the provisions of item (4) of the preceding Article, the People's Court shall, in accordance with laws and statutory regulations, organise shareholders, relevant authorities and relevant professionals to form a liquidation committee to conduct the liquidation.

In the case of the company being dissolved in accordance with the provisions of item (5) of the preceding Article, the competent authority shall organise shareholders, relevant authorities and relevant professionals to form a liquidation committee to conduct the liquidation.

^Article_155

In the case of the board of directors deciding that the company should enter into liquidation (except if the company is declared bankrupt and enters into liquidaton), the board of directors shall, in the notice for a shareholders' meeting convened for this reason, declare that the board of directors has already fully investigated the position of the company and considers that the company can fully repay its debts within twelve (12) months after commencement of the liquidation.

Following a resolution on liquidation passed by a shareholders' meeting, the powers of office of the board of directors shall immediately be terminated.

The liquidationn committee shall adhere to the instructions given by the shareholders' meeting and shall report to the shareholders' meeting on the income and expenditure of the liquidation committee, the business operations of the company and progress of the liquidation of the company at least once each year. The liquidation committee shall submit a final report to the shareholders' meeting at the conclusionof liquidation proceedings.

^Article_156

The liquidation committee shall, within ten (10) days of its establishment, notify creditors and make a public announcement in the press at least three (3) times within sixty (60) days. The liquidation committee shall register all claims.

^Article_157

The liquidation committee shall exercise the following powers of office during the period of liquidation:

(1) perform a stocktake of the company's property and formulate a balance sheet and property inventory;

(2) notify creditors and make public announcement of the liquidation;

(3) handle and finalise matters in relation to the unfinished business affairs of the company;

(4) pay overdue taxes;

(5) clear debts receivable and payable;

(6) dispose of the remaining assets after all debts have been paid;

(7) participate in civil proceedings on behalf of the company.

^Article_158

A liquidation plan shall be formulated by the liquidation committee after the stocktake of the company property has been performed and the balance sheet and property inventory have been compiled, and this shall be submitted to the shareholders' meeting or to relevant authorities in charge for confirmation.

The company property shall be used to settle claims in the following order: [settlement order].

The assets remaining after the company has settled its debts pursuant to the preceding paragraph shall be distributed to the various shareholders according to the classes and percentages of shares held.

During the period of liquidation, the company shall not be permitted to embark on new operating activities.

^Article_159

Where liquidation is carried out as a result of dissolution of the company, after dissolution and after a stocktake of the company's assets and compilation of a balance sheet and proper inventory, where the amount of assets is insufficient to settle debts, the liquidation committee shall promptly apply to the People's Court for a declaration of bankruptcy.

If a company has been declared bankrupt by the People's Court, the liquidation committee shall hand over liquidation matters to the People's Court.

^Article_160

After the conclusion of liquidation proceedings, the liquidation committee shall compile a liquidation report as well as draw up income and expenditure statements and various financial accounts for the liquidation period which shall be submitted to the shareholders' meeting or relevant authorities in charge for confirmation following verification by a certified public accountant registered in China.

Within thirty (30) days of confirmation by the shareholders' meeting or the relevant authorities in charge, the liquidation committee shall submit the aforesaid documents to the company registration authority and apply for cancellation of company registration and then publicly announce the company's termination.

CHAPTER XIX — PROCEDURES FOR AMENDMENT OF THE ARTICLES OF ASSOCIATION

^Article_161

The company may amend its articles of association in accordance with the law, statutory regulations and its articles of association.

^Article_162

Amendment of articles of association which involves the contents of the “Essential Clauses in Articles of Association of Companies Listed Overseas” (hereinafter referred to as “Essential Clauses”) shall, in order to be valid, be subject to approval by the Securities Committee of the State Council and the company examination and approval department authorised by the State Council; where the registered items have to be changed, the company shall apply to register the amendment in accordance with the law.

CHAPTER XX — RESOLUTION OF DISPUTES

^Article_163

In relation to disputes and claims relating to the company's affairs between the holders of foreign capital shares listed overseas and the company's directors, supervisors, managers and other senior management personnel, or between the holders of foreign capital shares listed overseas and the holders of domestic capital chares arising out of rights and obligaions provided for in the company's articles of association, laws and statutory regulations, where the competent securities authority of the State Council has not reached an understanding or agreement with the relevant overseas securities supervisory authority on the method of resolution or disputes, the parties concerned may resolve the dispute through means provided for in laws and statutory regulations or may resolve the matter through means determined by agreement of both parties.

Companies listed in Hong Kong shall include the following contents in their articles of association:

1. In relation to disputes and claims relating to the company's affairs between the holders of foreign capital shares listed overseas and the company, between the holders of foreign capital shares listed overseas and the company's directors, supervisors, managers and other senior management personnel, or between the holders of foreign capital shares listed overseas and the holders of domestic capital shares arising out of rights and obligations provided for in the company's articles of association, the Company Law or other laws and statutory regulations, the parties concerned shall refer the dispute to arbitration for settlement.

When referring the aforesaid dispute or claim to arbitration, it shall be the whole dispute or entire claim which is so referred; where those persons who have a cause of action arising out of the same facts or those persons required to participate in the resolution of a dispute or claim are the company's shareholders, directors, supervisors or other senior management personnel or such person is the company itself, such person shall be subject to arbitration.

Disputes over shareholder status and the share ledger may be resolved through means other than arbitration.

2. An applicant for arbitration may select the China International Economic and Foreign Trade Arbitration Comission to udnertake arbitration according to its rules or, alternatively, may choose the Hong Kong International Arbitration Centre to undertake arbitration according to its rules on securities arbitration. Arfer the applicant for arbitration refers the dispute or claim for arbitration, the opposing party shall participate in the arbitration at the arbitral body chosen by the applicant.

If an applicant chooses the Hong Kong Arbitration Centre, any party concerned may, in accordance with the rules of the Hong Kong Arbitration Centre on securities arbitration, request the arbitration to be undertaken in Shenzhen.

3. In resolving disputes or claims as mentioned in item 1 of thie Article through arbitration, the law of the People's Republic of China shall apply except if laws and statutory regulations stipulate otherwise.

4. An award made by the arbitral body shall be final and have binding force on the parties concerned.

CHAPTER XXI — SUPPLEMENTARY PRINCIPLES

^Article_164

The contents which shall be included in the articles of association of companies limited by shares listed in Hong Kong as clearly stipulated in the Essential Clauses need not be included in the articles of association of companies limited by shares listed in regions other than Hong Kong or other countries.

^Article_165

For companies listed in Hong Kong, the meaning of accounting firms as mentioned in the Essential Clauses shall be the same as that of “Heshushi”.^*

^Article_166

In the Essential Clauses, the contents indicated with [     ] shall be filled in by the company according to its actual circumstances; the contents marked with ( ) must be included in the company's articles of association.

 ^* Translator's note: “Heshushi” means auditor in Hong Kong usage.

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