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Charmacy Pharmaceutical Co., Ltd. Governance Information 2017

Sep 5, 2017

50500_rns_2017-09-05_fa4cab61-b2cc-44d6-8591-377505fc3a71.pdf

Governance Information

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CHARMACY PHARMACEUTICAL CO., LTD. 創美藥業股份有限公司

ARTICLES OF ASSOCIATION

Approved at the Company’s first shareholders’ extraordinary general meeting of 2015 held on 8 August 2015

Amended for the first time at the 2015 annual general meeting of the Company held on 3 June 2016 Amended for the second time at the 2016 annual general meeting of the Company held on 10 June 2017 Amended for the third time at the 2017 first extraordinary general meeting of the Company held on 5 September 2017

CONTENTS

CHAPTER 1 GENERAL PROVISIONS....................................................................................... 1 CHAPTER 2 OBJECTIVES AND SCOPE OF BUSINESS ......................................................... 2 CHAPTER 3 SHARES AND REGISTERED CAPITAL .............................................................. 3 CHAPTER 4 REDUCTION OF CAPITAL AND REPURCHASE OF SHARES ........................ 6 CHAPTER 5 FINANCIAL ASSISTANCE FOR REPURCHASE OF THE COMPANY’S SHARES ........................................................................................................................................... 8 CHAPTER 6 SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS..................... 9 CHAPTER 7 SHAREHOLDERS’ RIGHTS AND OBLIGATIONS ........................................... 14 CHAPTER 8 SHAREHOLDERS’ GENERAL MEETING ......................................................... 17 CHAPTER 9 SPECIAL VOTING PROCEDURES OF CLASS SHAREHOLDERS ................ 27 CHAPTER 10 BOARD OF DIRECTORS .................................................................................. 31 CHAPTER 11 SECRETARY TO THE BOARD OF THE COMPANY ...................................... 37 CHAPTER 12 SPECIAL COMMITTEES OF THE BOARD ..................................................... 38 CHAPTER 13 GENERAL MANAGER AND OTHER SENIOR MANAGEMENT OF THE COMPANY ................................................................................................................................... 39 CHAPTER 14 BOARD OF SUPERVISORS .............................................................................. 40 CHAPTER 15 QUALIFICATIONS AND OBLIGATIONS OF DIRECTORS, SUPERVISORS AND OTHER SENIOR MANAGEMENT OF THE COMPANY ................................................. 42 CHAPTER 16 FINANCIAL AND ACCOUNTING SYSTEMS AND PROFIT DISTRIBUTION ............................................................................................................................. 49 CHAPTER 17 APPOINTMENT OF ACCOUNTING FIRM...................................................... 52 CHAPTER 18 INSURANCE ....................................................................................................... 55 CHAPTER 19 LABOUR MANAGEMENT ............................................................................... 55 CHAPTER 20 LABOUR UNIORS ........................................................................................... 55 CHAPTER 21 MERGER AND DIVISION OF THE COMPANY ............................................. 56 CHAPTER 22 DISSOLUTION AND LIQUIDATION OF THE COMAPNY ........................... 57 CHAPTER 23 PROCEDURES FOR AMENDMENTS OF THESE ARTICLES ....................... 59 CHAPTER 24 DISPUTE RESOLUTIONS ................................................................................. 60 CHAPTER 25 NOTICE ............................................................................................................... 61 CHAPTER 26 INTERPRETATION AND DEFINITION OF THESE ARTICLES ............. 61

CHARMACY PHARMACEUTICAL CO., LTD. 創美藥業股份有限公司

ARTICLES OF ASSOCIATION

CHAPTER 1 GENERAL PROVISIONS

Article 1.1 CHARMACY PHARMACEUTICAL CO., LTD. (hereinafter referred to as the MP art.1
“Company”) is incorporated in accordance with the Company Law of the A13D.1(a)
People’s Republic of China (hereinafter referred to as the “Company Law”), the
Special Regulations on the Overseas Offering and Listing of Shares by Joint
Stock Limited Companies Promulgated by the State Council of the People’s
Republic of China (hereinafter referred to as the “Special Regulations”) and other
relevant laws and regulations of the PRC.
The Company was established by way of promotion on 5th May 2015 and
registered with Shantou Administration for Industry and Commerce on 28th May
2015. The unified social credit code in the business license of the Company is
91440500722414635C.
The promoters of the Company are Yao Chuanglong, Yao Xizhen,
Shantou Meizhi Investment Management Limited Partnership* (汕頭市
美智投資管理合夥企業（有限合夥）), Shantou Youran Investment
Management Limited Partnership * (汕頭市悠然投資管理合夥企業（有
限合夥）) and Shantou Zhichuang Investment Management Limited
Partnership* (汕頭市智創投資管理合夥企業（有限合夥）).
Article 1.2 The Company’s registered names MP art.2
Chinese name：創美藥業股份有限公司
English name：Charmacy Pharmaceutical Co.,Ltd
Article 1.3 The Company’s office：No. 235 Song Shan North Road Longhu District, MP art.3
Shantou City
Article 1.4 The Company’s legal representative is the Chairman of the Board. MP art.4
Article 1.5 The Company is a joint stock limited company that has perpetual MP art.5
existence.
The Company is an independent legal person under the jurisdiction and
protection of the laws, regulations and other relevant rules of the PRC.
All assets of the Company are divided into shares of equal value. The
shareholders shall be liable and entitled to the Company to the extent of
the shares they hold. The Company shall be liable for its debts to the
extent of all of its assets.

Page 1

Article 1.6 The Articles of Association shall take effect from the date of overseas initial MP art.6
public offering and listing of the Company’s shares.
Starting from its effective date, these Articles shall constitute a document legally
binding on the standardization of the organization and conduct of the Company,
and the rights and obligations between the Company and its shareholders, as well
as among the shareholders.
Article 1.7 These Articles are binding on the Company and its shareholders, directors, MP art.7
supervisors and other senior management, all of whom are entitled to claim for
rights concerning the affairs of the Company in accordance with these Articles.
A shareholder may take action against the Company pursuant to these Articles,
and vice versa. A shareholder may also take action against other shareholder(s)
and the directors, supervisors, and other senior management of the Company
pursuant to these Articles.
Taking actions referred to in the preceding clause shall include instituting
proceedings before the court or applying to the arbitration institution for
arbitration.
The senior management referred to in the preceding clause shall include general
manager, vice-president, chief financial officer and board secretary of the
Company.
Article 1.8 The Company may invest in other limited liability companies or joint stock MP art.8
limited companies. The Company’s liabilities to an investee company shall be
limited to the amount of its capital contribution to the investee company.

CHAPTER 2 OBJECTIVES AND SCOPE OF BUSINESS

Article 2.1 The Company’s business objectives are: Integrity Operation, Altruist and Win-Win MP art.9 Cooperation.

Article 2.2 The business scope of the Company: pharmaceutical business; medical device MP art.10 business; distribution of health products and food; freight transport business; domestic freight forwarder; third-party pharmaceutical products and medical devices logistics business; commodity information consultancy; management and planning service for pharmaceutical enterprises; logistics information consulting service; advertising business; lease of properties; distribution of sterilizing and bactericidal equipments and instruments, cosmetics, sanitary products, detergent, daily provisions and chemical products (excluding hazardous chemicals); purchasing and initial processing of agricultural by-products, seafood and local specialties; private warehouses locating at 1F and 2F No. 235 Song Shan North Road, Shantou City.

The business scope of the Company is subject to the same being approved by the authority in which the Company registered.

The Company may adjust its business scope and go through the relevant adjustment formalities based on changes in market conditions at home and abroad, its own business needs and self-capability.

Page 2

CHAPTER 3 SHARES AND REGISTERED CAPITAL

  • Article 3.1 There must, at all times, be ordinary shares in the Company. Subject to the approval MP art.11 by the company approval authorities authorized by the State Council, the Company may, according to its requirements, create different classes of shares. Shareholders of different classes of shares of the Company shall rank pari passu over dividends or any other forms of distribution.

  • Article 3.2 All shares issued by the Company have a par value of RMB 1 per share. MP art.12 Article 3.3 The Company shall issue shares under the principles of transparency, fairness and justness that shares of the same class shall carry the same rights. The issue conditions and price per share of the same class in the same issue shall be the same, and the same price per share shall be paid for the same class of shares subscribed for by any institution or individuals.

  • Article 3.4 Subject to the approval by the securities regulatory authorities of the State Council, MP art.13 the Company may issue shares to domestic investors and foreign investors. The term foreign investors referred to in the preceding paragraph means investors from foreign countries and from Hong Kong, Macau and Taiwan regions who subscribe for the shares issued by the Company, while the term domestic investors referred to in the preceding paragraph means investors within the People’s Republic of China, excluding the regions aforementioned, who subscribe for the shares issued by the Company.

  • Article 3.5 Shares issued by the Company to domestic investors for subscription in RMB shall MP art.14 be referred to as domestic shares. Shares issued by the Company to foreign investors for subscription in foreign currencies shall be referred to as foreign shares. Foreign shares which are listed overseas shall be referred to as overseas-listed foreign shares.

Both holders of domestic shares and overseas-listed foreign shares are ordinary shareholders and share the same obligations and rights.

The overseas-listed foreign shares issued by the Company and listed in Hong Kong shall be referred to as H shares. H shares shall mean the shares which have been admitted to listing on the Stock Exchange of Hong Kong Limited (hereinafter referred to as “Hong Kong Stock Exchange”) with the par value dominated in RMB and subscribed for and traded in Hong Kong dollars.

Page 3

Subject to the approval of the securities regulatory authorities of the State Council, the domestic shareholders of the Company may transfer their shares to foreign investors, and such shares may be listed or traded in overseas markets. The listing and trading of the transferred shares on the overseas stock exchange do not require any meeting of class shareholders.

Article 3.6 Subject to the approval by the company approval authorities authorized by the State MP art.15 Council, a total of 80,000,000 ordinary shares were issued by the Company upon its establishment, among which 70,000,000 shares (representing 87.5% of the total ordinary shares) held by Yao Chuanglong, 6,500,000 shares(representing 8.125% of the total ordinary shares) held by Yao Xizhen, 1,500,000 shares (representing 1.875% of the total ordinary shares) held by Shantou Meizhi Investment Management Limited Partnership（汕頭市美智投資管理合夥企業（有限合夥））, 1,000,000 shares (representing 1.250% of the total ordinary shares) held by Shantou Youran Investment Management Limited Partnership（汕頭市悠然投資 管理合夥企業（有限合夥））and 1,000,000 shares (representing 1.250% of the total ordinary shares) held by Shantou Zhichuang Investment Management Limited Partnership（汕頭市智創投資管理合夥企業（有限合夥））. Article 3.7 Subject to the approval by the securities regulatory authorities of the State Council, MP art.16 the Company may issue up to 28,000,000 overseas-listed foreign shares or 32,200,000 overseas-listed foreign shares (assuming the Over-allotment Option is exercised). Upon the completion of aforesaid issuance of overseas-listed foreign shares, the overseas-listed foreign shares after the issuance represent approximately 25.93% of the total issuable ordinary shares of the Company (in the event that the Over-allotment Option is not exercised), and the capital structure of the Company will be as follows: among 108,000,000 ordinary shares, 70,000,000 shares held by Yao Chuanglong, 6,500,000 shares held by Yao Xizhen, 1,500,000 shares held by Shantou Meizhi Investment Management Limited Partnership (汕頭市美智投資 管理合夥企業（有限合夥）), 1,000,000 shares held by Shantou Youran Investment Management Limited Partnership (汕頭市悠然投資管理合夥企業（有限合夥）), 1,000,000 shares held by Shantou Zhichuang Investment Management Limited Partnership (汕頭市智創投資管理合夥企業（有限合夥）) and they were paid up as at 25 May 2015. 28,000,000 shares will be held by shareholders of overseas-listed foreign shares and were paid up as at 16 December 2015. The abovementioned share capital was verified in the capital verification report issued by Shinewing Certified Public Accountants.”

Article 3.8 The board of directors of the Company is entitled to implement its respective plans MP art.17 to issue overseas-listed foreign shares and domestic shares after those plans have been approved by the securities regulatory authorities of the State Council.

The Company may implement its plans to issue overseas-listed foreign shares and domestic shares respectively pursuant to the preceding paragraph within 15 months from the approval date by the securities regulatory authorities of the State Council.

Page 4

Article 3.9 Where the total number of shares stated in the share issue plans includes MP art.18
overseas-listed foreign shares and domestic shares, such shares should be fully
subscribed for in a single time at their respective offerings. If the shares cannot be
fully subscribed for at their offerings due to special circumstances, the shares may,
subject to the approval by the securities regulatory authorities of the State Council,
be issued in separate tranches.
Article 3.10 After the issuance of the overseas-listed foreign shares as aforementioned in Article MP art.19
3.7, the existing registered capital of the Company has been increased to RMB108,
000,000.
Article 3.11 The Company may, based on its operating and development needs and in MP art.20
accordance with the requirements of these Articles, authorize the increase of its
capital.
The Company may increase its capital through the following manners:
(I) offering new shares to non-specially-designated investors for subscription;
(II) placing new shares to the existing shareholders;
(III) allotting new shares to the existing shareholders;
(IV)converting common reserve fund into share capital;
(V)other means permitted by the laws and administrative regulations.
The Company’s increase of share capital by issuing new shares, after being
approved in accordance with the provisions of these Articles, shall be preceded in
accordance with the procedures stipulated by the relevant laws and administrative
regulations of the State.
Article 3.12 Unless otherwise stipulated in laws and administrative regulations or having MP art.21
obtained approval from the stock exchange where the Company’ s shares are listed App 3.1(2)
for overseas listed foreign shares, fully paid up shares of the Company shall be LR 19A.46
freely transferable and shall not be subject to any lien.
Article 3.13 The Company’s shares held by the Promoter shall not be transferred within 1 year
from the date of establishment of the Company. The shares issued before the
Company’s public issuance of shares shall not be transferred within 1 year from the
date of the listing of the Company’s shares on the stock exchange.
The directors, supervisors, and senior management of the Company shall, during
their term of office, regularly declare to the Company their holdings in the
Company’s shares and any subsequent change thereto. During their term of office,
they should not transfer more than 25% of their holdings in the Company’s shares
every year; and their holdings in the Company’s shares should not be transferred
within 1 year from the date of the listing of the Company’s shares. No transfer of
their holdings in the Company’s shares shall be made within six months after they
cease to hold their respective offices.

Page 5

CHAPTER 4 REDUCTION OF CAPITAL AND REPURCHASE OF SHARES

Article 4.1 The Company may reduce its registered capital in accordance with these Articles. MP art.22
The reduction of the registered capital shall be preceded by the Company in
accordance with the procedures specified in the Company Law and other relevant
regulations and the Articles of Association.
Article 4.2 The Company must prepare a balance sheet and an inventory of assets when it MP art.23
reduces its registered capital.
The Company shall notify its creditors within 10 days from the date of the App 3.7(1)
Company’s resolution for reduction of registered capital and shall publish an
announcement in a newspaper at least 3 times within 30 days from the date of such
resolution. A creditor shall, within 30 days from the date of receipt of the notice
from the Company or, in the case where a creditor does not receive such notice,
within 90 days from the date of the first announcement, be entitled to require the
Company to repay its debts or to provide a corresponding guarantee for the
repayment of such debt.
Article 4.3 Under the following circumstances, the Company shall, by way of the MP art.24
procedure prescribed by these Articles, report to the relevant authority in China for
approval to repurchase its shares in issue:
(I)
cancellation of shares for the purposes of reducing its capital;
(II)
merger with other companies that hold shares in the Company;
(III) granting shares to the Company’s staff as incentives;
(IV)
shareholders who disagree with the resolutions for the merger or
division of the Company passed at a general meeting request the
Company to purchase their shares;
(V)
other circumstances permitted by the laws and administrative
regulations.
Article 4.4 the Company may, with the approval of the relevant authorities in China for MP art.25
repurchasing the shares, conduct the repurchase in one of the following manners:
(I)
Make a repurchase offer on a pro rata basis to all shareholders ;
(II)
Repurchase through public dealing on a stock exchange;
(III)
Repurchase by an agreement outside the stock exchange.
Article 4.5 For share repurchase by an agreement outside the stock exchange, the Company MP art.26
shall obtain the prior approval in a general meeting of shareholders pursuant to
these Articles. The Company may, by obtaining the prior approval in a general
meeting of shareholders in the same manner aforesaid, release or alter a contract
which has been so entered into, or waive any of its rights thereunder.

The contract for share repurchase referred to in the preceding clause shall include (but not limited to) an agreement that consents to undertake the obligation to repurchase the shares and obtain the rights to repurchase the shares.

Page 6

The Company shall not assign an agreement for share repurchase or any of the rights contained therein.

In respect of the Company’s entitlement to repurchase the redeemable shares of the Company:

  • (1) If the shares are repurchased neither in the market nor by tender, the price shall App 3.8(1) not exceed a maximum amount;

  • (2) In case of repurchase by tender, the same tender shall be proposed to all the App 3.8(2) shareholders.

  • Article 4.6 After the Company repurchases its own shares in accordance with Article 4.3, the MP art.27 shares so repurchased shall be cancelled within ten days from the date of repurchase under the circumstances set forth in sub-paragraph (I) of Article 4.3; the shares so repurchased shall be transferred or cancelled within six months in the circumstances set forth in sub-paragraphs (II) and (IV).

If the Company repurchases its own shares in accordance with sub-paragraph (III) of Article 4.3 hereof, the shares so repurchased shall not exceed 5% of the total number of shares issued by the Company; The repurchase shall be funded by the after-tax profit of the Company; and the shares so repurchased shall be transferred to the employees within one year.

Shares which have been legally repurchased by the Company shall be cancelled within the period prescribed by the laws and administrative regulations. The Company shall apply to the original company registration authorities for registration of the change in its registered capital.

The aggregate par value of the cancelled shares shall be deducted from the Company’s registered capital.

Article 4.7 Unless the Company is in the course of liquidation, it must comply with the MP art.28 following provisions in relation to the repurchase of its shares in issue:

  • (I) Where the Company repurchases shares at par value, the payment shall be made out of the book balance of the Company’s distributable profits or out of the proceeds of the new shares issued for such purpose;

  • (II) Where the Company repurchases its shares at a premium to its par value, the portion of payment equivalent to par value may be made out of the book balance of the Company’s distributable profits or out of the proceeds of the new shares issued for such purpose. The payment for the portion in excess of the par value shall be effected as follows:

Page 7

  • (1) Where the shares being repurchased were issued at par value, the payment shall be made out of the book balance of the Company’s distributable profits;

  • (2) Where the shares being repurchased were issued at a premium to its par value, the payment shall be made out of the book balance of the Company’s distributable profits or out of the proceeds of the new shares issued for such purpose; provided that the amount paid out of the proceeds of the new issue shall not exceed the aggregate amount of premium received by the Company on the issue of the shares repurchased nor shall it exceed the amount of the Company’s share premium account or capital reserve account (including the premium on the new issue) at the time of the repurchase;

  • (III) The Company shall make the following payments out of the Company’s distributable profits:

  • (1) Payment for obtaining the right to repurchase its own shares;

  • (2) Payment for altering any contract for the repurchase of its shares;

  • (3) Payment for releasing its obligation(s) under any contract for the repurchase of shares.

  • (IV) After the reduction of the Company’s registered capital by the aggregate par value of the cancelled shares in accordance with the relevant provisions, the amount deducted from the distributable profits of the Company for payment of the par value of shares which have been repurchased shall be transferred to the Company’s share premium account or capital reserve account.

CHAPTER 5 FINANCIAL ASSISTANCE FOR REPURCHASE OF THE COMPANY’S SHARES

  • Article 5.1 Neither the Company nor its subsidiaries shall, at any time, provide any form of MP art.29 financial assistance to a person who is acquiring or is proposing to acquire shares of the Company. The term purchaser of the shares of the Company shall include any person who assumes obligations directly or indirectly as a result of the acquisition of shares of the Company.

Neither the Company nor its subsidiaries shall, at any time, provide any form of financial assistance to the aforementioned person for the purposes of reducing or discharging the obligations assumed by such person.

This Article shall not apply to the circumstances referred to in Article 5.3 of these Articles.

Article 5.2 The financial assistance mentioned in this chapter shall include (but not limited to) MP art.30 the following means:

(I) Gift;

  • (II) Guarantee (including the assumption of liability or the provision of assets by the guarantor to secure the performance of obligations by the obligor), compensation (other than the compensation caused by the Company’s own default) or release or waiver of any rights;

Page 8

  • (III) Provision of loan or entering into any agreement under which the obligations of the Company are to be fulfilled before the obligations of the other party, as well as the change in parties to, or the assignment of rights under such loan or agreement;

  • (IV) Any other form of financial assistance given by the Company in the event of insolvency, having no net assets or being likely to cause its net assets to be reduced significantly.

For the purposes of this Chapter, “assumption of obligations” shall include the assumption of obligations by the obligor by way of contract or arrangement (irrespective of whether such contract or arrangement is enforceable or not, and whether such obligation is to be borne solely by the obligor or jointly with other persons) or by any other means which results in a change in his financial position.

Article 5.3 The following actions shall not be deemed to be prohibited by Article 5.1 of these MP art.31 Articles:

  • (I) The financial assistance is provided by the Company in good faith in the interests of the Company, and the principal purpose of which is not for the acquisition of shares in the Company, or the said financial assistance is an incidental part of a general plan of the Company;

  • (II) The lawful distribution of the Company’s assets by way of dividend; (III) The distribution of share dividends in the form of shares;

  • (IV) A reduction of registered capital, a repurchase of shares of the Company or a reorganization of the share capital structure of the Company effected in accordance with these Articles;

  • (V) The provision of loans by the Company within its scope of operation for its ordinary business activities(provided that the net assets of the Company are not thereby reduced or, to the extent that the assets are thereby reduced, the said financial assistance is provided out of distributable profits);

  • (VI) Contributions made by the Company to the employee share ownership schemes (provided that the net assets of the Company are not thereby reduced or, to the extent that the assets are thereby reduced, the said financial assistance is provided out of distributable profits).

CHAPTER 6 SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS

Article 6.1 Share certificates of the Company shall be in registered form.

MP art.32

Apart from what is required by the Company Law to be stated on the share certificate of the Company, it shall also state other items which are required to be stated by the stock exchange(s) on which the Company’s shares are listed.

Page 9

Article 6.2
The Company’s shares can be transferred, granted by way of gift, succeeded and
charged in accordance with relevant laws, administrative regulations, requirements
of the stock exchange(s) where the Company’s shares are listed and these Articles.
Assignment and transfer of share certificates shall be registered with the share
registration office designated by the Company.
Article 6.3
Share certificates of the Company shall be signed by its Chairman. Where the
signatures of other senior officers of the Company are required by the stock
exchange(s) on which the shares of the Company are listed, the share certificates
shall also be signed by such other senior officers. The share certificate shall take
effect upon affixing the securities seal of the Company thereon. The affixture of the
seal of the Company on the share certificate shall be authorized by the board of
directors. The signatures of Chairman or other relevant senior officers of the
Company appearing on the share certificates may also be printed.
Article 6.4
The Company shall keep a share register to contain the following particulars:
(I)
The name, address (residence) and occupation or nature of each
shareholder;
(II)
The class and quantity of shares held by each shareholder;
(III)
The amount paid or payable in respect of the shares held by each
shareholder;
(IV)
The serial numbers of the shares held by each shareholder;
(V)
The date on which each shareholder was registered as a shareholder;
(VI)
The date on which each shareholder ceased to be the shareholder.
Unless there is evidence to the contrary, the share register shall be sufficient
evidence of the shareholders' shareholding in the Company.
Article 6.5
The Company may, pursuant to the understanding or agreement reached between
the securities regulatory authority under the State Council and the overseas
securities regulatory authority, keep the share register of the overseas listed foreign
capital shares outside China, and entrust its administration to an overseas agent.
Such original share register of overseas listed foreign capital shares listed in Hong
Kong shall be kept in Hong Kong.
A duplicate register of shareholders for the holders of overseas listed foreign shares
shall be maintained at the Company’s office. The appointed overseas agent(s) shall
ensure consistency between the original and the duplicate register of shareholders at
all times.		 LR 19A.46
App 3.1(1)
App 3.1(1)
MP art.33
Article 1 of
Zheng
Jian
Hai Han
App 3.2(1)
MP art.34
App 3.1(1)
MP art.35
Zheng
Jian
Hai Han
Article 2
A 13D.1(b)

Page 10

If there is any inconsistency between the original and the duplicate register of shareholders for the holders of overseas listed foreign shares, the original register of shareholders shall prevail.

Article 6.6 The Company shall have a complete register of shareholders which shall include the MP art.36 following parts:

  • (I) the register of shareholders which is maintained at the Company’s office (other than those share registers which are described in sub-paragraphs (II) and (III) of this Article);

  • (II) the register of shareholders in respect of the holders of overseas-listed foreign shares of the Company which is maintained in the same place as the overseas stock exchange on which the shares are listed; and

  • (III) the register of shareholders which is maintained in such other place as the board of directors may consider necessary for the purposes of the listing of the Company’s shares.

  • Article 6.7 Different parts of the register of shareholders shall not overlap. No transfer of any MP art.37 shares registered in any part of the register shall, during the continuance of that registration, be registered in any other part of the register.

Amendments or rectification of each part of the register of shareholders shall be made in accordance with the laws of the place where such part of the register of shareholders is maintained.

Article 6.8 All overseas-listed foreign shares listed in Hong Kong which have been fully Article 12 of paid-up may be freely transferred in accordance with these Articles. However, Zheng Jian unless such transfer complies with the following requirements, the Board may Hai Han refuse to recognize any instrument of transfer without providing any reason therefor:

  • (I) The instrument of transfer and other documents relating to or which will App 3.1(1) affect the right of ownership of the shares shall be registered and a fee shall be paid to the Company at an amount required by the Listing Rules for such registration;

  • (II) the instrument of transfer only relates to overseas-listed foreign shares listed in Hong Kong;

  • (III) the stamp duty which is chargeable on the instrument of transfer has already been paid;

  • (IV) the relevant share certificate(s) and any other evidence which the Board may reasonably require to show that the transferor has the right to transfer the shares have been provided;

  • (V) if it is intended that the shares be transferred to joint owners, the App 3.1(3) maximum number of joint owners shall not be more than four;

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App 3.1(2)

(VI) the Company does not have any lien on the relevant shares.

All overseas-listed foreign shares of the Company listed in Hong Kong shall be transferred by an instrument in writing in the usual or common form or any other form which the board of directors may accept. The instrument of transfer of any share may be executed by hand without seal, or if the assignor or the assignee is a recognized clearing house as defined in Laws of Hong Kong (referred to as the “Recognized Clearing House”) or its agent, the share transfer form may be executed in mechanically-printed form. All share transfer forms shall be maintained in the legal address of the Company or other places designated by the board of directors from time to time.

  • Article 6.9 No change shall be made in the register of shareholders as a result of a transfer of MP art.38 shares within 30 days prior to the date of a shareholders’ general meeting or within 5 days before the record date for the Company’s distribution of dividends.

  • Article 6.10 The Board shall decide a record date for the purpose of determining the rights MP art.39 attaching to shares of the Company when the Company holds a shareholders’ general meeting, distributes dividend, liquidates or engages in activities that require the determination of rights attaching to the shares of the Company. The shareholders of the Company shall be such persons who appear in the register as shareholders at the close of the record date.

  • Article 6.11 Any person aggrieved and claiming to be entitled to have his name (title) entered MP art.40 into or removed from the register of shareholders may apply to a court of competent jurisdiction for rectification of the same.

  • Article 6.12 Any person who is a registered shareholder or who requests his name (title) be MP art.41 entered in the register of shareholders in respect of shares in the Company may, if his share certificate (the “original share certificate”) relating to the shares is lost, apply to the Company for a replacement share certificate in respect of such shares (the “relevant shares”).

Application by a holder of domestic shares, who has lost his share certificate, for a replacement share certificate may be dealt with in accordance with the Company Law and relevant laws and regulations.

Application by a holder of overseas-listed foreign shares, who has lost his share certificate, for a replacement share certificate may be dealt with in accordance with the law, the rules of the stock exchange or other relevant regulations of the place where the original register of shareholders of overseas-listed foreign shares is maintained.

The issuance of replacement share certificate to a holder of overseas-listed foreign shares of the Company listed in Hong Kong who has lost his share certificate shall comply with the following requirements:

(I) the applicant shall submit an application to the Company in a prescribed form accompanied by a notarial certificate or a statutory declaration. The contents of the notarial certificate or statutory declaration should include the grounds upon which the application is made and the circumstances and evidence of the loss of share certificate, as well as a declaration that no other person is entitled to have his name entered in the register of shareholders in respect of the relevant shares.

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  • (II) the Company has not received any declaration made by any person other than the applicant that such person shall be entered into the register of shareholders as a shareholder in respect of such shares before it decides to issue a replacement share certificate to the applicant.

  • (III) the Company shall, if it intends to issue a replacement share certificate, App 3.7(1) publish a notice of its intention to do so at least once every 30days within a period of 90 consecutive days in such newspapers as may be prescribed by the Board.

  • (IV) the Company shall, prior to publication of its intention to issue a replacement share certificate, deliver to the stock exchange on which its shares are listed, a copy of the notice to be published and may publish the notice upon receipt of confirmation from such stock exchange that the notice has been exhibited in the premises of the stock exchange. Such notice shall be exhibited in the premises of the stock exchange for a period of 90 days.

In the case of an application which is made without the consent of the registered holder of the relevant shares, the Company shall deliver a copy of the notice to be published by mail to such registered shareholder.

(V)
if, by the expiration of the 90-day period referred to in paragraphs (III)
and (IV) of this Article, the Company has not received any challenge
from any person in respect of the issuance of the replacement share
certificate, it may issue a replacement share certificate to the applicant
pursuant to his application.
(VI)
where the Company issues a replacement share certificate pursuant to
this Article, it shall forthwith cancel the original share certificate and
record the cancellation of the original share certificate and issuance of a
replacement share certificate in the register of shareholders accordingly.
(VII)
all expenses relating to the cancellation of an original share certificate
and the issuance of a replacement share certificate shall be borne by the
applicant and the Company is entitled to refuse to take any action until
reasonable security is provided by the applicant therefor.
Article 6.13 Where the Company issues a replacement share certificate pursuant to these MP art.42
Articles, the name (title) of a bona fide purchaser gaining possession of such
replacement certificate or the person who is subsequently entered in the register of
shareholders as holder of such shares (if he is a bona fide purchaser) shall not be
removed from the register of shareholders.
Article 6.14 The Company shall not be liable for any damages sustained by any person by MP art.43
reason of the cancellation of the original share certificate or the issuance of the
replacement share certificate unless the claimant is able to prove that the Company
has acted in a deceitful manner.

Page 13

CHAPTER 7 SHAREHOLDERS’ RIGHTS AND OBLIGATIONS

Article 7.1 A shareholder of the Company is a person who lawfully holds shares of the MP art.44 Company and whose name (title) is entered in the register of shareholders. A shareholder shall enjoy rights and assume obligations according to the class and amount of shares held by him. Shareholders who hold shares of the same class shall enjoy the same rights and assume the same obligations.

The Company shall not exercise any of its rights to freeze or otherwise impair any App 3.12 of the rights attaching to any shares of the Company by reason that person or persons who are interested directly or indirectly therein have failed to disclose their interests to the Company. Article 7.2 Where two or more than two persons are registered as joint holders of any shares, App 3.1(3) they should be deemed as joint owners of such shares but shall be subject to the following restrictions:

  • (I) the Company may not register more than four persons as joint holders of any shares;

  • (II) all joint holders of any shares are jointly and severally assume obligation for all amounts payable for relevant shares;

if one of the joint holders dies, only the surviving joint holder(s) shall be deemed by the Company to be such person(s) as having the ownership of the relevant shares. The board of directors shall have the right, for the purpose of making amendments to the register of shareholders, to demand a death certificate of the relevant shareholder where it deems appropriate to do so;

for joint shareholders of any shares, only the joint shareholder whose name appears first in the register of shareholders has the right to receive the share certificate of the relevant shares from the Company, to receive notices of the Company, to attend the shareholders’ general meeting convened by the Company or to exercise all the voting rights attached to the relevant shares; and any notice served on such shareholder shall be treated as having been served on all joint shareholders of the relevant shares.

Article 7.3 Holders of ordinary shares of the Company shall have the following rights:

MP art.45

  • (I) the right to receive dividends and other distributions in proportion to the number of shares held;

  • (II) the right to attend or appoint a proxy to attend shareholders' general meetings and to exercise the voting right thereat;

(III) the right to supervise and manage the Company's business operations, and to put forward proposals or raise inquiries;

Page 14

  • (IV) the right to transfer, bestow or pledge shares in accordance with the laws, administrative regulations and provisions of these Articles;

  • (V) the right to obtain relevant information in accordance with the provisions of these Articles, including:

  • a copy of these Articles upon payment of the costs thereof;

  • the right to inspect and copy, subject to payment of reasonable charge:

    • (1) all parts of the register of shareholders;

    • (2) personal particulars of the directors, supervisors and senior management of the Company, including:

      • (A) present and former name and alias;

      • (B) principal address (place of residence); (C) nationality;

      • (D) full-time positions and all other part-time occupations and duties;

      • (E) identification documents and the numbers thereof;

    • (3) the status of the share capital of the Company;

    • (4) reports stating the aggregate par value, quantity, highest and lowest price paid in respect of each class of shares repurchased by the Company since the end of the last accounting year and the aggregate amount incurred by the Company for this purpose;

    • (5) minutes of shareholders’ general meetings;

  • (VI) in the event of the termination or liquidation of the Company, the right to participate in the distribution of the surplus assets of the Company according to the number of shares held;

  • (VII) request from shareholders for the Company to repurchase their shareholdings due to their objection to the resolution of merger or division made at an shareholders’ general meeting;

  • (VIII) other rights conferred by laws, administrative regulations and these Articles.

Shareholders demanding inspection of the relevant information or copies of the materials mentioned in the preceding provision shall provide to the Company written documents evidencing the class and number of shares of the Company they hold. Upon verification of the Shareholder’s identity and acceptance of reasonable fees, the Company shall provide such information at the shareholder’s request.

Page 15

Article 7.4 The ordinary shareholders of the Company shall assume the following MP art.46 obligations:

(I) to comply with these Articles;

(II) to pay subscription monies according to the number of shares subscribed and the method of subscription;

(III) not to withdraw their capital contribution, except as provided in laws and regulations;

(IV) not to abuse their rights as shareholders to prejudice the interests of the Company or other shareholders; not to abuse the independence of the Company as a legal person and the limited liabilities of shareholders to prejudice the interests of creditors of the Company;

Shareholders of the Company who abuse their rights as shareholders and thereby cause losses to the Company or other shareholders shall be liable for indemnity according to the laws.

Where shareholders of the Company abuse the Company’s position as an independent legal person and the limited liabilities of shareholders for the purposes of avoiding repayment of debts, thereby materially impairing the interests of the creditors of the Company, such shareholders shall be liable to the joint liabilities the Company thereon.

  • (V) other obligations imposed by laws, administrative regulations and these Articles.

Shareholders are not liable to make any further contribution to the share capital other than as agreed by the subscriber of the relevant shares on subscription.

Article 7.5

In addition to the obligations imposed by laws and administrative regulations MP art.47 or required by the listing rules of the stock exchange on which the Company’s shares are listed, a controlling shareholder, while exercising his powers as a shareholder, shall not exercise his voting rights in respect of the following matters in a manner which is prejudicial to the interests of all or part of the shareholders:

  • (I) to relieve a director or supervisor of his duty to act honestly in the best interests of the Company;

  • (II) to approve the expropriation by a director or supervisor (for his own benefit or for the benefit of another person) of the Company’s assets in any way, including (without limitation) opportunities which are beneficial to the Company;

  • (III) to approve the expropriation by a director or supervisor (for his own benefit or for the benefit of another person) of the individual rights of other shareholders, including (without limitation) rights to distributions and voting rights (save for a restructuring of the Company which has been submitted for approval by a general meeting in accordance with these Articles);

Page 16

Article 7.6 The controlling shareholder referred to in the preceding Article means a person MP art.48 who meets one of the following conditions:

  • (I) he alone or acting in concert with others has the power to elect more than half of the Board;

  • (II) he alone or acting in concert with others has the power to exercise or to control the exercise of 30% (including 30%) or more of the voting rights in the Company;

  • (III) he alone or acting in concert with others holds 30% (including 30%) or more of the issued and outstanding shares of the Company;

  • (IV) he alone or acting in concert with others in any other manner is in defacto control of the Company.

CHAPTER 8 SHAREHOLDERS’ GENERAL MEETING

Article 8.1 The shareholders’ general meeting is the organ of authority of the Company MP art.49 and shall exercise its functions and powers in accordance with law.

Article 8.2 The shareholders’ general meeting shall have the following functions and MP art.50 powers:

  • (I) to decide on the Company’s operational policies and investment plans;

  • (II) to elect and replace directors and to decide on matters relating to the App remuneration of directors; 3.4(3)

  • (III) to elect and replace the supervisors who are not representatives of staff and workers, and to decide on matters relating to the remuneration of supervisors;

  • (IV) to examine and approve reports of the Board;

  • (V) to examine and approve reports of the board of supervisors;

  • (VI) to examine and approve the Company’s annual financial budgets and final accounts;

  • (VII) to examine and approve the Company’s profit distribution plans and loss recovery plans;

  • (VIII) to decide on the increase or reduction of the Company’s registered capital;

  • (IX) to decide on matters such as merger, demerger, dissolution and liquidation of the Company and the change for the Company form;

Page 17

  • (X) to decide on the issue of bonds, other securities and listing of the Company;

  • (XI) to decide on the appointment, dismissal or non-reappointment of the accountants of the Company;

(XII) to amend these Articles;

  • (XIII)to examine and approve motions raised by shareholders who represent 3% (including 3%) or more of the total shares of the Company carrying voting rights;

(XIV) to decide on the repurchase of its own shares by Company;

  • (XV) to examine external guarantee matters stipulated by the laws and regulations as well as Article 8.3 in these Articles;

  • (XVI) to examine and approve major assets acquisition and disposal by the Company which exceeds 30% of the latest audited total assets within one year;

  • (XVII) to examine and approve major transactions of which the amount exceeds 50% of the latest audited net asset;

(XVIII) to examine connected transactions required to be decided by shareholder’s general meeting pursuant to the listing rules of the Company’s listing location;

(XIX) to examine and adopt shareholding incentives plan;

  • (XX) to examine and approve the matters on change on the use of the funds raised;

(XXI) to examine other matters to be decided by the shareholders’ general meeting as provided by the laws, administrative regulations, departmental rules and the Articles.

The “major transaction” referred to in XVII of this Article means following transactions:

  • (1) external investments (including entrusted asset management, entrusted loans, investment in subsidiaries, joint ventures and associated ventures, investment in trading financial assets, available-for-sale financial assets, held-to-maturity investments, etc.);

  • (2) to provide financial assistance;

  • (3) to rent or lease assets;

(4) to enter into contracts on management (including entrusted operations, commissioned operations, etc.);

Page 18

  • (5) creditor's rights or debts restructuring;

  • (6) to transfer or undertake research and development projects;

  • (7) to enter into licensing agreement.

The assets acquisition and disposal referred to this Article do not include acquisition and disposal of medicines, medical devices, health care products, cars, raw materials, fuel and power and other assets related to ordinary operation, but the acquisition and disposal involved in the assets transfer are still included.

The shareholders’ general meeting may authorise or entrust the Board to handle the matters it authorised or entrusted.

Article 8.3 Provision of external guarantee (provision of bank loans guarantee by the Company for the Company and/or its controlling subsidiaries is not included)by the Company as set forth below must be approved by the shareholders in a general meeting:

  • (I) provision of any guarantee after the amount of the external guarantee provided by the Company and its subsidiaries reaches or exceeds 50% of the latest audited net assets;

(II) provision of any guarantee after the amount of the external guarantee provided by the Company reaches or exceeds 30% of the latest audited total assets;

  • (III) provision of any guarantee to a guaranteed object which has a debt-equity ratio exceeding 70%;

  • (IV) provision of any single guarantee in which the amount exceeds 10% of the latest audited net assets;

  • (V) provision of any guarantee to the shareholders, de facto controllers and their related parties;

  • (VI) any other guarantee required to be approved by the shareholders’ general meeting according to the requirement of the stock exchange on which the Company’s share listed or the Articles of Association.

When the shareholders’ general meeting is considering a motion to provide guarantee for any shareholder, de facto controllers or their respective related parties, the said shareholder or the shareholders controlled by the said de facto controllers shall be abstained from voting on the motion, and the approval of such motion shall be subject to more than half of the voting rights of the other attending shareholders.

Page 19

Save for the aforesaid circumstances, approval of other external guarantee including bank loans guarantee provided by the Company for the Company and/or its controlling subsidiaries, is authorised to the Board. Article 8.4 The Company shall not, without prior approval by shareholders’ general MP art.51 meeting, enter into any contract with any person (other than the Directors, supervisors and other senior officers) pursuant to which the management of all or any substantial part of the business of the Company are delegated to such person. Article 8.5 Shareholders’ general meetings are categorized as annual general meetings and MP art.52 extraordinary general meetings. The shareholders' general meeting shall be convened by the Board of Directors. The AGM shall be convened once every year and held within six months after the end of the previous financial year. Extraordinary general meetings are convened irregularly. The Company shall convene an extraordinary general meeting within two months of the occurrence of any one of the following events:

  • (I) where the number of Directors is less than the number stipulated in the Company Law or less than 2/3 of the number required in these Articles;

  • (II) where the unrecovered losses of the Company amount to 1/3 of its total share capital;

  • (III) where shareholder(s) individually or jointly holding 10% or more (including 10%) of the Company’s issued and outstanding shares with voting rights request(s) in writing for the convening of an extraordinary general meeting;

  • (IV) whenever the Board deems necessary or whenever the board of supervisors so requests to convene;

(V) other circumstances specified by laws, administrative regulations, departmental rules or the Articles of Association. Article 8.6 A 45-days written notice (the date on which the notice is given is not included) MP art.53 for convening the shareholders’ general meeting shall be served on the App shareholders whose names appear in the register of shareholders with the 3.7(2) matters proposed to be considered and the date and place of the meeting. Shareholders who intend to attend the meeting shall send the written reply slip to the Company 20 days prior to the date of the meeting.

The calculation of the starting date shall not include the date on which the meeting is convened. Article 8.7 When the Company convenes an annual general meeting, shareholders holding MP art.54 3% or more of the Company's shares with voting rights have the right to put forward new proposal(s) in writing to the Company, and the Company shall include such proposal(s) into the agenda for such general meeting if they are matters falls within the functions and powers of general meeting.

Page 20

The shareholders solely or aggregately holding more than 3% of the Company’s shares may make an interim draft resolution to the convener in writing 10 days before the convening of the shareholders' general meeting. The convener shall, within 2 days after the receipt of the draft resolution, issue a supplementary notice of shareholders' general meeting and announce the content of such interim draft resolution.

Article 8.8 The Company shall calculate the number of shares with voting rights MP art.55 represented by shareholders who intend to attend the meeting according to the App written replies received as of 20 days prior to the convening of the shareholders' 3.7(2) general meeting. Where the number of shares with voting rights represented by shareholders who intend to attend the meeting exceeds 1/2 of the total number of shares with voting rights of the Company, the Company may convene a shareholders' general meeting; if not, the Company shall, within 5 days thereafter, again notify, in the form of announcement, shareholders of the matters to be considered at the meeting and the date and place of the meeting; only after such notice in the form of announcement, the Company may convene the shareholders' general meeting.

No matters unspecified in the notice may be decided at the extraordinary general meeting.

Article 8.9 Any notice of a general meeting shall comply with the following requirements: MP art.56 (I) be in writing;

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

  • (III) state the matters and proposals to be examined and approved at the meeting;

  • (IV) provide such information and explanation as necessary for the shareholders to make an informed decision on the proposals put before them. This principle includes (but is not limited to), where a proposal is made to merge the Company with another, to repurchase shares, to reorganise the share capital, or to restructure the Company in any other way, the terms of the proposed transaction must be provided in detail together with copies of the proposed agreement, if any, and the cause and effect of such proposal must be properly explained;

  • (V) contain a disclosure of the nature and extent of any material interests of any director, supervisor and senior management officer in the proposed transaction and provide an explanation of the differences between the effect of the proposed transaction on them in their capacity as shareholders and the effect on the shareholders of the same class;

  • (VI) contain the full text of any special resolution to be proposed at the meeting;

  • (VII) contain a conspicuous statement that a shareholder entitled to attend App and vote is entitled to appoint one or more proxies to attend and vote at the 3.11(1) meeting on his behalf and that such proxy need not be a shareholder;

  • (VIII) specify the time and place for lodging proxy forms for the relevant meeting.

Page 21

Article 8.10 The notice of shareholders’ general meeting shall be delivered to shareholders MP art.57
(whether or not entitled to vote thereat) by hand or by prepaid post at their App 3.7(1)
respective addresses which appear on the register of members. As for holders of
domestic shares, the notice of the shareholders’ general meeting may also be given
by way of announcement.
The announcement mentioned in the foregoing paragraph shall be published in one
or more newspapers designated by the securities governing authority under the
State Council within the interval between 45 days and 50 days prior to the meeting. MP art.58
Once the announcement is made, all the holders of domestic shares shall be deemed
to have received the notice of the relevant shareholders’ general meeting. The
notices of the shareholders’ general meeting delivered to the shareholders of
overseas listed foreign shares may be given by the website of Hong Kong Stock
Exchange or published in one or more newspapers designated by it. Once the
announcement is made, all the shareholders of overseas listed foreign shares shall
be deemed to have received the notice of the relevant shareholders’ general
meeting.
If a notice of meeting is accidentally omitted to be sent to any person who is
entitled to receive the same or that person has not received such a notice of
meeting, it will not cause the meeting and any resolution made thereat to be void.
Article 8.11 Any shareholder who is entitled to attend and vote at a shareholders’ general
meeting shall be entitled to appoint one or more persons (whether such person is a		 MP art.59
shareholder or not) as his proxy or proxies to attend and vote on his behalf. A proxy
so appointed shall be entitled to exercise the following rights pursuant to the
authorization from such shareholder:
(I) the shareholder’s right to speak at the meeting;
(II) the right to demand or join in demanding a poll;
(III) the right to vote by show of hands or by poll, provided that when a shareholder
has appointed more than one proxy, such proxies may only vote by poll.
Article 8.12 A shareholder shall appoint his proxy in writing under the hand of the shareholder
or his/her attorney authorized in writing, in the event that the shareholder is a legal		 MP art.60
person, it shall be under the seal of the legal person or under the hand of its director
or executive or attorney duly authorized. Such proxy form shall contain the number App
of shares represented by a proxy; if several persons are appointed as proxies, the 3.11(2)
number of shares represented by each proxy should be specified.
Article 8.13 The proxy form shall be lodged at the Company’s premises or such other place as
specified in the notice convening the meeting at least 24 hours prior to the relevant		 MP art.61
meeting for which the proxy is appointed to vote or 24 hours prior to the scheduled
voting time. Where the proxy form is signed by a person authorized by

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the principal, such power of attorney or other authorization documents shall be notarized. The notarized power of attorney and other authorization documents, together with the proxy form, shall be lodged at the Company’s premises or such other place as specified in the notice convening the meeting.

If the appointer is a legal person, its legal representative or person authorized by its Board of Directors or other decision-making body may attend shareholders’ general meeting of the Company as a representative of the appointer.

If such shareholder is a recognized clearing house (or its nominees), the shareholder may authorize one or more persons as it thinks fit to act as its representative at any shareholders’ general meeting or any class shareholders’ meeting; provided that if more than one person is so authorized, the power of attorney shall set out the number and class of shares in respect of which each such person is so authorized. The person(s) so authorized shall be entitled to exercise the same power on behalf of the recognized clearing house (or its nominees) as if such person is the individual shareholder of the Company.

Article 8.14 Any kind of proxy form given to a shareholder by the Board of Directors of the Company for appointing a proxy shall be in such format as to enable the shareholder to instruct the proxy to vote in favor of or against the resolutions according to his/her free will, and instructions shall be given in respect of each individual matter to be voted on at the meeting. Such proxy form shall contain a statement that in the absence of instructions by the shareholder the proxy may vote as he/she thinks fit.

MP art.62

Proxies should, when attending the general meeting on behalf of the shareholders, present their identification proof and the power of attorney signed by the appointer or a legal representative of the appointer or a duly appointed agent. The power of attorney should specify the date of issuance.

If a corporate shareholder (other than the recognized clearing house or its nominees) delegates its legal representative to attend the meeting, the Company shall have the right to request such legal representative to provide a proof of his/her identity and a valid proof of his/her legal representative qualification.

Article 8.15 A vote given by a proxy in accordance with the terms of an instrument of proxy shall remain valid notwithstanding the death or loss of capacity of the appointer or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the shares in respect of which the proxy is given, provided that no notice in writing of such aforesaid issues shall have been received by the Company before the commencement of the meeting.

Article 8.16 Resolutions of a shareholders’ general meeting can either be ordinary resolutions or special resolutions.

MP art.63

MP art.64

An ordinary resolution of a shareholders’ general meeting shall be passed by more than half of the total voting shares of the Company being held by the non-related shareholders (including proxies) who are present at the meeting.

A special resolution of a shareholders’ general meeting shall be passed by more than two-thirds of the total voting shares of the Company being held by the non-related shareholders (including proxies) who are present at the meeting.

Page 23

Article 8.17 In the case of voting at general meetings, shareholders (including their proxies)
may exercise their voting rights in accordance with the number of their voting		 MP art.65
shares. Each share shall have one vote.
Article 8.18 Any vote on resolution submitted at a shareholders’ general meeting must be taken
by poll, except pursuant to the Listing Rules the chairman of the meeting decides in		 MP art.66
good faith to allow a resolution which relates purely to a procedural or
administrative matter to be voted on by a show of hands.
Article 8.19 A poll demanded on the election of the chairman of the meeting, or on adjournment
of the meeting, shall be taken forthwith. A poll demanded on any other issues shall		 MP art.67
be taken at such time as the chairman of the meeting directs, and any matter other
than that upon which a poll has been demanded may proceed with, pending the
taking of the poll. The result of the poll shall be deemed to be a resolution of the
meeting at which the poll was demanded.
Article 8.20 On a poll taken at a meeting, a shareholder (including his/her proxies) entitled to
two or more votes need not cast all his/her votes in the same way.		 MP art.68
Where any shareholder is, under the Listing Rules, required to abstain from voting
on any particular resolution or restricted to voting only for or against any particular		 App 3.14
resolution, any votes cast by or on behalf of such shareholder in contravention of
such requirement or restriction shall not be counted.
Article 8.21 In the case of equal votes for and against the resolution whether on a show of hands
or on a poll, the chairman of the meeting shall be entitled to a casting vote.		 MP art.69
Article 8.22 The following matters shall be approved by ordinary resolution at the shareholders’
general meeting:		 MP art.70
(I) work reports of the Board of Directors and Board of Supervisors;
(II) plans of profit distribution and loss make-up schemes drafted by the Board of
Directors;
(III) dismissal of the members of the Board of Directors and the members of Board
of Supervisors who are not assumed by staff representatives, their
remuneration and payment methods;

Page 24

  • (IV) annual budget/final account report, balance sheet, income statement and other financial statements of the Company;

  • (V) such other matters other than those specified by the laws, administrative regulations or these Articles shall be resolved by special resolutions.

Article 8.23 The following matters shall be approved by a special resolution at a general meeting:

MP art.71

  • (I) increase/decrease of the share capital of the Company and issuance of any type of shares, warrants and other similar securities;

  • (II) issuance of bonds of the Company;

  • (III) division, merger, dissolution and liquidation of the Company and the change of form of the Company;

  • (IV) amendments to these Articles;

  • (V) other matters as required by the laws, administrative regulations or the Articles of Association shall be approved by special resolution, and as approved by ordinary resolution of the general meeting which are believed could materially affect the Company and shall be approved by special resolution.

Article 8.24 An extraordinary general meeting or class shareholders’ meeting required by shareholders shall be convened in accordance with the following procedures:

MP art.72

  • (I) two or more shareholders who jointly hold 10% or more of the shares carrying rights to vote at the proposed meeting may request the Board to convene an extraordinary general meeting or class shareholders’ meeting by signing a written requirement or several copies with the same format and content, and to illustrate the subject of the meetings. The Board shall convene an extraordinary general meeting or class shareholders’ meeting as soon as possible upon receipt of the foresaid written requirement. The aforesaid number of share holdings is calculated as at the date of the submission of the written requirement by the shareholders.

  • (II) if the Board fails to issue a notice of convening such a meeting within 30 days from the date of receipt of the aforesaid written requisition, the shareholders who raise the requisition may themselves convene the meeting within 4 months from the date of receipt of the requisition by the Board. The procedures of convening the meeting shall be the similar as those of convening a general meeting by the Board as far as possible.

If the shareholders call and convene a meeting by themselves since the Board cannot convene the meeting in accordance with the foresaid requirement, the expenses reasonably resulted therefrom shall be borne by our Company and

Page 25

deducted from the amounts owed to the Directors who have neglected their duties. Article 8.25 A general meeting shall be convened by the chairman who shall preside as MP art.73 chairman of the meeting. If the chairman cannot attend the meeting for any reasons, the general meeting shall be convened by the vice chairman who shall preside as chairman of the meeting. If both the chairman and vice chairman cannot attend the meeting, the Board may designate a director of the Company to convene and preside at the meeting as chairman on its behalf. If no chairman of the meeting has been designated, shareholders attending the meeting may elect a person to act as chairman. If the shareholders cannot elect the chairman due to any reason, the shareholder (including his/her proxy) presented at the meeting who hold the shares carrying the maximum voting rights shall act as the chairman of the meeting. Article 8.26 The chairman of the meeting shall be responsible for determining whether a MP art.74 resolution of the general meeting is passed or not and his/her determination shall be final and the same shall be announced at the meeting and entered into the minutes of the meeting. Article 8.27 A proposal listing candidates for directors and supervisors shall be submitted to the general meeting for a vote. When voting on the election of directors and supervisors, the general meeting may implement accumulative voting system according to the Articles of Association or the resolution of the general meeting. Accumulative voting system referred to in the preceding paragraph means a system whereby each share, in an election of directors or supervisors at a general meeting, carries the number of voting rights equivalent to the number of the directors or supervisors to be elected, and a shareholder may concentrate his/her voting rights. The Board shall make available to the shareholders the biographies and general information of the candidates for directors and supervisors. Other than the accumulative voting system, the general meeting shall vote on all proposals presented one by one. In the case where different proposals are made on the same matter, votes shall be cast in accordance with the sequence of the proposals presented. Article 8.28 At a general meeting, the approach and procedures for nomination of candidates for directors and supervisors are as follows:

  • (I) shareholder(s) severally or jointly holding more than 3% of the total outstanding issued shares with voting rights of the Company may, by way of a written proposal, put forward to the general meeting about the candidates for directors and supervisors (not being staff representatives). However, the number of candidates proposed shall comply with the provisions of the Articles of Association, and shall not exceed the number of the candidates to be elected. The aforesaid proposal put forward by shareholders to the Company should be served to the Company at least 14 days before the convening of the general meeting.

  • (II) within the number of head count as specified by these Articles and based on the proposed number of candidates to be elected, the Board and the Board of Supervisors may propose a list of recommended candidates for directors and supervisors, and submit the same to the Board and the Board of Supervisors respectively for their reviews. The list of candidates for directors and

Page 26

supervisors should be proposed at a general meeting by way of a written proposal upon reviewed and approved by the Board and the Board of Supervisors.

  • (III) the written materials of the intention to propose a candidate for election as a director or a supervisor, the acceptance of such candidate of his willingness to be nominated and relevant written materials on the nominated candidate shall be given to the Company no less than 7 days prior to the date of holding the general meeting. The Board and the Board of Supervisors shall provide shareholders with biographical details and basic information of the candidates for directors and supervisors.

  • (IV) the period accorded by the Company for the nominators and candidates to submit the aforementioned notices and documents (such period shall start from the day immediately following the date of issuance of the notice of the general meeting) shall be not less than 7 days;

  • (V) at the general meeting, voting for each candidate for a director and supervisor shall be taken on a one-by-one basis.

  • (VI) in the case of any need of addition to or replacement in any director or supervisor, the Board or the Board of Supervisors shall be responsible for putting forward a proposal to the general meeting to elect or replace the same.

  • Article 8.29 If the chairman of the meeting has any doubt concerning the result of the vote on MP art.75

  • any resolution, he /she may organize a recount of the number of votes cast. If the chairman of the meeting does not conduct a recount of the votes and an attending shareholder or proxy challenges the result of a vote announced by the chairman of the meeting, he/she has the right to demand a vote recount immediately following the announcement of the result, in which case the chairman of the meeting shall promptly organize a recount of the votes.

  • Article 8.30 If a vote recount is conducted at a general meeting, the result thereof shall be MP art.76

  • recorded in the minutes of the meeting. The general meeting shall keep minutes of its decisions on the matters considered. Directors attending the meeting shall sign their names on the minutes of the meeting. The minutes of meeting together with the attendance register of the attending MP art.76

  • shareholders and the power of attorney of their proxies shall be kept at the domicile of the Company.

  • Article 8.31 Copies of the minutes of meeting shall, during business hours of the Company, be MP art.77

  • open for inspection by any shareholder without any charge. If a shareholder requests for a copy of such minutes from the Company, the Company shall send a copy of such minutes to him within 7 days after receipt of reasonable fees therefor.

  • CHAPTER 9 SPECIAL VOTING PROCEDURES OF CLASS SHAREHOLDERS

  • Article 9.1 Shareholders who hold different classes of shares are class shareholders. MP art.78

Page 27

Class shareholders shall enjoy rights and assume obligations in accordance with laws, administrative regulations and these Articles. Where the share capital of the Company includes shares which do not carry voting rights, the words “non-voting” must appear in the designation of such shares. APP3.10

Where the share capital of the Company includes shares with different voting rights, the designation of each class of shares, other than those with the most favourable voting rights, must include the words “restricted voting” or “limited voting”.

Article 9.2 Rights conferred on any class of shareholders may not be varied or abrogated save MP art.79 with the approval by a special resolution at a shareholders’ general meeting and by shareholders of the affected class at a separate meeting convened in accordance with Article 9.4 to Article 9.8.

If the rights of class shareholders are changed or abrogated due to the change of the domestic and foreign laws, regulations and Listing Rules of the listing place, or decisions lawfully made by the domestic and foreign regulatory authorities, such change or abrogation needs not be approved at a general meeting or class shareholders’ meeting.

The holders of domestic shares of the Company referred to in Article 3.5 of these Articles may transfer their shares to overseas investors and list the said shares overseas, which shall not be deemed to be a proposed variation or abrogation of the rights conferred on any class of shareholders.

Article 9.3 The following circumstances shall be deemed to be a variation or an abrogation of rights conferred on a particular class of shares:

MP art.80

  • (I) to increase or decrease the number of shares of that class, or to increase or decrease the number of shares of a class with voting rights, rights to distribution or other privileges equal or superior to those of the shares of that class;

  • (II) to exchange all or part of the shares of that class for shares of another class or to exchange or to grant a right to exchange all or part of the shares of another class for shares of that class;

  • (III) to remove or reduce rights to accrued dividends or rights to cumulative dividends attached to shares of that class;

  • (IV) to reduce or remove preferential rights attached to shares of that class to receive dividends or to the distribution of assets in the event that the Company is liquidated;

  • (V) to add, remove or reduce conversion rights, options, voting rights, rights to transfer, pre-emptive rights or rights to acquire securities of the Company attached to shares of that class;

Page 28

  • (VI) to remove or reduce rights to receive payment payable by the Company in particular currencies attached to shares of that class;

  • (VII)to create a new class of shares with voting rights, rights to distribution or other privileges equal or superior to those of the shares of that class;

  • (VIII)to restrict the transfer or ownership of shares of that class or to increase the types of restrictions attaching thereto;

  • (IX) to issue rights to subscribe for, or to convert the existing shares into, shares of that class or another class;

  • (X) to increase the rights and privileges of shares of another class;

  • (XI) to restructure the Company in such a way so as to result in the disproportionate distribution of obligations between the various classes of shareholders;

  • (XII) to vary or abrogate the provisions of this Chapter.

Article 9.4 Shareholders of the affected class, whether or not otherwise having the right to vote at shareholders’ general meetings, have the right to vote at class meetings in respect of matters concerning sub-paragraphs (II) to (VIII), (XI) and (XII) of Article 9.3, but interested shareholder(s) shall not be entitled to vote at such class meetings.

MP art.81

“(An) interested shareholder(s)”, as such term is used in the preceding paragraph, means:

  • (I) in the case of a repurchase of shares of the Company by way of a general offer to all shareholders on a pro rata basis or by way of public dealing on a stock exchange pursuant to Article 4.4, a “controlling shareholder” within the meaning of Article 7.6 hereof;

  • (II) in the case of a repurchase of shares the Company by an off-market agreement pursuant to Article 4.4 hereof, a shareholder to which the agreement relates;

  • (III) in the case of a restructuring of the Company, a shareholder who assumes a relatively lower proportion of obligation than the obligations imposed on other shareholders of that class or who has an interest different from those of other shareholders of that class.

The quorum for a separate class meeting to consider a variation of the rights of any class of shares shall be the holders of at least one-third of the issued shares of the class.

App 3.6(2)

Page 29

Article 9.5
Resolutions of a class shareholders’ meeting shall be passed by votes representing
more than two-thirds of the voting rights of shareholders of that class represented at
the relevant meeting who, according to Article 9.4, are entitled to vote.
Article 9.6
A written notice of a class shareholders’ meeting shall be given to all shareholders
who are registered as holders of that class in the register of members 45 days before
the date of the meeting. Such notice shall give such shareholders notice of the
matters to be considered at such meeting, the date and the place of the meeting. A
shareholder who intends to attend the meeting shall deliver his written reply in
respect thereof to the Company 20 days before the date of the class shareholders’
meeting.
If the shareholders who intend to attend such class shareholders’ meeting represent
more than half of the total number of shares of that class with voting rights at such
meeting, the Company may convene and hold the class shareholders’ meeting; if
not, the Company shall within 5 days give the shareholders further notice of the
matters to be considered, the date and the place of the meeting by way of public
announcement. The Company may then hold the class shareholders’ meeting after
such public announcement has been made.
Article 9.7
The notice of the class meeting shall only be served on shareholders who have the
right to vote at that meeting.
The procedure to convene the class meeting shall resemble that of a shareholders’
general meeting as far as possible. Terms in the Articles which are related to the
procedure to convene a shareholders’ general meeting shall apply to a meeting of
class shareholders.
Article 9.8
Except shareholders of other class of shares, shareholders of domestic shares and
shareholders of overseas listed foreign shares shall be considered as different class
of shareholders. Shareholders of domestic shares and overseas listed foreign shares
shall enjoy equal rights in any distribution of dividend and other benefits.
The special voting procedures for class meetings do not apply to the following
circumstances:
(I) upon approval of the shareholders’ general meeting by special resolution, the
Company issues domestic shares and overseas listed foreign shares every
other 12 months, either separately or simultaneously, and the domestic
shares and overseas listed foreign shares to be issued do not exceed 20% of
the total number of such class of outstanding shares;
(II) the plan of issuing domestic shares and overseas listed foreign shares at the
establishment of the Company is accomplished within 15 months from the
date of obtaining approval from the securities regulatory authority of the
State Council;
(III) upon the approval of the securities regulatory authority of the State Council,
the shareholders of the Company have their unlisted shares listed and		 MP art.82
MP art.83
App 3.7(2)
MP art.84
MP art.85
Article 3
of Zheng
Jian Hai
Han
App 3.9
A
13D.1(f)(i)
A
13D.1(f)(ii)

Page 30

traded on overseas stock exchanges.

CHAPTER 10 BOARD OF DIRECTORS

Article 10.1 The Company shall establish a board, which shall be accountable to and report to MP art.86 the general meeting. The Board shall consist of seven directors, of which the external directors (hereinafter referred to directors who do not hold any office within the Company) shall represent not less than 50 percent of the members of the Board of Directors. Independent non-executive directors (hereinafter referred to directors who are independent to the shareholders and do not hold any office within the Company) shall represent at least one-third of the members of the Board of Directors.

The Board of Directors shall have one chairman and may have one vice chairman.

Article 10.2
Directors shall be elected at the general meeting for a term of three years from the
date of the election. Upon the expiry of the term, a director shall be eligible for
re-election.
Written notice of the intention to nominee a candidate for election as a director and
the written notice by such candidate of his willingness to accept the nomination
shall be sent to the Company 7 days before the date of the shareholders’ general
meeting.
The timeframe for the delivery of the above notices shall commence from the date
when a notice of meeting in respect of such election is dispatched and end no later
than 7 days prior to the date of such meeting.
The chairman shall be elected and removed by a majority of all directors. The term
of office of the chairman is three years, and renewable upon re-election.
Subject to the relevant laws and administrative regulations, the shareholders’ general
meeting may remove a director before the expiration of his term of office by an
ordinary resolution but without prejudice to any claim for damages under any
contract.
External directors shall have sufficient time and appropriate knowledge to perform
their duties. The Company shall provide necessary information to the external
directors to perform their duties. The independent non-executive directors may
report the situations directly to the shareholders’ general meeting, the securities
regulatory authorities of the State Council and other relevant departments.
A director shall not be required to hold any shares of the Company.
Article 10.3
The Board of Directors shall be accountable to the shareholder’s general meeting
and shall exercise the following functions and powers:		 MP art.87
Article
4
of
Zheng Jian
Hai Han
App 3.4(4)
App 3.7(2)
App 3.4(5)
App 3.4(3)
Article
6
of
the
Opinions
MP art.88

Page 31

  • (I) to convene the shareholder’s general meeting and report on work to the shareholder’s general meeting;

  • (II) to implement the resolutions of the shareholder’s general meeting;

(III) to determine the Company’s business and investment plans;

(IV) to devise the Company’s annual financial budget and final accounting plans;

  • (V) to devise the Company’s profit distribution and loss recovery plans;

  • (VI) to formulate the plans for increasing or decreasing the Company’s registered capital and the issuance of corporate bonds or other securities, as well as the listing of the Company;

  • (VII) to formulate plans for share repurchase of the Company, and the Company’s merger, separation, dissolution, and change of its form;

(VIII) to formulate proposal on the amendments on these Articles;

  • (IX) to determine the setup of the Company’s internal management organisation;

  • (X) to appoint or dismiss the general manager of the Company, the secretary of the Board of Directors, chairman of special committee of the Board of Directors and secretary of the Company; appoint or dismiss the deputy general manager of the Company and other senior management based on the nomination of the general manager and determine their remuneration;

  • (XI) to formulate the basic management system of the Company;

  • (XII) to formulate the plan for acquisition and disposal of major assets within one

  • year, which account for over 30% of the Company’s audited total assets for the latest period;

  • (XIII) to formulate the plan for material transaction (as defined in Article 8.2), which account for 50% of the audited net assets of the Company for the latest period;

  • (XIV) to consider and approve the acquisition and disposal of major assets within in one year amounting over RMB10 million but not over 30% of audited total assets of the Company for the latest period;

  • (XV) to consider and approve the material transactions (as defined in Article 8.2) amounting over RMB10 million but not over 50% of audited net assets of the Company for the latest period;

  • (XVI) to consider the connected transactions subject to the approval of the Board of Directors’ in accordance with the listing rules of the place on which the shares of the Company are listed;

Page 32

(XVII) to propose the appointment or replacement of the accounting firm that performs audits for our Company at the shareholders’ general meeting;

  • (XVIII) to formulate stock incentive scheme;

  • (XIX) to attend to the work report of our general manager and review the work of the general manager;

  • (XX) to submit the proposals on the candidate or replacement of the independent non-executive Directors of our Company to the shareholders’ general meeting;

  • (XXI) Other powers and duties authorised by the laws, administrative regulations, departmental rules, listing rules, the shareholders’ general meetings and these Articles.

Save in respect of the matters specified in sub-paragraphs (VI), (VII) and (VIII) of this Article which shall be passed by the affirmative votes of two-thirds or more of all the Directors, the Board’s resolutions in respect of all other matters above may be passed by the affirmative votes of more than one-half of the Directors.

Article 10.4 The Board shall not, without the prior approval of shareholders at a general meeting, dispose or agree to dispose of any fixed assets where the aggregate of the expected value of the consideration for the proposed disposition, and the value of the consideration for any fixed assets that have been disposed of within the period of 4 months immediately preceding the proposed disposition, exceeds 33% of the value of the Company’s fixed assets as shown in the latest balance sheet which was considered at a shareholders’ general meeting.

MP art.89

For the purposes of this Article, disposition of fixed assets includes an act involving the transfer of interests in assets other than the provision of security by fixed assets.

The validity of a disposition by the Company shall not be affected by any breach of the first paragraph of this Article.

  • Article 10.5

The Chairman shall exercise the following functions and powers:

MP art.90

  • (I) to preside over shareholders’ general meetings and to convene and preside over the Board meetings;

  • (II) to check on the implementation of resolutions passed by the Board at the Board meetings;

  • (III) to ensure that Directors receive, in a timely manner, adequate information which must be accurate, clear, complete and reliable;

  • (IV) to ensure that the Board works effectively and performs its responsibilities, and that all key and appropriate issues are discussed by it in a timely manner;

  • (V) to ensure that the formation of good corporate governance practices and procedures by the Company;

Page 33

  • (VI) to ensure that appropriate steps are taken to provide effective communication with shareholders;

  • (VII) to sign the securities issued by the company;

  • (VIII) to sign important documents of the Board and other documents which should be signed by the Company’s legal representative, and exercise the functions and powers of a legal representative;

  • (IX) to hear regular or non-regular performance reports of the Company’s senior management, and give opinions guiding the execution of board resolutions;

  • (X) to nominate candidates for secretary to the Board of the Company;

  • (XI) to supervise and check on the work of special committees of the Board;

  • (XII) to exercise other functions and powers conferred by the Board or the Listing Rules.

Where the Chairman is unable to perform his duties or fails to perform his duties, the vice chairman of the Board shall perform his duties. Where the vice chairman of the Board is unable perform his duties or fails to perform his duties, a Director selected by half or above of all Directors shall perform his duties.

Article 10.6 The Board shall hold at least 4 regular meetings every year and such meetings shall be convened by the Chairman. All of the Directors should be notified about the meeting 14 days beforehand.

MP art.91 App 3.7(2)

The chairman of the Board shall convene and preside over an extraordinary Board meeting within 10 days in one of the following situations when it is:

  • (I) An extraordinary meeting of the Board may be convened when the Chairman thinks it is necessary or the general manager requests it;

  • (II) When shareholders representing over 10% of voting rights so requests;

  • (III) when over one-third of the Directors so request;

  • (IV) when the Board of Supervisors so requests;

  • (V) When relevant regulatory authorities requests to convene it.

At the same time, the above proposers are entitled to propose motions to the Board and shall submit his proposal in writing while proposing to convene an extraordinary meeting.

Article 10.7 The notice for the meeting of Board shall be as follows:

The notice for the meeting of Board shall be as follows: MP art.92 Code on Corporate (I) In the event that the Board has stipulated in advance the date and place of the Governanc regular meeting of the Board, it shall not require the issue of notices to convene e Practices the meeting.

Page 34

  • (II) In the event that the Board has not stipulated in advance the date and place of In the meeting of the Board, the Chairman of the Board shall inform the directors at least 14 days in advance by sending the notice by means of telex, telegram, facsimile, speed post or registered mail or courier, unless specified otherwise by the Article10.6.

  • Appendix

  • 14 to The Listing

Rules

  • (III) The notice shall be in Chinese, and its English version may be attached if necessary, and shall include the agenda for the meeting. Any director may waive the right of obtaining the notice from the Board for the meeting of the Board.

  • A.1.3

  • App 3.7(2)

A notice of the Board meeting shall at least contain the following contents:

  • (I) date and place of the meeting;

  • (II) means of convening the meeting;

  • (III) the matters to be considered at (Session Proposal);

  • (IV) convener and presider of the meeting, requisitionist of the interim meeting and its written proposals;

  • (V) request of the directors to attend the meeting in person or by entrusting other directors;

  • (VI) contact person and contact method;

  • (VII) date of issuing the notice.

Verbal notice of a meeting shall at least include the contents of items (I) and (II) above and the explanation for emergency situations where an extraordinary meeting needs to be convened as soon as possible.

Article 10.8 All the major items that require the decision-making of the Board of Directors must be notified to all executive directors and external directors according to the time prescribed by this Article and strictly carried out in accordance with the procedures laid down. At the same time, a director may require sufficient information to be provided. Directors may require to be provided with supplementary materials. When more than a quarter of the directors or more than two external directors believe that the information is inadequate or unclear, they can jointly declare the deferment of the board meetings or some of the issues that shall be discussed by the board meeting, to which the Board of Directors shall give approval.

Article of The Opinions

Notice of a meeting shall be deemed to have been given to any Director who attends the meeting without protesting against, before or at its commencement, any lack of notice.

Page 35

The meeting of the Board shall be convened onsite in principle. A regular Board meeting or an impromptu Board meeting can be held by way of telephone conference or other similar telecommunication devices. As long as the Directors attending such meeting can clearly hear what other Directors say and can interact with each other, all attendees shall be deemed to have attended the meeting in person. Aricle 10.9 Board meeting shall only be held if more than one half of the Directors (including a MP art.93 Director appointing another Director to attend the meeting on his behalf by a written power of attorney according to Article 10.10) attend. Each Director has one vote. Voting can be classified into “for”, “against” and “abstained”, and in case of “against” or “abstained”, for which, relevant reasons shall be stated and filed. Unless otherwise specified in Article 10.3, a resolution of the Board must be passed by more than one-half of all the Directors. In case of an equality of votes cast for and against a resolution, the Chairman shall have a casting vote.

Article 10.10 Directors shall attend the Board meeting in person. Where a Director is unable to MP art.94
attend a meeting for any reason, he may by a written power of attorney appoint another
Director to attend the meeting on his behalf. The power of attorney shall set out the
scope of authorization. And an Independent Non-executive Director shall only appoint
another Independent Non-executive Director attending the meeting to attend the same
on his behalf.

A Director appointed as a representative of another Director to attend the meeting shall exercise the rights of the Director within the scope of authorization. Where a Director is unable to attend a Board meeting and has not appointed a representative to attend the meeting on his behalf, he shall be deemed to have waived his right to vote at that meeting.

Article 10.11 The Board shall keep minutes of resolutions passed at the Board meetings. The MP art.95 minutes shall be signed by the Directors who have attended the meeting and the person Article 6 who took the minutes. Opinions expressed by Independent Non-executive Directors of The shall be set out in the resolutions passed by the Board at the Board meetings. The Opinions minutes of the Board meeting shall be deposited at the Company’s office in the PRC. The Directors shall be liable for the resolutions of the Board. If a resolution of the Board violates the laws, administrative regulations or these Articles and the Company suffers serious loss as a result thereof, the Directors who participate in the passing of such resolution are liable to compensate the Company therefor. However, if it can be proved that a Director has expressed his objection when the resolution is voted on, and if such objection was recorded in the minutes of the meeting, such Director shall be released from such liability.

Article 10.12 Unless otherwise stipulated in these Articles and the listing rules at the place where the Company’s shares are listed, the Board may adopt written resolution in lieu of holding Board meeting provided that the proposal of such resolution must be delivered to each and every Director by hand, by post, by facsimile or by email. If the relevant written resolution has been delivered to all the Directors and the number of Directors who have signified their consent on one or more counterparts of that proposed resolution has reached the minimum prescribed by law for making such decision and the same is/are then delivered to the Chairman using one of the aforesaid manners, such resolution is deemed to be passed as a Board resolution and no Board meeting has to be convened.

Page 36

Article10.13 If any Director or any of his associates (as defined by the Listing Rules) has interest in App3.4 (1) the matter to be resolved by the Board, such Director shall excuse himself and shall not have any voting right. Such Director shall not be counted towards the quorum of the meeting.

CHAPTER 11 SECRETARY TO THE BOARD OF THE COMPANY

  • Article 11.1 The Company may have one Board Secretary. The Board Secretary is a senior officer MP art.96 of the Company.

The Board may, according to its requirements, establish the secretariat of the Board.

  • Article11.2 The Board Secretary shall be a natural person who has the requisite professional MP art.97 knowledge and experience and shall be appointed by the Board. The major responsibilities of the Board Secretary are as follows:

  • (I) to ensure the Company has complete constitutional documents and records;

  • (II) to ensure the Company to prepare and deliver in accordance with law those documents and reports required by competent authorities entitled thereto;

  • (III) to ensure that the Company’s registers of shareholders are properly maintained and that persons entitled to the Company’s records and documents are furnished with such records and documents without delay;

  • (IV) to organize and arrange for the meetings of the Board and general meetings, prepare meeting materials, handle relevant meeting affairs, be responsible for keeping minutes of the meetings and ensuring their accuracy, keep meeting documents and minutes and take initiative to keep abreast of implementation of relevant resolutions. Any important issues occurring during the implementation shall be reported and relevant proposals shall be put forward to the Board;

  • (V) to ensure the material matters resolved by the Board of the Company to be carried out strictly in accordance with the procedures as stipulated; according to the requirements of the Board, to participate in the consultation and analysis of the matters to be considered by the Board and offer relevant opinions and suggestions; and handle the day-to-day affairs of the Board and its committees as authorized;

  • (VI) as the contact person between the Company and securities regulatory authorities, to be responsible for the preparation and timely submission of the documents required by the regulatory authorities, and for accepting and organizing the implementation of the tasks from the regulatory authorities;

  • (VII) to be responsible for coordinating and organizing disclosure of information of the Company, establishing and improving the information disclosure system, participating in all meetings of the Company involving information disclosure, and keeping informed of the material operational decisions and relevant information of the Company in a timely manner;

Page 37

  • (VIII) to be responsible for keeping price-sensitive information of the Company confidential and working out effective and practical confidentiality systems and measures. Where there is any disclosure of price-sensitive information of the Company due to any reason, necessary remedial measures shall be taken; timely explanation and clarification shall be made; and relevant reports shall be submitted to the stock exchange of the place where the Company’s shares are listed and the CSRC;

  • (IX) to be responsible for coordinating reception of visitors, keeping in touch with news media; coordinating replies to inquiries from the public, handling relations with intermediaries, regulatory authorities and news media , and organizing submission of the reports on relevant matters to the CSRC;

  • (X) to assist directors and the general manager in duly complying with the domestic and foreign laws, regulations, these Articles and other provisions in the course of discharging their duties, and upon becoming aware that the Company has passed or may pass resolutions which are in breach of relevant regulations, to be obliged to immediately remind the Board, and to be entitled to report such facts to the CSRC and other regulatory authorities;

  • (XI) to coordinate the provision of relevant information necessary for the Board of Supervisors of the Company and other auditing authorities to discharge their duties; and assisting in carrying out investigations on the performance of the Chief Financial Officer, directors and the general manager of the Company of their fiduciary duties；

  • (XII) to exercise other functions and powers granted by the Board and those required by the stock exchange of the place where the Company’s shares are listed.

  • Article 11.3 A Director or other senior management personnel of the Company may act as the MP art.98 Board Secretary concurrently. The accountants in the Accounting Firm which have been engaged by the Company shall not act as the Board Secretary concurrently.

Where the office of Board Secretary is held concurrently by a director, and an act is required to be done by a Director and a Board Secretary of the Company separately, the person who holds the office of Director and Board Secretary of the Company shall not perform the act in a dual capacity.

CHAPTER 12 SPECIAL COMMITTEES OF THE BOARD

Article 12.1 The Board may, according to its requirements, establish special committees including audit committee, remuneration committee and nomination committee. The Board may also, according to its requirements, establish other special committees and restructuring the existing committees. The Board shall seek the views of the relevant special committees before making relevant resolutions.

Article 12.2 All members of the special committees established by the Board shall be Directors who are elected by the Board. Each of the special committees may engage intermediaries to provide professional advice and the relevant expenses shall be borne by the Company.

Page 38

Article 12.3 Each of the special committees shall be accountable to the Board and the proposal of each of the special committees shall be submitted to the Board for examination and determination.

CHAPTER 13 GENERAL MANAGER AND OTHER SENIOR MANAGEMENT OF THE

COMPANY

Article 13.1 The Company shall have one general manager who shall be appointed or removed MP art.99 by the Board.

Directors can be concurrently appointed as the general manager or other senior management personnel.

Article 13.2 The Company shall have several deputy general managers and a person in charge of finance (Chief Financial Officer) who shall assist the work of the general manager and shall be the senior management of the Company. Other persons expressly appointed by the Board as the senior management of the Company shall also be the senior management of the Company.

Deputy general managers and the person in charge of finance shall be nominated by the general manager and appointed or removed by the Board.

Article 13.3 The general manager of the Company shall be accountable to the Board and shall MP art.100 exercise the following functions and powers:

  • (I) to be in charge of the Company’s production, operation and management and to organize the implementation of the resolutions of the Board;

  • (II) to organize the implementation of the Company’s annual business and investment plans;

  • (III) to draft plans for the setup of the Company’s internal management organisation;

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

  • (V) to formulate basic rules and regulations for the Company;

  • (VI) to propose the appointment or dismissal of other senior management of the Company;

  • (VII) to appoint or dismiss management personnel other than those required to be appointed or dismissed by the Board;

  • (VIII) to the extent authorized by the Board, to decide on the investment, financing, contracts and transactions the amount of which not exceeds RMB10 million;

  • (IX) to request the convening of an impromptu Board meeting;

  • (X) subject to compliance with the relevant requirements of the State, to determine the level of remuneration and fringe benefits and the reward system;

Page 39

  • (XI) other functions and powers conferred by these Articles and the Board.

  • Article 13.4 The general manager of the Company can attend the Board meeting and has the MP art.101 right to receive the notice of Board meeting and relevant documents.

  • Article 13.5 The general manager of the Company, while exercising their functions and MP art.102 powers, shall act honestly and diligently in accordance with the laws, administrative regulations and these Articles.

CHAPTER 14 BOARD OF SUPERVISORS

Article 14.1 The Company shall set up a Board of Supervisors. MP art.103
Article 14.2 The Board of Supervisors shall consist of three members which includes one MP art.104
chairman. The tenure of a supervisor is three years, which is renewable upon
re-election.
The chairman of the Board of Supervisors shall be elected and dismissed by more A
than a two-thirds vote of the members of the Board of Supervisors. 13D.1(d)(i)
Article 14.3 The Board of Supervisors shall comprise one shareholders’ representative, one MP art.105
independent supervisor and one staff representative of the Company. The
shareholders’ representatives and independent supervisors shall be elected and
dismissed by the shareholders’ general meeting, while the staff representatives
shall be democratically elected and dismissed by the staffs of the Company.
Article 14.4 The Directors, the general manager, the deputy general manager, the secretary of MP art.106
the Board of Directors and the person in charge of finance shall not serve
concurrently as Supervisors.
Article 14.5 Meetings of the Board of Supervisors shall be convened at least twice a year. The MP art.107
Chairman of the Supervisory Committee shall be responsible for convening the
meeting and informing all Supervisors ten days in advance. In case of urgent
matters, an extraordinary meeting of the Board of Supervisors may be convened
upon proposal by one-third or more of all supervisors, which are not subject to the
following notice for the meeting of the Board of Supervisors.
In principle, the meeting of the Board of Supervisors shall be held at the residence
of the Company, but may be held in other places of China as resolved by the Board
of Supervisors.

The notice for the meeting of the Board of Supervisors shall be as follows:

  • (I) In the event that the Board of Supervisors has stipulated in advance the date App 3.7(2) and place of the regular meeting of the Board of Supervisors, it shall not require the issue of notices to convene the meeting;

  • (II) In the event that the Board of Supervisors has not stipulated in advance the App 3.7(2) date and place of the meeting of the Board of Supervisors, the Chairman of the Board of Supervisors shall inform the supervisors at least ten days

Page 40

but at most thirty days in advance by sending the notice by means of telex, cable, facsimile, speed post or registered mail or courier, unless specified otherwise by the first paragraph of this Article;

  • (III) The notice shall be in Chinese, and its English version may be attached if necessary, and shall include the agenda for the meeting. Any of the supervisors may waive the right of obtaining the notice from the Board of Supervisors for the meeting of the Board of Supervisors.

If the supervisor has attended the meeting and has not raised objection for non-receipt of the notice in advance before or during the meeting, he shall be deemed to have been issued the notice of the meeting.

Article 14.6 The Board of Supervisors shall be accountable to the shareholders’ general meeting MP art.108 and shall exercise the following functions and powers in accordance with law:

  • (I) to examine the financial position of the Company;

  • (II) to supervise the Directors, general managers and senior management of the Company to ensure that they do not contravened any laws, administrative regulations or these Articles while performing their duties, and put forward suggestions for dismissing the above persons;

  • (III) to require the Directors, general manager and other senior management who acts in a manner which is harmful to the Company’s interest to rectify such behavior;

  • (IV) to verify the financial information such as the financial reports, business reports and plans for distribution of profits to be submitted by the Board to the shareholders’ general meetings and authorize, in the name of the Company, a re-examination by the certified public accountants and practicing auditors should any queries arise;

  • (V) to propose to convene an extraordinary general meeting of the shareholders;

  • (VI) to propose to convene extraordinary meetings of the Board of Directors;

  • (VII) to represent the Company in negotiating with or in bringing actions against the Directors;

  • (VIII) Other functions and powers stipulated in these Articles.

The Board of Supervisors may suggest on the appointment of the accounting firm appointed by the Company, and where necessary, may otherwise appoint the accounting firm in the name of the Company to separately audit the accounts of the Company, and may directly report to the securities supervisory and regulatory body under the State Council and to other relevant departments.

Independent Supervisors shall report independently to the shareholders’ general meeting in relation to the performance of diligence and honesty of the Company’s senior management.

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Supervisors shall attend the Board meetings.
Article 14.7 Meetings of the Board of Supervisors shall only be convened when all supervisors MP art.109
attend. In special circumstances that meetings of the Board of Supervisors are A13D(1)(d
required to be convened while certain members cannot attend, the quorum of the )(ii)
meeting can be reduced to three-fifths of all supervisors. Article
6
of Zheng
Jian
Hai
Han
Resolutions of the Board of Supervisors shall be passed by two-thirds or more of A13D(1)(d
the members of the Board of Supervisors. )(ii)
Article 14.8 All reasonable fees incurred in respect of the engagement of professionals (such MP art.110
as, lawyers, certified public accountants or practicing auditors) which are required
by the Board of Supervisors in the exercise of its functions and powers shall be
borne by the Company.
Article 14.9 The supervisors shall perform their duties of supervision honestly and faithfully in MP art.111
accordance with the laws, administrative regulations and these Articles.

CHAPTER 15 QUALIFICATIONS AND OBLIGATIONS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT OF THE COMPANY

Article 15.1 None of the persons in any of the following situations shall serve as the Director, MP art.112 the Supervisor or the senior management of the Company:

  • (I) a person who has no civil capacity or has limited civil capacity;

  • (II) a person who has been convicted of the offence of corruption, bribery, asset embezzlement, asset misappropriation, or disrupting the social economic order within 5 years of the expiry date of punishment or has been deprived of political rights because of this conviction within 5 years of the expiry date of the sentence;

  • (III) a person who has served as director, factory manager or manager of a company or enterprise that is bankrupt and liquidated as a result of improper management and who has been personally liable for the bankruptcy of the company or enterprise within 3 years of the date of completion of bankruptcy and liquidation of the company or enterprise;

  • (IV) a person who has served as the legal representative of a company or enterprise whose business licence was revoked due to violation of the law and who has been personally liable within3 years of the date on which the business licence of such company or enterprise was revoked;

  • (V) a person who has a large sum of debt which was not paid at maturity;

  • (VI) a person who is investigated by the judicial authorities for violation of criminal law which is not settled yet;

  • (VII) a person who is prohibited from acting as a leader of an enterprise by the provisions of the laws and administrative regulations;

Page 42

(VIII) a non-natural person;

  • (IX) a person judged by the competent authorities to have violated the provisions of relevant securities laws and involved in deceptive or dishonest acts within 5 years of the date on which the judgment was made;

  • (X) circumstances specified by relevant laws and regulations on the places where the Company’s shares are listed.

Article 15.2 The validity of the conducts of the Director and the senior management of the MP art.113 Company on behalf of the Company against bona fide third parties shall not be affected by any non-compliance in their conducts during office, election or qualifications.

Article 15.3 In addition to the obligations required by laws, administrative regulations or MP art.114 listing rules of the stock exchange on which shares of the Company are listed, the Directors, Supervisors or senior management of the Company shall have the following obligations to each shareholder in the exercise of the functions and powers of the Company entrusted to them:

  • (I) not to cause the Company to exceed the scope of business stipulated in its business licence;

  • (II) to act honestly in the best interests of the Company;

  • (III) not to deprive the Company in any way of its properties, including (but not limited to) the opportunities beneficial to the Company;

  • (IV) not to deprive the shareholders of personal interest, including (but not limited to) the allotment rights and the voting rights, but excluding the restructuring of the Company submitted to the General Meeting of Shareholders for approval in accordance with these Articles.

  • Article 15.4 The Directors, Supervisors and senior management of the Company shall be MP art.115 prudent, diligent and skilled in exercising the powers or in discharging the obligations, just like a reasonably prudent person under comparable circumstances.

  • Article 15.5 The Directors, Supervisors and senior management of the Company shall perform MP art.116 their duties in good faith, and shall not get involved in any circumstances where their own interests may be contradictory to their obligations. This principle includes but not limited to the following obligations:

  • (I) Acting in good faith to the best interests of the Company;

  • (II) Exercising powers within his scope and not beyond the defined boundary;

  • (III) Exercising the discretion vested in him personally and not to allow himself to act under the control of another and, unless and to the extent permitted by the laws, administrative regulations or with the informed consent of

Page 43

shareholders given at a shareholders’ general meeting, not to delegate the exercise of his discretion;

  • (IV) Treating Shareholders of the same type equally and Shareholders of different types fairly;

  • (V) Entering into any contract, transaction or arrangement with the Company is not allowed, unless otherwise provided for in these Articles or otherwise by the approval of the shareholders’ general meeting with its full knowledge;

  • (VI) Seeking benefits using the properties of the Company in any manner is not allowed, unless agreed by the shareholders’ general meeting with its full knowledge;

  • (VII) Using one’s position to take bribes or other illegal gains is not allowed, nor is any form of embezzlement of our property, including, but not limited to, opportunities beneficial to the Company;

  • (VIII) Accepting commissions associated with transactions of the Company is not allowed unless agreed by the shareholders’ general meeting with its full knowledge;

  • (IX) Compliance with these Articles, discharging duties in a faithful manner, safeguarding the interests of the Company rather than seeking benefits by taking advantage of one’s position and authority in the Company;

  • (X) Competing with the Company in any manner is not allowed, unless agreed by the shareholders’ general meeting with its full knowledge;

  • (XI) Misappropriation of the Company’s funds or lending these funds to others is not allowed, nor is depositing the assets of the Company in an account opened in one’s own name or other names, nor is using the assets of the Company to provide guarantees for the debts of the Shareholders of the Company or other individuals;

  • (XII) Disclosure of any confidential information relating to the Company obtained during employment without the consent of the shareholders’ general meeting with its full knowledge; unless in the interests of the Company, using such information is also not allowed; however, under the following circumstances the information may be disclosed to a court or other competent government authorities as required by:

  • the provisions of the law;

  • the public interests;

  • the interests of such Directors, Supervisors, senior management.

Page 44

Article 15.6

The Directors, Supervisors and senior management of the Company may not MP art.117 direct the following personnel or institutions (“related personnel”) to do acts that the Directors, Supervisors and senior management are prohibited from doing:

  • (I) Spouses or minor children of the Directors, Supervisors and senior management of the Company;

  • (II) Trustors of the Directors, Supervisors and senior management of the Company or the persons mentioned in (I) above;

  • (III) Partners of the Directors, Supervisors and senior management of the Company or persons mentioned in (I) and (II) above;

  • (IV) The company under de facto control by the Directors, Supervisors and senior management individually or jointly with the persons or other directors, supervisors and senior management of companies mentioned in (I), (II) and (III) above;

  • (V) Directors, Supervisors or senior management of the controlled companies mentioned in (IV) above.

  • Article 15.7 The good faith obligation owed by the Directors, Supervisors and senior MP art.118 management of the Company may not necessarily terminate with the expiration of their terms; their obligation to keep the trade secrets of the Company in confidence shall survive the expiration of their terms. The duration of other obligations shall be determined in accordance with the principle of fairness, depending on the length of time from the occurrence of the events to the time of resignation, as well as the circumstances and conditions under which the relationship with the Company is terminated.

  • Article 15.8 Unless or otherwise provided in Article 7.5 hereof, liabilities of Directors, MP art.119 Supervisors and senior management of the Company arising from the violation of specific duties may be released with the informed consent of the shareholders given at a shareholder’s general meeting.

  • Article 15.9 Where a Director, Supervisor and senior management of the Company has MP art.120 material interests in the contracts, transactions or arrangements that the Company has entered into or plans to enter into in any manner directly or indirectly (except for employment contracts that the Company has entered into with the Directors, Supervisors and senior management), the above personnel shall disclose the nature and degree of their interests to the Board of Director as soon as possible no matter whether the relevant matters are subject to the approval of the Board of Director in normal circumstance. A Director shall not vote on any contract, transaction, arrangement or proposal in App3.4(1) which he or any of its related personnel is materially interested, and shall not be included in the quorum of the relevant meeting (the restrictions in this paragraph shall not apply to the circumstances permitted by the Listing Rules and Hong Kong Stock Exchange).

Page 45

Unless the Directors, Supervisors and senior management who have interests have made disclosure to the Board of Directors in accordance with the preceding paragraph of this Article and the Board of Directors approves the matters at the meeting in which they are not included in the quorum nor participate in voting, the Company shall have the right to cancel the contracts, transactions or arrangements, except where the opposite party is a party in good faith without knowledge of the acts of related Directors, Supervisors and senior management violating their obligations.

  • A Director, Supervisor, senior management of the Company is deemed to be interested in a contract, transaction or arrangement in which its related personnel is interested.

  • Article 15.10 If a Director, Supervisor, senior management of the Company has given the Board MP art.121 a notice in writing stating that, by reason of the facts specified in the notice, he is interested in the contract, transaction or arrangement which may subsequently be made by the Company, that notice shall be deemed to be a sufficient declaration of his interests stipulated under the preceding Article herein so far as the content stated in such notice is concerned, provided that such notice has been given before the entering into the relevant contract, transaction or arrangement is first taken into consideration by the Company.

  • Article 15.11 The Company may not in any manner pay tax on behalf of its directors, MP art.122 supervisors, general manager or other senior management.

  • Article 15.12 The Company shall neither provide the Directors, Supervisors, general manager MP art.123 or other senior management of the Company or its parent company with loans or loan guarantees, directly or indirectly, nor provide related personnel of the above personnel with loans or loan guarantees.

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

  • (I) The Company provides our subsidiaries with loans or loan guarantees;

  • (II) The Company provides the Directors, Supervisors or senior management of the Company with loans, loan guarantees or any other fund pursuant to the employment contracts approved at the shareholders’ general meeting to pay all expenses incurred for the purpose of the Company or performing his duties to the Company;

  • (III) In case that the normal scope of business of the Company covers the provision of loans or loan guarantees, the Company may provide relevant Directors, Supervisors or senior management or other related personnel with loans or guarantees for loans, provided that the conditions of the above loans or loan guarantees shall be normal commercial conditions.

Page 46

  • Article 15.13 In the event that the Company provides loans in violation of the provisions set forth MP art.124 in the preceding Article, the person who receives the loan(s) shall payoff the loan(s) immediately, regardless of the conditions of loans.

  • Article 15.14 A guarantee for repayment of loan provided by the Company in violation of MP art.125 provisions set forth in paragraph (I) of Article 15.12 shall not be mandatorily enforced against the Company, unless under the following circumstances:

  • (I) The loan provider unknowingly provides loans to personnel related to the Directors, Supervisors or senior management of the Company or its parent company;

  • (II) The collateral provided by the Company is sold lawfully by the loan provider to the buyer in good faith.

  • Article 15.15 For the purpose of the preceding provisions therein, a guarantee includes the acts of MP art.126 the guarantor bearing the liabilities or providing properties to ensure that the obligor performs the obligations

  • Article 15.16 In the event of violation of obligations owed to the Company by the Directors, MP art.127 Supervisors and senior management of the Company, the Company shall have the right to take the following measures in addition to various rights and remedial measures stipulated in legal and administrative regulations:

  • (I) Require related Directors, Supervisors or senior management to compensate the Company for losses incurred as a result of their neglect of duty;

  • (II) Cancel any contract or transaction entered into between the Company and related Directors, Supervisors or senior management as well as any contract or transaction entered into between the Company and any third person when the third person knew or should have known that the Directors, Supervisors or senior management acting on behalf of the Company violated their obligations owed to the Company;

  • (III) Require related Directors, Supervisors or senior management to turn over the proceeds obtained from the violation of their obligations;

  • (IV) Recover funds collected by related Directors, Supervisors or senior management that should have been collected for the Company, including but not limited to commissions; and

  • (V) Require related Directors, Supervisors or senior management to return to the Company the interest earned or that may be earned from funds that should have been paid to the Company.

  • Article 15.17 The Company shall enter into a contract in writing with the directors, supervisors and MP art.128 senior management containing at least the following provisions:

  • (I) the directors, supervisors and senior management shall undertake to the Company to comply with the Company Law, the Special Provisions, these Articles, the Code on Takeovers and Mergers and Share Repurchases and other provisions of Hong Kong Stock

Page 47

Exchange, and shall specify that the Company is entitled to take remedial measures as stipulated in these Articles. Neither the contract nor his office is capable of assignment;

  • (II) the directors, supervisors and senior management shall undertake to the Company to observe and perform their obligations to shareholders as stipulated in these Articles;

  • (III) the arbitration clauses as provided in the Listing Rules.

The Company shall, with the prior approval of the shareholders’ general meeting, enter into a contract in writing with the Director of the Company or the Supervisor regarding his emoluments. The aforesaid emoluments shall include:

  • (I) the emoluments in respect of his service as a director, supervisor or senior management of the Company;

  • (II) the emoluments in respect of his service as a director, supervisor or senior management of any subsidiary of the Company;

  • (III) the emoluments in respect of the provision of other services in connection with the management of the affairs of the Company and any of its subsidiaries;

  • (IV) the payment for compensation for the loss of office or retirement from office of such director or supervisor.

No proceedings may be brought by a Director or Supervisor against the Company for any benefit due to him in respect of the matters mentioned in this Article except pursuant to the contract mentioned above.

Article 15.18 As provided in the contract entered into between the Company and its Directors or Supervisors in connection with their emoluments, they are entitled to compensation or other payments for loss of office or retirement as a result of the acquisition of the Company, subject to the prior approval of the Shareholders at the shareholders’ general meeting.

MP art.129

For the purposes of the preceding paragraph, acquisition of the Company refers to any of the following circumstances:

  • (I) an offer made by any person to all shareholders;

  • (II) an offer made by any person such that the offeror will become the Controlling Shareholder. The term “controlling shareholder” has the same meaning as defined in Article 7.6 of these Articles.

If the relevant Director or Supervisor fails to comply with the above requirements, any payment received shall belong to the person who sells the shares for accepting the aforesaid offer. The Director or Supervisor shall bear all expenses arising from the distribution of such payments in a proportional manner and such expenses shall not be deducted from these payments distributed.

Page 48

CHAPTER 16 FINANCIAL AND ACCOUNTING SYSTEMS AND PROFIT DISTRIBUTION

Article 16.1 The Company shall establish its financial and accounting system in accordance with MP art.130 MP art.130 MP art.130
the laws, administrative regulations and PRC accounting standards formulated by the
competent finance authorities of the State Council.
Article 16.2 At the end of each fiscal year, the Company shall prepare a financial report which MP art.131
shall be reviewed as required by law.
Article 16.3 The Company shall adopt the Gregorian calendar year for its fiscal year, that is, a
fiscal year starts on 1 January every year and ends on 31 December every year on the
Gregorian calendar. The Company shall use RMB as thereporting currencyand the
accounts shall be written in Chinese.
Article 16.4 The Board of Directors shall submit the financial reports of the Company, as required MP art.132
by law, administrative regulations or directives promulgated by local governments
and competent authorities to be prepared by the Company, at every annual general
meeting.
Article 16.5 The Company’s financial reports shall be made available for shareholders’ inspection MP art.133
at the Company 20 days before the annual general meeting is convened. Each
shareholder of the Company shall have the right to receive a copy of such financial Article
7
reports referred to in this Chapter. of Zheng
Jian Hai
Han
The Company shall send the aforesaid reports to each of the holders of overseas App 3.5
listed foreign shares by postage-paid mail at least 21 days before the annual general
meeting is convened and the recipient’s address shall be the address as shown in the
register of Shareholders.
Article 16.6 The financial statements of the Company shall be prepared in accordance with the MP art.134
PRC accounting standards and regulations, with reference to international accounting
standards or the accounting standards of overseas areas where the Shares are listed (if
necessary).
Article 16.7 The Company’s interim results or financial information published or disclosed by the MP art.135
Company shall be prepared in accordance with the PRC accounting standards and
regulations, with reference to international accounting standards or the accounting
standards of overseas areas where the Shares are listed (if necessary).
Article 16.8 The Company shall publish the financial reports twice in each fiscal year. An interim MP art.136
financial report shall be published within 60 days of the end of the first six months of
a fiscal year, while the annual financial report shall be published within 120 days of
the completion of each fiscal year.
Article 16.9 The Company shall not keep any accounting books other than those specified by law. MP art.137

Page 49

  • Article 16.10 Upon completion of preparation of its interim and annual financial reports, the Company shall follow such procedures and make such announcements as required by the securities-related laws and regulations of the PRC and provisions of the stock exchange on which shares of the Company are listed.

  • Article 16.11 The profit of the Company shall be distributed in the following order of priority after payment of relevant taxes:

  • (I) making up for losses;

  • (II) allocation to the statutory surplus reserve;

(III) allocation to the discretionary surplus reserve ;

  • (IV) payment of dividends on ordinary shares.

The particular proportion of distribution in the year in respect of items (III) and (IV) of this Article shall be determined by the Board in accordance with the operational condition and development of the Company and shall be subject to the consideration and approval by shareholders’ general meeting.

  • Article 16.12 No dividends shall be paid before the Company has made up its losses and has made allocations to the statutory reserve fund.

  • Article 16.13 The Company shall allocate 10% of the profit after taxation to the statutory surplus reserve. When the total amount of the statutory surplus reserve exceeds 50% of the Company’s registered capital, no more allocations shall be made.

  • Article 16.14 Allocation to the discretionary surplus reserve shall be made from the profits of the Company in accordance with a resolution of shareholders at the general meeting after allocation to the statutory surplus reserve.

  • Article 16.15 The Company shall not allocate dividends or carry out other allocations in the form of bonuses before it has made up for its losses and made allocations to the statutory common reserve fund. Dividends paid by the Company shall not carry any interest except where the Company has failed to pay the dividends to the shareholders on the date on which such dividends become payable.

Any amount paid up in advance of calls on any share shall carry interest, but shall not App 3.3(1) entitle the holder of the share to receive, by way of advance payment, the dividend declared and distributed thereafter. Article 16.16 The capital reserve shall include the following amounts: MP art.138 (I) premium above the par value for shares issued at a premium price;

  • (II) any other income designated for the capital reserve as required by the competent finance authorities of the State Council.

The capital reserve of the Company shall not be applied for making up for losses.

Page 50

Article 16.17 The common reserve fund of the Company shall be applied for the following purposes only:

  • (I) to make up for losses;

  • (II) to expand the Company’s production and operation;

  • (III) to convert into capital to increase the Company’s capital. The Company can, resolved by the general meeting, capitalize capital reserve and surplus reserve which can be converted into capital under the relevant regulations, and shall either distribute new shares in proportion to the existing number of shares held by the shareholders, or to increase the par value of each share. However, when the statutory surplus reserve is converted to capital, the balance of such common reserve fund shall not fall below 25% of the registered capital of the Company before such conversion.

  • Article 16.18 Subject to the restrictions stipulated by Articles 16.11, 16.12 and 16.13 herein, the annual dividends shall be distributed to the shareholders in proportion to their respective shareholdings within six months after the end of the fiscal year.

  • Article 16.19 The Company may distribute dividends in the form of:

MP art.139

  • (I) cash;

  • (II) shares.

Article 16.20 When the Company pays cash dividends and other funds to the holders of Domestic
Shares, payment shall be made in Renminbi. When the Company pays cash dividends
and other funds to holders of overseas listed foreign Shares, payment shall be
denominated and declared in Renminbi and paid in Hong Kong dollars. The foreign
currencies required by the Company to pay cash dividends and other funds to holders
of overseas listed foreign Shares shall be handled in accordance with the relevant
regulations on foreign exchange control in the PRC.
Article 16.21 Unless otherwise provided for in relevant laws and administrative regulations, where
cash dividends and other funds are to be paid in Hong Kong dollars, the applicable
exchange rate shall be the average of the mid-point rate for the relevant foreign
currency announced by the Peoples' Bank of China during the week prior to the
announcement of payment of dividend and other funds.
Article 16.22 When distributing dividends to its shareholders, the Company shall withhold and pay
on behalf of its shareholders the taxes levied on the dividends in accordance with the
provisions of the PRC tax law.
Article 16.23 The Company shall appoint receiving agents for holders of the overseas listed foreign MP art.140
Shares. Such receiving agents shall receive dividends and other payable funds that Article
8
are distributed by the Company with respect to overseas listed foreign Shares on such of Zheng
shareholders’ behalf. Jian Hai
Han

Page 51

The receiving agents appointed by the Company shall comply with relevant provisions of the laws or the stock exchange where the Shares are listed.

The receiving agents appointed for holders of overseas listed foreign shares listed on A 13D.1(c)
the Hong Kong Stock Exchange shall be a trust company registered under the Trustee
Ordinance of Hong Kong.
Article 16.24 In respect of dividends distributed to shareholders, the Company has the power to LR19A.47
forfeit unclaimed dividends, but such power shall not be exercised until six years or App 3.3(2)
more after the date of declaration of the dividend. LR 19A.47
Article 16.25 The Company can send dividend warrants by post, either directly or through A 3.13(1)
receiving agents. Where such warrants have been left uncashed, the Company has
power to cease sending dividend warrants by post, either directly or through
receiving agents. However, such power should not be exercised until such warrants
have been so left uncashed on two consecutive occasions. Nevertheless, such power
may be exercised after the first occasion on which such a warrant is returned
undelivered.
Article 16.26 When permitted by law, the Company has the power to sell the shares of a member
who is untraceable under the following circumstances:
(I) The Company has paid dividends at least three times on these Shares within 12 App
years, but no one has claimed the dividends during that period; and 3.13(2)(a)
(II) Upon expiration of the 12-year period, the Company publishes an announcement App
in a newspaper, indicating its intention to sell the Shares and notifies the Hong 3.13(2)(b)
Kong Stock Exchange of such intention. App 3.7(1)
CHAPTER 17 APPOINTMENT OF ACCOUNTING FIRM
Article 17.1 The Company shall appoint an independent accounting firm which is qualified under MP art.141
the relevant regulations of the State to audit the Company's annual financial report
and review the Company's other financial reports.

The first accounting firm of the Company may be appointed at the inaugural meeting before the first annual general meeting. The accounting firm so appointed shall hold office until the conclusion of the first annual general meeting.

If the inaugural meeting does not exercise the powers under the preceding paragraph,
those powers shall be exercised by the board of directors.
Article 17.2 The accounting firm appointed by the Company shall hold office from the conclusion MP art.142
of the annual general meeting at which the appointment is made until the conclusion
of the next annual general meeting.

Page 52

Article 17.3 The Accounting Firm appointed by the Company shall enjoy the following rights: MP art.143

  • (I) the right to inspect the books, records and vouchers of the Company at any time, and the right to require the Directors, or senior management of the Company to supply relevant information and explanations;

  • (II) the right to require the Company to take all reasonable steps to obtain from its subsidiaries such information and explanation as are necessary for the discharge of the duties of the Accounting Firm;

(III) the right to attend shareholders’ general meetings and to receive all notices or
other information relating to the meetings which any shareholder is entitled to
receive, and the right to express its views in any shareholders’ general meeting
in relation to matters concerning its role as the Accounting Firm of the
Company.
Article 17.4 If there is a vacancy in the position of Accounting Firm, the Board may appoint MP art.144
another Accounting Firm to fill such vacancy before the convening of the
shareholders’ general meeting. Any other Accounting Firm which has been appointed
by the Company may continue to act during the period in which a vacancy arises.
Article 17.5 The shareholders in a shareholders’ general meeting may by ordinary resolution MP art.145
remove the Accounting Firm before the expiration of its term of office, irrespective
of the provisions in the contract between the Company and the Accounting Firm. The
Accounting Firm’s right (if any) to claim for damages which arise from its removal
shall not be affected thereby.
Article 17.6 The remuneration of an Accounting Firm or the manner according to which the MP art.146
Accounting Firm’s remuneration is to be decided shall be determined by the
shareholders in a shareholders’ general meeting. The remuneration of an Accounting
Firm appointed by the Board shall be determined by the Board.
Article 17.7 The Company’s appointment, removal or non-reappointment of an Accounting Firm MP art.147
shall be resolved by the shareholders in a shareholders’ general meeting, and shall be
filed with the securities governing authorities of the State Council.
Article 17.8 Where a resolution is proposed to be passed at a shareholders’ general meeting Article
9
concerning the appointment of an Accounting Firm which is not an incumbent of Zheng
Accounting Firm to replace the existing Accounting Firm or fill a casual vacancy in Jian Hai
the office of the Accounting Firm, the reappointment of a retiring Accounting Firm Han
which was appointed by the Board for the purpose of filling a casual vacancy or the
removal of an Accounting Firm before the expiration of its term of office, the A
following provisions shall apply: 13D.1(e)(i)
(I) A copy of the proposal about the appointment or removal shall be sent, before
the notice of the shareholders’ general meeting is given, to the Accounting Firm
proposed to be appointed or proposing to leave its position or the Accounting
Firm which has left its position in the relevant fiscal year. (Leaving includes
leaving by removal, resignation and retirement.)
(II) If the Accounting Firm leaving its position makes representations in writing and
requests the Company to give the shareholders notice of such representations,
the Company shall take the following measures unless the Company has
received such representations too late:

Page 53

  • (1) in any notice given in relation to the adoption of the resolution, to state the fact that such representations have been made by the Accounting Firm leaving its position;

  • (2) attach a copy of such representations to the notice and deliver it to the shareholders in the manner stipulated in these Articles.

  • (III) If the Company fails to send out the Accounting Firm’s representations in the manner set out in paragraph (2) of this Article above, such Accounting Firm may require such representations be read at the shareholders’ general meeting, and may make a further complaint.

  • (IV) An Accounting Firm which is leaving its position shall be entitled to attend the following shareholders’ general meetings:

  • (1) the general meeting at which its term of office would otherwise have expired;

  • (2) the general meeting at which it is proposed to fill the vacancy caused by its removal;

  • (3) the general meeting which is convened on its resignation.

An Accounting Firm which is leaving its position shall be entitled to receive all notices of the aforementioned shareholders’ general meetings and other communications related to any such meeting, and shall have the right to express its views at any such meeting in relation to matters concerning its role as the former Accounting Firm of the Company.

  • Article 17.9 Prior notice should be given to the Accounting Firm if the Company decides to remove such Accounting Firm or not to renew its appointment thereof. Such Accounting Firm shall be entitled to make a statement at the shareholders’ general meeting. Where the Accounting Firm requests to resign, it shall make it clear to the shareholders in a shareholders’ general meeting whether there has been any impropriety on the part of the Company.

Article 17.10 An Accounting Firm may resign by depositing at the Company’s office a written resignation notice which shall become effective on the date on which it is deposited or on such later date as may be stipulated in such notice. Such notice shall include the following statements:

MP art.148

Article 10 of Zheng Jian Hai Han A 13D.1(e)(ii )

  • (I) a statement to the effect that there are no circumstances connected with its resignation which it considers should be brought to the notice of the shareholders or creditors of the Company; or

  • (II) Any statement that should be disclosed.

The Company shall submit a copy of the written notice as referred to in the preceding clauses of this Article to the competent authorities within 14 days upon the receipt of such notice. In the event that the statements referred to in clause (II) of this Article is set forth in the notice, a copy of such statement shall be kept in the Company and made available for shareholders’ inspection, and the Company shall deliver a copy of the aforementioned statement to every holder of overseas listed foreign shares by prepaid post at their respective addresses which appeared in the register of Shareholders.

A 13D.1(e)(ii i)

Page 54

In the event that the resignation notice of the Accounting Firm includes any statement A that should be disclosed, the Accounting Firm may request the Board of Directors to 13D.1(e)(i convene an extraordinary general meeting to hear its explanations regarding the v) resignation.

CHAPTER 18 INSURANCE

  • Article 18.1 All kinds of insurance of the Company shall be purchased from insurance companies which are registered in the PRC and are permitted to provide insurance services to PRC companies under the laws of the PRC.

  • Article 18.2 The type of insurance, the insured amounts, the period of coverage and other insurance terms shall be determined after discussion by the Board of the Company in accordance with the practices of companies in similar industries in other countries and the convention and legal requirements in the PRC.

CHAPTER 19 LABOUR MANAGEMENT

  • Article 19.1 The Company shall formulate its systems regarding labour management, human resources management, payroll and welfare and social insurance in accordance with the laws, rules and administrative regulations of the PRC.

  • Article 19.2 The Company shall hire the management personnel of different levels by appointment and the common employees by contract. The Company may determine the allocation of human resources at its own discretion. It is also entitled to hire management personnel and other employees on its own, and to dismiss the same in accordance with the laws and regulations and the contract provisions.

  • Article 19.3 The Company is entitled to, within the scope specified by the administrative regulations, determine the payroll and welfare benefits of management personnel of different levels and different employees in accordance with its own economic efficiency.

  • Article 19.4 Subject to the relevant administrative regulations of the PRC government and regional governments, the Company shall arrange medical, retirement and unemployment insurance for its management personnel and employees and shall execute the laws, rules and relevant requirements of labour insurance regarding retirement and unemployment of employees.

CHAPTER 20 EMPLOYEES

Article 20.1 The Company’s employees may organize labour union and carry out union activities in accordance with the Trade Union Law of the People’s Republic of China to safeguard the legitimate rights and interests of employees.

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CHAPTER 21 MERGER AND DIVISION OF THE COMPANY

Article 21.1 Any resolution on merger or division of the Company shall be proposed by the Board
of the Company, and the relevant examination and approval procedures shall be
completed in accordance with laws after being approved pursuant to the procedures		 MP art.149
stipulated in these Articles. Any shareholder opposing the resolution on merger or
division of the Company shall have the right to request the Company or those
shareholders who consent to such resolution to purchase shares from them at a fair
price. The contents of the resolution of merger or division of the Company shall
constitute a special document which shall be made available for shareholders’
inspection.
The document above shall also be sent by means of mails to holders of overseas
listed foreign shares.
Article 21.2 The merger of the Company may take the form of either merger by absorption or
merger by the establishment of a new company. MP art.150
In the case of a merger of the Company, all parties to the merger shall execute a
merger agreement and prepare a balance sheet and an inventory of assets. The
Company shall notify its creditors within 10 days from the date when the resolution		 App 3.7(1)
for the merger is passed and publish an announcement in newspaper(s) for at least 3
times within 30 days from the date when the resolution for the merger is passed.
After the merger, the rights of the parties to the merger and their indebtedness shall
be assumed by the company which survives the merger or the newly established
company.
Article 21.3 Where there is a division of the Company, its assets shall be divided accordingly.
MP art.151
In the case of a division of the Company, all parties to the division shall execute a App 3.7(1)
division agreement and prepare a balance sheet and an inventory of assets. The
Company shall notify its creditors within 10 days from the date when the resolution
for the division is passed and publish an announcement in a newspaper for at least 3
times within 30 days from the date when the resolution for the division is passed.
Debts of the Company prior to division shall be assumed by the companies which
exist after the division according to the agreement concluded.
Article 21.4 The Company shall, in accordance with laws, apply for change in its registration with MP art.152
the companies registration authority when there is a change in any item in its
registration as a result of the merger or division of the Company. Where the
Company is dissolved, the Company shall apply for its de-registration in accordance
with laws. Where a new company is established, the Company shall apply for
registration thereof in accordance with laws.

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CHAPTER 22 DISSOLUTION AND LIQUIDATION OF THE COMPANY

  • Article 22.1 The Company shall be dissolved and liquidated in accordance with laws upon the MP art.153 occurrence of any of the following events:

  • (I) A resolution for dissolution is passed by shareholders’ general meeting;

  • (II) The Company shall be dissolved for the purpose of merger or division;

  • (III) The Company is declared legally bankrupt as a result of failure to pay debts as they fall due;

  • (IV) The Company has its business license revoked, or is eliminated or ordered to close in accordance with the laws for violation of laws and administrative regulations;

  • (V) Where the Company encounters significant difficulties in business and management, continuous survival may be significantly detrimental to the interests of the Shareholders and the difficulties may not be overcome through other means, Shareholders who hold more than 10% of total shares of the Company carrying voting rights may request the court to dissolve the Company.

  • Article 22.2 Where the Company is dissolved due to the provisions set forth in paragraphs (I), (II) MP art.154 or (V) of the preceding Article, the liquidation team shall be established within 15 days, and the composition of the liquidation team shall be determined by an ordinary resolution of shareholders in a general meeting. In the event the liquidation team is not established during such period, the creditors can request the people’s court to appoint relevant personnel to establish the liquidation team for liquidation.

In the event that the Company is dissolved in accordance with the provisions set forth in paragraph (III) of the preceding Article, the people’s court shall organise the Shareholders, related agencies and professionals to form the liquidation team for liquidation pursuant to relevant provisions of the laws.

In the event that the Company is dissolved in accordance with the provisions set forth in paragraph (IV) of the preceding Article, the relevant competent authorities shall organise the Shareholders, related agencies and professionals to form the liquidation team for liquidation. Article 22.3 If the Board of Directors decides to liquidate the Company (except where the MP art.155 Company is liquidated after declaring bankruptcy), the Board of Directors shall state in the notice of the shareholder’s general meeting convened for this purpose that the Board of Directors has performed a comprehensive investigation of the status of the Company and believes that the Company is able to pay off all of our debts within 12 months from the commencement of liquidation.

Upon the passing of the resolution by the shareholders in a general meeting for the liquidation of the Company, the functions and powers of the Board shall immediately cease.

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In accordance with the instructions of the shareholder’s general meeting, the liquidation team shall at least once a year report at the shareholder’s general meeting on the income and expenditure of the liquidation team, progress of the business and liquidation of the Company, and submit a final report at the shareholder’s general meeting upon completion of liquidation.

  • Article 22.4 The liquidation team shall, within ten days of its establishment, inform the creditors MP art.156 and shall, within sixty days of its establishment, publish an announcement in App 3.7(1) newspaper(s) for at least three times. The liquidation team shall carry out registration of the creditors’ claims.

  • Article 22.5 The liquidation team shall exercise the following powers during the liquidation MP art.157 period:

  • (I) take stock of the Company’s assets and prepare a balance sheet and a list of assets respectively;

  • (II) notify or publish an announcement to creditors;

  • (III) deal with and liquidate any pending business associated with the Company;

  • (IV) pay off all outstanding taxes and taxes in connection with liquidation;

  • (V) settle claims and debts;

  • (VI) dispose of the remaining assets of the Company after paying up the debts; and

  • (VII) represent the Company in the civil litigation proceedings.

  • Article 22.6 After taking stock of the assets of the Company and preparing the balance sheet and list of properties, the liquidation team shall draw up a liquidation scheme and submit MP art.158

  • it to the shareholders’ general meeting or the relevant competent authorities for confirmation.

The Company’s assets shall be distributed in the following order:

  • (I) liquidation expenses;

  • (II) wages owed to the employees of the Company and labour insurance costs;

  • (III) payment of outstanding taxes;

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(IV) repayment of bank loans and other debts of the Company.

Any surplus assets of the Company after the repayment as stipulated in the preceding Article hereof shall be distributed to the Company’s shareholders according to the classes and proportion of the shares held by them.

During the liquidation period, the Company shall continue to exist but shall not carry out any business activities not relating to liquidation.

  • Article 22.7 In the event of liquidation in connection with dissolution of the Company and the liquidation team finds that, after taking stock of the Company’s assets and preparing the balance sheet and list of assets, the assets of the Company are insufficient to pay the debts, it shall immediately apply to the people’s court to declare bankruptcy.

    • MP art.159

  • After the Company is declared insolvent by the ruling of people’s court, the liquidation team shall turn over matters regarding the liquidation to the people’s court.

  • Article 22.8 Upon completion of liquidation of the Company, the liquidation team shall prepare a liquidation report, income and expenditure report and financial record during the MP art.160

  • liquidation period, which, after being verified by a China-registered accountant, shall be submitted to the shareholders’ general meeting or the relevant competent authorities for recognition.

  • Within 30 days of the date of approval by the shareholders’ general meeting or the relevant competent authorities, the liquidation team shall submit the above-mentioned documents to the company registration authority and apply for cancellation of the registration and publish an announcement on the termination of the Company.

CHAPTER 23 PROCEDURES FOR AMENDMENTS TO THESE ARTICLES

Article 23.1 The Company may amend these Articles in accordance with the requirements of MP art.161 laws, administrative regulations and these Articles.

Article 23.2 Except as otherwise provided in Articles 8.7 and 8.24 hereof, any amendment to these Articles shall be made in the following procedures:

  • (I) The Board shall, in accordance with these Articles, adopt a resolution thereon to propose to the shareholders’ general meeting to amend these Articles, and draw up a proposal for such amendments;

  • (II) The amendment proposal shall be notified to the shareholders, and a shareholders’ general meeting shall be convened for voting on the proposal;

  • (III) Subject to the relevant provisions of these Articles, the amendments submitted to the shareholders’ general meeting for approval shall be approved by way of special resolution;

  • (IV) The Company shall submit the amended Articles of Association to the company registration authority for filing.

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Article 23.3

Any amendment to these Articles involving matters provided for in the MP art.162 Mandatory Provisions shall become effective upon approval by the examination and approval authorities for companies authorized by the State Council and the China Securities Regulatory Commission. If there is any change relating to the registered particulars of the Company, application shall be made for change in registration in accordance with the law.

CHAPTER 24 SETTLEMENT OF DISPUTES

Article 24.1 The Company shall comply with the following rules governing the settlement of disputes:

MP art.163 Article 11 of Zheng Jian Hai Han

  • (I) Whenever there occur any disputes or claims between holders of the overseas listed foreign shares and the Company, holders of the overseas listed foreign shares and the Company’s Directors, Supervisors or senior management, or holders of the overseas listed foreign shares and holders of domestic shares regarding the rights or obligations relating to the affairs of the Company imposed by these Articles, the Company Law or any other relevant laws and administrative regulations, such disputes or claims shall be referred by relevant parties to arbitration.

Where the aforesaid dispute or claim of rights is referred to arbitration, the entire claim or the dispute as a whole shall be referred to arbitration, and any parties who have a cause of action based on the same facts giving rise to the dispute or the claim or whose participation is necessary for the settlement of such dispute or claim, are bound by the award of the arbitration provided that such person is the Company or a shareholder of the Company, a Director, a Supervisor or senior management.

Disputes in relation to the definition of Shareholders and disputes in relation to the Shareholders’ register shall not be resolved by arbitration.

  • (II) A claimant may elect for arbitration at either the China International Economic and Trade Arbitration Commission in accordance with its rules or the Hong Kong International Arbitration Centre in accordance with its Securities Arbitration Rules. Once a claimant refers a dispute or claim to arbitration, the other party shall submit to the arbitral body so elected by the claimant.

If a claimant elects for arbitration at Hong Kong International Arbitration Centre, any party to the dispute or claim may request the arbitration to be conducted in Shenzhen in accordance with the Securities Arbitration Rules of the Hong Kong International Arbitration Centre.

  • (III) The laws of the PRC are applicable to the arbitration for the disputes or claims of rights referred to in paragraph (I) of this Article, unless otherwise provided in the laws and administrative regulations.

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(IV) The award of an arbitration body shall be final and binding on all parties.

CHAPTER 25 NOTICE

Article 25.1 Unless as otherwise stipulated in these Articles, any notice, information or written statement issued by the Company to holders of overseas listed foreign shares shall be delivered by hand to each of the holders of overseas listed foreign shares (holding registered shares) at his registered address, or by mail or otherwise to each of the holders of overseas listed foreign shares at his address set out in the register of Shareholders.

Article 25.2 In the event of such notice being delivered by mail, the Company is only required to clearly write the address and name (title) of the receiver, prepay the postage, and put the notice in the envelope. The envelope containing the notice will be deemed as being received in 48 hours after it is mailed.

  • Article 25.3 Any notice, document, information or written statement sent by shareholders or directors to the Company shall be delivered to the legal address of the Company by hand or by registered mail.

  • Article 25.4 To prove that the shareholders or directors has delivered notices, documents, information or written statements to the Company, proof shall be provided that the notices, documents, information or written statements have been delivered through the means specified in Article 25.3 with the time prescribed; the Company’ confirmation shall be provided if they are delivered by hand ; a proof showing that notices, documents, information or written statements have been delivered to correct address with prepaid mail shall be provided for the those delivered by registered mail.

CHAPTER 26 INTERPRETATION AND DEFINITION OF THESE ARTICLES

  • Article 26.1 The right to interpret these Articles shall vest with the Board. Matters which are not resolved by these Articles shall be proposed by the Board to the shareholders’ general meetings for resolution.

  • Article 26.2 These Articles are written in both Chinese and English and the Chinese version shall prevail.

  • Article 26.3 Unless otherwise required by the context, the following nouns and phrases shall have the following meanings in these Articles:

“these Articles” the articles of association of the Company “Board” or “Board of the board of Directors of the Company Directors” “Chairman” the chairman of the Board

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“Director” any director of the Company “Overseas Listed any overseas listed foreign shares of the Foreign Shares” Company “Company’s office” the registered address of the Company at No. 235, Song Shan North Road, Longhu District, Shantou City “RMB” the legal currency of the PRC “Secretary of the Board” the company secretary appointed by the Board “Senior Management the general manager (also known as Member” “president” or “chief executive officer”), deputy general manager (also known as “vice president”), financial controller (also known as “chief financial officer”), secretary of the board of directors of the Company and other persons expressly appointed by the board of directors as the Company’s senior management. The terms “general manager”, “deputy general manager” in these Articles shall refer to the “manager”, “deputy manager” defined under the Company law, and the term “financial controller” shall refer to “person in charge of finance” defined under the Company law. “China”, “PRC” or the People’s Republic of China “State” “Hong Kong Stock The Stock Exchange of Hong Kong Limited Exchange” “Listing Rules” the Listing Rules issued by the Hong Kong Stock Exchange “Company” our Company, i.e. Charmacy Pharmaceutical Co., Ltd. “Accounting Firm” shall have the same meaning as the Auditor MP art.165 defined in the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited “MP” the Mandatory Provisions for Articles of Association of Companies to be Listed Overseas (Zheng Wei Fa [1994] No. 21), which was promulgated by the former State Council Securities Policy Committee and the former State Commission for Restructuring the Economic System

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“APP3” Appendix 3 of the new Rules Governing the
Listing of Securities on the Hong Kong Stock
Exchange
“A13D” Part D, Appendix 13 of the new Rules
Governing the Listing of Securities on the
Hong Kong Stock Exchange
“LR19A” Chapter 19A of the new Rules Governing the
Listing of Securities on the Hong Kong Stock
Exchange
“Zheng Jian Hai Han” Circular
Regarding
Comments
on
the
Amendment of Articles of Association of
Companies Listing Overseas in Hong Kong
(Zheng Jian Hai Han [1995] No.1), which was
promulgated
by
the
Overseas-Listing
Department of China Securities Regulatory
Commission and the Production System
Department of the former State Commission
for Restructuring the Economic System
“Opinions” Opinions Regarding the Promotion of Legally
Compliant Operations and the Further Reform
of Companies Listing Overseas, which was
promulgated by the State Economic and Trade
Commission and China Securities Regulatory
Commission

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