Dynagreen Environmental Protection Group Co., Ltd. - Proxy Solicitation & Information Statement 2016

THE CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Dynagreen Environmental Protection Group Co., Ltd.[*] , you should at once hand this circular, together with the accompanying form of proxy, to the purchaser or to the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

綠色動力環保集團股份有限公司 Dynagreen Environmental Protection Group Co., Ltd.[*]

(a joint stock limited liability company incorporated in the People’s Republic of China)

(Stock Code: 1330)

(1) PROPOSED A SHARE ISSUE

(2) ADOPTION OF COMPANY SHARE PRICE STABILIZATION MEASURES FOR THE THREE YEARS AFTER THE LISTING,

THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN, NEW ARTICLES AND INTERNAL RULES

(3) AUTHORIZATION TO THE BOARD TO DEAL WITH MATTERS RELATING TO A SHARE ISSUE

(4) PROPOSED APPOINTMENT OF DIRECTOR

(5) NOTICE OF EXTRAORDINARY GENERAL MEETING

(6) NOTICE OF CLASS MEETING FOR HOLDERS OF H SHARES

(7) NOTICE OF CLASS MEETING FOR HOLDERS OF DOMESTIC SHARES

A letter from the Board is set out on pages 3 to 14 of this circular.

A notice convening the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares to be held at 16th Floor, Block B, Fukai Building, No.19 Finance Street, Xicheng District, Beijing, the PRC on Monday, 18 April 2016 at 10:00 a.m. is set out on pages 233 to 242 of this circular.

If you intend to attend the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares, please complete and return the enclosed reply slip in accordance with the instructions printed thereon as soon as possible and in any event on or before Monday, 28 March 2016.

Whether or not you are able to attend the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares, please complete and return the enclosed proxy form in accordance with the instructions as soon as possible and in any event not less than 24 hours before the time scheduled for holding such meetings (or any adjourned meeting thereof). Completion and delivery of the proxy form shall not preclude you from attending and voting in person at the EGM, the Class Meeting for Holders of H Shares, the Class Meeting for Holders of Domestic Shares or any adjournment thereof should you so wish.

3 March 2016

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the	Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix I	— The Company Share Price Stabilization Measures for the
	Three Years after the Listing of the Shares of the Company . . . . .	15
Appendix II	— The Three-year Shareholders’ Profit Distribution Plan . . . . . . . . . . . .	22
Appendix III	— Articles of Association (Draft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
Appendix IV	— Rules of Procedures for General Meeting (Draft) . . . . . . . . . . . . . . . . . .	113
Appendix V	— Rules of Procedures for Board Meeting (Draft) . . . . . . . . . . . . . . . . . . . .	134
Appendix VI	— Rules of Procedures for Supervisory Committee Meeting (Draft) . . .	146
Appendix VII	— Working Regulations of Independent Directors (Draft) . . . . . . . . . . . .	152
Appendix VIII	— Administrative Regulations of Use of Proceeds (Draft) . . . . . . . . . . . . .	161
Appendix IX	— Administrative Rules of Connected Transactions (Draft) . . . . . . . . . . .	172
Appendix X	— Regulations of External Guarantee (Draft) . . . . . . . . . . . . . . . . . . . . . . . .	185
Appendix XI	— Administrative Regulations of Information Disclosure (Draft) . . . . . .	190
Appendix XII	— Administrative Rules of Investor Relations (Draft) . . . . . . . . . . . . . . . .	207
Appendix XIII	— Implementation Rules for Online Voting (Draft) . . . . . . . . . . . . . . . . . . .	215
Appendix XIV	— Letter of Undertaking relating to Repurchase of
	New A Shares and Reparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	222
Appendix XV	— Letter of Undertaking in respect of the Performance
	of Various Undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	223
Appendix XVI	— Remedial Measures for Dilution of Current Returns . . . . . . . . . . . . . . .	224
Appendix XVII	— Connected Transactions of the Company
	in 2013, 2014 and 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	231

– i –

	Page
Appendix XVIII— Biography of Mr. Guo Yitao . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	232
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	233
Notice of Class Meeting for Holders of H Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	237
Notice of Class Meeting for Holders of Domestic Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	240

– ii –

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings.

‘‘A Share(s)’’

ordinary shares of the Company with nominal value of RMB1.00 each proposed to be issued under the A Share issue and listed on the Shanghai Stock Exchange or Shenzhen Stock Exchange (to be finally determined by the Board) and traded in RMB

‘‘Articles’’

the articles of association of the Company as amended, revised or supplemented from time to time

‘‘Board of Directors’’ or ‘‘Board’’ the board of directors of the Company
‘‘Class Meeting for Holders of Domestic Shares’’

the first class meeting for Holders of Domestic Shares for the year 2016 to be held and convened immediately after the Class Meeting for Holders of H Shares

‘‘Class Meeting for Holders of H Shares’’
the first class meeting for Holders of H Shares for the year 2016 to be held and convened immediately after the EGM
‘‘Company’’

Dynagreen Environmental Protection Group Co., Ltd. (綠色動力環保集團股份有限公司), a joint stock limited liability company incorporated under the laws of the PRC on 23 April 2012, which is listed on the Main Board of Hong Kong Stock Exchange (Stock Code: 1330)

‘‘Company Law’’ the Company Law of the PRC
‘‘connected persons’’
have the meaning ascribed thereto under the Hong Kong Listing Rules
‘‘CSRC’’ China Securities Regulatory Commission
‘‘Director(s)’’ director(s) of the Company
‘‘Domestic Share(s)’’ ordinary share(s) of the capital of the Company, with a nominal value of RMB1.00 each, which are subscribed for and paid up in RMB and are unlisted Shares which are currently not listed or traded on any stock exchange
‘‘EGM’’ the first extraordinary general meeting of the Company for the year 2016 to be convened and held on Monday, 18 April 2016
‘‘EGM Notice’’ the notice for convening the EGM set out on pages 233 to 236 of this circular

– 1 –

DEFINITIONS

‘‘H Share(s)’’
‘‘Holders of Domestic Shares’’
‘‘Holders of H Shares’’
‘‘Hong Kong’’ or ‘‘HK’’
‘‘Hong Kong Listing Rules’’
‘‘Hong Kong Stock Exchange’’
‘‘Latest Practicable Date’’
‘‘Notice of Class Meeting for Holders of Domestic Shares’’
‘‘Notice of Class Meeting for Holders of H Shares’’
‘‘PRC’’
‘‘Proposed A Share Issue’’
‘‘RMB’’
‘‘Share(s)’’
‘‘Shareholder(s)’’
‘‘Supervisory Committee’’

overseas listed foreign invested ordinary share(s) in the ordinary share capital of the Company, with a nominal value of RMB1.00 each, listed on the Main Board of the Hong Kong Stock Exchange

holders of Domestic Shares

holders of H Shares

the Hong Kong Special Administrative Region of the PRC

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended, supplemented or otherwise modified from time to time

The Stock Exchange of Hong Kong Limited
1 March 2016, being the latest practicable date before the printing of this circular for ascertaining certain information

the notice of Class Meeting for Holders of Domestic Shares as set out on pages 240 to 242 of this circular

the notice of Class Meeting for Holders of H Shares as set out on pages 237 to 239 on this circular

the People’s Republic of China which, for the purpose of this circular, excludes Hong Kong, Macau Special Administrative Region of the PRC and Taiwan

the proposed issue of 116,200,000 A Shares in the PRC
Renminbi, the lawful currency of the PRC
share(s) in the share capital of the Company, with a nominal value of RMB1.00 each, including both Domestic Share(s) and H Share(s)
holder(s) of the Shares, including holders of both Domestic Shares and H Shares

the supervisory committee of the Company

– 2 –

LETTER FROM THE BOARD

綠色動力環保集團股份有限公司 Dynagreen Environmental Protection Group Co., Ltd.[*]

(a joint stock limited liability company incorporated in the People’s Republic of China)

(Stock Code: 1330)

Non-executive Directors:

Mr. ZHI Jun (直軍先生) (Chairman)

Ms. SUN Jing (孫婧女士)

Mr. LIU Shuguang (劉曙光先生)

Mr. MA Xiaopeng (馬曉鵬先生)

Executive Directors:

Mr. QIAO Dewei (喬德衛先生) (General Manager)

Mr. HU Shengyong (胡聲泳先生)

Independent non-executive Directors:

Ms. CHEN Xin (陳鑫女士)

Mr. KWAN Kai Cheong (關啟昌先生)

Mr. OU Yuezhou (區岳州先生)

3 March 2016

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED A SHARE ISSUE

(2) ADOPTION OF COMPANY SHARE PRICE STABILIZATION MEASURES FOR THE THREE YEARS AFTER THE LISTING,

THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN, NEW ARTICLES AND INTERNAL RULES

(3) AUTHORIZATION TO THE BOARD TO DEAL WITH MATTERS RELATING TO A SHARE ISSUE

(4) PROPOSED APPOINTMENT OF DIRECTOR

(5) NOTICE OF EXTRAORDINARY GENERAL MEETING

(6) NOTICE OF CLASS MEETING FOR HOLDERS OF H SHARES

(7) NOTICE OF CLASS MEETING FOR HOLDERS OF DOMESTIC SHARES

– 3 –

LETTER FROM THE BOARD

I INTRODUCTION

The Company intends to apply to the CSRC and other relevant regulatory authorities for the issue of 116,200,000 A Shares with a nominal value of RMB1.00 each on the Shanghai Stock Exchange or the Shenzhen Stock Exchange. The Proposed A Share Issue will be subject to the approval by the Shareholders at the EGM, Class Meeting for Holders of H Shares and Class Meeting for Holders of Domestic Shares, as well as the approvals by the CSRC and other relevant regulatory authorities.

To comply with the applicable PRC laws and regulations in relation to the issue of A Shares, the Company proposes to adopt the Proposed A Share Issue plan, the use of proceeds plan, authorization to the Board to deal with matters relating to the listing, the plan on distribution of accumulated and undistributed profits before the initial public offering of A Shares, the company share price stabilization measures for the three years after the listing, the three-year shareholders’ profit distribution plan, the new Articles and the internal rules including Rules of Procedures for General Meeting, Rules of Procedures for Board Meeting, Rules of Procedures for Supervisory Committee Meeting, Working Regulations for Independent Directors, Administrative Regulations of Use of Proceeds, Administrative Rules for Connected Transactions, Regulations of External Guarantee, Administrative Regulations of Information Disclosure, Administrative Rules of Investor Relations and Implementation Rules for Online Voting (together the ‘‘Internal Rules’’), the feasibility of proposed investment projects, the issue of letters of undertaking and the remedial measures for dilution of current returns.

In addition, the Company proposes at the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares for Shareholders’ consideration and approval of the connected transactions for 2013, 2014 and 2015 of the Company. The Company also proposes at the EGM for Shareholders’ consideration and approval of the proposed appointment of a Director.

The special resolutions or ordinary resolutions on the above matters will be considered and approved at the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares. The new Articles are subject to the approval or endorsement from or registration with the relevant regulatory authorities, and shall come into effect upon approval by the CSRC and completion of the Proposed A Share Issue.

The purpose of this circular is to provide you with details of the Proposed A Share Issue and other relevant resolutions.

– 4 –

LETTER FROM THE BOARD

II. APPLICATION FOR INITIAL PUBLIC OFFERING AND LISTING OF RMB ORDINARY SHARES (A SHARES)

The Company proposes to apply for the initial public offering and listing of RMB ordinary shares (A Shares), and the issue plan is as follows:

Type of Shares to be issued: domestic listed RMB ordinary shares (A Shares);
Nominal value of the Shares to be issued: RMB1.00 each;
Number of Shares to be issued: 116,200,000 new Shares to be issued by the Company in a public offering;
Issue price per Share: the issue price per Share to be determined by the issuer through consultation with the lead underwriters based on market price consultations;
Issue method: a combination of placement through offline offering to investors based on market price consultations and online subscription based on market capitalization or other issue methods as approved by regulatory authorities such as the CSRC;
Target subscribers: qualified domestic individual and corporate investors who have opened an account at the Shanghai/Shenzhen Stock Exchange (except those prohibited from subscribing for the Shares under PRC laws and regulations);
Listing of Domestic Shares: all existing domestic shares of the Company will be converted into A Shares and listed on the Shanghai/Shenzhen Stock Exchange in compliance with the relevant laws and regulations on dealing restrictions at the time of the application for the issue of RMB ordinary shares (A Shares);
Underwriting method: the balance will be underwritten;
Stock exchange on which the A Shares will be listed: Shanghai/Shenzhen Stock Exchange;
Time of issue and listing: to be negotiated and determined by the Board and relevant regulatory authorities after approval by the CSRC and Shanghai/Shenzhen Stock Exchange;
Effective period of the resolution: within 12 months from the date on which it is approved at the first EGM for the year 2016.

– 5 –

LETTER FROM THE BOARD

III. USE OF PROCEEDS FROM INITIAL PUBLIC OFFERING OF A SHARES

The proceeds from the initial public offering of A Shares of the Company will be used to invest in Tianjin Ninghe Straw-fired Power Project, Tianjin Ninghe Biomass Power Project, Bengbu Solid Waste Incineration Power Generation Plant and replenish the working capital of the Company according to their priorities, and the proceeds used for investment will not exceed RMB560 million in total.

Before the proceeds from this issue become available, if, among other things, the Company requires initial investment in investment projects due to reasons such as market competition or business operation needs, the Company may use its own resources or bank loans to make such initial investment, and replenish the capital when the proceeds become available. If the proceeds are not sufficient to meet the requirements of the above projects, the funding shortfall will be covered by the Company’s own resources or bank loans.

According to the Administrative Regulations of Use of Proceeds, the proceeds will be deposited into a segregated account as determined by the Board which will be administered and used for specific purposes. When the proceeds become available, the Company will sign a threeparty (or four-party) escrow agreement with the sponsor and a commercial bank, or commercial banks, where the proceeds will be deposited.

IV. AUTHORIZATION TO THE BOARD TO DEAL WITH MATTERS RELATING TO THE ISSUE AND LISTING OF A SHARES BY THE COMPANY IN ITS ABSOLUTE DISCRETION

As part of the Company’s application to the CSRC for the public offering of A Shares, the Company proposes that authority be granted by the Shareholders at the general meeting to the Board to deal with the matters relating to this issue and listing of the Shares within the scope as permitted by the relevant laws and administrative regulations in its absolute discretion, including but not limited to the following:

to formulate and implement the detailed plan of this public offering, determine specific matters relating to this issue of A Shares including the stock exchange, the board, the timing, the number of Shares to be issued, target subscribers, issue method and pricing method in accordance with PRC laws and regulations, relevant provisions and policies by securities regulatory departments, the stock market conditions and the resolutions at the general meeting;
the Board be authorized to make corresponding adjustments to the issue plan based on new provisions and policies in the event of any new provisions and policies promulgated by the PRC and securities regulatory departments on the initial public offering of shares of a joint stock limited liability company and the listing on the relevant board of the Shanghai/Shenzhen Stock Exchange;

– 6 –

LETTER FROM THE BOARD

to handle the application matters relating to this issue and listing, including but not limited to, applying for vetting, registration, filing, approval and consent by relevant government agencies, regulatory authorities, stock exchanges and securities registration and settlement institutions; to authorize, sign, execute, amend, complete all necessary documents, agreements and contracts relating to this issue and listing (including but not limited to the prospectus, the sponsor agreement, the underwriting agreement, the listing agreement and various announcements); and to reply to, in its absolute discretion, comments from the CSRC and other government departments;
to sign various documents and contracts relating to this public offering and the listing of the Shares, and major contracts involving the use of the proceeds in the investment projects; to adjust the size of the proceeds for investment projects according to the priorities of the investment projects; and to handle relevant government approval formalities relating to the investment projects financed by the proceeds;
to handle various government approval formalities during the issue of Shares; to pay various fees related to share issue, listing and sponsorship; and to complete other necessary formalities and work for this share issue and listing;
to deal with the matters relating to registration, lock-up and listing on the Shanghai/ Shenzhen Stock Exchange and the Shanghai/Shenzhen branch, China Securities Depository and Clearing Corporation Limited in connection with listing of Shares after completion of this public offering of A Shares;
upon the approval of this share issue by the CSRC and Shanghai/Shenzhen Stock Exchange, to finalize relevant provisions of the Articles of Association of Dynagreen Environmental Protection Group Co., Ltd. (applicable after the issue of A Shares) based on specific situations for approval and issue, to report the same to competent authorities for filing and to implement the same upon approval; and to handle matters relating to change of registered capital;
other matters relating to this public offering of Shares and their listing on the Shanghai/ Shenzhen Stock Exchange; and
the authorization to the Board, in its absolute discretion, to deal with matters relating to the initial public offering of Shares is effective for 12 months from the date on which the resolutions of the first EGM for the year 2016 of the Company are passed.

– 7 –

LETTER FROM THE BOARD

V. THE PLAN ON DISTRIBUTION OF ACCUMULATED AND UNDISTRIBUTED PROFITS BEFORE INITIAL PUBLIC OFFERING OF A SHARES

The Board has resolved that, subject to any dividend distribution plan that may be declared by the Board and approved by the Shareholders before the completion of the issue of A Shares, the accumulated and undistributed profits of the Company before the issue of A Shares will be shared by the existing and new Shareholders after the issue of A Shares in proportion to their respective shareholdings.

VI. ADOPTION OF COMPANY SHARE PRICE STABILIZATION MEASURES FOR THE THREE YEARS AFTER LISTING, THE THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN, NEW ARTICLES AND INTERNAL RULES

According to the Guidance for the Articles of Listed Company (Revised in 2014) issued by the CSRC on 20 October 2014, and other PRC applicable laws and regulations and regulatory requirements, the Company proposes to adopt the company share price stabilization measures for the three years after the listing of the shares of the Company, the three-year shareholders’ profit distribution plan, the new Articles and the Internal Rules in compliance with the related requirements of the Hong Kong Listing Rules, the related PRC laws, the Mandatory Provisions for the Articles of Association of Companies to be Listed Outside the PRC, and the listing rules of Shanghai Stock Exchange or Shenzhen Stock Exchange to further improve and enhance the corporate governance of the Company.

The major changes of the new Articles include:

(i) more provisions relating to the number of the issued new A Shares;
(ii) removal of provisions inconsistent with prevailing PRC laws;
(iii) addition of mandatory provisions applicable to A Shares; and
(iv) re-ordering of the Articles to improve their logical order.

The adoption of the company share price stabilization measures for the three years after the listing of the shares of the Company, the three-year shareholders’ profit distribution plan, the new Articles and the Internal Rules is subject to approval at the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares. Special resolutions or ordinary resolutions on the above issues will be proposed for consideration and approval at the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares. The adoption of the new Articles is subject to the approval or endorsement from or registration with the relevant regulatory authorities, and shall come into effect upon approval by the CSRC and completion of the issue of A Shares. The company share price stabilization measures for the three years after the listing of the shares of the Company, the three-year shareholders’ profit distribution plan and the Internal Rules, which are applicable to the rules for the issue and listing of A Shares, shall also come into effect upon completion of the issue of A Shares.

– 8 –

LETTER FROM THE BOARD

The details regarding the company share price stabilization measures for the three years after the listing of the shares of the Company, the three-year shareholders’ profit distribution plan, the new Articles and the Internal Rules are set out in the appendices to this circular as follows:

Appendix I: The company share price stabilization measures for the three years after the listing of the Shares of the Company Appendix II: The three-year shareholders’ profit distribution plan Appendix III: Articles of Association (Draft) Appendix IV: Rules of Procedures for General Meeting (Draft) Appendix V: Rules of Procedures for Board Meeting (Draft) Appendix VI: Rules of Procedures for Supervisory Committee Meeting (Draft) Appendix VII: Working Regulations of Independent Directors (Draft) Appendix VIII: Administrative Regulations of Use of Proceeds (Draft) Appendix IX: Administrative Rules for Connected Transactions (Draft) Appendix X: Regulations of External Guarantee (Draft) Appendix XI: Administrative Regulations of Information Disclosure (Draft) Appendix XII: Administrative Rules of Investor Relations (Draft) Appendix XIII: Implementation Rules for Online Voting (Draft)

VII. THE FEASIBILITY OF PROPOSED INVESTMENT PROJECTS

The proceeds from the initial public offering of A Shares of the Company will be used to invest in the Tianjin Ninghe Straw-fired Power Project, the Tianjin Ninghe Biomass Power Project and the Bengbu Solid Waste Incineration Power Generation Plant, and replenish the working capital of the Company according to their priorities. The Company has conducted a feasibility analysis on the three fixed asset investment projects mentioned above, and the feasibility of each project is as follows:

(I) Tianjin Ninghe Straw-fired Power Project

The Tianjin Ninghe Straw-fired Power Project is located in Lianzhuang Village, Ninghe County, Tianjin. The site area of the project is approximately 114.19 mu. The proposed construction scale of the straw-fire power project is 2×75t/h (evaporation capacity) CFB Straw Incinerators and 2×N15MW Pure Condensing Steam Turbine Generating Units (equipped with 18MW generator) with a planned investment of RMB248.93 million. The straw-fire project has officially commenced construction in February 2016 and is expected to commence operation in the first half of 2017. After the completion of the project, the annual straw treatment capacity is expected to be 187,200 tons.

– 9 –

LETTER FROM THE BOARD

In March 2015, Electric Power Engineering Design Research Branch of Architects & Engineers Co., Ltd of Southeast University Limited issued the Report on Application of Tianjin Ninghe Straw-fired Power Project (2014-1629ax-01) and has taken the view that this project brings economic benefits and is relatively risk-resistant and socially efficient.

(II) Tianjin Ninghe Biomass Power Project

The Tianjin Ninghe Straw-fired Power Project is located in Lianzhuang Village, Ninghe County, Tianjin. The site area of the project is approximately 51.93 mu. The proposed construction scale of the biomass generating project is 2×250 t/d (daily treatment capacity) mechanical grate type garbage incinerators and 1×7.5 MW (installed capacity) condensing power plant with a planned investment of RMB254.3735 million. After the completion of the project construction, the annual urban waste treatment capacity will be approximately 182,500 tons/year.

In January 2015, Electric Power Engineering Design Research Branch of Architects & Engineers Co., Ltd of Southeast University Limited issued the Report on Feasibility Analysis of Tianjin Ninghe Biomass Power Project (2014-1629ax-02), and has taken the view that the Tianjin Ninghe Biomass Power Project is technically feasible and economically reasonable, especially in terms of energy conservation and environmental protection.

(III) Bengbu Solid Waste Incineration Power Generation Plant Project

The Bengbu project is located in Bengbu, Anhui. Its solid waste treatment capacity is 1,500 tons/day, and its construction is divided into two phases, of which the first phase will have daily municipal solid waste treatment capacity of 1,000 tons. For the first phase construction, the project will be installed with 2×605 t/d incinerators and 1×25MW steam turbine generator unit with annual treatment capacity of approximately 441,650 tons. In the second phase construction, a 750t/d waste incineration production line and 1×15MW steam turbine generator unit will be installed. The infrastructure is a one-off construction and the equipment will be installed in different phases. The expected total investment for the project construction will be RMB504.0145 million, and the planned construction period is 22 months. After the completion of the whole project, the annual waste treatment capacity is expected to be 715,400 tons.

– 10 –

LETTER FROM THE BOARD

In September 2015, China Nuclear Power Engineering Co., Ltd. issued the Report on the Feasibility Analysis of Bengbu Solid Waste Incineration Project, and has taken the view that the Bengbu Solid Waste Incineration Power Generation Plant Project is financially sound, riskresistant, economically efficient and with social and environmental prominence.

VIII. LETTER OF UNDERTAKING

As required by the CSRC, the Company shall issue a letter of undertaking in respect of the performance of various undertakings during the process of the initial public offering and listing of A Shares and the statements and representations in the prospectus. The details of the letter of undertaking are set out in Appendix XIV — Letter of Undertaking relating to Repurchase of New A Shares and Reparation and Appendix XV — Letter of Undertaking in respect of the Performance of Various Undertakings.

IX. THE REMEDIAL MEASURES FOR DILUTION OF CURRENT RETURNS

According to the General Office of the State Council’s Opinions on Further Enhancing the Protection of Legitimate Rights and Interests of Small and Medium-sized Investors in the Capital Market issued by the General Office of the State Council on 25 December 2013, ‘‘where a company has an initial public offering of shares or a listed company carries out refinancing activities or merger, acquisition and reorganization that may cause dilution to the current returns of shareholders, it shall undertake and implement measures to recover the dilution of returns.’’

The Company has conducted an analysis of the impact of the issue of A Shares on the dilution of current returns, and has proposed remedial measures for dilution of current returns, which will come into effect after the issue of A Shares.

The full-text of the dilution of current returns by this issue and the proposed remedial measures is set out in Appendix XVI to this circular.

X. REASONS FOR AND BENEFITS OF THE PROPOSED A SHARE ISSUE

If the Proposed A Share Issue is completed, the Company will enhance its corporate image and open new financing channels for its business development and financial resources for the projects mentioned in the paragraph headed ‘‘Use of proceeds from initial public offering of A Shares’’ above, so as to increase the sustainable development capability and core competitiveness of the Company and to promote the Company’s long term development.

The Board is of the opinion that the Proposed A Share Issue is in the interests of the Company and the Shareholders as a whole.

– 11 –

LETTER FROM THE BOARD

XI. EFFECT OF PROPOSED A SHARE ISSUE ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

The shareholding structure of the Company (i) as at the Latest Practicable Date; and (ii) immediately after the completion of the Proposed A Share Issue (assuming that the Company will not issue any other H Shares, Domestic Shares or A Shares from the date of the Latest Practicable Date up to and including the date of the issue of A Shares) is summarized in the table below:

Domestic Shares — Issued — A Shares to be issued H Shares — held by the public Total	Number of Shares of RMB1.00 each as at the Latest Practicable Date % 640,640,208 61.31% — — 404,359,792 38.69% 1,045,000,000 100.00%	Number of Shares of RMB1.00 each immediately after completion of the Proposed A Share Issue % 640,640,208 55.17% 116,200,000 10.01% 404,359,792 34.82% 1,161,200,000 100.00%	Number of Shares of RMB1.00 each immediately after completion of the Proposed A Share Issue % 640,640,208 55.17% 116,200,000 10.01% 404,359,792 34.82% 1,161,200,000 100.00%
			100.00%

The Directors and other connected persons will undertake to the Company that they and their associates will not subscribe for new A Shares. The Company will not issue new A Shares to its connected persons (including their associates).

The Company will ensure that a minimum public float is maintained after the completion of Proposed A Share Issue.

The Company has not conducted any fund raising activities in the past twelve months before the Latest Practicable Date.

– 12 –

LETTER FROM THE BOARD

XII. CONFIRMATION OF CONNECTED TRANSACTIONS OF THE COMPANY IN 2013, 2014 AND 2015

In accordance with the requirements of the Proposed A Share Issue, an ordinary resolution will be proposed at the EGM to consider and approve the connected transactions of the Company for 2013, 2014 and 2015, details of which are set out in Appendix XVII. None of these transactions are subject to the reporting, announcement and/or independent shareholders’ approval requirements under the Hong Kong Listing Rules.

XIII. PROPOSED APPOINTMENT OF DIRECTOR

At the Board meeting held on 1 March 2016, the Board approved the proposal to appoint Mr. Guo Yitao as a non-executive director.

In accordance with the Articles, the proposed appointment of a Director is subject to approval of Shareholders. An ordinary resolution relating to the proposed appointment will be proposed at the EGM for Shareholders’ approval.

The Board is of the opinion that the professional and business experience of Mr. Guo Yitao will bring an additional perspective to the Group’s business and enhance the corporate governance level of the Company.

The biography of Mr. Guo Yitao is set out in Appendix XVIII to this circular.

XIV. GENERAL INFORMATION

The Company will convene the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares for the purpose of, among other things, seeking Shareholders’ approval on the Proposed A Share Issue and other related resolutions. The resolutions 1 to 18 proposed at the EGM and the resolutions 1 to 8 proposed at the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares must be passed in order for the Proposed A Share Issue to proceed. If approval by the Shareholders can be obtained at the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares, the above resolutions shall be effective for a period of 12 months commencing from the date on which such approval is obtained. Nonetheless, it should be noted that apart from the approval by the Shareholders, the Proposed A Share Issue is still subject to the approvals by the CSRC and other relevant regulatory authorities.

There is no assurance that the Proposed A Share Issue will proceed to completion. Shareholders and potential investors are advised to exercise caution in dealing in the Shares of the Company. Further details about the Proposed A Share Issue will be disclosed by the Company in accordance with the Hong Kong Listing Rules once the terms are finalised.

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LETTER FROM THE BOARD

XV. EGM, CLASS MEETING FOR HOLDERS OF H SHARES AND CLASS MEETING FOR HOLDERS OF DOMESTIC SHARES AND PROXY ARRANGEMENT

The EGM notice, the Notice of Class Meeting for Holders of H Shares and the Notice of Class Meeting for Holders of Domestic Shares are set out on pages 233 to 242 of this circular.

Pursuant to the Hong Kong Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. An announcement on the poll results will be published by the Company after the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares in the manner prescribed under the Hong Kong Listing Rules.

Forms of proxy for use at the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares are enclosed with this circular and such forms of proxy are also published on the websites of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Company (www.dynagreen.com.cn). To be valid, the form of proxy must be completed and signed in accordance with the instructions printed thereon and deposited, together with the power of attorney or other authority (if any) under which it is signed or a certified copy of that power of attorney or authority at the Company’s place of business at 2nd Floor, Northeastern Wing, Jiuzhou Electronic Building, 007 Keji South 12th Street, Nanshan District, Shenzhen, 518057, the PRC (for holders of Domestic Shares) or the Company’s H Share Registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong (for holders of H Shares) as soon as possible but in any event not less than 24 hours before the time appointed for holding the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares or any adjournment thereof. Completion and delivery of the form of proxy will not preclude you from attending and voting at the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares if you so wish.

XVI. RECOMMENDATION

The Directors (including all independent non-executive Directors) consider that all resolutions proposed at the EGM, the Class Meeting for Holders of H Shares and Class Meeting for Holders of Domestic Shares are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of such resolutions to be proposed at the EGM, the Class Meeting for Holders of H Shares and the Class Meeting for Holders of Domestic Shares as set out in the EGM Notice, the Notice of Class Meeting for Holders of H Shares and the Notice of Class Meeting for Holders of Domestic Shares.

Yours faithfully By Order of the Board Dynagreen Environmental Protection Group Co., Ltd.[*] Zhi Jun

Chairman

For identification purposes only

– 14 –

THE COMPANY SHARE PRICE STABILIZATION MEASURES FOR THE THREE YEARS AFTER THE LISTING OF THE SHARES OF THE COMPANY

APPENDIX I

Pursuant to the relevant rules and regulations of the China Securities Regulatory Commission, the Company has specifically formulated the Company Share Price Stabilization Measures for the Three Years after the Listing of the Shares of the Company based on the principle of protecting investors’ interests, and its details are set out as follows:

I. CONDITIONS FOR ACTIVATING MEASURES FOR STABILIZING SHARE PRICE

If, within three years from the listing of the Company, the closing prices of the shares of the Company have been lower than the latest audited net assets per share for 20 consecutive trading days (where there have been profit distribution, capitalization of capital accumulation funds, issues of new shares, allotments, etc. after the latest audit date leading to changes to the Company’s net assets or the total number of shares, the net assets per share shall be adjusted accordingly, which will also apply below) and such price level is not attributable to events of force majeure, these measures for stabilizing share prices shall be activated according to the laws and regulations as well as the provisions of the Articles, provided that the Company’s qualifications for listing are not effected.

After the conditions for activating the measures for stabilizing share prices have been triggered, the Company will adopt the following price stabilization measures in sequential order, repurchase of shares by the Company, increase in shareholding by the controlling shareholder and increase in shareholding by the directors and senior management, provided that the price of repurchase or increase in shareholding does not exceed the latest audited net assets per share of the Company.

II. SPECIFIC MEASURES FOR STABILIZATION OF SHARE PRICES

(1) Repurchase of Shares by the Company

The repurchase of its shares by the Company for the purpose of stabilizing the share prices shall be in compliance with the stipulations of relevant laws and regulations such as the ‘‘Administrative Measures for the Repurchase of Public Shares by Listed Companies (Trial Implementation)’’, the ‘‘Supplementary Regulations of the Repurchase of Shares by Listed Companies Using Centralized Auction Price Transaction Method’’ and should not lead to a shareholding distribution in non-compliance with the listing conditions.

Where the repurchase of its shares by the Company shall be carried out for the purpose of price stabilization, it should comply with the following in addition to pursuant to relevant laws and regulations:

The cumulative amount of the funds the Company used to repurchase its shares shall not exceed the aggregate amount of the funds raised in the initial public offering of its shares;
The quantity of the shares repurchased on a single occasion shall not exceed 1% of the total share capital after the issue of the Company; the cumulative quantity of the shares in a single accounting year shall not exceed 2% of the total share capital after the issue of the Company.

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THE COMPANY SHARE PRICE STABILIZATION MEASURES FOR THE THREE YEARS AFTER THE LISTING OF THE SHARES OF THE COMPANY

APPENDIX I

The Company shall adopt the centralized auction price transaction method to repurchase its shares. If, before the implementation of the repurchase plan, the closing prices of the Company’s shares do not satisfy the conditions for activating the measures for stabilizing the share prices, the board of directors may resolve to terminate the repurchase of the shares and not to re-activate the repurchase in the forthcoming 3 months.

Procedures of Activating the Repurchase by the Company are as follows:

Within 5 trading days after the aforesaid conditions for activating the measures for stabilizing the share prices having been triggered, the Company should convene a meeting of the board of directors to consider whether the Company shall repurchase its shares to stabilize the share prices as well as a specific plan for the repurchase;
If the board of directors decides not to repurchase, it shall announce its reasons; if it decides to repurchase, it shall announce its plan and convene a general meeting within 30 trading days to consider the relevant share repurchase resolution;
After the consideration and passing of the relevant share repurchase resolution by the general meeting, the Company shall fulfill the procedures of informing its creditors and putting it on record (if necessary) according to law. The resolution passed by the general meeting as regard the repurchase of the shares shall have to be passed by the shareholders attending the meeting, who hold more than 2/3 of the voting rights present in the meeting;
From the day of the general meeting passing the resolution relating to the repurchase of the shares, the Company should fulfill the statutory formalities relating to the repurchase, and should complete the repurchase thereof within 30 trading days after the fulfillment of the relevant statutory formalities. After the completion of the implementation of the repurchase plan, the Company should make an announcement on the report on the change of the Company shareholding within 2 trading days, cancel the repurchased shares and handle the registration formalities of the change with the business registration authorities within 10 trading days according to law.

Undertaking of the shareholders currently holding more than 5% of the shares: If, within three years from the listing of the Company, the conditions for activating the measures for stabilizing the share prices have been triggered, and where the repurchase of the shares by the Company is deemed necessary for the purpose of stabilizing the share prices, if I/we hold(s) the shares of Dynagreen Environmental Protection Group Co. Ltd., at the time when the relevant share repurchase resolution shall be considered in the general meeting, I/we shall vote for the resolution to repurchase in the general meeting.

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THE COMPANY SHARE PRICE STABILIZATION MEASURES FOR THE THREE YEARS AFTER THE LISTING OF THE SHARES OF THE COMPANY

APPENDIX I

(2) Increase of Shareholding by the Controlling Shareholder (De facto Controller, hereinafter called the ‘‘Controlling shareholder’’)

The Controlling shareholder of the Company should increase his/her shareholding of the shares of the Company in accordance with the conditions and requirements of laws and regulations such as the ‘‘Methods for the Management of Acquisitions by Listed Companies’’.

When one of the following conditions occurs, the Controlling shareholder of the Company should stabilize the share prices of the Company by way of increasing his/her shareholding:

After the completion of the implementation of the share repurchase plan of the Company, the conditions for triggering the activation of the measures for stabilizing the share prices are yet to be satisfied;
Within 3 months after the termination by the Company of the share repurchase plan, the conditions for the activation of the measures for stabilizing the share prices are triggered again.

Within 2 trading days after any one of the aforesaid conditions is satisfied, the Company shall issue a notice in writing to the Controlling shareholder to increase his/her shareholding to stabilize the share prices.

Procedures of activating the increase of shareholding by the Controlling shareholder are as follows:

If the Controlling shareholder is to increase his/her shareholding for the purpose of stabilizing the share prices, the Controlling shareholder of the Company should within 2 trading days after receipt of the Company’s notice, inform the Company in writing as to whether he/she has any specific plan for increasing his/her shareholding which shall be announced by the Company. The announcement should disclose the information such as the range of quantity of the intended increase, price brackets and total amount;
From the day the announcement of the increase was made, the Controlling shareholder should fulfill the statutory formalities relating to the increase, and should complete the increase thereof within 30 trading days after handling the relevant statutory formalities according to law.
After the completion of the implementation of the increase plan, the Company should announce the report on the change of the Company shareholding within 2 trading days.

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THE COMPANY SHARE PRICE STABILIZATION MEASURES FOR THE THREE YEARS AFTER THE LISTING OF THE SHARES OF THE COMPANY

APPENDIX I

Undertaking of the Controlling shareholder of the Company: The funds used on the increase of its shareholding on a single occasion shall not be lower than 30% of the total amount of the remuneration and compensation (after tax) obtained from the Company last year and 50% of the total cash dividend (after tax) obtained from the Company last year, whichever is the higher.

(3) Increase of shareholdings by directors and senior management of the Company under employment of the Company and who are receiving remuneration and compensation (not including independent directors)

The Company’s directors (not including independent directors) and the senior management who are under employment of the Company and who receive remuneration and compensation should stabilize the share prices of the Company by way of increasing the shareholdings in accordance with the conditions and requirements of the laws and regulations such as the ‘‘Methods for the Management of Acquisitions by Listed Companies’’ and ‘‘Administrative Rules for the Shareholdings and Changes of Shares Held by Directors, Supervisors and Senior Management of Listed Companies’’.

If the conditions for the activation of the measures for stabilizing the share prices are still triggered after the day when the Controlling shareholder’ quantity of increased shareholding on a single occasion has reached its maximum limit, the directors and the senior management should stabilize the share prices of the Company by way of increasing their shareholdings. Within 2 trading days after any one of the aforesaid conditions is satisfied, the Company shall issue a notice in writing to the directors and the senior management who have the obligation to increase their shareholdings to stabilize the share prices.

Procedures of activating the increase of shareholdings by the directors and senior management:

If the directors and senior management are to increase their shareholdings for the purpose of stabilizing the share prices, the directors and senior management of the Company, who have the obligation to increase their shareholdings, should within 2 trading days after receipt of the Company’s notice, inform the Company in writing as to whether they have any specific plan for increasing their shareholdings which shall be announced by the Company. The announcement should disclose the information such as the range of quantity of the intended increase, price brackets and total amount;

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THE COMPANY SHARE PRICE STABILIZATION MEASURES FOR THE THREE YEARS AFTER THE LISTING OF THE SHARES OF THE COMPANY

APPENDIX I

From the day the announcement of the increase in shareholding is made, the directors and senior management of the Company, who have the obligation to increase their shareholdings, should fulfill the statutory formalities relating to the increase, and should complete the increase thereof within 30 trading days after handling the relevant statutory formalities according to law.
After the completion of the implementation of the increase plan, the Company should announce the report on the change of the Company shareholdings within 2 trading days.

Undertaking of the directors and senior management of the Company who have the obligation to increase their shareholdings: The funds used on the increase of shares on a single occasion will not be lower than 30% of the total sum of the remuneration and compensation (after tax) received from the Company last year, but the funds used on the increase of shares on a single occasion in the last accounting year will not exceed 60% of the total sum of the remuneration and compensation (after tax) received from the Company last year.

The Company’s directors (not including independent directors) and senior management who are under the employment of the Company and who receive remuneration and compensation should sign the relevant undertaking in accordance with the provisions of these measures. When the Company intends to employ new directors (not including independent directors) and senior management who are to be under the employment of the Company and who are to receive remuneration and compensation within 3 years after the listing, the Company shall procure them to sign the relevant undertaking according to the provisions of these measures.

III. PROTECTIVE MEASURES FOR THE IMPLEMENTATION OF THESE MEASURES

(1) Punishment measures for the Company’s breach of these measures

Timely and adequately disclose the specific reasons for failing and being unable to perform its undertaking or for being unable to perform on time;
Put forward to investors its supplementary undertaking or alternative undertaking in order to best protect the interests of the investors;
Submit the supplementary undertaking or alternative undertaking aforesaid for consideration by the general meeting;
Compensate the investors according to law where the breach of the undertaking causes loss or damage to the investors.

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THE COMPANY SHARE PRICE STABILIZATION MEASURES FOR THE THREE YEARS AFTER THE LISTING OF THE SHARES OF THE COMPANY

APPENDIX I

(2) Punishment measures for the Company’s Controlling shareholder’s breach of these measures

The Controlling shareholder of the Company shall not:

Abstain or cast a vote against the share repurchase plan put forward in the general meeting leading to the failure of the passing of the resolution to stabilize the share prices;
When circumstances dictate that the Controlling shareholder should increase his/her shareholding, and the Controlling shareholder has not, within 2 trading days after receipt of the notice from the Company, notified the Company in writing to announce his/her specific plan for increasing his/her shareholding;
The Controlling shareholder has notified the Company in writing to announce his/ her specific plan for the increasing his/her shareholding, but failed to implement the same.

When the Controlling shareholder of the Company is in breach of his/her undertaking, the Controlling shareholder should:

Timely and adequately disclose the specific reasons for failing and for being unable to perform his/her undertaking or for being unable to perform on time;
Put forward to investors his/her supplementary undertaking or alternative undertaking in order to best protect the interests of the investors;
Submit the supplementary undertaking or alternative undertaking aforesaid for consideration by the general meeting;
Compensate the Company or the investors according to law where the breach of the undertaking causes loss or damage to the Company or the investors;
The Company shall have the right to withhold the cash dividend payable to the Controlling shareholder, which is equivalent to the amount of money which the Controlling shareholder should use to perform his/her obligation to increase his/her shareholding until the Controlling shareholder perform his/her obligation; and if this occurs for more than two consecutive times, the Company may withhold the cash dividend payable to the Controlling shareholder, which is equivalent to the amount of money which the Controlling shareholder should use to perform his/her obligation and use it for the repurchase plan with the Controlling shareholder losing his/her right of claim for the corresponding cash dividend.

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THE COMPANY SHARE PRICE STABILIZATION MEASURES FOR THE THREE YEARS AFTER THE LISTING OF THE SHARES OF THE COMPANY

APPENDIX I

(3) Punishment measures for the breach of these measures by the directors and senior management of the Company

The directors and senior management of the Company shall not:

Abstain or cast a vote against the share repurchase plan put forward in the general meeting leading to the failure of the passing of the resolution for the Company to repurchase the shares to stabilize the share prices;
When circumstances dictate that the directors and senior management should increase their shareholdings, and the directors and senior management who have the obligation to increase their shareholdings have not, within 2 trading days after receipt of the notice from the Company, notified the Company in writing to announce their specific plans for increasing their shareholdings;
The directors and senior management have notified the Company in writing to announce their specific plans for increasing their shareholdings, but failed to implement the same.

When the directors and senior management of the Company who have the obligation to increase their shareholdings have failed to perform their obligations to increase their shareholdings according to the relevant agreement of these measures when they are under employment of the Company, the Company shall have the right to withhold the salaries (the part after deduction of standard local minimum wages) which is equivalent to the amount of money which they should use to perform their obligations on their behalf; where the directors and senior management of the Company, who have the obligations to increase their shareholdings, have failed to perform actively their obligations to increase their shareholdings as prescribed under these measures for more than two consecutive times when they are under employment of the Company, the Controlling shareholder or the board of directors, the Supervisory Committee or the majority of the independent directors shall submit their proposal to the general meeting for the removal of the director(s) concerned and the board of directors shall dismiss the senior management concerned.

IV. THESE MEASURES SHALL TAKE EFFECT FOR 3 YEARS FROM THE DAY OF CONSIDERATION AND APPROVAL BY THE GENERAL MEETING AND THE INITIAL PUBLIC OFFERING AND LISTING OF A SHARES.

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APPENDIX II

THE THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

In order to fully safeguard the legitimate interests of the shareholders of the Company, provide stable and sustainable investment returns to shareholders and maximize the investment returns of shareholders, the board of directors prepared the Three-year Shareholders’ Profit Distribution Plan of Dynagreen Environmental Protection Group Co., Ltd. (hereinafter referred to the ‘‘Shareholders’ Profit Distribution Plan’’), according to the relevant requirements of laws, regulations, and normative documents including the Company Law, the Articles of Association, the Notice Regarding Matters in relation to Further Implementation of Cash Dividends Distribution of Listed Companies (Zheng Jian Fa [2012] No. 37) and Guidelines No. 3 on the Supervision and Administration of Listed Companies — Distribution of Cash Dividends of Listed Companies (Zheng Jian Fa [2013] No. 43) issued by the CSRC.

I. FACTORS CONSIDERED IN FORMULATING SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

The Company places an emphasis on its business operations and long-term sustainable development, and has built a sustainable, stable and scientific and reasonable return mechanism to its investors based on a comprehensive analysis of factors such as corporate development strategy and external environment, having fully taken into account the requirements and needs of shareholders, capital costs, development trend, profit scale and bank credit. The profit distribution policy shall be sustainable and stable, and shall not impact the sustainable operation of the Company.

II. PRINCIPLES FOR FORMULATION OF SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

The Company implements a dividend distribution policy which entitles the shareholders to the same rights and same dividends, under which shareholders are entitled to receive dividends and other kinds of distribution of interests based on the number of shares held by them. The Company adopts a consistent and stable profit distribution policy, which emphasizes investors’ reasonable investment returns while maintaining a consistent and stable return mechanism to investors by taking into account the profitability and sustainable business development of the Company. The Company shall formulate its profit distribution plans in accordance with the prevailing Articles of Association. The Company’s profit distribution shall not exceed the range of the accumulated distributable profits or adversely affect the Company’s ability to continue operations. The shareholders, the board of directors and the supervisory committee of the Company shall, in the decision-making and discussion process in respect of profit distribution policies, fully consider and listen to the opinions of and requests from independent directors, supervisors, and shareholders (especially public investors) in their respective meetings.

III. THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN AFTER LISTING

(1) Means of profit distribution: the Company may declare profit distribution by cash, stock or a combination of both, and consider payment of cash dividends as a matter of priority. Profit distribution shall not exceed the accumulated profit distributable or adversely affect the sustainable operating ability of the Company. The Company may distribute interim dividends according to profit and capital needs of the Company.

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APPENDIX II

THE THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

(2) The Company shall give priority to the payment of cash dividends. If no cash dividends are available, no scrip dividends shall be issued for the same year. Any cash dividends proposed shall satisfy the following criteria: the current profit and accumulated retained earnings of the Company shall be positive and its cash flow shall be sufficient to support the continuous operation and long-term development of the Company; the profit to be distributed in cash shall not be less than 10% of the distributable profits of the year, and the cumulative profit distributed in cash in any three consecutive financial years shall not be less than 30% of the average distributable profit of the Company for such three years.

With a view to providing investment returns to its shareholders and sharing its corporate values, the Company may declare the payment of scrip dividends in addition to the cash dividends, taking into account practical and reasonable factors such as the growth of the Company, dilution of net asset value per share and the maintenance of an adequate reflection of its share capital on its share price.

Where the Company records surplus for consecutive years, each cash dividend shall not be paid more than 24 months apart.

(3) The board of directors shall distinguish the following situations and formulate/diversified cash dividend distribution proposals in accordance with requirements of the Articles of Association and comprehensively take into account of the Company’s industry, stage of development, business model, and profitability and other factors such as whether there are significant capital expenditure arrangements:
If the Company is at a mature stage of development and has no significant capital expenditure arrangements, the proportion of cash dividends should be at least 80% in the profit distribution;
If the Company is at a mature stage of development and has significant capital expenditure arrangements, the proportion of cash dividends should be at least 40% in the profit distribution;
If the Company is at a development stage and has significant capital expenditure arrangements, the proportion of cash dividends should be at least 20% in the profit distribution.

When it is difficult to assess the Company’s stage of development but there are significant capital expenditure arrangements, the profit distribution may be determined in accordance with the foregoing provisions.

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APPENDIX II

THE THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

IV. DECISION-MAKING MECHANISM ON SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

(1) The Company reviews the Shareholders’ Profit Distribution Plan at least once every three years, makes appropriate and necessary amendments on prevailing dividend distribution policy in accordance with the opinions of shareholders (especially public investors), independent directors and external supervisors, confirms the shareholders’ return plan and submits to the general meeting for online voting. However, the profit distribution policy as amended by the Company should not contravene the relevant requirements of the CSRC and the stock exchange of the place where the Company’s shares are listed.
(2) The Company’s actual profit distribution plan shall be proposed by the board of directors, taking into account the provisions of the Articles of Association, profitability, capital supply, needs and shareholders’ return plan, and shall be submitted to the general meeting for approval after the approval by half of the supervisory committee.

The board of directors shall specify its plan for utilizing undistributed profits in the profit distribution plan. For dividend payment, it shall specify the reasonableness and feasibility of dividend payment. In the event where the board of directors fails to declare cash dividends in accordance with the profit distribution policies as specified in the Articles of Association, the board of directors shall provide specific explanations in the annual profit distribution plan on issues such as the reasons for failing to declare cash dividends or declaration of cash dividends which is below the required level, the intended use of retained earnings by the Company and the expected yield of investment. The board of directors shall express opinions in this regard, and submit it to the general meeting for consideration. Such specific instructions shall be disclosed in the announcement relating to resolutions made by the board of directors and periodic reports of the Company.

Independent directors shall seek opinions from small and medium-sized shareholders and propose a profit distribution plan and directly submit it to the board of directors for approval.

The Company shall, through effective methods including investor relation interactive platform, company website, telephone, fax and email, seek opinions on profit distribution from investors. The secretary to the board of directors shall be responsible for summarizing such opinions and explaining the at the meeting of the board of directors at which the profit distribution proposal will be considered.

The profit distribution plan, which shall be considered by the board of directors, shall be passed by more than 2/3 of independent directors. When considering specific plans for cash dividend, it shall conscientiously consider and verify the opportunity, conditions and minimum proportion of cash payment, adjustment conditions and decision-making procedural requirements and other matter. Independent directors shall express specific independent opinions on such specific plan before considering the profit distribution plan. The board of directors will submit the plans to the general meeting for approval upon approving the same at the board level.

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APPENDIX II

THE THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

Before considering the cash dividend plans by the general meeting, it shall proactively communicate and interact with shareholders, especially small and medium-sized shareholders, through various channels, and fully listen to opinions and request of shareholders. Apart from onsite voting, the Company shall provide shareholders with online voting at the general meeting. The profit distribution plan shall be approved by a simple majority of shareholders who attend the meeting, including their proxies. After the resolution on the profit distribution plan has been approved, the board of directors shall complete the payment of the dividend within 2 months from the date of the general meeting.

V. OTHERS

For matters unspecified in this plan, they shall be dealt with in accordance with the relevant laws and regulation, normative documents and requirements of the Articles of Association.

– 25 –

ARTICLES OF ASSOCIATION (DRAFT)

APPENDIX III

Articles of Association

of

==> picture [187 x 13] intentionally omitted <==

Dynagreen Environmental Protection Group Co., Ltd.*

(A joint stock limited company incorporated in the People’s Republic of China)

(Applicable after the issue of A shares)

(As approved at the 1st extraordinary general meeting of the Company in 2016 held on 18 April 2016)

– 26 –

ARTICLES OF ASSOCIATION (DRAFT)

APPENDIX III

Chapter 1	General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	29
Chapter 2	Operational Objectives and Scope of Business	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	32
Chapter 3	Shares, Registered Capital and Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . .		33
Chapter 4	Increase, Reduction and Repurchase of Shares	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	37
Chapter 5	Financial Assistance for Purchase of Company Shares . . . . . . . . . . . . . . . . . . . . .		40
Chapter 6	Share Certificates and Register of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . .		42
Chapter 7	Rights and Obligations of Shareholders . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	47
Chapter 8	General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	52
Section	1 General Provisions on General Meeting . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	52
Section	2 Proposing and Convening of General Meeting	. . . . . . . . . . . . . . . . . . . . . . . . . . .	54
Section	3 Proposals and Notices of General Meeting . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	56
Section	4 Convening General Meeting . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	59
Section	5 Voting and Resolutions at General Meetings .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	63
Chapter 9	Special Procedures for Voting at Class Meeting	. . . . . . . . . . . . . . . . . . . . . . . . . . .	66
Chapter 10	Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	69
Section	1 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	69
Section	2 Independent Directors . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	70
Section	3 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	71
Chapter 11	Secretary to the Board of Directors . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	78
Chapter 12	Company Secretary . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	81
Chapter 13	General Manager . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	82
Chapter 14	Supervisory Committee . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	84
Section	1 Supervisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	84
Section	2 Supervisory Committee . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	84

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Chapter 15	Qualifications and Obligations of the Company’s Directors, Supervisors
	and Other Senior Management Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
Chapter 16	Financial Accounting System and Distribution of Profits . . . . . . . . . . . . . . . . .	95
Chapter 17	Appointment of an Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	101
Chapter 18	Merger, Division, Dissolution and Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . .	104
Section	1 Merger and Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	104
Section	2 Dissolution and Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	105
Chapter 19	Amendment to Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	108
Chapter 20	Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	109
Chapter 21	Resolution of Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	111
Chapter 22	Supplementary Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	112

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CHAPTER 1 GENERAL

Article 1 To safeguard legitimate rights and interests of Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Company’’) and its shareholders and creditors, and to regulate organization and acts of the Company, these Articles of Association are formulated pursuant to the Company Law of the PRC (the ‘‘Company Law’’), the Securities Law of the PRC (the ‘‘Securities Law’’), the Special Provisions of State Council on Overseas Issuance and Listing for Joint Stock Limited Company (the ‘‘Special Provisions’’), the Mandatory Provisions for the Articles of Association of Companies to be Listed Outside the PRC, the Guidelines for Articles of Association of Chinese Listed Companies (Revised 2014), listing rules of other places of listing, and other relevant provisions.

Article 2 The Company is a joint stock limited company duly incorporated in accordance with the Company Law, and other relevant laws, regulations and regulatory documents.

According to the Approval on State-Owned Equity Management Issues Related to Dynagreen Environmental Protection Group Co., Ltd. (Preparing) (Jing Guo Zi Chan Quan [2011] No.227), issued by State-owned Assets Supervision and Administration Commission of Beijing on 15 December 2011, and the Approval on the Consent for Dynagreen Environmental Protection Group Co., Ltd. to Change into a Foreign Invested Joint Stock Company (SZSITIC Zi Zi [2012] No.0051), issued by the Shenzhen Science, Industry, Trade and Information Commission on 10 January 2012, the Company was established by way of promotion, with all shareholders of the original Shenzhen Dynagreen Environmental Engineering Co., Ltd. as the promoters, through the overall conversion of all audited book net assets of Shenzhen Dynagreen Environmental Engineering Co., Ltd. as at 31 May 2011 into the shares of the Company, and was registered with the Market Supervision Administration of Shenzhen Municipality and obtained its Enterprise Legal Person Business License (registration number 440301501133392) on 23 April 2012.

The promoters of the Company are:

Beijing State-Owned Assets Management Co., Ltd., a company incorporated and existing under the laws of the PRC, address: 16/F, Tower B, Fu Kai Building (富凱大廈), 19 Finance Street, Xicheng District, Beijing, telephone: 010-66573366, legal representative: Li Aiqing (李愛慶), nationality: Chinese, position: Chairman.
Beijing State-Owned Assets Management (Hong Kong) Company Limited, a company incorporated and existing under the laws of the HKSAR of the PRC, address: 1/F, Siu Ping Commercial Building, 104 Jervois Street, Sheung Wan, Hong Kong, telephone: 00852-28508228, representative: Guo Yanbin, nationality: Chinese, position: Chairman.
Anhui Jianghuai Growth Investment Fund Centre (Limited Partnership), a limited partnership established and existing under the laws of the PRC, address: Room 1303, Investment Building, 1757 Tu Shandong Street, Bengbu City, Anhui Province (安徽省蚌

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埠市塗山東路1757號投資大廈1303室), telephone: 0552-3183836, managing partner: Anhui Botao Chuangtou Fund Management Company Limited (authorized representative: LIU Shuguang, nationality: Chinese).

Poly Longma Hongli Equity Investment Fund (Tianjin) Limited Partnership (Limited Partnership), a limited partnership established and existing under the laws of the PRC, address: Room Q303, 3/F, 6 Binghai Finance Street, 52 Xin Cheng West, Development Zone, Tianjin (天津開發區新城西路52號濱海金融街6號樓三層Q303室), telephone: 01085655818, managing partner: Poly Longma Asset Management Co., Ltd. (authorized representative: Chen Lin (陳林), nationality: Chinese).
Beijing Venture Capital Co., Ltd., a company incorporated and existing under the laws of the PRC, address: 10/F, Haidian Science Building, 3 Zhongkwancun South Street, Haidian District, Beijing, telephone: 010-68943739, legal representative: Xu Zhe (徐哲), nationality: Chinese, position: Chairman.
Shenzhen Jingxiu Investment Partnership (Limited Partnership), a limited partnership established and existing under the laws of the PRC, address: Room 704H, Haosheng Commercial Centre, Dongbin Road, Nanshan District, Shenzhen, telephone: 075586360162, managing partner: Qiao Dewei, nationality: Chinese.

Article 3 The Company was approved by the China Securities Regulatory Commission (hereinafter referred to as the ‘‘CSRC’’) on 13 May 2014 to initially issue 345,000,000 overseas listed foreign shares to the public, and was listed on The Stock Exchange of Hong Kong Limited (hereinafter referred to as the ‘‘Hong Kong Stock Exchange’’) on 19 June 2014.

The Company was approved by the CSRC on [.] to initially issue [.] RMB ordinary shares to the public, and was listed on the [.] stock exchange on [.].

Article 4 The registered Chinese name of the Company is 綠色動力環保集團股份有限公司.

The English name of the Company is Dynagreen Environmental Protection Group Co., Ltd.

Article 5 Address of the Company: 2nd Floor, Jiuzhou Electronic Building, 007 Keji South 12th Street, Nanshan District, Shenzhen

Postal code: 518057 Telephone No.: 0755-33631280 Fax No.: 0755-33631220

Article 6 The chairman of the board of directors is the Company’s legal representative.

Article 7 The Company is a perpetual joint stock limited company.

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Article 8 All the Company’s assets are divided into equal shares. Each shareholder is responsible to the Company up to his subscribed shares. The Company is responsible for its debts to the extent of its total assets.

Article 9 These Articles of Association are approved by a resolution adopted at the general meeting of the Company and by competent authorities, and shall take effect on the day of the listing and trading of RMB ordinary shares under the initial public offering in the PRC. After these Articles of Association have become effective, the original Articles of Association shall be replaced by these Articles of Association.

Article 10 From the effective date of these Articles of Association, these Articles of Association shall become a legally binding document which regulates the Company’s organization and acts, the rights and obligations between the Company and its shareholders, and amongst the shareholders.

These Articles of Association shall be legally binding on the Company, its shareholders, directors, supervisors, senior management members. Each of such persons shall have the rights and obligations in relation to the Company in accordance with these Articles of Association.

Without prejudice to Article 245 hereof, and according to these Articles of Association, a shareholder can sue another shareholder, the Company, or any directors, supervisors or senior management members of the Company. The Company can sue any of its shareholders, directors, supervisors and senior management member.

For the purposes of the above paragraph, the term ‘‘sue’’ shall include the initiation of proceedings in a court or application to an arbitration institution for arbitration.

The term ‘‘senior management member’’ in these Articles of Association refers to the general manager (also known as ‘‘president’’), deputy general manager (also known as ‘‘vice president’’), financial controller, secretary of the board of directors, chief engineer and other persons expressly appointed by the board of directors as the Company’s senior management. The terms ‘‘general manager’’, ‘‘deputy general manager’’ and ‘‘financial controller’’ shall refer to the ‘‘manager’’, ‘‘deputy manager’’ and ‘‘financial manager’’ under the Company law.

Article 11 The Company may invest in other enterprises. However, it shall not become a capital contributor that shall bear joint and several liabilities for the debts of the enterprises invested, unless otherwise provided for by law.

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CHAPTER 2 OPERATIONAL OBJECTIVES AND SCOPE OF BUSINESS

Article 12 The operational objectives of the Company are: to facilitate the development of environmental protection industry in the PRC by strengthening economic collaboration and encouraging technical exchange, and to secure satisfactory returns.

Article 13 The Company’s scope of business covers: technological research and development in environment-friendly waste-incineration, research and development systems design for related equipment, the investment, construction, management, operation and management of waste treatment projects and the provision of technological services for the projects and technical consulting (where license or relevant qualification is required for any operation under the aforesaid business scope, such operation shall be conducted in compliance with the relevant requirements).

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CHAPTER 3 SHARES, REGISTERED CAPITAL AND TRANSFER OF SHARES

Article 14 The Company shall have ordinary shares at all times. Subject to the approval of authorities authorized by the State Council, the Company may, according to its requirements, create different classes of shares.

Article 15 The shares of the Company shall be in the form of share certificates.

All the shares issued by the Company shall have a par value which shall be RMB1.00 for each share.

The RMB mentioned in the preceding paragraph refers to the lawful currency of the People’s Republic of China.

Article 16 The shares of the Company shall be issued based on the principles of openness, fairness and justice. Shares of the same class shall carry equal rights.

For the same class of shares of the same issuance, each share shall be issued at the same conditions and price. The price paid by any organization or individual for each share of the same class during the same share issue shall be the same.

Article 17 The Company may issue shares to investors inside the PRC and investors outside the PRC subject to approval of the State Council authorities in charge of securities.

For the purpose of the preceding paragraph, the term ‘‘investors outside the PRC’’ shall refer to investors from foreign countries or Hong Kong, Macau or Taiwan that subscribe for shares issued by the Company. The term ‘‘investors inside the PRC’’ shall refer to investors inside the People’s Republic of China, excluding the above-mentioned regions, which subscribe for the shares issued by the Company.

Article 18 The shares issued by the Company to investors inside the PRC for subscription in Renminbi shall be referred to as domestic shares. The domestic shares listed in the PRC shall be referred to as domestically listed domestic shares (‘‘A shares’’). The shares issued by the Company to investors outside the PRC for subscription in foreign currency shall be referred to as ‘‘foreign shares’’. The foreign shares listed overseas shall be referred to as ‘‘overseas listed foreign shares’’. Holders of domestic shares and overseas listed foreign shares are all ordinary shareholders of the Company, and shall have the same obligations and rights.

The term ‘‘foreign currency’’ in the preceding paragraph shall refer to any lawful currency of a country or region other than RMB, which is freely convertible and accepted by state foreign exchange authority, and may be used to pay for the shares of the Company.

The overseas listed foreign shares issued by the Company and listed in Hong Kong (the ‘‘H shares’’) shall refer to shares with a par value denominated in RMB, which are approved by the Hong Kong Stock Exchange for listing and will be subscribed for and traded in Hong Kong dollars.

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Subject to approval of the securities regulatory authorities under the State Council, the Company’s domestic shares and foreign shares can be converted into overseas listed foreign shares for listing and trading on the stock exchange outside the PRC. The listing and trading of such shares, after being converted into overseas listed foreign shares, on overseas stock exchanges shall comply with the regulatory procedures, regulations and requirements of the overseas securities markets. The conversion of domestic shares and foreign shares to overseas listed foreign shares and their listing and trading on the stocks exchanges outside the PRC do not require a voting at a general meeting or any class shareholder meeting. The overseas listed foreign shares so converted and the outstanding overseas listed foreign shares shall be of the same class of shares.

Article 19 Upon approval by the approval department of the Company, the Company issued 700,000,000 ordinary shares to the promoters at the time of establishment, among which:

514,771,140 shares have been subscribed and held by Beijing State-Owned Assets Management Co., Ltd., representing 73.54% of the total issued ordinary shares of the Company;

69,725,295 shares have been subscribed and held by Anhui Jianghuai Growth Investment Fund Centre (Limited Partnership), representing 9.96% of the total issued ordinary shares of the Company;

48,806,817 shares have been subscribed and held by Poly Longma Hongli Equity Investment Fund (Tianjin) Limited Partnership (Limited Partnership), representing 6.97% of the total issued ordinary shares of the Company;

24,859,792 shares have been subscribed and held by Beijing State-Owned Assets Management (Hong Kong) Company Limited, representing 3.55% of the total issued ordinary shares of the Company;

20,918,478 shares have been subscribed and held by Beijing Venture Capital Co., Ltd., representing 2.99% of the total issued ordinary shares of the Company;

20,918,478 shares have been subscribed and held by Shenzhen Jingxiu Investment Partnership (Limited Partnership), representing 2.99% of the total issued ordinary shares of the Company.

Article 20 The Company has 1,161,200,000 shares in total, all of which are ordinary shares including 756,840,208 domestically listed domestic shares and 404,359,792 overseas listed foreign shares.

Article 21 The domestic shares issued by the Company are centrally deposited at the China Securities Depository and Clearing Corporation Limited. The H shares of the Company are mainly under the custody of the central depository of Hong Kong Securities Clearing Company Limited and may also be held by individual shareholders in their own names.

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Article 22 Subject to approval of the securities regulatory authorities under the State Council, the Company’s board of directors may issue domestic shares and overseas listed foreign shares separately according to the issuance plans as approved by the securities regulatory authorities.

Unless otherwise required by the securities regulatory authorities, the Company may implement such plans of separate issuance in accordance with the preceding paragraph within 15 months from the date of such approval by the securities regulatory authorities.

Article 23 Where the Company separately issues overseas-listed foreign-invested shares and domestic-invested shares, and the total number of shares to be issued is within the issuance proposals, the shares should be fully allotted in one issuance. If this is not possible due to special circumstances, the shares may, subject to the approval of the securities regulatory authorities of the State Council, be issued on separate occasions.

Article 24 The registered capital of the Company is RMB1,045,000,000 at present.

Upon completion of the issue of A shares, the registered capital of the Company shall be RMB1,161,200,000. The Company shall register with the Market Supervision Administration of Shenzhen Municipality for the relevant changes in its registered capital in accordance with the actual number of shares issued and file the same with the securities regulatory authorities of the State Council for record.

Article 25 Unless otherwise provided in laws, administrative regulations, listing rules of the shares’ listing place, or these Articles of Association, the shares of the Company shall be transferrable and subject to no lien. Any transfer of the Company’s shares shall be registered in the share registrar appointed by the Company.

Article 26 The Company shall not accept any pledge created over its own shares.

Article 27 The shares of the Company held by the promoters shall not be transferred within one year from the date of establishment of the Company. The shares issued before the Company’s initial public offering shall not be transferred within one year from the date on which the shares of the Company are listed and traded on a stock exchange.

Each director, supervisor and senior management member of the Company shall report to the Company the shares of the Company held by him/her and the changes thereof. During the term of his/her office, the shares transferred by him/her each year shall not exceed 25% of the total shares of the Company that he/she holds. The shares of the Company held by the aforesaid persons shall not be transferred within one year from the date on which the shares of the Company are listed and traded on a stock exchange. If any of the aforesaid persons leaves his/her post, he/she shall not transfer the shares of the Company that he/she holds within six months from such departure. If the listing rules applicable to the shares of the Company provide otherwise on restrictions on transfer of H shares, such rules shall prevail.

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Article 28 If a director, supervisor or senior management member of the Company, or a shareholder holding 5% or more of the shares of the Company sells the shares of the Company within six months after buying those shares, or buys the shares within six months after selling, all the gains arising thereof shall belong to the Company. Such gains shall be collected by the board of directors of the Company. But if a securities company holds 5% or more of the shares the Company due to purchase of unsold shares from its underwriting, the sale of these shares shall not be subject to the said six month restriction.

If the board of directors of the Company does not enforce the foregoing paragraph, the shareholders may request the board to do so within 30 days. If the board does not enforce such right within the said period, the shareholders are entitled to commence litigations in court in their own names for the interest of the Company.

If the board of directors of the Company does not enforce the first paragraph of this Article, the accountable directors shall be jointly and severally responsible in accordance with the law.

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CHAPTER 4 INCREASE, REDUCTION AND REPURCHASE OF SHARES

Article 29 Subject to approval by a resolution at the general meeting, the Company may increase the capital as required for its operation and development, pursuant to the laws, regulations and relevant provisions of these Articles of Association.

The Company may increase its capital by the following methods:

(1) Public issuance of shares;
(2) Non-public issuance of shares;
(3) Distribution of bonus shares to existing shareholders;
(4) Conversion of common reserve into capital;
(5) Other methods prescribed by the law and regulations or approved by the relevant regulatory authorities.

After the Company’s increase of share capital by means of the issuance of new shares has been approved in accordance with the provisions of these Articles of Association, the issuance should be made in accordance with the procedures set out in the relevant laws and administrative regulations.

Article 30 The Company may reduce its registered capital. If the Company reduces its registered capital, such reduction shall be made in accordance with the requirements of the Company Law, other related regulations and these Articles of Association.

Article 31 If the Company reduces its registered capital, a balance sheet and an inventory of assets must be prepared.

When the Company reduces its registered capital, the Company shall notify its creditors and make a public announcement in accordance with provisions of the Company Law, and repay its debts or provide corresponding guarantees as required by the creditors.

The Company’s registered capital may not, after any reduction in capital, be less than the minimum amount prescribed by law.

Article 32 The Company may, in accordance with the procedures set out in these Articles of Association and applicable laws and with the approval of the competent authorities, repurchase its outstanding shares under the following circumstances:

(1) cancellation of shares in order to reduce its registered capital;
(2) merger with another company holding shares in the Company;
(3) rewarding the employees of the Company with shares;

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(4) when requested by any shareholder to purchase his shares because this shareholder objects to any resolution of merger or division made by the Company at general meeting; or
(5) other circumstances permitted by law, administrative regulations or competent authorities.

Article 33 The Company may repurchase shares in one of the following ways, with the approval of the relevant competent authority:

(1) by making an offer for the repurchase of shares to all its shareholders on a pro-rata basis;
(2) by repurchase through open transactions on a stock exchange;
(3) by off-market repurchase through an agreement; or
(4) by any other means which is permitted by competent regulatory authorities.

Article 34 The Company must obtain prior approval of the shareholders in a general meeting in the manner stipulated in these Articles of Association before it can effect an off-market repurchase through an agreement. The Company may, by obtaining the prior approval of the shareholders in a general meeting (in the same manner), rescind or vary any contract which has been so entered into or waive any right thereunder.

A contract for the repurchase of shares referred to in the preceding paragraph includes (but is not limited to) an agreement which causes the Company to become entitled or obliged to repurchase its shares.

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

Where the Company has the right to repurchase redeemable shares, repurchases not made onmarket or by tender shall be limited to a maximum price; or if repurchases are made by tender, tenders shall be made to all shareholders alike.

Article 35 After repurchasing its own shares according to the provisions of Articles 32(1), (2), (4) of these Articles of Association, the Company shall cancel or transfer such shares within the prescribed time limit according to relevant laws, regulations and listing rules. Shares repurchased according to Article 32(3) of these Articles of Association shall not exceed the maximum limit prescribed by the law and regulations, and such repurchase shall be funded by after tax profit of the Company, and such shares shall be transferred to employees of the Company within the specified time limit.

Article 36 If any share of the Company is cancelled due to repurchase by the Company, the Company shall apply to the original company registrar for registration of the change in registered capital.

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

Article 37 Unless the Company is in liquidation, it must comply with the following provisions in relation to repurchase of its issued and outstanding shares:

(1) where the Company repurchases shares at their par value, payment shall be made out of the book balance of distributable profits and/or out of the proceeds of a new share issuance made for that purpose;
(2) where the Company repurchases shares at a price higher than their par value, payment up to their par value shall be made out of the book balance of distributable profits and/or out of the proceeds of a new share issuance made for that purpose; and payment of the premium shall be effected as follows:
if the shares being repurchased were issued at par value, payment shall be made out of the book balance of the distributable profits of the Company
if the shares being repurchased were issued at a premium, payment shall be made out of the book balance of the distributable profits of the Company and/or out of the proceeds from a new issue of shares made for that purpose, provided that the amount paid out of the proceeds from the new issue shall not exceed the total premium received by the Company on the issue of the repurchased shares nor shall it exceed the book value of the Company’s premium account (or capital common reserve fund account) (including any premiums on the new issue) at the time of the repurchase;
(3) the Company shall make any payment for the following purposes out of the Company’s distributable profits:
acquisition of the right to repurchase its own shares;
amendments to any contract for repurchase of its own shares;
release from any of its obligations under any repurchase contract.
(4) after the Company’s registered capital has been reduced 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 recorded in the Company’s premium account (or capital common reserve fund account).

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CHAPTER 5 FINANCIAL ASSISTANCE FOR PURCHASE OF COMPANY SHARES

Article 38 The Company or its subsidiaries (including affiliates) shall not at any time provide any financial assistance in any form to purchasers or prospective purchasers of the shares in the Company. Purchasers of shares in the Company as referred to above shall include any person who directly or indirectly incurs any obligations as a result of acquisition of shares in the Company.

The Company or its subsidiaries (including affiliates) shall not at any time provide any financial assistance in any form to the above obligors in order to reduce or discharge their obligations.

The provisions of this Article shall not apply to the circumstances described in Article 40 of this Chapter.

Article 39 For the purposes of this Chapter, the term ‘‘financial assistance’’ shall include (but is not limited to) the following:

(1) gifts;
(2) guarantee (including assumption of obligations of another or provisions of assets to secure the performance of the obligation of another), indemnity (not including, however, indemnity against loss arising from the Company’s own fault) and release or waiver of rights;
(3) provision of a loan or conclusion of a contract under which the obligations of the Company are to be fulfilled prior to the obligations of the other party to the contract, or a change in the party to such loan or contract as well as the assignment of rights under such loan or contract;
(4) financial assistance in any other form when the Company unable to pay its debts, or has no net assets or when such assistance would lead to a major reduction in the Company’s net assets.

For the purposes of this Chapter, ‘‘assumption of obligations’’ by a person includes the assumption of obligations by way of contract or other arrangement (whether or not such contract or arrangement is enforceable and whether such obligations are borne by such person alone or jointly with other persons) or by any other means which results in a change in his financial position.

Article 40 The acts listed below shall not be regarded as the acts prohibited under Article 38 of this Chapter:

(1) provision of financial assistance by the Company where the financial assistance is given in good faith and in the interests of the Company, and the principal purpose of which is not for the acquisition of shares in the Company, or the giving of the financial assistance is an incidental part of some larger purpose of the Company;

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(2) lawful distribution of the Company’s assets as dividends;
(3) distribution of dividends in the form of shares;
(4) a reduction of registered capital, a repurchase of shares of the Company or a reorganization of the shareholding structure of the Company effected in accordance with these Articles of Association;
(5) provision of loans by the Company within its scope of business and in the ordinary course of business (provided that this does not reduce the net assets of the Company, or if it does reduce the net assets of the Company, that financial assistance is provided out of the distributable profits of the Company); and
(6) contributions made by the Company to employee share schemes (provided that this does not reduce the net assets of the Company, or if it does reduce the net assets of the Company, that financial assistance is provided out of the distributable profits of the Company).

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CHAPTER 6 SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS

Article 41 The Company’s share certificates shall be in registered form.

In addition to the particulars required by the Company Law, the share certificates of the Company shall clearly state such other particulars as required to be included by the stock exchange(s) on which the Company’s shares are listed.

Overseas listed foreign shares issued by the Company may be issued in the form of overseas depositary receipts or other derivations of share certificate in accordance with laws and securities registration and depository practice of the place where such shares are listed.

While H shares of the Company remain listed on the Hong Kong Stock Exchange, the Company shall ensure that all ownership documents of its securities listed on the Hong Kong Stock Exchange (including H shares certificates) shall include the following statements, and shall instruct and cause each of its share registrars not to register any subscription, purchase or transfer of any of its shares in the name of any particular holder unless and until such holder delivers to such share registrar a signed form in respect of such shares bearing statements to the following effect:

the purchaser of shares agrees with the Company and each shareholder of the Company, and the Company agrees with each Shareholder, to observe and comply with the Company Law, the Special Regulations and other requirements of these Articles of Association;
the purchaser of shares agrees with the Company, each shareholder, director, supervisor, president and other senior management members of the Company and the Company (acting for itself and for each director, supervisor, president and other senior management member) agrees with each shareholder, to refer all disputes and claims arising from these Articles of Association or any right or obligation conferred or imposed by the Company Law or other relevant laws and administrative regulations concerning the affairs of the Company to arbitration in accordance with these Articles of Association, and any reference to arbitration shall be deemed to authorize the arbitration tribunal to conduct hearing in open session and to publish its award. Such arbitration shall be final and conclusive;
the purchaser of shares agrees with the Company and each shareholder of the Company that shares in the Company are freely transferable by the holder thereof; and
the purchaser authorizes the Company to enter into a contract on his behalf with each director and other senior management member whereby such directors and other senior management members undertake to observe and comply with their obligations to shareholders stipulated in these Articles of Association.

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Article 42 The share certificates shall be signed by the Chairman. Where the signatures of other senior management members of the Company are required by the stock exchange(s) on which the Company’s shares are listed, the share certificates shall also be signed by such other senior management members. The share certificates shall become effective after the Company seal is affixed thereto or printed thereon. Such affixing or printing of the Company seal on share certificates shall require authorization of the board of directors. The signature of legal representative or of other senior management members on the share certificates may also be in printed form. If the Company shares are issued and traded in dematerialized form, provisions otherwise provided by local securities regulatory authorities of the listing venue shall apply.

Article 43 The Company shall establish a register of shareholders in accordance with evidence from the share registrar, and shall enter therein the following particulars:

(1) the name, address (domicile), profession or nature of each shareholder;
(2) the class and number of shares held by each shareholder;
(3) the amount paid or payable for the shares held by each shareholder;
(4) the serial number of the shares held by each shareholder;
(5) the date on which each shareholder is registered as a shareholder; and
(6) the date on which each shareholder ceases to be a shareholder.

The register of shareholders is the conclusive evidence of shareholders’ holding of the Company’s shares, unless there is evidence to the contrary.

Article 44 The Company may, pursuant to an understanding or agreement reached between the securities authority under the State Council and relevant securities regulatory authority outside the PRC, keep outside the PRC the original register of holders of overseas listed foreign shares, and appoint overseas agent(s) to manage such register of shareholders. The original register of shareholder of H shares shall be maintained in Hong Kong.

The Company shall keep at its domicile a duplicate of the register of holders of overseas listed foreign shares. The appointed overseas agent shall ensure the consistency between the original and the duplicate registers of holders of overseas listed foreign shares at all times.

Where the original and the duplicate of the registers of holders of overseas listed foreign shares are inconsistent, the original shall prevail.

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

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The register of shareholders shall include the following parts:

(1) a register kept at the Company’s domicile other than those specified in Items (2) and (3) of this article;
(2) the register(s) of holders of overseas listed foreign shares kept in the place(s) of the stock exchange(s) outside the PRC on which the shares are listed;
(3) registers of shareholders kept in such other places as the board of directors may consider necessary for listing purposes.

Article 46 The various parts of the register of shareholders shall not overlap one another. The transfer of shares registered in a certain part of the register of shareholders shall not, during the continuance of the registration of such shares, be registered in any other part of the register.

Changes and corrections to each part of the register of shareholders shall be carried out in accordance with the law of the places where such part is kept.

Article 47 All H shares which have been fully paid-up are freely transferable according to these Articles of Association. Unless a transfer satisfies the following conditions, the Board may decline to recognize any instrument of transfer without giving a reason:

(1) any transfer instrument or other instrument which relates to share ownership or may affect share ownership must be registered, and HK$2.50 (for each transfer instrument) or such other higher fee determined by the board of directors (but such fees shall not exceed the maximum prescribed in the listing rules of the Hong Kong Stock Exchange from time to time) shall be paid to the Company for such registration;
(2) the transfer instrument only relates to H shares listed in Hong Kong;
(3) the stamp duty payable for such transfer instrument has already been paid;
(4) the relevant share certificates and such other evidence as the board of directors may reasonably require to prove the transferor’s right to transfer are lodged;
(5) if it is intended that the shares be transferred to joint holders, the maximum number of joint holders shall not be more than four (4);
(6) the Company does not have any lien on the relevant shares; and
(7) no share may be transferred to a minor or to a person of unsound mind or under other legal disability.

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Shareholder of foreign shares may transfer all or part of his shares through an instrument in a written form which is common or usual in the places where such shares are listed, or as the board of directors may accept. The transfer of H shares may adopt the standard transfer form prescribed by the Hong Kong Stock Exchange. The instrument of transfer of any share may be executed by hand without seal, or if the transferor or the transferee is a recognized clearing house as defined in the Securities and Futures Ordinance or its agent, the share transfer instrument may be executed by hand or in mechanically-printed form.

Article 48 No change may be made in the register of shareholders as a result of a transfer of shares within 30 days prior to the date of a shareholders’ general meeting or within five days before the reference date for the Company’s distribution of dividends.

Article 49 When the Company needs to convene a general meeting, distribute dividends, commence liquidation or carry out any other activities for which shareholdings need to be determined, the board of directors or the convener of the general meeting shall decide the record date. The shareholders whose names appear on the register of shareholders at the close of trading on the record date, shall enjoy the relevant rights.

Article 50 Any person who disputes the register of shareholders and asks for inclusion of his name in or removal of his name from the register of shareholders may apply to a court of competent jurisdiction for rectification of the register.

Article 51 For any person who is a registered shareholder or who claims to be entitled to have his name entered in the register of shareholders in respect of shares in the Company may, if his share certificate (the ‘‘original 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 shall be dealt with in accordance with the relevant requirements of the Company Law.

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, regulations, the rules of the stock exchange or other relevant provisions of the place where the original register of shareholders of such overseas listed foreign shares is maintained.

The issuance of a replacement share certificate to a shareholder of H shares, who has lost his share certificate, shall comply with the following requirements

(1) The applicant shall submit the application in the form prescribed by the Company accompanied by a notarial certificate or statutory declaration. The notarial certificate or statutory declaration shall include the applicant’s reason for the application, the circumstances and proof of the loss of the share certificate and a declaration stating that no other person may claim to be registered as a shareholder in respect of the Relevant Shares.

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(2) The Company has not received any declaration from any person other than the applicant, claiming that such person shall be registered as a shareholder in respect of the shares, before it decides that a replacement share certificate shall be issued;
(3) If the Company decides to issue a replacement share certificate to the applicant, it shall publish a public announcement of its intention in the newspapers designated by the board of directors; the period of the public announcement shall be 90 days, during which such announcement shall be published repeatedly at least once every 30 days. The newspapers designated by the board of directors shall be the Chinese and English newspapers accepted by the Hong Kong Stock Exchange (at least one for each language).
(4) Before publishing the public announcement of its intention to issue a replacement share certificate, the Company shall submit a copy of the announcement to be published to the stock exchange where it is listed, and may proceed with the publication upon receipt of a reply from the stock exchange confirming that the announcement has been displayed in the stock exchange. The public announcement shall be displayed in the stock exchange for a period of 90 days.

If the application for issuance of a replacement share certificate is made without consent of the registered holder of the Relevant Shares, the Company shall mail to such shareholder a photocopy of the public announcement that it intends to publish.

(5) Upon expiry of the 90-day period specified in Items (3) and (4) of this Article, if the Company has not received any objection to the issuance of a replacement share certificate from any person, it may issue a replacement share certificate according to the application of the applicant.
(6) When the Company issues a replacement share certificate under this Article, it shall immediately cancel the original share certificate and record such cancellation and the issuance of the replacement share certificate in the register of shareholders.
(7) All expenses for the cancellation of the original share certificate and issuance of a replacement share certificate shall be borne by the applicant. The Company shall be entitled to refuse to take any action until reasonable guarantee is obtained from the applicant.

Article 52 After the Company has issued a replacement share certificate in accordance with these Articles of Association, it shall not delete from the register of shareholders the name of a bona fide purchaser of the replacement share certificate mentioned above or of a shareholder that is subsequently registered as the owner of the shares (provided that he is a bona fide purchaser).

Article 53 The Company shall not be liable for any damage suffered by any person from the cancellation of the original share certificate or the issuance of the replacement share certificate, unless such person can prove fraudulent act on the part of the Company.

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CHAPTER 7 RIGHTS AND OBLIGATIONS OF SHAREHOLDERS

Article 54 A shareholder of the Company is a person who lawfully holds shares of the Company and whose name is entered in the register of shareholders.

A shareholder shall enjoy rights and have obligations according to the class and number of shares held by him. Holders of shares of the same class shall enjoy equal rights and have equal obligations.

Shareholder of every class shall enjoy equal rights in the distribution of dividend or distribution in any other form.

Where two or more persons are registered as joint shareholders of any share, they shall be deemed as holding such shares in common ownership, and shall be subject to the following provisions:

(1) the Company is not required to register more than four persons as joint shareholders for any shares; and
(2) all joint shareholders of any share shall be jointly and severally responsible for all amounts payable in relation to such share.

In the circumstance of joint shareholders:

(1) upon death of one of the joint shareholders, only the surviving joint shareholder(s) shall be deemed as owners of the shares, but for the purpose of revising the register of shareholder, the board of directors is entitled to demand the surviving shareholder(s) to provide a death certificate as the board thinks fit.
(2) for joint shareholders of any share, only the person whose name stands first in the register shall be entitled to receive share certificate of the relevant shares, receive notice from the Company, attend a general meeting of the Company or exercise corresponding voting rights, and the service of notice to the aforesaid person shall be deemed as service of notice to all joint shareholders of the relevant shares.

Where one of the joint shareholders delivers receipt to the Company as regards to any dividends, bonus or return of capital which shall be distributed to such joint shareholders, such receipt shall be deemed as valid receipt from all such joint shareholders to the Company.

Article 55 The holders of ordinary shares of the Company shall enjoy the following rights:

(1) to receive dividends and other profit distributions on the basis of the number of shares held by them;
(2) to request, convene, preside over, attend or send proxy to attend a general meeting and exercise corresponding voting rights in accordance with the law;

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(3) to supervise the Company’s business operations, to make proposals and to raise queries in relation to the Company’s business operations;
(4) to transfer (whether for consideration or free of charge) or pledge shares held by them in accordance with the laws, administrative regulations, listing rules of the places where the Company’s shares are listed, as well as provisions of these Articles of Association;
(5) to obtain relevant information in accordance with these Articles of Association, which shall include:
to obtain a copy of these Articles of Association of the Company, subject to payment of costs;
the right to inspect and copy, subject to payment of a reasonable fee, of:
- (1) all parts of the register of shareholders;
- (2) personal information of the directors, supervisors and senior management members of the Company, including:
  - a current and former names and aliases;
  - b principal address (domicile);
  - c nationality;
  - d full-time and all other part-time occupations and duties;
  - e identification documents and their numbers.
- (3) the status of the Company’s issued share capital;
- (4) reports of the aggregate par value, number of shares and highest and lowest prices of each class of shares repurchased by the Company since the last fiscal year as well as all the expenses borne by the Company for such repurchase;
- (5) counterfoil of the Company’s debentures, minutes of general meetings, resolutions of board meetings, resolutions of the supervisors meetings, financial and accounting reports;
- (6) the Company’s most recent audited financial statements, and the reports of the board of directors, auditors and the supervisory committee;
- (7) a copy of the latest annual review report which has been filed with the Industry and Commerce Administration Bureau of the PRC or other competent authorities.

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(6) in the event of the winding-up or liquidation of the Company, to participate in the distribution of remaining assets of the Company in proportion to the number of shares held;
(7) to request the Company to repurchase his/her shares if he/she disputes with any resolution adopted at a general meeting in respect of a merger or division of the Company; and
(8) other rights provided under the laws, administrative regulations, departmental regulations and these Articles of Association.

Where any person directly or indirectly having rights and interests fail to disclose such rights and interests, the Company shall not exercise its rights to freeze or otherwise impair any right of such person attached to the shares.

Article 56 When a shareholder requests to have access to or obtain a copy of the information mentioned in the preceding Article, he shall present written evidence to prove the class and number of shares held by him. The Company shall, after verifying the shareholder’s identity, provide the information as requested by such shareholder, and may charge reasonable fees for providing copies of the foregoing information.

Article 57 If a resolution of the Company’s general meeting or board meeting contravenes the laws or administrative regulations, the shareholders may request the court to annul the resolution.

If the convening procedure or voting method of a general meeting or board meeting contravenes the laws, administrative regulations or these Articles of Association, or if the contents of the resolutions of such meetings contravene these Articles of Association, the shareholders may request the court to revoke the resolution within 60 days after the date of such resolution.

Article 58 If a director or senior management member violates the laws, administrative regulations or these Articles of Association when carrying out his/her duties, resulting in losses to the Company, any shareholders individually or together holding 1% or more of the shares of the Company for 180 days consecutively may request the supervisory committee in writing to bring a legal action in a court. If the supervisory committee violates the laws, administrative regulations or these Articles of Association when carrying out its duties, resulting in losses to the Company, the shareholders may request the board of directors in writing to bring a legal action in a court.

If the supervisory committee or board of directors refuses to bring legal actions upon receipt of the shareholder’s written request under the preceding paragraph, or fails to bring legal actions within 30 days upon receipt of the request, or there is an emergency where the Company would suffer irreparable loss if a legal action is not initiated immediately, then the shareholders described in the preceding paragraph may directly bring a legal action in a court in their own names for the interest of the Company.

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If any other person damages the lawful interests of the Company and result in losses to the Company, the shareholders described in the first paragraph of this Article may bring a legal action in a court in accordance with the two preceding paragraphs of this Article.

Article 59 If a director or senior management member violates the laws, administrative regulations or these Articles of Association, resulting in damage to shareholders’ interests, the shareholders may bring a legal action in a court.

Article 60 Should a shareholder holding more than 5% of the Company’s domestic shares with voting rights pledge the shares he or she holds, he or she shall report to the Company in writing on the day of the pledge. Any pledge of overseas listed foreign shares shall be carried out in accordance with the Hong Kong laws, listing rules and other relevant requirements.

Article 61 The holders of ordinary shares of the Company shall have the following obligations:

(1) to comply with laws, administrative regulations and these Articles of Association;
(2) to pay subscription money according to the number of shares subscribed and the method of subscription;
(3) to refrain from surrendering the shares unless required by laws or administrative regulations;
(4) to refrain from abusing its rights as a shareholder to harm the Company’s or other shareholders’ interests; to refrain from abusing the independent legal personality of the Company and the limited liability of the shareholders to harm the interests of creditors of the Company;

where the shareholder’s abuse of its power causes damage to the Company or other shareholders, its shall be liable for compensation in accordance with the law;

where the shareholder has abused the Company’s independent legal personality and shareholder’s limited liability for debt evasion and caused serious damage to the interests of the Company’s creditors, it shall be held jointly and severally liable for the debts of the Company;

(5) other obligations required by the laws, administrative regulations and these Articles of Association.

Shareholders shall not bear any liability for further contribution to share capital other than the conditions agreed to as a subscriber of the relevant shares on subscription.

Article 62 The controlling shareholder or actual controller of the Company shall not use its connected relationship to damage the Company’s interests. In case of a breach which results in losses to the Company, such controlling shareholder or actual controller shall be liable for compensation.

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The controlling shareholder and actual controller of the Company have fiduciary duty towards the Company and public shareholders of the Company. The controlling shareholder shall exercise its rights as a capital contributor strictly according to the laws. The controlling shareholder shall not make use of methods such as distribution of profits, restructuring of assets, external investment, appropriation of funds, providing loans or guarantee to damage the lawful interests of the Company and public shareholders. The controlling shareholder shall not make use of its controlling position to damage the lawful interests of the Company and public shareholders.

In addition to the obligations under the laws, administrative regulations or the listing rules of the stock exchange(s) on which the shares of the Company are listed, the controlling shareholder may not, in exercising its powers as a shareholder, shall not exercise its voting rights in respect of the following matters in a manner prejudicial to the interests of all or a portion of the shareholders of the Company:

(1) to exempt a director or supervisor from the obligation of acting honestly in the best interests of the Company;
(2) 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 (but not limited to) opportunities which are beneficial to the Company;
(3) Approving a director or supervisor (for his/her own or another person’s benefit) to deprive other shareholders of their rights or interests, including (but not limited to) the rights to distributions and voting rights, but not including restructuring of the Company submitted to and adopted at the shareholders general meeting in accordance with these Articles of Association.

Article 63 The term ‘‘controlling shareholder’’ mentioned in the preceding Article refers to a person that satisfies any of the following conditions:

(1) such person, acting alone or in concert with others, has the power to elect at least half of the directors;
(2) such person, acting alone or in concert with others, has the power to exercise or control the exercise of 30% or more of the Company’s voting rights;
(3) such person, acting alone or in concert with others, holds 30% or more of the issued and outstanding shares of the Company; or
(4) such person, acting alone or in concert with others, actually controls the Company in any other manner.

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CHAPTER 8 GENERAL MEETING

SECTION 1 GENERAL PROVISIONS ON GENERAL MEETING

Article 64 The shareholders’ general meeting holds the powers of the Company and shall exercise its functions and powers in accordance with the law.

Article 65 The general meeting shall exercise the following functions and powers:

(1) to decide on the Company’s operational policies and investment plans;
(2) to elect and replace directors and supervisors who are not representatives of the employees and to decide on matters relating to the remuneration of directors and supervisors;
(3) to review and approve the reports of the board of directors;
(4) to review and approve the reports of the supervisory committee;
(5) to review and approve the annual financial budgets and final accounts of the Company;
(6) to review and approve the profit distribution plan and loss compensation plan of the Company;
(7) to decide on increasing or reducing the registered capital of the Company;
(8) to decide on merger, division, winding up, liquidation or change of corporate form of the Company;
(9) to decide on issuance of debentures or other securities of the Company or its listing plan;
(10) to decide on appointment and dismissal of accounting firms by the Company;
(11) to amend these Articles of Association;
(12) to review and approve any provision of guarantees which shall be reviewed at the general meeting as prescribed in Article 66 of these Articles of Association;
(13) to review any major acquisition or disposal of assets within a year with a value exceeding 30% of the latest audited total assets of the Company;
(14) to review share incentive schemes;
(15) to review proposals of the shareholders who represent 3% or more of the Company’s voting shares; and

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(16) to review other matters which shall be approved at the general meeting in accordance with the laws, administrative regulations, departmental regulations, listing rules of the local stock exchange where the Company’s shares are listed or these Articles of Association.

Article 66 Provision of any of the following guarantees by the Company must be reviewed and approved at the general meeting:

(1) any further guarantee to be provided after the total amount of all existing guarantees provided by the Company or its controlled subsidiaries reaches or exceeds 50% of the latest audited net assets;
(2) any further guarantee to be provided after the total amount of all existing guarantees provided by the Company reaches or exceeds 30% of the latest audited total assets;
(3) any guarantee to secure any debt of a person whose debt asset ratio exceeds 70%;
(4) a single guarantee under which the secured amount exceeds 10% of the latest audited net assets;
(5) any guarantee to be provided for shareholders, actual controller or their respective connected parties; or
(6) any other guarantee which shall be approved at the general meeting as prescribed by the local stock exchange where the Company’s shares are listed or under these Articles of Association.

Article 67 Except when the Company is under a special circumstance such as a crisis, the Company shall not, without an approval by a special resolution at a general meeting, enter into any contract with any person other than the directors, supervisors, senior management personnel pursuant to which such person shall be responsible for the management and administration of the whole or any substantial part of the Company’s business.

Article 68 The general meetings shall include annual general meetings and extraordinary general meetings. Annual meetings shall be convened once a year and shall be held within six months after the end of the preceding fiscal year.

Article 69 The Company shall convene an extraordinary general meeting within two months
after occurrence of any of the following circumstances: (1) the number of directors is less than the minimum number required by the Company Law or less than two-third of the number prescribed in these Articles of Association;
(2) the losses of the Company that have not been made up reach one-third of the total paidin share capital of the Company;

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(3) shareholders who individually or together hold 10% or more of the shares of the Company require in writing an extraordinary general meeting to be convened;
(4) whenever the board of directors considers necessary;
(5) the supervisory committee proposes an extraordinary general meeting to be convened; or
(6) any other circumstances prescribed by the laws, administrative regulations, departmental regulations or these Articles of Association.

Article 70 The venue of a general meeting of the Company shall be the domicile of the Company or another specific location informed by the convener of the general meeting.

Generally, the general meetings shall be held on-site, or to the extent permitted by competent securities regulatory authorities, in any other way as recognized or required by relevant securities regulatory authorities. A shareholder who attends a general meeting in the aforesaid manners shall be deemed to have been present at the meeting.

Article 71 The Company, when convening a general meeting, shall engage lawyers to
provide legal opinions on the following and arrange publication of such opinions: (1) Whether or not the convening and the convening procedures of the meeting are in compliance with the laws, regulations and the Articles of Association;
(2) Whether or not the qualifications of the persons attending the meeting and the qualification of the convener are lawful and valid;
(3) Whether or not the voting procedures and the voting results are lawful and valid;
(4) Other relevant matters as required by the Company.

SECTION 2 PROPOSING AND CONVENING OF GENERAL MEETING

Article 72 Independent directors may propose to the board of directors to convene an extraordinary general meeting. The board of directors shall, in accordance with the law, administrative regulations and these Articles of Association, give a written reply within 10 days after its receipt of such proposal, to state whether it agrees or disagrees to convene an extraordinary general meeting.

If the board of directors agrees to convene the extraordinary general meeting, it shall issue a notice of general meeting within 5 days after the board resolution for this purpose is adopted. If the board of directors does not agree to convene an extraordinary general meeting, it shall explain the reasons and make an announcement accordingly.

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Article 73 The supervisory committee may propose to the board of directors to convene an extraordinary general meeting to the board of directors. Such proposal shall be made in writing. The board of directors shall, in accordance with the law, administrative regulations and these Articles of Association, give a written reply within 10 days after its receipt of such proposal, to state whether it agrees or disagrees to convene an extraordinary general meeting.

If the board of directors agrees to convene the extraordinary general meeting, it shall issue a notice of general meeting within 5 days after the board resolution for this purpose is adopted. Any changes made by such notice to the proposal of the supervisory committee shall be approved by the supervisory committee.

If the board of directors disagrees to convene the extraordinary general meeting, or fails to reply within 10 days after its receipt of the proposal, the board of directors shall be deemed as unable to or failing to perform its duties to convene the general meeting, and the supervisory committee may convene and preside over the meeting.

Article 74 Shareholders who individually or together hold 10% or more of shares may call for an extraordinary general meeting or class meeting according to the following procedures:

(1) Such shareholders shall sign a written request for an extraordinary general meeting or class meeting, in one or more counterparts, which shall state the subjects of the meeting, and submit such request to the board of directors. The board of directors shall, in accordance with the law, administrative regulations and these Articles of Association, give a written reply within 10 days after its receipt of such request, to state whether it agrees or disagrees to convene an extraordinary general meeting or class. For the purpose of determining the number of shares held by such requesting shareholders, the reference date shall be the date on which such shareholders submit the written request.
(2) If the board of directors agrees to convene an extraordinary general meeting or class meeting, it shall issue a meeting notice within 5 days after the board resolution for this purpose is adopted. Any changes made by such notice to the original request shall be approved by the relevant shareholders.
(3) If the board of directors disagrees to convene the extraordinary general meeting or class meeting, or fails to reply within 10 days after its receipt of the request, the shareholders individually or together holding 10% or more of the shares of the Company may request the supervisory committee in writing to convene such meeting.
(4) If the supervisory committee agrees to convene the extraordinary general meeting or class meeting, it shall issue a meeting notice within 5 days after its receipt of such request. Any changes made by such notice to the original request shall be approved by the relevant shareholders.

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(5) If the supervisory committee fails to issue the meeting notice within the prescribed period, it shall be deemed that the supervisory committee will not convene or preside over the general meeting, and the shareholders who individually or together hold 10% or more of the shares for more than 90 days consecutively may convene and preside over the meeting themselves.
(6) The shareholding of the convening shareholders shall not fall below 10% of the shares of the Company before the resolution adopted by the general meeting is announced. When the convening shareholder issues the notice of general meeting and publicly announces the resolution(s) of the general meeting, they shall submit the relevant documentary proof to the securities regulatory authorities at the Company’s residence and the stock exchange.

Article 75 Where the supervisory committee or shareholders convene a meeting in accordance with the provisions of this section, a written notice shall be sent to the board of directors and filed with the securities regulatory authorities where the Company is located and relevant stock exchange. The board of directors and the board secretary shall cooperate. The board of directors shall provide the register of shareholders on the shareholding record date. All reasonable expenses incurred for the meeting shall be borne by the Company, and be deducted from the amounts due to the director(s) who breaches the duty.

SECTION 3 PROPOSALS AND NOTICES OF GENERAL MEETING

Article 76 The proposed matters shall be within the scope of duties and powers of the general meetings. A proposal shall have a clear subject and specific matters to be resolved on, and shall be in compliance with relevant requirements of the laws, administrative regulations and these Articles of Association.

Article 77 When a general meeting is held by the Company, the board of directors, supervisory committee or shareholders individually or together holding 3% or more of the shares of the Company may make proposals to the Company.

Shareholders individually or together holding 3% or more of the shares of the Company may submit ad hoc proposals in writing to the convener of the general meeting at least 10 days before the date of the general meeting. The convener shall issue a supplementary notice of the general meeting within 2 days upon receipt of the proposals and announce the contents of the ad hoc proposals.

Except for circumstances provided in the above paragraph, the convener, after issuing the notice of the general meeting, cannot revise the proposals stated in the notice of general meetings or add new proposals.

A general meeting shall not vote or resolve on any proposal which is not listed in the notice of such general meeting or does not comply with Article 78 of these Articles of Association.

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Article 78 Where a general meeting is convened by the Company, a written notice shall be sent to all the registered shareholders at least 45 days prior to the meeting, which shall contain the matters to be considered as well as the date and place of the meeting. Shareholders who intend to attend the general meeting shall deliver their written replies to the Company at least 20 days prior to the meeting.

When calculating the time limit of the notice, the date of the meeting and the date of issuing the meeting notice shall be excluded.

Article 79 The Company shall calculate the number of voting shares represented by the shareholders who intend to attend the meeting based on the written replies which have been received as of the date which is 20 days prior to the date of the general meeting. If the number of voting shares represented by the shareholders who intend to attend the meeting is no less than one half of the total number of the Company’s voting shares, the Company may hold the general meeting. If not, the Company shall within 5 days notify the shareholders again by public announcement of the matters to be considered as well as the date and place of the meeting. After such notification by the public announcement, the Company may hold the general meeting.

An extraordinary general meeting shall not decide on matters not specified in the notice.

Article 80 A notice of a general meeting shall meet the following requirements:

(1) It shall be made in writing;
(2) It shall specify the place, date and time of the meeting;
(3) It shall specify the matters to be discussed at the meeting;
(4) It shall specify the shareholding record date for determining shareholders who are entitled to attend the meeting;
(5) It shall provide the shareholders with the information and explanation necessary for them to make an informed decision on the matters to be discussed, including (but not limited to), the specific conditions and contract (if any) in respect of any merger, repurchase of shares, reorganization of share capital or other restructuring proposed by the Company, as well as detailed explanation on the rationale and effect of such proposed transactions;
(6) Any director, supervisor, manager or other senior management members who have material conflicts of interests in any matters subject to discussion shall disclose the nature and extent of such conflicts of interests. If the effect of proposed matters on such director, supervisor, manager or other senior management members in their capacity as shareholders is different from that on other shareholders of the same class, the differences shall also be specified;
(7) It shall contain the full text of any special resolution proposed to be adopted at the meeting;

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(8) It shall contain a clear statement that a shareholder who has right to attend and vote at the meeting shall have the right to appoint one or more proxies to attend and vote on its behalf and that such proxies need not be a shareholder;
(9) It shall state the time and place for the delivery of the proxy forms for the meeting;
(10) It shall state the name and telephone number of the contact persons who handles the meeting affairs;
(11) It shall meet requirements provided by laws, administrative regulations, departmental rules, normative documents and other requirements issued by relevant regulatory authorities and under the Articles of Association.

Article 81 If a general meeting will discuss the election of directors or supervisors, the notice of general meeting shall disclose full information of each candidate for directors and supervisors. It shall at least include the following:

(1) personal particulars such as education background, work experience and other positions concurrently held by such candidate;
(2) whether he/she has any connected relationship with the Company or the controlling shareholder and actual controller of the Company;
(3) the number of shares of the Company held by such candidate;
(4) whether he/she has received any punishment by CSRC or other securities regulatory authorities or sanctions by any stock exchange.

Except for the cumulative voting system for the election of directors, each candidate of director or supervisor shall be proposed in a separate proposal.

Article 82 A notice of general meeting shall be served on shareholders (whether such shareholders have voting right on such general meeting or not) either by hand or by post in a prepaid mail, addressed to such shareholder at his registered address as shown in the register of shareholders, or to the extent permitted by applicable laws, regulations and listing rules, by publication on the Company’s website or other website designated by the stock exchange where the Company’s shares are listed. For holders of domestic shares, a notice of general meeting may be given by public announcement.

The public announcement referred to in the preceding paragraph shall be published in one or more newspapers or periodicals designated by the securities regulatory authority under the State Council between the dates which are respectively 45 and 50 days before the date of the meeting. Once the announcement is published, all holders of domestic shares shall be deemed to have received the notice of the general meeting.

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Article 83 After issuance of the notice for the general meeting, the general meeting shall not be postponed or cancelled without proper reasons and the proposals specified in the notice shall not be withdrawn. In case of delay or cancellation, the convener shall make a public announcement, together with the reasons for such delay or cancellation, at least 2 working days before the scheduled date of the meeting. If the listing rules of the listing venue of the Company contain any other provision in respect of the matters mentioned in this Article above, such provisions shall be complied with.

Article 84 The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive such notice shall not invalidate the meeting and the resolutions passed at the meeting.

SECTION 4 CONVENING GENERAL MEETING

Article 85 All holders of ordinary shares on the register of shareholders on the shareholding record date shall be entitled to attend and vote at the general meeting, and vote in accordance with the provisions of relevant law, regulations and these Articles of Association.

Such proxies may exercise the following rights pursuant to the authorization by the shareholder:

(1) the shareholder’s right to speak at the general meeting;
(2) the right to demand or join in demanding a poll;
(3) Unless otherwise provided in the applicable listing rules or other securities laws and regulations, the right to vote by a show of hands or on a poll, except that if a shareholder has appointed more than one proxy, such proxies may only exercise their voting rights on a poll.

Article 86 An individual shareholder who attends the general meeting in person shall present valid proof which can confirm his shareholder’s identity. If a proxy is appointed to attend the meeting, in addition to presenting the shareholder’s identity proof, the proxy shall also present its own identity proof together with the power of attorney from the shareholder.

If a shareholder who is a legal person appoints its representative to attend the meeting, the Company has rights to request the representative to present the identity proof for the shareholder and its representative, as well as any resolution or authorization letter from the board of directors of the shareholder who is a legal person or other authority as proof of the such authorization.

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Article 87 The instrument appointing a proxy shall be in writing and signed by the appointing shareholder or his attorney duly authorized in writing; where the appointing shareholder is a legal person, such instrument shall be under its seal or signed by its director or duly authorized representative.

The instrument issued by the shareholder to appoint a proxy to attend the general meeting shall state the following contents:

(1) the name of the proxy;
(2) whether the proxy has voting rights;
(3) instructions as to vote for, vote against or abstain from each proposal on the general meeting agenda;
(4) the signing date and validity term of the instrument;
(5) signature (or seal) of the principal. If the principal is a legal person shareholder, the seal of the legal person shall be affixed;
(6) specifying the number of shares represented by such proxy;
(7) If more than one proxy is appointed, the instrument shall specify the number of shares represented by each proxy respectively.

Article 88 The instrument appointing a voting proxy shall be placed at the domicile of the Company or at such other place as specified in the notice of the meeting at least 24 hours prior to the meeting at which the proxy is authorized to vote or at least 24 hours prior to the specified time of the voting. Where the instrument is signed by another person authorized by the principal, the authorization letter or other document authorizing the signatory shall be notarized. The notarized authorization letter or other authorizing document shall be placed together with the instrument appointing the voting proxy at the domicile of the Company or at such other place as specified in the notice of the meeting.

Where the principal is a legal person, it shall be represented by its legal representative or the person authorized by resolution of its board of directors or other decision-making body at the Company’s general meetings.

Article 89 Any form issued by the board of directors of the Company to the shareholders for the appointment of proxies shall enable the shareholders to separately instruct their proxies to cast vote in favour of or against each matter to be voted on at the meeting.

The authorization letter shall state that if the shareholder does not give specific instructions, the proxy may vote in his/her own discretion.

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Article 90 A vote made in accordance with the terms of a proxy shall be valid notwithstanding the death or loss of capacity of the appointor or revocation of the proxy or revocation of the authority to sign any power of attorney for a proxy, or the transfer of the shares in respect of which the proxy is given, provided that the Company does not receive any written notice in respect of such matters before the commencement of the relevant meeting.

Article 91 A registration record for attendants at the meeting shall be compiled by the Company. The registration record shall contain the names of attendants (or names of organizations), identity card numbers, domicile, the number of voting shares held or represented by each attendant and names (or name of organizations) of the proxies.

Article 92 The convener and the lawyers engaged by the Company shall examine the shareholders’ qualifications according to the register of shareholders provided by the securities registrations and clearing organizations. The names of shareholders and the number of voting shares held by such shareholders shall be registered. The registration shall be closed before the chairman of the meeting announces the number of shareholders and proxies attending the meeting and the voting shares held by such shareholders.

Article 93 Directors, supervisors and the secretary to the board of directors shall attend the general meetings. The general manager and other senior management members shall be in attendance at the meeting.

Article 94 The general meeting shall be presided over and chaired by the chairman of the board of directors. Where the chairman of the board of directors is unable to discharge the duty or will not discharge his duty, the meeting shall be presided over and chaired by the vice chairman of the board, or if there are two or more vice chairmen, by the one elected by at least half of the directors. Where no vice chairman is appointed or the vice chairman of the board is unable to discharge the duty or will not discharge the duty, the meeting shall be presided over and chaired by a director elected by at least half of the directors. Where no director can be elected by at least half of the directors to preside over and chair a general meeting, the shareholders attending the meeting may elect one person to chair such meeting. If for any reason the shareholders are unable to elect a chairman, the attending shareholder holding the largest number of voting shares (whether in person or by proxy) shall chair the meeting.

If a general meeting is convened by the supervisory committee, the chairman of the supervisory committee shall preside over the meeting. If the chairman of the supervisory committee is unable to or will not discharge his duties, the meeting shall be presided over by a supervisor elected by at least one half of the supervisors.

If a general meeting is convened by the shareholders themselves, the conveners shall elect a representative to preside over the meeting. If for any reason the shareholders are unable to elect a chairman, the attending shareholder holding the largest number of voting shares (whether in person or by proxy) shall preside over the meeting.

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In a general meeting, if the chairman of the meeting violates the meeting procedures, making the meeting impossible to proceed, the shareholders may, with approval by at least half of the votes represented by the shareholders present at the meeting, nominate one person to serve as the chairman and continue with the meeting. If for any reason the shareholders are unable to elect a chairman, the attending shareholder holding the largest number of voting shares (whether in person or by proxy) shall chair the meeting.

Article 95 The Company shall formulate the rules of procedures for general meeting and specify in details the procedure for convening and voting at the general meeting, including notification, registration, reviewing of proposals, voting, counting of votes, announcement of voting results, adoption of resolutions, minutes of meeting and their signing, public announcements, as well as principles of authorization to the board of directors by the general meeting. The rules of procedures for general meeting shall be appended to these Articles of Association. They shall be formulated by the board of directors and approved by the general meeting.

Article 96 In the annual general meeting, the board of directors and the supervisory committee shall report their work during the past year to the general meeting. Each independent director shall also present a work report.

Article 97 Directors, supervisors and senior management members shall explain and answer the enquiries and suggestions from shareholders at the general meeting.

Article 98 The chairman of the meeting shall, prior to voting, announce the number of shareholders and proxies attending the meeting as well as the total number of voting shares held by them, which shall be the number of shareholders and proxies attending the meeting in person and the total number of their voting shares as indicated in the meeting’s registration record.

Article 99 The board secretary shall keep minutes for each general meeting. The minutes shall contain the following contents:

(1) the time, venue and agenda of the meeting and names of the conveners;
(2) the name of the meeting chairman and the names of the directors, supervisors, and senior management members present or in attendance at the meeting;
(3) the numbers of shareholders (including holders of domestic shares and overseas listed foreign shares (if any)) and proxies attending the meeting, the total number of voting shares held by them and the percentages of their voting shares to the total share capital of the Company for each shareholder;
(4) the process of review and discussion, summary of any speech and voting results of each proposal;
(5) shareholders’ questions, opinions or suggestions and corresponding answers or explanations;

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(6) the names of the persons who count votes and the persons supervising the voting process; and
(7) other contents to be included as specified in these Articles of Association.

Article 100 The convener shall ensure that the contents of the minutes are true, accurate and complete. Directors, supervisors, board secretary, conveners and their representatives and the meeting chairman shall sign on the minutes. The minutes shall be kept together with the registration record of attending shareholders, powers of attorney for proxies, valid record on internet voting and other means of voting, for a period of no less than 10 years.

Article 101 The convener shall ensure that the general meeting be conducted continuously until final resolutions are made. If the general meeting is suspended or resolutions cannot be made because of force majeure or other special circumstances, the convener shall take necessary measures to promptly resume the meeting or directly terminate that meeting, and make a timely public announcement and report in accordance with the laws, regulations or listing rules of the place where the Company’s shares are listed.

SECTION 5 VOTING AND RESOLUTIONS AT GENERAL MEETINGS

Article 102 Resolutions of the general meeting include ordinary resolutions and special resolutions.

An ordinary resolution at a general meeting shall be passed by more than one half of the voting shares held by shareholders attending the general meeting (whether in person or by proxy).

A special resolution at a general meeting shall be passed by at least two-third of the voting rights held by shareholders attending the general meeting (whether in person or by proxy).

Article 103 The matters with respect to the exercise of powers in a general meeting as set out in paragraphs (1), (2), (3), (4), (5), (6), (10), (12) and (16) under Article 65 or all matters other than those required by laws, administrative regulations or these Articles of Association to be approved by a special resolution of the general meeting shall be approved by ordinary resolutions of the general meeting.

Article 104 The matters with respect to the exercise of powers in a general meeting as set out in paragraphs (7), (8) (9), (11), (13) and (14) under Article 65, or the matters as required by laws, administrative regulations or these Articles of Association or as confirmed by ordinary resolutions of the general meeting to have material impact on the Company to be approved by a special resolution of the general meeting shall be approved by special resolutions of the general meeting. The matters set out in paragraph (15) shall be subject to ordinary or special resolutions as stated above depending on the specific contents of shareholder’s proposals.

Article 105 When shareholders (including proxies) vote at the general meeting, they shall exercise their voting rights according to the number of voting shares that they represent. Each share shall carry one vote.

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Shares held by the Company do not carry voting rights, and shall not be counted in the total number of voting shares represented by shareholders present at a general meeting.

Subject to applicable laws, regulations and/or requirements of the listing rules of the place where the Company’s shares are listed, the board of directors, independent directors and other qualified shareholders may solicit for the voting rights from shareholders.

When the general meeting considers connected transactions, if so required under the applicable laws, regulations or listing rules of the place where the Company’s shares are listed, the connected shareholders shall abstain from such voting, and the voting shares held by such shareholders will not be counted within the total number of valid votes. The public announcement on the voting results of the general meeting shall fully disclose the voting results of the non-connected shareholders.

If any shareholder is required by applicable laws, regulations and listing rules of the place where the Company’s shares are listed to vote for or to vote against or to abstain from voting on (as the case may be) any particular proposal, any votes cast by the shareholders (or their proxies) in violation of such requirement or restriction shall not be counted in the voting results.

Article 106 Voting at general meeting will record the name of the voter.

Article 107 The list for candidates of directors and supervisors shall be submitted as proposed resolutions to the general meeting for voting.

Where voting for the election of directors at the meeting, cumulative voting system can be adopted in accordance with the provisions in these Articles of Association or resolutions made at the meeting.

The directors shall be elected under the cumulative voting system when the largest shareholder holds over 30% of the total shares of the Company or the related parties together hold over 50% thereof.

The cumulative voting system as mentioned in the preceding paragraph means that in the election of directors at the general meeting, each share carries a voting right equivalent to the number of directors to be elected. A shareholder may concentrate the votes on one candidate. The board of directors shall announce to the shareholders the biographies and basic information of each candidate of directors.

Article 108 Except for the cumulative voting system, the general meeting shall vote on each proposal individually. Where there are different proposals for the same issue, voting should be carried out according to the order of the proposals raised. Except for special reasons such as force majeure causing the meeting to suspend or unable to reach a resolution, the meeting shall not set aside any proposal or have any proposal not voted on.

Article 109 When a poll is taken at a meeting, a shareholder (including proxies) who have the right to two or more votes need not cast all his votes in the same way.

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Article 110 The chairman of the meeting shall decide whether a resolution of the general meeting has been passed, based on the voting result. His decision shall be final and shall be announced at the meeting and recorded in the minutes of meeting.

Article 111 If the chairman of the meeting has any doubts about the voting result of a resolution, he may arrange re-counting of the votes. If the chairman of the meeting does not arrange re-counting of the votes, a shareholder or proxy attending the meeting who challenges the result announced by the chairman of the meeting shall be entitled to request re-counting of votes immediately after such announcement, and the chairman of the meeting shall immediately arrange re-counting of the votes.

Article 112 If re-counting of votes is held at a general meeting, the result of the re-counting shall be recorded in the minutes of meeting. The minutes of meeting and the registration record of attendants signed by the attending shareholders and proxies shall be kept at the Company’s domicile for a period no less than 10 years.

Article 113 Shareholders may examine photocopies of the minutes of meetings during the Company’s office hours free of charge. If any shareholder requests for a photocopy of the relevant minutes of meetings, the Company shall send such photocopies within 7 days upon receipt of payment of reasonable charges.

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CHAPTER 9 SPECIAL PROCEDURES FOR VOTING AT CLASS MEETING

Article 114 Shareholders who hold different classes of shares shall be shareholders of different classes.

Shareholders of different classes shall enjoy rights and undertake obligations in accordance with the laws, administrative regulations and these Articles of Association.

Where the share capital of the Company includes shares which do not carry voting rights, the words ‘‘non-voting shares’’ must appear in the designation of such shares.

Where the share capital 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 115 Save for as provided in the fourth paragraph under Article 18, the Company shall not proceed to change or abrogate the shareholders’ rights of a class of shares unless such change or abrogation has been approved by way of a special resolution of the general meeting and by a separate class meeting of the affected class shareholders convened in accordance with Articles 117 to 121.

Any change or abrogation of shareholders’ rights of a class of shares caused by any changes in domestic or foreign laws, regulations or the listing rules of the place where the shares of the Company are listed, or decisions of domestic or foreign regulatory authorities will not require the approval of shareholder’ meeting or class meeting.

Article 116 The rights of shareholders of a certain class shall be deemed to have been changed or abrogated in the following conditions:

(1) an increase or decrease in the number of shares of such class or an increase or decrease in the number of shares of a class having voting rights, distribution rights or other privileges equal or superior to those of the shares of such class;
(2) conversion of all or part of the shares of such class into shares of another class, conversion of all or part of the shares of another class into shares of such class or grant of the right to make such conversion;
(3) removal or reduction of rights to accrued dividends or cumulative dividends attached to shares of such class;
(4) removal or reduction of any preference granted to shares of such class in distribution of dividends or distribution of assets during liquidation of the Company;
(5) addition, removal or reduction of share conversion rights, options, voting rights, transfer rights, preemptive rights to rights issues or rights to acquire securities of the Company attached to shares of such class;

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(6) removal or reduction of rights attached to shares of such class to receive amounts payable by the Company in a particular currency;
(7) creation of a new class of shares with voting rights, distribution rights or other privileges equal or superior to those of the shares of that class;
(8) imposition of restrictions or additional restrictions on the transfer or ownership of shares of such class;
(9) issuance of rights to subscribe for, or convert into, shares of such class or another class;
(10) increase in the rights and privileges of shares of another class;
(11) any restructuring of the Company which causes shareholders of different classes to bear liability out of proportion during the restructuring; or
(12) any amendment or cancellation of the provisions of this section.

Article 117 Affected class shareholders, whether or not otherwise having the right to vote at the general meeting, shall have the right to vote at class meetings in respect of matters referred to in paragraphs (2) to (8) and (11) to (12) in Article 116, except that interested shareholders shall not vote at class meetings.

The term ‘‘interested shareholders’’ in the preceding paragraph shall have the following meanings:

(1) in respect of a tender offer made by the Company to all shareholders in the same proportion or repurchase by the Company of its own shares through open market transactions on a stock exchange in accordance with Article 32 hereof, the ‘‘interested shareholders’’ shall mean the controlling shareholder as defined in these Articles of Association;
(2) in respect of repurchase by the Company of its own shares by off-market repurchase through an agreement in accordance with Article 32 hereof, the ‘‘interested shareholders’’ shall mean any shareholder in relation to such agreement; and
(3) in respect of a restructuring proposal of the Company, the ‘‘interested shareholders’’ shall mean shareholders who will bear a lower proportion of liability than that other shareholders of the same class, or shareholders who have an interest that is different from the interest of other shareholders of the same class.

Article 118 Resolutions of a class meeting shall be passed by at least two-third of the voting rights of that class represented at the class meeting in accordance with Article 117.

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Article 119 When the Company is to hold a class meeting, it shall issue a written notice, at least 45 days prior to the meeting, to all shareholders who are registered as shareholders of that class in the register of shareholders, stating the matters to be considered at the meeting as well as the date and place of the meeting. Shareholders who intend to attend the meeting shall, at least 20 days prior to the day of the meeting, deliver their written replies to the Company of their attendance.

If the number of the voting shares represented by the shareholders intending to attend the meeting is one half or more of the total number of voting shares of that class, the Company may hold the class meeting of shareholders. If not, the Company shall within five days notify the shareholders once again of the matters to be considered at the meeting and the date and place of the meeting in the form of a public announcement. After notification by public announcement, the Company may hold the class meeting.

If there is any special requirement by the listing rules of the place where the Company’s shares are listed, such requirements shall prevail.

Article 120 The notice of a class meeting of shareholders is only required to be delivered to the shareholders entitled to vote at such meeting.

The procedure of a class meeting shall, to the extent possible, be identical with the procedure of a general meeting. Unless otherwise specified in this section, provisions of the Articles of Association of the Company related to procedure for holding a general meeting shall be applicable to a class meeting.

Article 121 Apart from the holders of other classes of shares, holders of domestic shares and holders of overseas listed foreign shares are deemed to be different classes of shareholders.

The special procedure for voting in class meeting shall not apply to the following circumstances:

(1) upon approval by a special resolution of its shareholders in a general meeting, the Company issues domestic shares and overseas listed foreign shares, separately or concurrently once every 12 months, and the number of each class of shares to be issued is not more than 20% of the outstanding shares of such class.
(2) the Company implements its plan, which was prepared upon its incorporation, to issue domestic shares and overseas listed foreign shares, provided that such plan shall be implemented within 15 months from the date of approval by the securities regulatory authority of the State Council.
(3) with the approval by the securities regulatory authority of the State Council, the shareholders of the Company convert their domestic shares and foreign shares to overseas listed foreign shares for listing and trading outside the PRC.

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CHAPTER 10 BOARD OF DIRECTORS

SECTION 1 DIRECTORS

Article 122 Directors shall be elected or replaced by the general meeting and serve a term of three years for each term. A director may serve consecutive terms if re-elected upon the expiry of his term, unless otherwise stipulated by the relevant laws, regulations and listing rules of the place where the Company’s shares are listed.

A director’s term of service commences from the date he takes up the appointment, until the current term of service of the board of directors ends. If a director’s term of service expires but a new director is not yet appointed, the original director shall continue to carry out the director’s duties according to the laws, administrative regulations, departmental regulations and these Articles of Association until the newly elected director’s appointment comes into effect. Before expiry of the current term of office, a director cannot be dismissed without cause by the general meeting.

A director’s post may be assumed by the general manager or other senior management members. But the total number of the directors who also serve as the general manager or other senior management members and the directors as staff representative, shall not exceed one half of the total number of directors.

A director need not be a shareholder of the Company.

Article 123 The directors, both collectively and individually, are expected to fulfill fiduciary duties and duties of skill, care and diligence to a standard at least in compliance with the standard established by the laws of Hong Kong. This means that every director must, in the performance of his duties as a director:

(a) act honestly and in good faith in the interests of the company as a whole;
(b) act for proper purpose;
(c) be responsible to the issuer for the application or misapplication of its assets;
(d) avoid actual and potential conflicts of interest and conflicts in duty;
(e) disclose fully and fairly his interests in contracts with the issuer; and
(f) apply such degree of skill, care and diligence as may reasonably be expected of a person of his knowledge and experience and holding a directorship in a listed company.

Article 124 The Company shall be notified in writing of the intention to nominate a candidate as director and such candidate’s willingness to accept the nomination no later than 7 days prior to the date appointed for such general meeting.

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Subject to relevant laws and regulations, a director can be removed by an ordinary resolution passed on a general meeting before the expiry of his term of office, without prejudice to the director’s claim for damages pursuant to any contract.

Article 125 If a director fails to attend board meetings in person for two consecutive meetings, and does not appoint other directors to attend board meeting on his behalf, he shall be deemed as failing to carry out his duties. The board of directors shall propose to the general meeting to replace him.

Article 126 A director may resign before expiry of his term of service. When a director resigns, he shall submit a written resignation notice to the board of directors. The board of directors shall disclose the relevant circumstances within 2 days.

If resignation of a director would cause the number of the directors to fall below the minimum statutory requirement, the notice of resignation of the resigning director will not become effective until a new director is appointed to fill the vacancy. The remaining members of the board shall promptly convene an extraordinary general meeting to elect a new director to fill the vacancy.

Save for the circumstances referred to in the preceding paragraph, the director’s resignation takes effect upon delivery of his/her resignation report to the board of directors.

Article 127 When a director’s resignation takes effect or when his term of service expires, the director shall complete all handover procedures with the board of directors. His fiduciary duties towards the Company and the shareholders shall continue to be effective for twelve months from the end of his term of service. The duty of confidentiality in relation to trade secrets of the Company survives the termination of their tenure until the same falls into the public domain. Other duties may continue for such as period as the principle of fairness may require depending on the time lapse between the occurrence of the event concerned and the termination of tenure and the circumstances under which the relationship between him and the Company are terminated.

Article 128 Unless otherwise duly authorized under these Articles of Association or by the board of directors, no director shall act in his personal capacity on behalf of the Company or the board of directors. When a director acts in his personal capacity, but a third party may reasonably believe that the director is acting for the Company or the board of directors, that director shall declare his position and capacity in advance.

Article 129 If a director violates the laws, administrative regulations, departmental regulations or these Articles of Association when carrying out his duties and causes loss to the Company, he shall be held responsible for compensation.

SECTION 2 INDEPENDENT DIRECTORS

Article 130 The Company shall have independent directors. An independent director means a directors who takes no, position in the Company other than the directorship, and has no relationship with the Company or its substantial shareholders (‘‘substantial shareholders’’ mean shareholders

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who separately or together hold at least 5% of the total number of voting shares of the Company) that may be prejudicial to his ability to make independent and objective judgement, and satisfies the requirements on independence by the listing rules of the place where the Company’s shares are listed.

In addition to the provisions of this section, the relevant provisions set out in Chapter 15 of these Articles of Association shall also apply to the qualifications and obligations of independent directors.

Article 131 No less than one-third members of board of directors and no less than three members of the board of directors of the Company shall be independent non-executive directors; among which, at least one of the independent non-executive directors must have appropriate professional qualifications or accounting or related financial management expertise. If the number of independent directors fails to meet the minimum number required by these Articles of Association due to any independent director failing to meet the requirement of independence or otherwise unsuitable for the position, the Company shall appoint additional independent directors to meet the requirement.

At least one of the independent non-executive directors of the Company shall ordinarily reside in Hong Kong.

Article 132 An independent director shall have the same term of office as other directors of the Company, and may be re-elected upon expiry of the term, provided that an independent director may not stay in his position consecutively for more than six years.

Article 133 The Company shall formulate working regulations of independent directors, which will specify the qualification, nomination, election and replacement and rights and obligations, liabilities of an independent director.

Article 134 Matters relating to independent directors which are not covered in this section shall be dealt with according to the relevant laws, regulations or listing rules of the place where the Company’s shares are listed.

SECTION 3 BOARD OF DIRECTORS

Article 135 The Company shall set up a board of directors, which shall be accountable to the general meeting.

Article 136 The board of directors shall comprise nine directors, including three independent directors. The board of directors shall have one chairman, and the general meeting may decide whether and how to set up the post of vice chairman by an ordinary resolution at the general meeting. (The provisions in these Articles of Association in relation to a vice chairman are only applicable if the Company has a vice chairman. The same applies below.)

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The chairman and vice chairman (or vice chairmen) of the board of directors shall be elected and removed by more than one half of all the directors. The chairman and vice chairman (or vice chairmen) of the board shall serve a term of three years and may be re-elected upon the expiry of their terms.

Article 137 The board of directors exercises the following functions and powers:

(1) to be responsible for the convening of general meetings and report its work to the general meetings;
(2) to implement resolutions of the general meetings;
(3) to decide on the Company’s business plans and investment schemes;
(4) to formulate the annual financial budgets and final accounts of the Company;
(5) to formulate the Company’s profit distribution plans and plans on making up losses;
(6) to formulate proposal for the Company to increase or decrease of its registered capital, issue debentures or other securities and listing thereof;
(7) to formulate plans for mergers, divisions, dissolution and alteration of corporate form of the Company;
(8) to formulate plans for the Company’s substantial acquisitions or repurchase of shares of the Company;
(9) within the scope authorized by the general meeting, to decide, among others, the Company’s external investment, purchase and sale of assets, creation of mortgage on the Company’s assets, provision of guarantees, wealth management entrustment, connected transactions;
(10) to decide on establishment of internal management organizations of the Company;
(11) to determine the setup of the specialized committees under the board of directors, appoint or dismiss the chairmen of such committees (the conveners);
(12) to appoint or dismiss the general manager, the secretary to the board of directors and the secretary to the Company; in accordance with the nominations by the general manager, to appoint or dismiss senior management members such as deputy general managers, financial controller and chief engineer, and to decide on their remunerations;
(13) to formulate the basic management system of the Company;
(14) to formulate proposals to amend these Articles of Association;

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(15) to formulate the stock incentive plan of the Company;
(16) to manage information disclosure of the Company;
(17) to propose to the general meeting on the appointment or replacement of the accounting firms which provide audit services to the Company;
(18) to listen to work reports of the general manager and review his/her work;
(19) to review and approve provision of guarantees by the Company, other than the guarantees which are subject to review and consideration at a general meeting in accordance with Article 68 hereof;
(20) other powers authorized by the laws, administrative regulations, and departmental rules, listing rules of the listing place where the Company’s shares are listed, these Articles of Association and the general meetings.

If any matter of authority to be exercised by the board of directors above or any transaction or arrangement of the Company shall be subject to review by the general meeting according to the listing rules of the place where the Company’s shares are listed, such matters shall be submitted to the general meeting for review.

Except for the matters specified in paragraphs (6), (7) and (14) of this Article, which shall be passed by at least two-thirds of the directors, all other matters above may be passed by at least one half of the directors.

Article 138 The board of directors shall formulate the rules of procedures for meetings of the board of directors to ensure implementation of the resolutions of the general meeting, improve the efficiency of work and ensure scientific decision-making. The rules of procedures for the board of directors stipulate the convening and voting procedures of the board of directors, and shall be appended to these Articles of Association. It shall be formulated by the board of directors and approved by the general meeting.

Article 139 The board of directors shall set up the Audit Committee, Remuneration and Appraisal Committee and Nomination Committee, and may set up other specialized committees such as Strategic Committee, to advise the board of directors on major decisions.

Each specialized committee is responsible to the board of directors. All members of the specialized committees shall be directors. The Audit Committee shall comprise at least three members, who shall be non-executive directors. The majority of its members shall be independent non-executive directors with at least one independent non-executive director holding proper qualification as required by the listing rules, or appropriate accounting or related financial management expertise. The chairman of the Audit Committee shall be an independent nonexecutive director. The majority of the Remuneration and Appraisal Committee shall be independent non-executive directors and the chairman of the Remuneration and Appraisal Committee shall be an independent non-executive director. The chairman of the Nomination

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Committee shall be the chairman of the board of directors or an independent non-executive director and the majority of the Nomination Committee shall be independent non-executive directors. The board of directors may also set up additional specialized committees or adjust the existing committees if necessary. The board of directors shall separately formulate the scope of responsibilities and rules of procedures for each specialized committee.

Article 140 If the board of directors proposes to dispose of any fixed assets, the expected value of which, when aggregated with value of fixed assets disposed of within four months before the proposed disposal, exceeds 33% of the fixed assets value set out in the latest audited balance sheet considered by the general meetings, the board of directors shall not dispose of or agree to dispose of such fixed assets without prior approval by the general meeting.

The term ‘‘fixed assets disposal’’ referred to in this Article includes transfer of certain interests in assets, but excludes creation of security interests over fixed assets.

The validity of fixed assets disposal by the Company shall not be affected by a breach of the first paragraph of this Article.

Article 141 The chairman of the board shall have the following functions and powers:

(1) to preside over general meetings and to convene and preside over meetings of the board of directors;
(2) to procure and check the implementation of resolutions of the board of directors;
(3) to sign on share certificates, debentures and other securities issued by the Company;
(4) organize the formulation of various rules and coordinate operation of the board of directors;
(5) to sign on important documents of the board of directors and legally binding documents on behalf of the Company;
(6) to exercise the powers and functions as the legal representative;
(7) to nominate candidates for secretary to the board of directors, members and chairmen of the specialized committees under the board of directors;
(8) to listen to periodic or ad hoc work reports of the company’s senior management, and provide guidance opinion to implementation of the resolutions of the board of directors;
(9) in case of emergency of catastrophic natural disasters and other force majeure events, exercise the special right of disposal over the Company’s affairs that are in accordance with the requirements of laws and interests of the Company, and report to the board of directors and the general meeting afterwards;

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(10) to exercise certain powers of the board of directors within the mandate of the board of directors when the board of directors is not in session;
(11) other functions and powers authorized by the laws, administrative regulations, departmental rules, these Articles of Association and the board of directors.

Article 142 The vice chairman (or vice chairmen) shall assist the chairman of the board of directors in work. When the chairman is unable to or does not carry out his duties, the vice chairman shall (or if there are two or more vice chairmen, the vice chairmen elected by at least half of the directors shall) carry out such duties. If no vice chairman is appointed or the vice chairman is unable to or does not carry out his duties, such duties shall be carried by a director elected by at least half of the directors.

Article 143 The board meetings include regular meetings and extraordinary meetings.

Regular meetings of the board of directors shall be held at least twice a year. The meeting shall be convened by the chairman of the board with the notice and documents of meeting being served upon all the directors and supervisors at least 14 days before the meeting is held.

The chairman, any shareholder holding at least one-tenth voting rights, at least one third of the directors, or the supervisory committee or the general manager may propose the holding of an extraordinary meeting of the board of directors. The chairman shall convene and preside over the extraordinary meeting of the board of directors within 10 days upon receipt of the proposal, and shall give a notice to all the directors and supervisors at least five days before the meeting is held.

Where there is an urgent matter, the extraordinary board meeting may be held upon approval by the chairman, which is not subject to the requirement of meeting notice as set out in paragraph 3 of this Article, provided that a proper notice shall be given to the directors, supervisors and the general manager.

Regular Board meetings or extraordinary meetings can be held by way of telephone conference or use of similar communication equipment. As long as all directors present in the meeting can hear clearly the conversation of the other directors and can give feedback, all directors participated should be treated as present in the meeting in person.

Article 144 The notice of board meetings may be delivered in the manners as set out in Article 246 of these Articles of Association.

Directors who have attended the meeting will be deemed to have been issued a notice of board meeting if he had not raised any issues of not having received such notice before or during the board meeting.

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Article 145 A notice of board meeting shall include the following contents:

(1) date and place of meeting;
(2) period of the meeting;
(3) reasons and agenda;
(4) date of issuance of notice; and
(5) method of convening the meeting.

Article 146 For any major matters to be determined by the board of directors, sufficient information shall be provided to the directors and the directors are entitled to request supplementary materials. When at least one-fourth of the directors or at least two external directors (an external director means a director who have no executive positions in the Company) consider that the provided materials insufficient or the reasoning is unclear, they may jointly propose to defer the board meeting or defer the consideration on the relevant matters, the board of directors shall accept such proposal accordingly.

Article 147 Except for the consideration on the connected transactions by the board of directors as set out in Article 149, the quorum of a board meeting shall be presence of more than one half of the directors.

Unless otherwise provided elsewhere in these Articles of Association, resolutions of the board of directors shall be passed by more than one half of all the directors.

As for the voting on a board resolution, each director shall have one vote only.

Article 148 The directors shall attend a board meeting in person. If a director is unable to attend for any reasons, he may appoint another director in writing to attend on his behalf. The authorization letter shall contain the name of the proxy, the matters represented, scope of authorization and validity period. It shall be signed or sealed by the principal.

A director who acts as a proxy of another director at a board meeting shall exercise the other director’s rights within the authorized scope. If a director does not attend a board meeting in person and does not appoint a proxy to attend the meeting, he/she shall be deemed to have waived the voting rights in the meeting.

Article 149 When a director is connected to companies which are the subject of a resolution to be decided at a board meeting, the connected director shall not vote on that resolution, and shall not vote on behalf of other directors on such resolution. Such board meeting shall be deemed as having a quorum if more than one half of the non-connected directors attend the meeting. Resolutions made by the board meeting shall be passed by more than one half of the non-connected directors. If the number of non-connected directors attending the board meeting is less than three, the matter shall be submitted to the general meeting for consideration.

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Article 150 The board meeting shall vote by way of disclosed ballot.

Provided that the directors can fully express their opinions at the extraordinary board meetings, decisions could be made by signing written resolutions instead of convening board meetings, given that the resolutions to be reviewed shall be delivered to each of the directors by hand, post, fax or other means of communication and the number of directors who signed the said resolutions shall reach the number as required for pass such resolution.

If a substantial shareholder (a substantial shareholder means a shareholder holding 10% or more of the shares of the Company) or a director has material conflict of interest in the matters to be considered, such matters shall be considered and decided on by the means of convening board meetings (rather than written resolutions) and independent non-executive directors who do not have any material interest in such matters shall attend the board meeting.

Article 151 The board of directors shall keep minutes of its decisions on the matters discussed at the meeting. The directors who attended the meeting, the board secretary and the recorder shall sign the minutes of that meeting.

The directors shall be responsible for the decisions of the board of directors. Where a resolution of the board of directors is in violation of the laws, administrative regulations or these Articles of Association, thereby causing serious losses to the Company, the directors who took part in the resolution shall be liable to the Company for compensation. However, where a director can prove that he expressed his opposition to such resolution when it was put to voting, and that such opposition was recorded in minutes of the meeting, the director shall be exempted from such liability.

The minutes of board meetings shall be kept as a company file for a period of no less than 10 years.

Article 152 The minutes of the board meetings shall contain the following information:

(1) date and venue of the meeting and the name of the convener;
(2) the names of the directors present and names of directors (proxy) acting for other directors to attend the meeting;
(3) the agenda;
(4) the main points of directors’ speeches;
(5) the voting method of each resolution and the result (the result shall specify the number of votes for, against and abstaining).

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CHAPTER 11 SECRETARY TO THE BOARD OF DIRECTORS

Article 153 The Company shall have one board secretary. The board secretary shall be a senior management member of the Company.

Article 154 The secretary to the board of directors shall be a natural person with the requisite professional knowledge and experience and shall be appointed by the board of directors.

The primary responsibilities of the secretary to the board include:

(1) to assist the daily work operations of the board, continuously provide the board with the operation provisions on corporate operations under the law, regulations, policies and requirements of domestic and foreign regulatory agencies and ensure the board comprehend such provisions, and assist the directors and general manager perform duty under domestic and foreign law, regulations, the Articles of Association and any other relevant provisions;
(2) to organize board meeting and shareholders general meeting, prepare the relevant documentations, prepare the meeting minutes, ensure the meeting’s decision-making processes in accordance with statutory procedures, and be fully aware of the implementation of the board’s resolutions;
(3) to be responsible for arrangement and coordination of information disclosure, liaise with investors, and enhance the transparency of the Company’s work operations;
(4) to participate in the arrangement of capital market financing;
(5) to with intermediate agencies, regulatory authorities and media, and maintain good public relations;
(6) to fulfill other tasks assigned by the board of directors as well as the chairman.

The scope of responsibilities of the secretary to the board includes:

(1) to organize board meetings and shareholders general meetings, prepare relevant documentations, arrange for meeting affairs, prepare meeting minutes, ensure the accuracy of the meeting minutes, keep the meeting documents including the meeting minutes and take the initiative to fully comprehend the implementation of the related resolutions, report to the board of directors with suggestions on important issues in relation to such implementation.
(2) to ensure that the board’s decision-making on major issues is in strict accordance with the prescribed procedures, organize and participate in the discussion and analysis meetings and provide relevant opinions or suggestions as requested by the board, and fulfill routine work assigned by the board or related committees of the board.

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(3) to serve as the contact person between the Company and the securities regulatory authorities, organize the preparation and timely submission of the documents requested by the regulatory authorities, and receive and organize the completion of relevant tasks assigned by the regulatory authorities.
(4) to coordinate and organize the information disclosure of the Company, improve the information disclosure system, participate in all the meetings related to information disclosure, and be fully aware of the major business decisions and related information timely.
(5) be responsible for the confidentiality of the sensitive information on the Company’s share price, and formulate effective confidentiality measures; in the event of any leakage of sensitive information of the share price of the Company, to take necessary remedial measures, make prompt explaining and clarifying accordingly, and inform overseas listing regulatory agencies and the CSRC.
(6) to coordinate and organize the Company’s marketing events, receive visitors in such events, deal with investor relationship, liaise with investors, intermediate agencies and media, coordinate and reply to public enquiries, ensure that investors are able to receive timely information disclosed by the Company; prepare and organize the Company’s domestic and overseas promotion events, compile summary reports on such events and important visits, and report on relevant matters to the CSRC.
(7) to be responsible for the maintenance of shareholders’ register, directors’ register, records of shareholdings of substantial shareholders and directors as well as a list of holders of outstanding debentures of the Company.
(8) to assist directors and the general manager in performing duties in accordance with domestic and foreign law, regulations, these Articles of Association and other relevant regulations. When knowing that the Company is making or to make a resolution in violation of any relevant provisions, the secretary has an obligation to timely remind the Company and has the right to truthfully report the situation to the CSRC and other regulatory agencies.
(9) to coordinate to provide information to the Company’s supervisory committee and other auditing agencies needed for performance of their supervisory functions, and assist the investigation relevant to the Company’s financial controller, directors and general manager on fulfillment of fiduciary duties.
(10) to perform such other functions and powers assigned by the board of directors and other functions required by the law in the listing place of the Company or stock exchange.

Article 155 Directors or other senior management members may concurrently act as the secretary to the board of directors. No accountant(s) of the accounting firm engaged by the Company may concurrently act as the secretary to the board of directors.

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If the office of the secretary to the board is held concurrently by a director, and an act is required to be taken by a director and the secretary to the board separately, the person who concurrently holds the offices of director and secretary to the board shall not perform the act in dual capacity.

Article 156 The Company’s directors, general manager and related departments shall support the secretary to the board to perform his/her duties in terms of institutional setup, staff deployment, funding etc. if required. All relevant departments of the Company shall actively cooperate with the secretary to the board.

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CHAPTER 12 COMPANY SECRETARY

Article 157 The Board shall appoint a company secretary to ensure good communication among the members of the board and compliance with the bard policies and procedures. The company secretary shall report his/her work to the chairman and/or the general manager, recommend to the board on corporate governance through the chairman and/or the general manager, and make arrangements in respect of director’s induction training and professional development.

Article 158 The election, appointment and dismissal of a company secretary shall be approved by the board through board meetings but not written resolutions. The post of company secretary shall be taken by a person who, by virtue of his/her academic or professional qualifications or relevant experience, is, in the opinion of the Hong Kong Stock Exchange, capable of discharging the functions of a company secretary. The Company may appoint the company secretary by selecting an employee who is familiar with the ordinary course of business of the Company or engaging external agencies. In the event that the company secretary is an external agency, the Company shall designate a senior management member to liaise with the external agency.

Article 159 The company secretary shall attend professional training of no less than 15 hours for each fiscal year.

Article 160 All the directors of the Company may have access to the advice and services of the company secretary to ensure compliance with the board procedures and all the laws, regulations and provisions.

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CHAPTER 13 GENERAL MANAGER

Article 161 The Company shall have one management team who, under the steering of the board of directors, implements the decisions of the board of directors and supervises the Company’s daily work operations. The management team shall be led by the general manager.

The Company shall have one general manager and several deputy general managers to assist the general manager and shall also have one financial controller and one chief engineer. The general manager, deputy general managers, financial controller and chief engineer shall be appointed and dismissed by the board of directors.

Article 162 The term of office of the general manager shall be three years and the general manager may serve consecutive terms if re-appointed.

The general manager can submit his resignation before the expiry of his term of office. The procedures and methods concerning the general manager’s resignation shall be regulated by the employment contract between the general manager and the Company. If the general manager fails to perform his/her duties for special reasons, one deputy general manager designated by the Board of directors shall act on his/her behalf.

A director may concurrently take the post of general manager or deputy general manager, provided that the post of chairman and general manager shall be taken by different persons.

Article 163 The Company’s general manager shall be accountable to the board of directors and shall exercise the following functions and powers:

(1) to lead the Company’s production, operation and management, and report to the board of directors;
(2) to organize resources to carry out the Board’s resolutions;
(3) to organize the implementation of the Company’s annual business plan and investment plan formulated by the board of directors;
(4) to draft plans for the establishment of the Company’s internal management structure;
(5) to draft the basic management system of the Company;
(6) to formulate detailed rules and regulations of the Company;
(7) to propose the appointment or dismissal of the Company’s deputy general manager(s), financial controller and chief engineer to the board;
(8) to appoint or dismiss other management members other than those required to be appointed or dismissed by the Board;

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(9) to exercise other powers conferred by these Articles of Association or the board of directors.

Article 164 The Company’s general manager shall be in attendance at the meetings of the board of directors. If the general manager is not a director, he shall not have the right to vote at such meetings.

Article 165 The general manager shall formulate the detailed working rules of the general manager, which shall be submitted to the board of directors for approval.

The working rules of the general manager include the following:

(1) conditions, procedures and attendants for convening manager meeting;
(2) respective duties and responsibilities of the general manager and other senior management members;
(3) limits of authority in using company funds and assets as well as the signing of significant contracts, together with the reporting system to the board of directors and the supervisory committee;
(4) other matters considered necessary by the board of directors.

Article 166 In the exercise of his/her functions and powers, the general manager shall act honestly and diligently in accordance with the law, administrative regulations and these Articles of Association.

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CHAPTER 14 SUPERVISORY COMMITTEE

SECTION 1 SUPERVISORS

Article 167 The term of office of a supervisor shall be three years, renewable upon reelection and re-appointment.

Article 168 Directors and other senior management members cannot concurrently hold a post as supervisor.

Article 169 When a supervisor’s term of office expires while a new supervisor is not yet appointed, or the number of supervisors falls below the statutory minimum due to resignation of any supervisor during his term of office, the original supervisor shall continue to perform his/her duties according to the law, administrative regulations and these Articles of Association, until the new supervisor takes office.

Article 170 A supervisor shall ensure that the information disclosure of the Company is true, accurate and complete.

Article 171 A supervisor can be in attendance at a board of director’s meeting. He/she can also raise questions or suggestions concerning proposed resolutions at the meeting.

Article 172 A supervisor shall not make use of his connected relationship to prejudice the Company’s interests, and shall be liable for compensating all losses incurred by the Company due to such reason.

Article 173 A supervisor shall faithfully perform his supervisory duties in accordance with the law, administrative regulations and these Articles of Association.

If a supervisor violates the laws, administrative regulations, departmental regulations or these Articles of Association while performing his duties and causes losses to the Company, he/she shall bear the responsibility of compensation.

SECTION 2 SUPERVISORY COMMITTEE

Article 174 The Company shall establish a supervisory committee.

Article 175 The supervisory committee shall comprise three supervisors, one of whom shall be the chairman of the supervisory committee.

The appointment and dismissal of the chairman of the supervisory committee shall be passed by at least two-third of its members.

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Article 176 The supervisory committee shall comprise shareholder representative supervisors and employee representative supervisors. The shareholder representative supervisors shall be elected and removed by the general meeting. The number of employee representative supervisors shall be no less than one third of the total number of supervisors, and the employee representative supervisors shall be democratically elected and removed by the Company’s employees.

Article 177 The supervisory committee shall be accountable to the general meeting and exercise the following functions and powers according to the laws:

(1) to examine the Company’s financial affairs;
(2) to supervise the directors and senior management during their performance of duties to the Company, and propose the dismissal of directors or senior management members who violate the law, administrative regulations, these Articles of Association or resolutions of general meetings;
(3) to demand rectification from a director and any other senior management members when the acts of such persons are harmful to the Company’s interests;
(4) to verify financial information such as financial reports, business reports and profit distribution plans, etc. to be submitted by the Board to the general meetings and, should any queries arise, to engage, in the name of the Company, certified public accountants and practicing auditors to conduct a re-examination;
(5) to propose convening of extraordinary general meeting and to convene and preside over the general meeting when the Board fails to perform such duties;
(6) to submit proposals to the general meetings;
(7) to propose convening of extraordinary meeting of board of directors;
(8) to initiate legal action against directors and senior management members in accordance with the Company Law;
(9) to conduct investigations upon discovery of abnormality in the business operation and engage, at the cost of the Company, professional firms such as accounting firms and law firms to assist its work where necessary; and
(10) any other duties as prescribed by these Articles of Association.

Article 178 The supervisory committee shall hold a meeting at least once every six (6) months. Such meeting shall be convened and presided over by the chairman of the supervisory committee. A supervisor may propose to convene an extraordinary meeting of the supervisory committee.

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Where the chairman of the supervisory committee is incapable of performing or fails to perform his/her duties, a supervisor elected by not less than half of the supervisors shall convene and preside over the supervisory committee meeting.

Article 179 The supervisory committee shall formulate the rules of procedures for the supervisory committee in order to ensure working efficiency and scientific decision-making. The rules of procedures of the supervisory committee shall contain the convening and voting procedure of meetings of the supervisory committee, and shall be appended to these Articles of Association. Such rules of procedures shall be drafted by the supervisory committee and approved by the general meeting.

Article 180 The quorum of a meeting of the supervisory committee shall be presence of more than half of the supervisors. Voting at the supervisory committee meeting shall be carried out by disclosed ballot and each supervisor shall have one vote. A supervisor shall attend meetings of the supervisory committee in person. If a supervisor is unable to attend such meeting for any reason, he/she shall appoint in writing another supervisor to attend the meeting on his/her behalf. The letter of authorization shall specify the extent of authorization.

Resolutions at the meeting of the supervisory committee shall be passed by at least two-third of the supervisors’ votes.

Article 181 Decisions made at a meeting of the supervisory committee shall be recorded in the minutes of such meeting. Supervisors attending the meeting shall sign on the minutes of meeting.

Supervisors are entitled to request that an explanation of their comments made at the meetings be noted in the minutes. Minutes of meetings of the supervisory committee shall be maintained as corporate archives for at least 10 years.

Article 182 A notice of the regular meeting of the supervisory committee shall be given to all supervisors in writing at least 10 days before the meeting is held and a notice of the extraordinary meeting of the supervisory committee shall be given to all supervisors in writing at least three days before the meeting is held.

A notice of the supervisory committee meeting shall include the following contents:
(1) date, venue, and duration of the meeting;
(2) reasons and agenda;
(3) date of issuance of notice.

Article 183 Any reasonable expenses incurred by the supervisory committee for engagement of professionals such as lawyers, certified public accountant, practicing auditors, etc., to perform its (his) duties shall be borne by the Company.

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CHAPTER 15 QUALIFICATIONS AND OBLIGATIONS OF THE COMPANY’S DIRECTORS, SUPERVISORS AND OTHER SENIOR MANAGEMENT MEMBERS

Article 184 A person may not serve as a director, supervisor, or senior management member of the Company if he/she is in any of the following circumstances:

(1) he/she has no capacity or only has restricted capacity for civil acts;
(2) he/she has been found guilty of offences of corruption, bribery, embezzlement or misappropriation of property or disruption of the social economic order, and not more than five years have lapsed since the sentence was served, or he/she has been deprived of his political rights as a criminal punishment, and not more than five years have lapsed since the sentence was served;
(3) he/she is a former director, factory manager or general manager of a company or enterprise which has entered into insolvent liquidation and he/she is personally liable for the insolvency of such company or enterprise, where less than three (3) years have elapsed since the date of completion of the insolvency and liquidation of the company or enterprise;
(4) he/she is a former legal representative of a company or enterprise which had its business license revoked due to violation of the law and he/she is personally liable for such revocation, where less than three (3) years has elapsed since the date of revocation of the business license;
(5) he/she has a relatively large amount of debts due and outstanding;
(6) he/she is under criminal investigation by a judicial organization for violation of the criminal law where said investigation is not yet concluded;
(7) he/she is prohibited to enter the securities market by the securities regulatory authority under the State Council and the aforesaid prohibition period has not yet expired;
(8) he/she is has been found by the competent authority as violating relevant securities regulations and acting fraudulently or dishonestly, where not more than five years have lapsed since the date of such finding;
(9) he/she is not a natural person;
(10) other circumstances prescribed by the laws, administrative regulations or departmental regulations or rules of security regulators and stock exchange(s) in the territory where the Company’s shares are listed.

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Article 185 The validity of an act of a director or senior management member on behalf of the Company vis-a-vis a bona fide third party shall not be affected by any non-compliance in relation to the performance of duties, election or qualification of such director or senior management member.

Article 186 In addition to the obligations imposed by laws, administrative regulations or listing rules of the stock exchange(s) on which shares of the Company are listed, the Company’s directors, supervisors, and other senior management members owe the following duties to each shareholder, in the exercise of the functions and powers of the Company entrusted to them:

(1) not to cause the Company to exceed the scope of business stipulated in its business licence;
(2) to act honestly in the best interests of the Company;
(3) not to expropriate in any guise the Company’s property, including (without limitation) usurpation of opportunities beneficial to the Company; and
(4) not to deprive the shareholders of their individual rights or interests, including (without limitation) rights to distribution and voting rights, save pursuant to restructuring of the Company submitted to Shareholders for approval in accordance with these Articles of Association.

Article 187 Each of the Company’s Directors, supervisors, general manager and other senior management members owes a duty, in the exercise of his powers and discharge of his duties, to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Article 188 The Company’s directors, supervisors, and senior management members must, in the exercise of their duties, abide by the principles of good faith and shall not place themselves in a position where there is a conflict between their personal interests and their duties. This principle shall include (but not limited to) the fulfillment of the following obligations

(1) to act honestly in the best interests of the Company;
(2) to exercise powers within the scope of their functions and powers and not to exceed such powers;
(3) to personally exercise the discretion vested in him/her, not to allow himself/herself to be manipulated by another person and, not to delegate the exercise of his discretion to another party unless permitted by the law and administrative regulations or with the informed consent of the shareholders at the general meeting;
(4) to treat shareholders of the same class equally and to treat shareholders of different classes fairly;

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(5) not to conclude a contract or enter into a transaction or arrangement with the Company except as otherwise provided in these Articles of Association of the Company or with the informed consent of the shareholders at the general meeting;
(6) not to use the Company’s property for his own benefit in any way without the informed consent of the general meeting;
(7) not to exploit his position to accept bribes or other illegal income, misappropriate the Company’s funds or expropriate the Company’s property by any means, including (without limitation) opportunities advantageous to the Company;
(8) not to accept commissions in connection with Company’s transactions without the informed consent of the general meeting;
(9) to abide by these Articles of Association, perform his duties faithfully, and protect the interests of the Company and not to exploit his position and power in the Company to advance his own private interests;
(10) not to seek for himself/herself or others the business opportunities originally belonged to the Company, not to operate for himself or others business similar to the Company’s and not to compete with the Company in any way, in each case without the informed consent of the shareholders at the general meeting;
(11) not to misappropriate company funds or deposit the properties or funds of the Company in an account under his own or other’s name; and
(12) not to, in violation of the provisions of these Articles of Association, lend funds to any other person or provide security for the Company’s shareholders or other person with any properties of the Company, without the consent of the general meeting or the board of directors;
(13) not to harm the interests of the Company through the use of his connected relationship;
(14) not to disclose confidential information relating to the Company that was acquired by him or her during his or her office without the informed consent of the shareholders at the general meeting, and not to use such information except in the interests of the Company; however, such information may be disclosed to the court or other government authorities in any of the following circumstances:
mandatorily provided by law;
required for the public interest; or
required for the interest of such director, supervisor or senior officer of the Company.

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The income acquired by the said persons in violation of this Article shall belong to the Company and any loss caused to the Company shall be borne by such persons.

Article 189 Each director, supervisor, senior management member of the Company shall not direct the following persons or institutions (‘‘associates’’) to act in a manner which a director, supervisor or senior management personnel is prohibited from so acting

(1) the spouse or minor child of such director, supervisor or senior management member of the Company;
(2) the trustee of such director, supervisor or senior management member of the Company or of any person referred in Item (1) hereof;
(3) the partner of such director, supervisor or senior management member of the Company or of any person referred in Items (1) and (2) hereof;
(4) the company over which such director, supervisor or senior management member of the Company, alone or jointly with any person referred to in Items (1), (2) and (3) hereof or any other director, supervisor or senior management member of the Company, has actual control; and
(5) the director, supervisor or senior management member of a company being controlled as referred to in Item (4) hereof.

Article 190 The fiduciary duties of the directors, supervisors, general manager and other senior management members of the Company do not necessarily cease with the termination of their tenure. The duty of confidence in relation to trade secrets of the Company survives the termination of their tenure. Other duties may continue for such period as fairness may require depending on the time lapse between the termination of tenure and the occurrence of the event concerned and the circumstances under which the relationships between them and the Company are terminated.

Article 191 Except for circumstances prescribed in Article 62 of these Articles of Association, a director, supervisor, and other senior management member of the Company may be relieved of liability for specific breaches of his duty by the informed consent of shareholders given at a general meeting.

Article 192 Where a director, supervisor and other senior management member of the Company is in any way, directly or indirectly, materially interested in a contract, transaction or arrangement or proposed contract, transaction or arrangement with the Company (other than his/her service contract with the Company), he/she shall disclose the nature and extent of his/her interests to the board at the earliest opportunity, whether or not such matter is otherwise subject to the approval of the Board.

A director shall not vote on a contract, transaction or arrangement in which he/she or any of his/her associates has a material interest, nor shall such director be included in the quorum for a meeting.

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Unless the interested director, supervisor or senior management member of the Company has disclosed such interest to the board of directors as required under the first paragraph hereof and the matter has been approved by the board of directors at a meeting where he/she was not counted in the quorum and had refrained from voting, the Company shall have the right to void the contract, transaction or arrangement, except the other party is a bona fide party acting without knowledge of the breach of obligation by the director, supervisor or senior management concerned.

A director, supervisor or senior management member of the Company shall be deemed to have an interest in any contract, transaction or arrangement in which an associate of that director, supervisor or senior officer has an interest.

Article 193 If a director, supervisor or senior management member of the Company has given a written notice to the board of directors before a contract, transaction or arrangement is considered by the Company for the first time, stating that he has an interest in the contract, transaction or arrangement to be made by the Company for the reasons as described in the notice, such director, supervisor or senior management member shall be deemed for the purposes of the preceding articles of this chapter to have declared his interest to the extent stated in the notice.

Article 194 The Company shall not in any manner pay tax for or on behalf of its directors, supervisors or senior management members.

Article 195 The Company shall not directly or indirectly provide a loan or provide any guarantee for a loan for a director, supervisor or senior management member of the Company or its parent, or any associate of the said persons.

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

(1) provision of a loan or a guarantee for loan by the Company for a subsidiary of the Company;
(2) provision of a loan or a guarantee for loan or other funds by the Company to a director, supervisor or senior management member of the Company under a service contract approved by the general meeting, so as to enable him to pay the expenses incurred for the sake of the Company or for the performance of his duties; and
(3) provision of a loan or a guarantee for loan by the Company to relevant director, supervisor or senior management member of the Company or to an associate thereof on normal commercial terms, if the ordinary business scope of the Company includes the lending of money or the provision of guarantees.

Article 196 A loan provided by the Company in violation of the preceding Article shall be immediately repayable by the recipient of the loan, regardless of the terms of the loan.

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Article 197 A guarantee provided by the Company in violation of provision under the first paragraph of Article 195 shall be unenforceable against the Company, provided that:

(1) the lender is not aware of such violation when providing the loan to an associate of a director, supervisor or senior management member of the Company or its parent
(2) the collateral provided by the Company has been lawfully sold by the lender to a bona fide purchaser.

Article 198 For the purposes of the preceding articles of this chapter, the term ‘‘guarantee’’ shall include an undertaking or creation of security interest over property to guarantee or secure the obligor’s performance of his obligations.

Article 199 In addition to any rights and remedies provided by the laws and administrative regulations, where a director, supervisor or senior management member of the Company is in breach of his duties to the Company, the Company has a right to:

(1) demand the relevant director, supervisor or senior management member to compensate for the losses sustained by the Company as a consequence of his/her dereliction of duty;
(2) rescind any contract or transaction concluded by the Company with the relevant director, supervisor or senior management member or contracts or transactions with a third party (where such third party is aware or should be aware that the director, supervisor or senior management member representing the Company is in breach of his obligations to the Company);
(3) demand the relevant director, supervisor or senior management member to surrender the gains derived from the breach of his obligations;
(4) recover any funds received by the relevant director, supervisor or senior management member that should have been received by the Company, including (but not limited to) commissions;
(5) demand the relevant director, supervisor or senior management member to return the interest which is generated or may be generated from the funds that should have been given to the Company; and
(6) take legal proceedings to decide that director, supervisor or senior management member should return to the Company the property obtained as a consequence of his breach of obligations.

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Article 200 The Company shall enter into a contract in writing with every director and supervisor of the Company concerning his emoluments. Such contract shall be approved by the general meeting before it is entered into. The above-mentioned emoluments shall include:

(1) emoluments in respect of his service as a director, supervisor or senior management member of the Company;
(2) emoluments in respect of his service as a director, supervisor or senior management member of a subsidiary of the Company;
(3) emoluments otherwise in connection with the management of the Company or any subsidiary thereof; and
(4) funds as compensation for his loss of office or retirement to the aforementioned directors and supervisors.

A director or supervisor may not sue the Company for benefits due to him/her on the basis of the above-mentioned matters, except under the contract as mentioned above.

In addition, the Company shall enter into a contract in writing with each director, supervisor and senior management member containing at least the following provisions:

(1) an undertaking by the director, supervisor or senior management member to the Company that he shall observe and comply with the Company Law, the Special Regulations, these Articles of Association, the Codes on Takeovers and Mergers and Share Repurchases of Hong Kong and other regulations prevailing in places where shares of the Company are listed, and an agreement that the Company shall have the remedies provided in these Articles of Association and that neither the contract nor his/her office is assignable;
(2) an undertaking by the director, supervisor or senior management member to the Company that he shall observe and comply with his obligations to shareholders stipulated in these Articles of Association; and
(3) the arbitration clause as set out in Article 250 hereof.

Article 201 The contract for emoluments entered into between the Company and its directors or supervisors should provide that in the event of a takeover of the Company, the Company’s directors and supervisors shall, subject to the prior approval of the general meeting, have the right to receive compensation or other payment for loss of office or retirement. If the listing rules of places where shares of the Company are listed provide otherwise, such rules shall prevail.

For the purposes of the preceding paragraph, the term ‘‘a takeover of the Company’’ shall refer to any of the following circumstances:

(1) any person making a general offer to all the shareholders;

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(2) any person making a general offer so that the offeror becomes a controlling shareholder as defined hereof.

If a director or supervisor fails to comply with this Article, any fund received by him shall belong to those persons that have sold their shares as a result of their acceptance of the abovementioned offer, and the expenses incurred in distribution of such fund on a pro rata basis shall be borne by the relevant director or supervisor and may not be paid out of such fund.

Article 202 The Company may establish a liability insurance system for directors, supervisors and senior management members in order to reduce the risks which may arise from the ordinary performance of duties by such personnel.

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CHAPTER 16 FINANCIAL ACCOUNTING SYSTEM AND DISTRIBUTION OF PROFITS

Article 203 The Company shall formulate its own financial and accounting systems in accordance with provisions of the laws, administrative regulations and relevant authorities.

Article 204 The Company adopts the calendar year as its fiscal year, which shall begin in each year on 1 January and end on 31 December of the Gregorian calendar.

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

Article 205 The board of directors of the Company shall place before the shareholders at each general meeting such financial reports as required by relevant laws, administrative regulations and normative documents promulgated by the local government and the competent authorities. Article 206 The financial reports of the Company shall be made available in the office of the Company for inspection by shareholders at least 20 days prior to an annual general meeting. Each shareholder of the Company shall have the right to obtain a copy of the financial reports referred to in this chapter.

At least 21 days before the annual general meeting, the Company shall deliver the aforementioned reports to each holder of overseas listed foreign shares with the pre-paid mail or by other means (including through posting at the Company website or other websites designated by the relevant stock exchange) permitted by the Stock Exchange of the place where the Company’s shares are listed, to the registered address of the shareholders as recorded in the share register.

Article 207 The financial statements of the Company shall be prepared not only in accordance with PRC accounting standards, laws and regulations but also in accordance with international accounting standards or the accounting standards of the place(s) outside the PRC where shares of the Company are listed. If there are major differences in the financial statements prepared in accordance with these two sets of accounting standards, such differences shall be stated in notes appended to such financial statements. For the purposes of the Company’s distribution of after-tax profits in a given fiscal year, the smaller amount of after-tax profits shown in the two types of financial statements as set out above shall prevail.

Article 208 Interim results or financial information published or disclosed by the Company shall be prepared in accordance with PRC accounting standards, laws and regulations as well as international standards or the accounting standards of the place(s) outside the PRC where shares of the Company are listed.

Article 209 The Company shall publish two financial reports each fiscal year, namely an interim financial report within 60 days after the end of the first six months of the fiscal year and an annual financial report within 120 days after the end of the fiscal year.

If it is otherwise required by the securities regulatory authority of the place where the Company’s shares are listed, such requirements and regulations shall prevail.

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Article 210 The Company shall not maintain any account books other than statutory account books.

Article 211 The capital reserve shall include the following funds:

(1) the premiums obtained from the issue of shares in excess of the par;
(2) other revenue required by the finance authority under the State Council to be included in the capital reserve.

Article 212 When the Company distributes its after-tax profits of the current year, it shall allocate 10% of the profits to the Company’s statutory common reserve. The Company may stop such allocation if the accumulative balance of the common reserve is equal to or more than 50% of the Company’s registered capital.

If the accumulative balance of the Company’s statutory common reserve is not enough to make up for the losses of the Company of the previous years, the current year’s profits shall first be used for making up the losses before any allocation to the statutory common reserve according to the provisions of the preceding paragraph.

After the Company makes allocation to the statutory common reserve from the after-tax profits, it may, upon a resolution made by the general meeting, make allocation to the discretionary common reserve from the after-tax profits.

After the losses have been made up and allocation to common reserves have been made, the remaining after-tax profits shall be distributed to its shareholders in proportion to their respective shareholding, except for any out-of-proportion distribution as required under these Articles of Association.

If the general meeting violates the provisions of the preceding paragraph by distributing profits before the losses are made up and the allocation to statutory common reserves are made, the profits so distributed must be refunded to the Company.

No profit shall be distributed in respect of the shares of the Company which are held by the Company.

Article 213 The reserve of the Company is used to make up the Company’s losses, expand the production and operation of the Company or increase the Company’s capital. However, capital reserve shall not be used to make up the Company’s losses.

When statutory reserve funds are capitalized, the remaining balance of that reserve fund shall not be less than 25% of the registered capital of the Company before the capitalization.

Article 214 Profit distribution policies and decision-making mechanism

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(1) Any profit distribution of the Company shall not exceed the amount of accumulated distributable profits and shall not adversely affect the continued operation of the Company. The Company may distribute interim dividends according to its profit and capital requirements.
(2) Terms and policies of cash dividends

The Company shall give priority to the payment of cash dividends. If no cash dividends are available, no scrip dividends shall be declared for the same year. Any cash dividends proposed shall satisfy the following criteria: The current profit and accumulated retained earnings of the Company shall be positive and its cash flow shall be sufficient to support the continued operation and long-term development of the Company; the profit to be distributed in cash shall not be less than 10% of the distributable profits of the year, and the cumulative profit distributed in cash in any three consecutive financial years shall not be less than 30% of the average distributable profit of the Company for such three years.

Where the Company records surplus for consecutive years, each cash dividend shall not be more than 24 months apart.

The board of directors shall distinguish the following situations and formulate/diversified cash dividend distribution proposals in accordance with requirements of these Articles of Association and comprehensively take into account of the Company’s industry, stage of development, business model, and profitability and other factors such as whether there are significant capital expenditure arrangements:

If the Company is at a mature stage of development and has no significant capital expenditure arrangements, the proportion of cash dividends should be at least 80% in the profit distribution;
If the Company is at a mature stage of development and has significant capital expenditure arrangements, the proportion of cash dividends should be at least 40% in the profit distribution;
If the Company is at a development stage and has significant capital expenditure arrangements, the proportion of cash dividends should be at least 20% in the profit distribution.

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Significant capital expenditure arrangements are transactions involving, among other things, acquisition of assets, external investment and investment in fixed assets contemplated by the Company and settled in cash in the following 12 months with expenditure amounting to or exceeding an aggregate of 30% of the latest audited total assets, or exceeding 50% of the latest audited net assets and RMB50 million, in each case except for project investments through raised capital.

(3) Decision-making mechanism

Particulars of any profit distribution shall be determined by the board of directors in accordance with the requirements of these Articles of Association, the Company’s profits, capital supply and requirements and shareholders’ return as approved by a simple majority at the supervisory committee and as proposed for approval at a general meeting.

The board of directors shall specify the use of retained earnings and, where scrip dividends are to be distributed, the reasonableness and feasibility thereof in any profit distribution proposal. In the event that the board of directors does not declare any cash dividend in its annual profit distribution plan in accordance with relevant requirements herein, the board shall provide reasons for not declaring the cash dividend or declaring a dividend below the stipulated percentage and the specific use of the retained profits and expected return thereon, which shall be opined by independent directors and proposed at a general meeting for shareholders’ approval. Such information shall be disclosed in the announcement on results of the meeting of the board of directors of the Company and periodic reports.

Independent directors may collect opinions from minority shareholders, propose dividend distribution proposals and directly submit it to the board of directors for approval.

The Company shall elicit opinion of investors on profit distribution through effective means such as investors’ interaction platforms, the website of the Company, telephone, facsimile and electronic mail. Such opinion shall be summarized by the secretary to the board of directors and provided at the meeting thereof considering a proposal for profit distribution.

When considering a proposal for profit distribution at a board meeting, such proposal shall be passed by two thirds of independent directors by a separate voting. By considering a cash dividend proposal, the board of directors shall earnestly research and determine the timing, conditions, minimum proportion, adjustment conditions and other decision-making procedures in relation thereto. The independent directors shall express clear opinions before such proposals are considered in a board meeting. Such proposals shall be proposed at a general meeting upon being approved by the board of directors.

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Before a cash dividend proposal is considered at a shareholders’ meeting, the Company shall communicate with shareholders, especially minority shareholders through various channels to listen to the opinion and requests of minority shareholders and give timely responses to issues which minority shareholders are concerned about. When convening a general meeting to consider a proposal for profit distribution, online voting shall be provided in addition to the on-site meeting for the convenience of minority shareholders. A proposal for profit distribution shall be passed by over half of the shareholders present (including their proxies). Upon passage of the resolution on such proposal at the general meeting, the Company’s board of directors shall complete the dividend payout within two months after the general meeting is held.

Article 215 The Company may distribute dividends in either or both of the following forms:

(1) cash;

(2) shares.

Any cash dividends and other payments to domestic shareholders shall be paid in RMB. Any cash dividends and payments to foreign shareholders will be denominated and declared in RMB and paid in foreign currency. The Company will, according to regulations on foreign exchange, deal with foreign currency matters for cash dividends and other payments to foreign shareholders.

Unless otherwise provided by the relevant laws and regulations, for the payment of cash dividends and other payments in foreign currency, the applicable exchange rates shall be the average sell price announced by the People’s Bank of China in one calendar week immediately preceding the declaration date of such cash dividends and other payments.

Article 216 Any amount paid up in advance of calls on any share of the Company may carry interest but shall not entitle the holder of the share to participate in respect thereof in a dividend subsequently declared. Article 217 The Company shall appoint a receiving agent for holders of overseas listed foreign shares to collect on behalf of the relevant shareholders the dividends distributed and other funds payable in respect of overseas listed foreign shares.

The receiving agent appointed by the Company shall meet the requirements of the laws of the place(s), or the relevant regulations of the stock exchange(s), where the Company’s shares are listed.

The receiving agent appointed by the Company for shareholders of overseas listed foreign shares listed on the Hong Kong Stock Exchange shall be a trust company registered under the Trustee Ordinance of Hong Kong.

Subject to relevant PRC laws and regulations, the Company may exercise the power to retain unclaimed dividends, but that power shall not be exercised until the applicable limitations period applicable to claim of such dividends expires.

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The Company has the right to cease sending dividend warrants by post to certain holders of overseas listed foreign shares, provided that such right may not be exercised until such warrants have been so left uncashed on two consecutive occasions. However, such right may be exercised after the first occasion on which such a warrant is returned undelivered.

The Company has the right to sell the shares held by a holder of overseas listed foreign shares who is untraceable under the following circumstances

(1) during a period of 12 years at least three dividends in respect of the shares in question have become payable and no dividend during that period has been claimed; and
(2) on expiry of such 12 years the Company gives notice of its intention to sell the shares by way of an advertisement published in the newspapers and notifies the stock exchange where such shares are listed of such intention.

Article 218 After the general meeting has resolved on the plan to allocate profits, the board of directors shall complete the distribution of dividends (or bonus shares) within 2 months of the general meeting.

Article 219 The Company will give full consideration to the interests of shareholders and adopt a reasonable profit distribution policy according to business situation and market environment. The Company’s profit distribution policy shall to the greatest extent maintain continuity and stability, and give priority to cash dividends, with the specific dividend rate to be passed with a resolution at the general meeting in accordance with relevant laws and regulations.

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CHAPTER 17 APPOINTMENT OF AN ACCOUNTING FIRM

Article 220 The Company shall employ an independent accounting firm that complies with relevant regulations to audit the annual and other financial reports and financial statements of the Company, and provide services such net asset tests and relevant consulting service.

The first accounting firm of the Company may be employed by the inaugural meeting prior to the first annual general meeting. Such accounting firm shall hold office until the conclusion of the first annual general meeting.

If the Company’s inaugural meeting does not exercise its power under the preceding paragraph, the board of directors shall exercise such power.

Article 221 The term of employment of an accounting firm employed by the Company shall start from the end of the annual general meeting until the end of the next annual general meeting.

Article 222 An accounting firm employed by the Company shall have the following rights:

(1) the access at any time to the account books, records or vouchers of the Company and the right to require directors and other senior management members of the Company to provide the relevant information and explanations;
(2) the right to require the Company to take all reasonable measures to obtain from its subsidiaries the information and explanations necessary for the accounting firm to perform its duties;
(3) the right to attend general meetings, receive a notice or other information concerning any meetings which shareholders have a right to receive, and to be heard at any general meetings on any matter which relates to it as the accounting firm of the Company.

Article 223 If the position of accounting firm becomes vacant, the board of directors may appoint an accounting firm to fill such vacancy before a general meeting is held. Any other accounting firm which has been appointed by the Company may continue to act during the period when such a vacancy arises.

Article 224 Save as the circumstances stipulated in Article 218, the engagement of the accounting firm by the Company must be determined by the general meeting. The board of directors cannot engage an accounting firm before the decision by the general meeting.

The general meeting may, by means of an ordinary resolution, dismiss any accounting firm prior to the expiration of its term of employment, notwithstanding anything in the contract between the accounting firm and the Company, but without prejudice to such accounting firm’s right, if any, to claim damages from the Company in respect of such dismissal.

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Article 225 The remuneration of an accounting firm employed by the board of directors or the way to set the remuneration shall be determined by the general meeting.

Article 226 The decision to employ, dismiss or not to renew the employment of an accounting firm shall be made by the general meeting and reported to the securities regulatory authority under the State Council for filing.

Where the Company is intended to pass a resolution at a general meeting to appoint a nonincumbent accounting firm to fill any vacancy of the position of the accounting firm, or to dismiss an accounting firm before the expiration of a term of office, such matters shall be dealt with the following provisions:

(1) before the notice of such general meeting is given, the proposal on the appointment or dismissal shall be delivered to the accounting firm to be appointed or to leave its office or already left in the relevant fiscal year. ‘‘Leave or left’’ referred in this paragraph shall include dismissal, resignation and retirement.
(2) If the accounting firm to leave its office makes any statement in writing and requires the statement to be informed to shareholders by the Company, the Company shall (unless the written statement has been received too late) take the following measures:
(1) to state, in the notice to shareholders for the resolution, the fact that the statement has been made by the accounting firm leaving its post; and
(2) to attach a copy of the statement to the notice and deliver it to the shareholders in the manner stipulated in these Articles of Association.
(3) If the Company fails to deliver such statement by the relevant accounting firm in accordance with the provisions in paragraph (2) of this article, the accounting firm concerned may require the statement to be read out at the general meeting and make further complaints.
(4) The leaving accounting firm is entitled to attend the following meetings:
(1) the general meeting at which its term of office shall expire;
(2) the general meeting at which it is proposed to fill the vacancy caused by its removal; and
(3) the general meeting which is convened as a result of its voluntary resignation.

The leaving accounting firm is entitled to receive all notices or other information related to the above meetings, and to speak at the aforementioned meetings on matters related to it as the former accounting firm of the Company.

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Article 227 Where the Company decides to dismiss or not to renew the appointment of an accounting firm, it shall notify the accounting firm in advance. The accounting firm is entitled to present its views to the general meeting. Where an accounting firm submits its resignation, it shall explain to the general meeting whether there are any irregularities in the Company.

(1) The accounting firm may resign from its post by placing its resignation notice in writing at the legal address of the Company. Such notice shall take effect upon the date it is placed at the legal address of the Company or a later date as specified in the notice. The notice shall include the following statements:
(1) 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
(2) a statement of any such circumstances.
(2) Within 14 days upon the receipt of such notice in writing as referred to in paragraph (1) of this article, the Company shall deliver a copy of the notice to the competent authorities. If the notice contains statements as above mentioned in paragraph (1)(2), the Company shall prepare and place copies of such statements at the company for inspection by shareholders. The Company shall also deliver copies of such foregoing statements with postage prepaid mail to each holder of overseas listed foreign shares at its address registered in the share register, or, subject to applicable laws, regulations and listing rules, post such information at the company website or a website specified by the stock exchange of the listing place of the Company’s shares.
(3) If the accounting firm’s resignation notice contains any statement referred to in paragraph (1)(2). of this Article, the accounting firm may request the board of directors to convene an extraordinary general meeting of shareholders to hear its explanations on the situation of its resignation.

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CHAPTER 18 MERGER, DIVISION, DISSOLUTION AND LIQUIDATION

SECTION 1 MERGER AND DIVISION

Article 228 The merger or division of the Company shall require preparation of a proposal by the board of directors. After such proposal has been adopted in accordance with the procedures specified in these Articles of Association, relevant examination and approval procedures shall be carried out according to laws. Shareholders that oppose to such proposal on the merger or division of the Company shall have the right to require the Company or shareholders that approve such proposal to purchase their shares at a fair price. The contents of resolutions approving the merger or division of the Company shall be compiled in a special document for inspection by shareholders.

The abovementioned document shall also be served on the holders of overseas listed foreign by post or by any other means as permitted by relevant laws, regulations or listing rules of the listing place.

Article 229 The merger of a company may be effected by merger by absorption or merger by the establishment of a new company.

If the Company is subject to a merger, the parties to such merger shall conclude a merger agreement and prepare a balance sheet and an inventory of assets. The Company shall notify the creditors according to the Company Law, and shall make a public announcement on a newspaper recognized by the stock exchange of the place where the Company’s shares are listed, and discharge its debts or provide corresponding guarantees as the creditors require.

After the merger, the rights against debtors and the indebtedness of each of the parties to the merger shall be inherited by the company which survives the merger or the newly established company.

Article 230 Where there is a division of the Company, its assets shall be divided up accordingly.

In the event of division of the Company, the parties to such division shall execute a division agreement and prepare a balance sheet and an inventory of assets. The Company shall notify its creditors according to the Company Law, and shall make a public announcement on a newspaper recognized by the stock exchange of the place where the Company’s shares are listed.

Debts of the Company prior to division shall be severally and jointly assumed by the companies which exist after the division, unless otherwise agreed in writing with the creditors in respect of the debt settlement before division takes place.

Article 231 Where any of the registered items of the Company is changed due to merger or division of the Company, the Company shall go through modification registration with the company registry. Where the Company is dissolved, the Company shall apply for cancellation of its registration in accordance with law. Where a new company is established, the Company shall apply for registration thereof in accordance with law.

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SECTION 2 DISSOLUTION AND LIQUIDATION

Article 232 The Company shall be dissolved under any of the following circumstances:

(1) any of the matters for dissolution as stipulated in these Articles of Association appears;
(2) a resolution regarding the dissolution is passed by shareholders at a general meeting;
(3) it is necessary to be dissolved due to merger or division of the Company;
(4) the Company is declared insolvent according to the law for being unable to pay its due debts;
(5) its business license is canceled or it is ordered to close down or to be dissolved according to the law; or
(6) the Company is dissolved by the competent people’s court in accordance with law, if the Company has great difficulties in operation or management, which would cause substantial loss to the interests of the shareholders if the Company continues to exist, and there is no other solution to remove such difficulties, and the shareholders who hold 10% or more of the voting rights of all the shareholders of the Company plead the people’s court to dissolve the Company.

Article 233 Where the Company is dissolved according to the provisions of Article 232 (1), (2), (5) or (6) of these Articles of Association, a liquidation committee shall be formed within 15 days as of the occurrence of the causes of dissolution, to carry out a liquidation. The liquidation committee shall comprise the directors or any other people as determined by the general meeting. Where no liquidation committee is formed within the time limit, the creditors may plead the people’s court to designate relevant persons to form a liquidation committee.

Where the Company is dissolved according to the provisions of Article 232 (4) of these Articles of Association, the people’s court shall, in accordance with relevant laws, arrange for the shareholders, relevant authorities and relevant professionals to establish a liquidation committee to carry out liquidation.

Article 234 If the board of directors decides that the Company shall be liquidated (except the liquidation as a result of the Company being declared insolvent), the notice of the shareholders’ general meeting convened for such purpose shall include a statement to the effect that the board of directors has made full inquiry into the position of the Company and that the board of directors is of the opinion that the Company can pay its debts in full within 12 months after the commencement of the liquidation.

The functions and powers of the board of directors shall terminate immediately after the shareholders’ general meeting has passed the resolution to carry out liquidation.

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The liquidation committee shall take instructions from the shareholders’ general meeting and shall make a report to the shareholders’ general meeting on the committee’s income and expenditure as well as the business of the Company and the progress of the liquidation at least annually. It shall make a final report to the shareholders’ general meeting when the liquidation is completed.

Article 235 The liquidation committee shall, within ten days as of its formation, notify the creditors, and shall, within 60 days, make a public announcement on newspapers recognized by the stock exchange for the listing of shares of the Company. Creditors shall, within 30 days as of the receipt of the notice or within 45 days as of the publications of the public announcement in the case of failing to receiving the notice, declare to the liquidation committee their claims against the Company.

To declare claims, a creditor shall explain the relevant matters and provide relevant supporting documents. The liquidation committee shall register the credits.

The liquidation committee shall not discharge any of the debts of any creditor during the period of credit declaration.

Article 236 The liquidation committee shall have the following functions during the process of liquidation:

(1) liquidating the properties of the Company, and preparing a balance sheet and an inventory of assets;
(2) informing creditors by notice or public announcement;
(3) disposing of and liquidate any unfinished businesses of the Company that are related to the liquidation;
(4) paying the outstanding taxes and the taxes incurred in the process of liquidation;
(5) settling all credits and debts;
(6) disposing of the residual assets of the Company after discharge of debts; and
(7) participating in the civil litigation on behalf of the Company.

Article 237 The liquidation committee shall, after liquidating the properties of the Company and preparing the balance sheet and the inventory of properties, make a plan of liquidation, and report it to the shareholders’ general meeting or the people’s court for confirmation.

The residual assets after paying off the liquidation expenses, wages of employees, social insurance premiums and statutory compensation, the outstanding taxes and the debts of the Company may be distributed to the shareholders according to the proportions of shares held by the shareholders.

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During the period of liquidation, the Company continues to exist, but may not carry out any business operation that is not related to the liquidation. The Company’s assets shall not be distributed to shareholders until all debts and liabilities mentioned in the preceding paragraph are paid off.

Article 238 In case of liquidation upon dissolution, if the liquidation committee discovers, after liquidating the properties of the Company and preparing the balance sheet and the inventory of properties, that the assets of the Company are insufficient to fully discharge all debts, it shall file an application to the people’s court for insolvency of the Company.

Once the people’s court declares the insolvency of the Company, the liquidation committee shall hand over the liquidation matters to the people’s court.

Article 239 Following the completion of liquidation, the liquidation committee shall prepare a liquidation report, a revenue and expenditure statement and financial accounts in respect of the liquidation period and, after verification thereof by a CPA in China, submit the same to the shareholders’ general meeting or the people’s court for confirmation. Within 30 days from the date of the confirmation of the shareholders’ general meeting or the people’s court, the Company shall submit the above-mentioned documents to the companies registration authority and apply for cancellation of registration of the Company, and publish a public announcement relating to the termination of the Company.

Article 240 The members of the liquidation team shall be faithful to their duty and fulfill the liquidation obligation in accordance with the law.

None of the members of the liquidation committee may take any bribe or any other illegal proceeds by taking advantage of his position, nor may he misappropriate any of the properties of the Company.

Where any of the members of the liquidation committee causes any loss to the Company or any creditor by intention or due to gross negligence, he shall make corresponding compensations.

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CHAPTER 19 AMENDMENT TO ARTICLES OF ASSOCIATION

Article 241 The Company may amend these Articles of Association in accordance with the law, administrative regulations and relevant provisions prescribed in these Articles of Association.

Article 242 In any one of the following circumstances, the Company shall amend the Articles of Association:

(1) after amendment to the Company Law or relevant laws or administrative regulations, the contents of these Articles of Association conflict with the laws or administrative regulations;
(2) the status of the Company has changed so that it is different from the contents of these Articles of Association; or
(3) the shareholders’ general meeting decides that these Articles of Association shall be amended.

Article 243 If any amendment to these Articles of Association passed by resolutions at the shareholders’ general meeting is subject to examination and approval by the competent authorities, such amendment shall be submitted to the competent authorities for approval. If any amendment to these Articles of Association involves any registered item of the Company, such amendment shall be filed for alteration registration according to the law.

Article 244 The board of directors shall amend these Articles of Association according to the resolutions of the shareholders’ general meeting and the opinions of the relevant competent authority.

Notwithstanding the foregoing paragraph, in the following circumstances, the shareholders’ general meeting may pass a resolution to authorize the board of directors to amend these Articles of Association in accordance with the following principles:

(1) the board of directors may make non-substantial amendments to these Articles of Association as required for implementing a resolution passed by the general meeting, such as changes to registered capital, number of shares, company name or address as required by the resolution of the general meeting; and
(2) the board of directors may change the wordings or order of articles of these Articles of Association in accordance with the requirements raised by the competent authorities during their review of the draft of these Articles of Association passed by the general meeting.

Article 245 Any amendment to these Articles of Association which involves information to be disclosed as required by the laws, regulations or the listing rules of the place where the Company’s shares are listed shall be publicly announced as required.

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CHAPTER 20 NOTICE

Article 246 Notices of the Company may be served through the following means:

(1) delivery by hand;
(2) by post;
(3) by fax or email;
(4) subject to the laws, regulations and listing rules of the place where the Company’s shares are listed, by posting at the Company’s website and such website designated by relevant stock exchange;
(5) by public announcement;
(6) by means agreed between the Company and the recipient in advance or accepted by the recipient after receipt of such notices;
(7) other means approved by the relevant regulatory agency of the listing place or as set out in these Articles of Association.

Where the Company issues a notice by public announcement, all recipients shall be deemed to have received such notice once the public announcement has been made.

Unless the context otherwise requires, ‘‘public announcement’’ referred to in these Articles of Association shall refer to, if issued to domestic shareholders or within the PRC in accordance with relevant regulations and these Articles of Association, an announcement published in such Chinese newspapers as specified by the Chinese laws and regulations or the securities regulatory authority under the State Council; and, if issued to holders of H shares or in Hong Kong in accordance with the relevant regulations and these Articles of Association, an announcement published in Hong Kong newspapers specified in relevant listing rules. All notices or other documents required under Chapter 13 of the Main Board Listing Rules to be sent by the Company to the Hong Kong Stock Exchange shall be in English, or accompanied by a certified English translation.

Subject to the relevant listing rules of the place where the Company’s shares are listed, with respect to the service/distribution of corporate communications to holders of the overseas listed foreign shares, the Company may electronically or at the company’s website or such website of the stock exchange post such corporate communication so as to deliver such information to such holders, instead of such delivery by hand or postage prepaid mail.

Article 247 Unless otherwise provided in these Articles of Association, the means of delivery of notice as set out in the preceding Article may also be applicable to notices for shareholders’ general meeting, meetings of board of directors or the supervisory committee.

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Article 248 If the notice is served by hand, the date of service is the date of acknowledgement of receipt by signature or affixed seal on the service return slip. If the notice is sent by post, the date of service is the fifth working day from the date on which the notice is put into the post. If the notice is made via facsimile, e-mail or website or other electronic means, the date of service is the date of transmission. If the notice is made by public announcement, the date of service is the date of the first publication of the public announcement.

Article 249 If any corporate documents are required, under to the listing rules of the place where Company’s shares are listed, to be sent, posted, distributed, given, published or otherwise provided in both English and Chinese versions, but the Company has made proper arrangements to confirm whether a shareholder is willing to receive only one of the two language versions above, then the Company may send to such shareholder only the language version as requested by such shareholder, in accordance with and to the extent permitted by applicable laws and regulations.

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CHAPTER 21 RESOLUTION OF DISPUTES

Article 250 The Company shall abide by the following provisions for dispute resolution:

(1) Whenever any disputes or claims arise from these Articles of Association or any rights or obligations conferred or imposed by the Company Law or other relevant laws and administrative regulations concerning the affairs of the Company between any holder of overseas listed foreign shares and the Company; or any holder of overseas listed foreign shares and any director, supervisor, the general manager or other senior management member of the Company; or any holder of overseas listed foreign shares and any holder of domestic shares, the parties concerned shall submit such disputes or claims to arbitration.

Where a dispute or claim of rights referred to in the preceding paragraph is submitted to arbitration, the entire claim or dispute must be submitted to arbitration, and all persons who have a cause of action based on the same facts giving rise to the dispute or claim and all persons whose participation is necessary for the resolution of such dispute or claim, shall, where such persons are the Company or the Company’s shareholders, directors, supervisors, general manager or senior management members, submit to the arbitration.

Disputes in respect of the definition of shareholders and disputes in relation to the register of shareholders need not be resolved by arbitration.

(2) The arbitration claimant may opt to submit the dispute or claim either to the China International Economic and Trade Arbitration Commission for arbitration in accordance with its arbitration rules, or to the Hong Kong International Arbitration Centre for arbitration in accordance with its arbitration rules. Once the claimant submits a dispute or claim to arbitration, the other party must submit to the arbitral body selected by the claimant.

If the arbitration claimant elects to submit the dispute or claim to the Hong Kong International Arbitration Centre for arbitration, then either party may apply to have such arbitration proceedings conducted in Shenzhen according to the securities arbitration rules of the Hong Kong International Arbitration Centre.

(3) The laws of PRC shall govern the arbitration of disputes or claims described in clause (1) above, unless otherwise provided by the laws or administrative regulations.
(4) The award of the arbitral body is final and shall be binding on the parties thereto.

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CHAPTER 22 SUPPLEMENTARY PROVISIONS

Article 251 Definition

(1) In these Articles of Association, ‘‘acting in concert’’ means two or more persons agree, whether in oral or written form, that one of such persons acquires and holds voting rights in a company for and on behalf of all such persons, so as to achieve or reinforce their control over such company.
(2) The ‘‘actual controller’’ means a person who, though not a shareholder of a company, has actual power to direct the acts of such company by investment, contract or other arrangements.
(3) ‘‘Connected relationship’’ is the relationship between the controlling shareholder, the actual controller, directors, supervisors or senior management members of a company and enterprises directly or indirectly controlled by them, as well as other relationships which may cause the transfer of the Company’s interests. However, enterprises owned by the State will not be regarded as having connected relationship only because they are owned by the State.

Article 252 In these Articles of Association, the terms ‘‘not less than’’, ‘‘within’’, ‘‘not more than’’ and ‘‘before’’ shall include the given figure following such terms, and the terms ‘‘more than half’’, ‘‘below’’, ‘‘beyond’’, ‘‘exceeding’’, ‘‘below’’, ‘‘less than’’, ‘‘fewer than’’ and ‘‘more than’’ shall not include the given figure following such terms.

Article 253 The term ‘‘accounting firm’’ as used in these Articles of Association shall have the same meaning as ‘‘auditor’’.

Article 254 These Articles of Association are made in Chinese. If there is any discrepancy between the Chinese version and any other language versions, or between different revisions of these Articles of Association, the Chinese version which was most recently filed and registered at the Market Supervision Administration of Shenzhen Municipality shall prevail.

Article 255 The board of directors of the Company shall have the power to interpret these Articles of Association.

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Rules of Procedures for General Meeting of

Dynagreen Environmental Protection Group Co., Ltd.*

(Applicable after the issue of A shares)

(As approved at the 1st extraordinary general meeting of the Company in 2016 held on 18 April 2016)

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CHAPTER 1 GENERAL

Article 1 To safeguard legitimate rights and interests of Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Company’’) and its shareholders, to further define the scope of duties and powers of the general meeting of the Company, and to regulate its organization and acts, thereby ensure its duties are duly performed in general meeting according to laws with high efficiency, these Rules of Procedures for General Meeting (the ‘‘Rules’’) are formulated pursuant to relevant laws and regulations including the Company Law of the PRC (the ‘‘Company Law’’), the Mandatory Provisions for the Articles of Association of Companies to be Listed Outside the PRC, and the Guidelines for Articles of Association of Chinese Listed Companies, as well as the Articles of Association of Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Articles of Association’’), and relevant rules under the listing rules of the local stock exchange where the Company’s shares are listed.

Article 2 The Rules shall be applicable to the general meeting of the Company, and binding upon the Company, shareholders, proxies of shareholders attending the general meeting, directors, supervisors, and other relevant persons who are in attendance at the general meeting.

CHAPTER 2 RULES FOR GENERAL MEETING

Article 3 The general meetings shall include annual general meetings and extraordinary general meetings. Annual meetings shall be convened once a year and shall be held within six months after the end of the preceding fiscal year.

In the event of any circumstances as stipulated under the Articles of Association, the Company shall convene a class meeting. Shareholders who hold different classes of shares shall be shareholders of different classes. Apart from the holders of other classes of shares, holders of domestically listed RMB ordinary shares and holders of overseas listed foreign shares are deemed to be different classes of shareholders.

Article 4 Extraordinary general meetings will be held on an ad hoc basis. The Company shall convene an extraordinary general meeting within two months after occurrence of any of the following circumstances: (1) the number of directors is less than the minimum number required by the Company Law or less than two-third of the number prescribed in the Articles of Association;

(2) the losses of the Company that have not been made up reach one-third of the total paidin share capital of the Company;
(3) shareholders who individually or together hold 10% or more of the shares of the Company require in writing an extraordinary general meeting to be convened;

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(4) whenever the board of directors considers necessary;
(5) the supervisory committee proposes an extraordinary general meeting to be convened; or
(6) any other circumstances prescribed by the laws, administrative regulations, departmental regulations or the Articles of Association.

Article 5 The venue of a general meeting of the Company shall be the domicile of the Company or another specific location informed by the convener of the general meeting.

Article 6 When convening a general meeting, the Company shall appoint a lawyer to issue a legal opinion and publish an announcement in respect of the following issues:

(1) whether the convening of the shareholders’ general meeting and its procedures are in accordance with the laws, administrative regulations and the Articles of Association;
(2) whether the qualifications of the attendees and the convener are lawful and valid;
(3) whether the voting procedures and results at the meeting are lawful and valid;
(4) legal opinions on any other matters as requested by the Company.

CHAPTER 3 FUNCTIONS AND POWERS OF GENERAL MEETING

Article 7 The general meeting shall exercise the following functions and powers:

(1) to decide on the Company’s operational policies and investment plans;
(2) to elect and replace directors and supervisors who are not representatives of the employees and to decide on matters relating to the remuneration of directors and supervisors;
(3) to review and approve the reports of the board of directors;
(4) to review and approve the reports of the supervisory committee;
(5) to review and approve the annual financial budgets and final accounts of the Company;
(6) to review and approve the profit distribution plan and loss compensation plan of the Company;

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(7) to decide on increasing or reducing the registered capital of the Company;
(8) to decide on merger, division, winding up, liquidation or change of corporate form of the Company;
(9) to decide on issuance of debentures or other securities of the Company or its listing plan;
(10) to decide on appointment and dismissal of accounting firms by the Company;
(11) to amend the Articles of Association;
(12) to review and approve any provision of external guarantees which shall be reviewed at the general meeting as prescribed in Article 8 of the Rules;
(13) to review any major acquisition or disposal of assets within a year with a value exceeding 30% of the latest audited total assets of the Company;
(14) to review share incentive schemes;
(15) to review proposals of the shareholders who represent 3% or more of the Company’s voting shares; and
(16) to review other matters which shall be approved at the general meeting in accordance with the laws, administrative regulations, departmental regulations, listing rules of the local stock exchange where the Company’s shares are listed or the Articles of Association.

Article 8 Provision of any of the following external guarantees by the Company must be reviewed and approved at the general meeting:

(1) any further guarantee to be provided after the total amount of all existing external guarantees provided by the Company or its controlled subsidiaries reaches or exceeds 50% of the latest audited net assets;
(2) any further guarantee to be provided after the total amount of all existing external guarantees provided by the Company reaches or exceeds 30% of the latest audited total assets;
(3) any guarantee to secure any debt of a person whose debt asset ratio exceeds 70%;
(4) a single guarantee under which the secured amount exceeds 10% of the latest audited net assets;
(5) any guarantee to be provided for shareholders, actual controller or their respective connected parties; or

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(6) any other guarantee which shall be approved at the general meeting as prescribed by the local stock exchange where the Company’s shares are listed or under the Articles of Association.

Article 9 Matters which require approval by the general meeting as stipulated by laws, regulations, the listing rules of the place where the Company’s shares are listed as well as the Articles of Association must be considered at the general meeting in order to protect the decisionmaking power of the shareholders of the Company. Apart from the aforesaid, under necessary and reasonable circumstances, the general meeting may authorize the board of directors to make decision(s) within the scope of the functions and powers of the general meeting.

An authorization to the board of directors by the general meeting that falls into the scope of an ordinary resolution shall be approved by shareholders (including their proxies) representing more than half of the voting rights present at the general meeting. An authorization to the board of directors that falls into the scope of a special resolution shall be approved by shareholders (including their proxies) representing not less than two-thirds of the voting rights present at the general meeting. The contents of the authorization shall be clear and specific.

CHAPTER 4 PROPOSING AND CONVENING OF GENERAL MEETING

Article 10 Independent directors may propose to the board of directors to convene an extraordinary general meeting. The board of directors shall, in accordance with the law, administrative regulations and the Articles of Association, give a written reply within 10 days after its receipt of such proposal, stating whether it agrees or disagrees to convene an extraordinary general meeting. If the board of directors agrees to convene the extraordinary general meeting, it shall issue a notice of general meeting within 5 days after the board resolution for this purpose is adopted. If the board of directors does not agree to convene an extraordinary general meeting, it shall explain the reasons and make an announcement accordingly.

Article 11 The supervisory committee may propose to the board of directors to convene an extraordinary general meeting to the board of directors. Such proposal shall be made in writing. The board of directors shall, in accordance with the law, administrative regulations and the Articles of Association, give a written reply within 10 days after its receipt of such proposal, to state whether it agrees or disagrees to convene an extraordinary general meeting.

If the board of directors agrees to convene the extraordinary general meeting, it shall issue a notice of general meeting within 5 days after the board resolution for this purpose is adopted. Any changes made by such notice to the proposal of the supervisory committee shall be approved by the supervisory committee.

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Article 12 Shareholders who individually or together hold 10% or more of shares may call for an extraordinary general meeting or class meeting according to the following procedures:

(1) Such shareholders shall sign a written request for an extraordinary general meeting or class meeting, in one or more counterparts, which shall state the subjects of the meeting, and submit such request to the board of directors. The board of directors shall, in accordance with the law, administrative regulations and the Articles of Association, give a written reply within 10 days after its receipt of such request, to state whether it agrees or disagrees to convene an extraordinary general meeting or class. For the purpose of determining the number of shares held by such requesting shareholders, the reference date shall be the date on which such shareholders submit the written request.
(2) If the board of directors agrees to convene an extraordinary general meeting or class meeting, it shall issue a meeting notice within 5 days after the board resolution for this purpose is adopted. Any changes made by such notice to the original request shall be approved by relevant shareholders.
(3) If the board of directors disagrees to convene the extraordinary general meeting or class meeting, or fails to reply within 10 days after its receipt of the request, the shareholders individually or together holding 10% or more of the shares of the Company may request the supervisory committee in writing to convene such meeting.
(4) If the supervisory committee agrees to convene the extraordinary general meeting or class meeting, it shall issue a meeting notice within 5 days after its receipt of such request. Any changes made by such notice to the original request shall be approved by relevant shareholders.
(5) If the supervisory committee fails to issue the meeting notice within the prescribed period, it shall be deemed that the supervisory committee will not convene or preside over the general meeting, and the shareholders who individually or together hold 10% or more of the shares for more than 90 days consecutively may convene and preside over the meeting themselves.
(6) The shareholding of the convening shareholders shall not fall below 10% of the shares of the Company before the resolution adopted by the general meeting is announced. When the convening shareholder issues the notice of general meeting and publicly announces the resolution(s) of the general meeting, they shall submit the relevant documentary proof to the securities regulatory authorities at the Company’s residence and the stock exchange.

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Article 13 Where the supervisory committee or shareholders convene a meeting in accordance with the provisions of this section, a written notice shall be sent to the board of directors and filed with the securities regulatory authorities where the Company is located and relevant stock exchange. The board of directors and the board secretary shall cooperate. The board of directors shall provide the register of shareholders on the shareholding record date. All reasonable expenses incurred for the meeting shall be borne by the Company, and be deducted from the amounts due to the director(s) who breaches the duty.

CHAPTER 5 PROPOSALS AND NOTICES OF GENERAL MEETING

Article 14 The proposed matters shall be within the scope of duties and powers of the general meetings. A proposal shall have a clear subject and specific matters to be resolved, and shall be in compliance with relevant requirements of the laws, administrative regulations and the Articles of Association.

Article 15 When a general meeting is held by the Company, the board of directors, supervisory committee or shareholders individually or together holding 3% or more of the shares of the Company may make proposals to the Company.

A general meeting shall not vote or resolve on any proposal which is not listed in the notice of such general meeting or does not comply with Article 13 of the Rules.

Article 16 Where a general meeting is convened by the Company, a written notice shall be sent to all the registered shareholders at least 45 days prior to the meeting, which shall contain the matters to be considered as well as the date and place of the meeting. Shareholders who intend to attend the general meeting shall deliver their written replies to the Company at least 20 days prior to the meeting.

When calculating the time limit of the notice, the date of the meeting and the date of issuing the meeting notice shall be excluded.

Article 17 The Company shall calculate the number of voting shares represented by the shareholders who intend to attend the meeting based on the written replies which have been received as of the date which is 20 days prior to the date of the general meeting. If the number of voting shares represented by the shareholders who intend to attend the meeting is no less than one

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half of the total number of the Company’s voting shares, the Company may hold the general meeting. If not, the Company shall within 5 days notify the shareholders again by public announcement of the matters to be considered as well as the date and place of the meeting. After such notification by the public announcement, the Company may hold the general meeting.

An extraordinary general meeting shall not decide on matters not specified in the notice.

Article 18 A notice of a general meeting shall meet the following requirements:

(1) It shall be made in writing;
(2) It shall specify the place, date and time of the meeting;
(3) It shall specify the matters to be discussed at the meeting;
(4) It shall specify the shareholding record date for determining shareholders who are entitled to attend the meeting;
(5) It shall provide the shareholders with the information and explanation necessary for them to make an informed decision on the matters to be discussed, including (but not limited to), the specific conditions and contract in respect of any merger, repurchase of shares, reorganization of share capital or other restructuring proposed by the Company, as well as detailed explanation on the rationale and effect of such proposed transactions;
(6) Any director, supervisor, manager or other senior management members who have material conflicts of interests in any matters subject to discussion shall disclose the nature and extent of such conflicts of interests. If the effect of proposed matters on such director, supervisor, manager or other senior management members in their capacity as shareholders is different from that on other shareholders of the same class, the differences shall also be specified;
(7) It shall contain the full text of any special resolution proposed to be adopted at the meeting;
(8) It shall contain a clear statement that a shareholder who has right to attend and vote at the meeting shall have the right to appoint one or more proxies to attend and vote on its behalf and that such proxies need not be a shareholder;
(9) It shall state the time and place for the delivery of the proxy forms for the meeting;
(10) It shall state the name and telephone number of the contact persons who handles the meeting affairs.
(11) Other requirements as stipulated under the laws, administrative regulations, departmental regulations, regulatory documents, and rules of relevant regulatory authorities and the Articles of Association.

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Article 19 If a general meeting will discuss the election of directors or supervisors, the notice of general meeting shall disclose full information of each candidate for directors and supervisors. It shall at least include the following:

(1) personal particulars such as education background, work experience and other positions concurrently held by such candidate;
(2) whether he/she has any connected relationship with the Company or the controlling shareholder and actual controller of the Company;
(3) the number of shares of the Company held by such candidate;
(4) whether he/she has received any punishment by CSRC or other securities regulatory authorities or sanctions by any stock exchange.

Except for the cumulative voting system for the election of directors, each candidate of director or supervisor shall be proposed in a separate proposal.

Article 20 A notice of general meeting shall be served on shareholders (whether such shareholders have voting right on such general meeting or not) either by hand or by post in a prepaid mail, addressed to such shareholder at his registered address as shown in the register of shareholders, or to the extent permitted by applicable laws, regulations and listing rules, by publication on the Company’s website or other website designated by the stock exchange where the Company’s shares are listed. For holders of domestic shares, a notice of general meeting may be given by public announcement.

Article 21 After issuance of the notice for the general meeting, the general meeting shall not be postponed or cancelled without proper reasons and the proposals specified in the notice shall not be withdrawn. In case of delay or cancellation, the convener shall make a public announcement, together with the reasons for such delay or cancellation, at least 2 working days before the scheduled date of the meeting. If the listing rules of the listing venue of the Company contain any other provision in respect of the matters mentioned in this Article above, such provisions shall be complied with.

Article 22 The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive such notice shall not invalidate the meeting and the resolutions passed at the meeting.

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CHAPTER 6 CONVENING OF A GENERAL MEETING

Article 23 Ordinary shareholders on the register of shareholders on the shareholding record date shall be entitled to attend and vote at the general meeting, and vote in accordance with the provisions of relevant law, regulations and the Articles of Association.

Any shareholder entitled to attend and vote at a general meeting has the right to appoint one or more persons (who are not required to be a shareholder) as his proxies to attend and vote on his behalf. Such proxies may exercise the following rights pursuant to the authorization by the shareholder:

(1) the shareholder’s right to speak at the general meeting;
(2) the right to demand or join in demanding a poll;
(3) Unless otherwise provided in the applicable listing rules or other securities laws and regulations, the right to vote by a show of hands or on a poll, except that if a shareholder has appointed more than one proxy, such proxies may only exercise their voting rights on a poll.

Article 24 An individual shareholder who attends the general meeting in person shall present valid proof which can confirm his shareholder’s identity. If a proxy is appointed to attend the meeting, in addition to presenting the shareholder’s identity proof, the proxy shall also present its own identity proof together with the power of attorney from the shareholder.

If a shareholder which is a legal person appoints its representative to attend the meeting, the Company has the right to request the representative to present the identity proof for the shareholder and its representative, as well as any resolution or authorization letter from the board of directors of the shareholder which is a legal person or other authority as proof of the such authorization.

Article 25 The instrument appointing a proxy shall be in writing and signed by the appointing shareholder or his attorney duly authorized in writing; where the appointing shareholder is a legal person, such instrument shall be under its seal or signed by its director or duly authorized representative.

The instrument issued by the shareholder to appoint a proxy to attend the general meeting shall state the following contents:

(1) the name of the proxy;
(2) whether the proxy has voting rights;
(3) instructions as to vote for, vote against or abstain from each proposal on the general meeting agenda;
(4) the signing date and validity term of the instrument;

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(5) signature (or seal) of the principal. If the principal is a legal person shareholder, the seal of the legal person shall be affixed;
(6) specifying the number of shares represented by such proxy;
(7) if more than one proxy is appointed, the instrument shall specify the number of shares represented by each proxy respectively.

Article 26 The instrument appointing a voting proxy shall be placed at the domicile of the Company or at such other place as specified in the notice of the meeting at least 24 hours prior to the meeting at which the proxy is authorized to vote or at least 24 hours prior to the specified time of the voting. Where the instrument is signed by another person authorized by the principal, the authorization letter or other document authorizing the signatory shall be notarized. The notarized authorization letter or other authorizing document shall be placed together with the instrument appointing the voting proxy at the domicile of the Company or at such other place as specified in the notice of the meeting.

Article 27 Any form issued by the board of directors of the Company to the shareholders for the appointment of proxies shall enable the shareholders to separately instruct their proxies to cast vote in favour of or against each matter to be voted on at the meeting.

The authorization letter shall state that if the shareholder does not give specific instructions, the proxy may vote in his/her own discretion.

Article 28 A vote made in accordance with the terms of a proxy shall be valid notwithstanding the death or loss of capacity of the appointor or revocation of the proxy or revocation of the authority to sign any power of attorney for a proxy, or the transfer of the shares in respect of which the proxy is given, provided that the Company does not receive any written notice in respect of such matters before the commencement of the relevant meeting.

Article 29 A registration record for attendants at the meeting shall be compiled by the Company. The registration record shall contain the names of attendants (or names of organizations), identity card numbers, domicile, the number of voting shares held or represented by each attendant and names (or name of organizations) of the proxies.

Article 30 The convener and the lawyer appointed by the Company shall examine the shareholders’ qualifications according to the register of shareholders provided by the securities registrations and clearing organizations. The names of shareholders and the number of voting shares held by such shareholders shall be registered. The registration shall be closed before the chairman of the meeting announces the number of shareholders and proxies attending the meeting and the voting shares held by such shareholders.

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Article 31 If the Company convenes a general meeting, directors, supervisors, and the secretary to the board of directors of the Company shall attend the meeting. The general manager and other senior management members shall be in attendance at the meeting.

Article 32 The general meeting shall be presided over and chaired by the chairman of the board of directors. Where the chairman of the board of directors is unable to discharge the duty or will not discharge his duty, the meeting shall be presided over and chaired by the vice chairman of the board (articles in relation to vice chairman under the Rules only applicable if there is a vice chairman, same applies to below), or if there are two or more vice chairmen, by the one elected by at least half of the directors. Where no vice chairman is appointed or the vice chairman of the board is unable to discharge the duty or will not discharge the duty, the meeting shall be presided over and chaired by a director elected by at least half of the directors. Where no director can be elected by at least half of the directors to preside over and chair a general meeting, the shareholders attending the meeting may elect one person to chair such meeting. If for any reason the shareholders are unable to elect a chairman, the attending shareholder holding the largest number of voting shares (whether in person or by proxy) shall chair the meeting.

Article 33 In the annual general meeting, the board of directors and the supervisory committee shall report their work during the past year to the general meeting. Each independent director shall also present a work report. Article 34 Directors, supervisors and senior management members shall explain and answer the enquiries and suggestions from shareholders at the general meeting.

Article 35 The chairman of the meeting shall, prior to voting, announce the number of shareholders and proxies attending the meeting as well as the total number of voting shares held by them, which shall be the number of shareholders and proxies attending the meeting in person and the total number of their voting shares as indicated in the meeting’s registration record.

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Article 36 The board secretary shall keep minutes for each general meeting. The minutes shall contain the following contents:

(1) the time, venue and agenda of the meeting and names of the conveners;
(2) the name of the meeting chairman and the names of the directors, supervisors, and senior management members present or in attendance at the meeting;
(3) the numbers of shareholders (including holders of domestic shares and overseas listed foreign shares (if any)) and proxies attending the meeting, the total number of voting shares held by them and the percentages of their voting shares to the total share capital of the Company for each shareholder;
(4) the process of review and discussion, summary of any speech and voting results of each proposal;
(5) shareholders’ questions, opinions or suggestions and corresponding answers or explanations;
(6) the names of the persons who count votes and the persons supervising the voting process; and
(7) other contents to be included as specified in the Articles of Association.

Article 37 The convener shall ensure that the contents of the minutes are true, accurate and complete. Directors, supervisors, board secretary, conveners and their representatives and the meeting chairman shall sign on the minutes. The minutes shall be kept together with the registration record of attending shareholders, powers of attorney for proxies, valid record on internet voting and other means of voting, for a period of no less than 10 years.

Article 38 The convener shall ensure that the general meeting be conducted continuously until final resolutions are made. If the general meeting is suspended or resolutions cannot be made because of force majeure or other special circumstances, the convener shall take necessary measures to promptly resume the meeting or directly terminate that meeting, and make a timely public announcement. Meanwhile, the convener shall report to relevant regulatory authorities and the stock exchange of the place where the Company’s shares are listed in accordance with applicable laws, regulations or listing rules.

CHAPTER 7 VOTING AND RESOLUTIONS AT GENERAL MEETINGS

Article 39 Resolutions of the general meeting include ordinary resolutions and special resolutions.

An ordinary resolution at a general meeting shall be passed by more than one half of the voting shares held by shareholders attending the general meeting (whether in person or by proxy).

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A special resolution at a general meeting shall be passed by at least two-third of the voting rights held by shareholders attending the general meeting (whether in person or by proxy).

Article 40 When shareholders (including proxies) vote at the general meeting, they shall exercise their voting rights according to the number of voting shares that they represent. Each share shall carry one vote.

Shares held by the Company do not carry voting rights, and shall not be counted in the total number of voting shares represented by shareholders present at a general meeting.

Article 41 Voting at general meeting will record the name of the voter.

Article 42 The list for candidates of directors and supervisors shall be submitted to the general meeting for voting in the form of proposal.

Where voting for the election of directors at the general meeting, cumulative voting system can be adopted in accordance with the provisions in the Articles of Association or resolutions made at the meeting.

When the shareholding of the controlling shareholder of the Company reaches 30% or above, or the aggregate shareholding of related parties reaches 50% or above, the election of directors shall be conducted using cumulative voting system.

The cumulative voting system as mentioned in the preceding paragraph means that in the election of directors at the general meeting, each share carries a voting right equivalent to the number of directors to be elected. A shareholder may concentrate the votes on one candidate. The board shall announce to the shareholders the biographies and basic information of each candidate of directors.

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Article 43 Except for the cumulative voting system, the meeting shall vote on each proposal individually. Where there are different proposals for the same issue, voting should be carried out according to the order of the proposals raised. Except for special reasons such as force majeure causing the meeting to suspend or unable to reach a resolution, the meeting shall not set aside any proposal or have any proposal not voted on.

Article 44 Before a proposal is voted on at the meeting, two representatives of the shareholders shall be elected to take part in counting the votes and scrutinizing the conduct of the poll. Any shareholder who is interested in the matter under consideration and his proxy shall not take part in counting the votes or scrutinizing the conduct of the poll.

When a proposal is being voted on at the meeting, lawyers, the shareholders’ representatives and representatives of the supervisors shall be jointly responsible for counting the votes and scrutinizing the conduct of the poll, while the auditor appointed by the Company, the H share registrar or the external accountant qualified in serving as auditor shall act as the scrutinizer. The voting result shall be announced at the meeting. The voting results relating to such proposal shall be recorded in the minutes of meeting.

Shareholders or their proxies, who have cast their votes through online voting system or by other means, shall have the right to check the voting results through the respective voting system.

Article 45 When a poll is taken at a meeting, a shareholder (including proxy) who has the right to two or more votes need not cast all his votes in the same way.

Article 46 The matters as set out in paragraphs (1), (2), (3), (4), (5), (6), (10), (12) and (16) under Article 7 of the Rules in relation to the functions and powers to be exercise by the general meeting, and all matters other than those required by laws, administrative regulations or the Articles of Association to be approved by a special resolution of the general meeting, shall be approved by ordinary resolutions of the general meeting.

Article 47 The matters as set out in paragraphs (7), (8) (9), (11), (13) and (14) under Article 7 of the Rules in relation to the functions and powers to be exercise by the general meeting, the matters required by laws, administrative regulations or these Articles of Association to be approved by a special resolution of the general meeting, and the matters which, if subject to ordinary resolutions of the general meeting, would have material impact on the Company, shall be approved by special resolutions of the general meeting. The matters set out in paragraph (15) of Article 7 shall be subject to ordinary or special resolutions depending on the specific content of shareholder’s proposals.

Article 48 On the premise of ensuring the legality and effectiveness of the general meeting, the Company shall offer various channels and ways, including taking advantage of information technology such as online voting platform, in order to facilitate participation in the general meeting for the shareholders.

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Article 49 The on-site general meeting shall not end earlier than the online meeting or meeting delivered through other means. The chairman of the meeting shall announce the voting status and voting result for each proposal and announce whether a resolution is passed according to the voting result, and should be recorded in the meeting minutes. Before the voting result is officially announced, the Company, counter, scrutineer, substantial shareholders, network services provider and other related parties involved in the on-site general meeting, online meeting or meeting delivered through other means shall keep in confidential the voting result.

Article 50 Where the chairman of the meeting has any doubt as to the voting result of a resolution proposed for voting, he may have the votes counted. If the chairman of the meeting fails to have the votes counted, any shareholder or proxy attending the meeting who objects to the result announced by the chairman of the meeting may demand immediately after the declaration to have the votes counted, the chairman of the meeting shall have the votes counted immediately. Where the votes are counted at a general meeting, the counting results shall be recorded in the meeting minutes.

Article 51 The board secretary shall keep minutes for each general meeting. The chairman of the meeting, directors, supervisors, board secretary, conveners and their representatives and the meeting chairman shall sign on the minutes. The minutes shall contain the following contents:

(1) the time, venue and agenda of the meeting and names of the conveners;
(2) the name of the meeting chairman and the names of the directors, supervisors, and senior management members present or in attendance at the meeting;
(3) the numbers of shareholders (including holders of domestic shares and overseas listed foreign shares (if any)) and proxies attending the meeting, the total number of voting shares held by them and the percentages of their voting shares to the total share capital of the Company for each shareholder;
(4) the process of review and discussion, summary of any speech and voting results of each proposal;
(5) shareholders’ questions, opinions or suggestions and corresponding answers or explanations;
(6) the names of the persons who count votes and the persons supervising the voting process; and
(7) other contents to be included as specified in the Articles of Association.

The minutes of meeting and the registration record of attendants signed by the attending shareholders and proxies shall be kept at the Company’s domicile for a period of no less than 10 years.

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Article 52 Shareholders may examine photocopies of the minutes of meetings during the Company’s office hours free of charge. If any shareholder requests for a photocopy of the relevant minutes of meetings, the Company shall send such photocopies within 7 days upon receipt of payment of reasonable charges.

CHAPTER 8 SPECIAL PROCEDURES FOR VOTING AT CLASS MEETINGS

Article 53 Shareholders who hold different classes of shares shall be shareholders of different classes.

Shareholders of different classes shall enjoy rights and undertake obligations in accordance with the laws, administrative regulations and the Articles of Association.

Where the share capital of the Company includes shares which do not carry voting rights, the words ‘‘non-voting shares’’ must appear in the designation of such shares.

Article 54 Save for the circumstances as provided in the fourth paragraph under Article 18 of the Articles of Association, the Company shall not proceed to change or abrogate the shareholders’ rights of a class of shares unless such change or abrogation has been approved by way of a special resolution of the general meeting and by a separate class meeting of the affected class shareholders convened in accordance with Articles 56 to 60 of the Rules.

Article 55 The rights of shareholders of a certain class shall be deemed to have been changed or abrogated in the following conditions:

(1) an increase or decrease in the number of shares of such class or an increase or decrease in the number of shares of a class having voting rights, distribution rights or other privileges equal or superior to those of the shares of such class;
(2) conversion of all or part of the shares of such class into shares of another class, conversion of all or part of the shares of another class into shares of such class or grant of the right to make such conversion;
(3) removal or reduction of rights to accrued dividends or cumulative dividends attached to shares of such class;

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(4) removal or reduction of any preference granted to shares of such class in distribution of dividends or distribution of assets during liquidation of the Company;
(5) addition, removal or reduction of share conversion rights, options, voting rights, transfer rights, pre-emptive rights to rights issues or rights to acquire securities of the Company attached to shares of such class;
(6) removal or reduction of rights attached to shares of such class to receive amounts payable by the Company in a particular currency;
(7) creation of a new class of shares with voting rights, distribution rights or other privileges equal or superior to those of the shares of that class;
(8) imposition of restrictions or additional restrictions on the transfer or ownership of shares of such class;
(9) issuance of rights to subscribe for, or convert into, shares of such class or another class;
(10) increase in the rights and privileges of shares of another class;
(11) any restructuring of the Company which causes shareholders of different classes to bear liability out of proportion during the restructuring; or
(12) any amendment or cancellation of the provisions of this chapter.

Article 56 Affected class shareholders, whether or not otherwise having the right to vote at the general meeting, shall have the right to vote at class meetings in respect of matters referred to in paragraphs (2) to (8) and (11) to (12) under Article 55, except that interested shareholders shall not vote at class meetings.

The term ‘‘interested shareholders’’ in the preceding paragraph shall have the following meanings:

(1) in respect of a tender offer made by the Company to all shareholders in the same proportion or repurchase by the Company of its own shares through open market transactions on a stock exchange in accordance with Article 32 of the Articles of Association, the ‘‘interested shareholders’’ shall mean the controlling shareholder as defined in the Articles of Association;
(2) in respect of repurchase by the Company of its own shares by off-market repurchase through an agreement in accordance with Article 32 of the Articles of Association, the ‘‘interested shareholders’’ shall mean any shareholder in relation to such agreement; and

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(3) in respect of a restructuring proposal of the Company, the ‘‘interested shareholders’’ shall mean shareholders who will bear a lower proportion of liability than that other shareholders of the same class, or shareholders who have an interest that is different from the interest of other shareholders of the same class.

Article 57 Resolutions of a class meeting shall be passed by at least two-third of the voting rights of that class represented at the class meeting in accordance with Article 56.

Article 58 When the Company is to hold a class meeting, it shall issue a written notice, at least 45 days prior to the meeting, to all shareholders who are registered as shareholders of that class in the register of shareholders, stating the matters to be considered at the meeting as well as the date and place of the meeting. Shareholders who intend to attend the meeting shall, at least 20 days prior to the day of the meeting, deliver their written replies to the Company of their attendance.

If there is any special requirement by the listing rules of the place where the Company’s shares are listed, such requirements shall prevail.

Article 59 The notice of a class meeting of shareholders is only required to be delivered to the shareholders entitled to vote at such meeting.

The procedure of a class meeting shall, to the extent possible, be identical with the procedure of a general meeting. Unless otherwise specified in this section, provisions of the Articles of Association of the Company related to procedure for convening a general meeting shall be applicable to a class meeting.

Article 60 Apart from the holders of other classes of shares, holders of domestic shares and holders of overseas listed foreign shares are deemed to be different classes of shareholders.

The special procedure for voting in class meeting shall not apply to the following circumstances: (1) upon approval by a special resolution of its shareholders in a general meeting, the Company issues domestic shares and overseas listed foreign shares, separately or concurrently once every 12 months, and the number of each class of shares to be issued is not more than 20% of the outstanding shares of such class;

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(2) the Company implements its plan, which was prepared upon its incorporation, to issue domestic shares and overseas listed foreign shares, provided that such plan shall be implemented within 15 months from the date of approval by the securities regulatory authority of the State Council;
(3) with the approval by the securities regulatory authority of the State Council, the shareholders of the Company convert their domestic shares and foreign shares to overseas listed foreign shares for listing and trading outside the PRC.

CHAPTER 9 SUBSEQUENT EVENT AND ANNOUNCEMENT

Article 61 The secretary to the Board shall be responsible for submitting the meeting resolutions, minutes and other relevant materials (if required) to the relevant regulatory authorities in accordance with laws and regulations, and the requirements of the securities regulatory authorities of the State Council, the stock exchange where the Company’s shares are listed and the Articles of Association, and for arranging the announcement to be published in the designated media. The contents of the announcement shall comply with the relevant regulatory requirements. The announcement shall include the number of shareholders and proxies present, the aggregate number of shares held by such shareholders and proxies, the percentage of such shares out of the total voting shares of the Company, the mode of voting, the voting result of each motion and the details of each resolution passed.

Article 62 Where the proposed resolution is not passed, or the meeting alters the resolution(s) passed at the previous meeting, a special note shall be made in the announcement of the resolutions of the meeting.

Article 63 Where proposed resolutions in relation to the election of directors or supervisors are passed at a meeting, the term of office of the new directors or supervisors shall take effect upon the passing date of such resolutions at the meeting.

Article 64 In the event that proposals for distribution of cash, bonus shares or capitalization of capital reserve have been passed at general meeting, the Company shall effect the distribution within two months after the meeting.

CHAPTER 10 SUPPLEMENTARY PROVISIONS

Article 65 The Rules are formulated by the board of directors, and shall be appended to the Articles of Association. As approved by the general meeting, the Rules shall be effective from the date on which the ordinary RMB shares (A shares) to be issued by the Company are being listed and traded. Any amendments to the Rules shall be made through amendments proposed by the board of directors, and shall be effective after being approved by the general meeting.

Article 66 Any other matters which are not stipulated under the Rules shall be conducted in accordance to relevant laws, regulations, the listing rules of the local stock exchange where the Company’s shares are listed as well as the Articles of Association.

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Article 67 Unless otherwise specified, the terms used in the Rules shall have the same meanings with those in the Articles of Association.

Article 68 The Company’s board of directors, as authorized by the general meeting, shall be responsible for the interpretation of the Rules.

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APPENDIX V

Rules of Procedures for Board Meeting of

Dynagreen Environmental Protection Group Co., Ltd.*

(Applicable after the issue of A shares)

(As approved at the 1st extraordinary general meeting of the Company in 2016 held on 18 April 2016)

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CHAPTER I GENERAL PROVISIONS

Article 1 In order to ensure the standardized operation of Dynagreen Environmental Protection Group Co., Ltd. (hereinafter referred to as the ‘‘Company’’) and enhance the efficiency and scientificity of the decision-making of the board of directors (hereinafter referred to as the ‘‘Board’’) in order to protect the interest of the Company and legitimate interest of shareholders, these rules of procedures for Board Meeting (the ‘‘Rules’’) are hereby formulated in accordance with the Company Law of the People’s Republic of China, the Mandatory Provisions for the Articles of Association of Companies to be Listed Outside the PRC, the Guidelines for Articles of Association of Chinese Listed Companies and other laws and regulations as well as the Articles of Association of Dynagreen Environmental Protection Group Co., Ltd. (hereinafter referred to as the ‘‘Articles of Association’’) and listing rules prevailing in places where shares of the Company are listed.

CHAPTER II OFFICE OF THE BOARD

Article 2 The office of the Board shall be set up under the Board for handling day-to-day affairs of the Board.

The secretary to the Board shall also serve as the person in charge of the office of the Board responsible for keeping the seals of the Board and its office.

CHAPTER III POWERS OF THE BOARD

Article 3 The Board exercises the following functions and powers:

(1) to be responsible for the convening of general meetings and report its work to the general meetings;
(2) to implement resolutions of the general meetings;
(3) to decide on the Company’s business plans and investment schemes;
(4) to formulate the annual financial budgets and final accounts of the Company;
(5) to formulate the Company’s profit distribution plans and plans on making up losses;
(6) to formulate proposal for the Company to increase or decrease of its registered capital, issue debentures or other securities and listing thereof;
(7) to formulate plans for mergers, divisions, dissolution and alteration of corporate form of the Company;

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(8) to formulate plans for the Company’s substantial acquisitions or repurchase of shares of the Company;
(9) within the scope authorized by the general meeting, to decide, among others, the Company’s external investment, purchase and sale of assets, creation of mortgage on the Company’s assets, provision of guarantees, wealth management entrustment, connected transactions;
(10) to decide on establishment of internal management organizations of the Company;
(11) to determine the setup of the specialized committees under the Board, appoint or dismiss the chairmen of such committees (the conveners);
(12) to appoint or dismiss the general manager, the secretary to the Board and the secretary to the Company; in accordance with the nominations by the general manager, to appoint or dismiss senior management members such as deputy general managers, financial controller and chief engineer, and to decide on their remunerations;
(13) to formulate the basic management system of the Company;
(14) to formulate proposals to amend the Articles of Association;
(15) to formulate the stock incentive plan of the Company;
(16) to manage information disclosure of the Company;
(17) to propose to the general meeting on the appointment or replacement of the accounting firms which provide audit services to the Company;
(18) to listen to work reports of the general manager and review his/her work;
(19) to review and approve provision of external guarantees by the Company, other than the guarantees which are subject to review and consideration at a general meeting in accordance with Article 68 of the Articles of Association;
(20) other powers authorized by the laws, administrative regulations, and departmental rules, listing rules of the place where the Company’s shares are listed, the Articles of Association and the general meetings.

If any matter of authority to be exercised by the Board above or any transaction or arrangement of the Company shall be subject to review by the general meeting according to the listing rules of the place where the Company’s shares are listed, such matters shall be submitted to the general meeting for review.

CHAPTER IV MEETINGS OF THE BOARD

Article 4 The Board meetings include regular meetings and extraordinary meetings.

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Article 5 Regular meetings of the Board shall be held at least twice a year. The meeting shall be convened by the chairman of the Board.

Article 6 The chairman, any shareholder holding at least one tenth voting rights, at least one third of the directors, or the supervisory committee or the general manager may propose the holding of an extraordinary meeting of the Board. The chairman shall convene and preside over the extraordinary meeting of the Board within 10 days upon receipt of the proposal.

Where an extraordinary meeting of the Board is held according to the preceding paragraph, a written proposal signed or sealed by the proposer shall be submitted to the Board office for it to forward to the Board office or to the chairman direct. Such proposal shall specify:

(1) the name of the proposer;
(2) the reason for proposing to convene the meeting or objective facts based on which the proposer proposes convening the meeting;
(3) the time or time limit, venue and form of the meeting proposed to be held;
(4) well-defined and specific proposals; and
(5) contact information of the proposer and the date of the proposal.

The proposal shall cover only matters falling within the scope of the functions and powers of the Board set forth in the Articles of Association, and all materials related with such proposal shall be submitted together.

The Board office shall submit the written proposal and related materials to the chairman upon receipt. The chairman may request the proposer to modify or supplement the proposal if he thinks that the proposal is not sufficiently clear or specific or the supporting materials provided not adequate.

CHAPTER V PROCEDURES OF BOARD MEETINGS

Article 7 The Board meeting shall be convened and presided over by the chairman of the Board. Where the chairman of the Board is unable to discharge the duty or will not discharge his duty, the duty shall be discharged by the vice chairman of the Board (Provisions herein in relation to a vice chairman are applicable only when the Company has a vice chairman; the same herein after), or if there are two or more vice chairmen, by the one elected by at least half of the directors. Where no vice chairman is appointed or the vice chairman of the Board is unable to discharge the duty or will not discharge the duty, the meeting shall be presided over and chaired by a director elected by at least half of the directors.

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Article 8 The Board office shall deliver a notice and relevant documents to each director, supervisor, the general manager (if not a director) and the secretary to the Board fourteen (14) days in advance when convening a regular meeting of the Board and five (5) days in advance when convening an extraordinary meeting thereof. If a notice is not delivered by hand, a phone call shall be made for confirmation and corresponding record shall be kept.

Where there is an urgent matter, the extraordinary Board meeting may be held upon approval by the chairman, which is not subject to the requirement of meeting notice as set out in the paragraph 1 of this Article, provided that a proper notice shall be given to the directors, supervisors and the general manager.

Article 9 Notice convening a Board meeting may be served through the following means:

(1) delivery by hand;
(2) by post;
(3) by fax or email;
(4) subject to the laws and regulations, and the listing rules of the place where the Company’s shares are listed, by posting at the Company’s website and such website as designated by relevant stock exchange;
(5) by public announcement;
(6) by means agreed between the Company and the recipient in advance or accepted by the recipient after receipt of such notices; and
(7) other means approved by the relevant regulatory agency of the listing place or as set out in the Articles of Association.

If a director is present at a meeting of the Board and fails to, before and up to the beginning of the meeting, state that he did not receive the meeting notice, he shall be deemed to have received the meeting notice.

Article 10 A notice of Board meeting shall include the following contents:

(1) the date and place of meeting;
(2) the period of the meeting;
(3) the reasons and agenda;
(4) the date of issuance of notice; and
(5) the method of convening the meeting.

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Article 11 After the notice for regular meeting of the Board is sent, if the time and venue of the meeting must be changed or meeting proposals must be added, changed or cancelled, a written notice of change shall be sent three days before the original designated date of the meeting, giving an explanation and provides the contents of new proposals and the related materials. Where the notice of change is sent less than three days in advance, the date of the meeting shall be postponed accordingly or the meeting shall be held at the original date subject to the consent of all directors attending the meeting.

After the written notice for extraordinary meeting of the Board is sent, if the time and venue of the meeting must be changed or meeting proposals must be added, changed or cancelled, a prior consent shall be obtained from all directors attending the meeting and corresponding records shall be kept.

Article 12 Except for the consideration on the connected transactions by the Board as set out in Article 149 of the Articles of Association and Article 21 hereof, the quorum of a Board meeting shall be more than one half of the directors.

Supervisors may be in attendance at a Board meeting. Directors and the secretary to the Board not being a director shall be in attendance at the meetings of the Board. The chairman presiding over the meeting may notify other relevant persons to be in attendance at the meetings of the Board if he thinks necessary.

Article 13 The directors shall attend a Board meeting in person. If a director is unable to attend for any reasons, he may appoint another director in writing to attend on his behalf. The authorization letter shall contain the name of the proxy, the matters represented, scope of authorization and validity period. It shall be signed or sealed by the principal.

A director who acts as a proxy of another director at a Board meeting shall exercise director’s rights within the authorized scope. If a director does not attend a Board meeting in person and does not appoint a proxy to attend the meeting, he/she shall be deemed to have waived the voting rights in the meeting.

Article 14 An appointing director and a proxy in attendance at Board meetings shall observe the following rules:

(1) When the meeting considers connected transactions, a non-connected director must not appoint a connected director to attend the meeting, and a connected director must not accept such appointment by a non-connected director.
(2) An independent director must not appoint a non-independent director to attend the meeting, and a non-independent director must not accept such appointment by an independent director.

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(3) A director shall not grant unrestricted power to another director to attend the meeting unless the appointing director has stated his opinions and voting intention on the proposals, and the director concerned shall not accept such unrestricted power or ambiguous appointment.
(4) A director must not accept the authorization from more than two directors and a director must not appoint any director having accepted appointment from two other directors to attend the meeting.

Article 15 The Board meeting shall be convened on site in principle. If necessary, the meeting may be conducted by way of conference call or other similar communication facilities (including but not limited to voting by trans-functional signature, video, fax or vote through email, etc.). As long as the directors present in the meeting can hear clearly the conversation of the other directors or can communicate instantly, all directors participated should be treated as present in the meeting. The Board meeting may also be held in the form of a combination of on-site meeting and other forms.

Where the meeting is convened in an off-site manner, the number of the participating directors shall be counted based on the directors present in the video and expressing opinions in the conference call, the actual receipt of documents with trans-functional signature within the prescribed period, the valid votes delivered via fax or email, or the written confirmation letters submitted by the directors afterwards to confirm their attendance of the meeting.

The whole process of the Board meeting convened on site or off-site shall be recorded if necessary.

Article 16 An agenda and accompanying meeting papers shall be sent in full to all directors in a timely manner and at least fourteen (14) days before the intended date of a board meeting. The foregoing restriction shall not apply to any extraordinary board meeting.

From the issue of the notice of meeting until the convening of the meeting, the secretary to the Board shall be responsible for or make arrangement for communication and contact with all directors, in particular with independent non-executive directors; to obtain opinions or suggestions on the relevant resolutions from directors, and to convey such opinions or suggestions to those who propose the resolutions, so as to clarify the relevant resolutions put forward by them. To the extent practicable, the secretary to the Board will also provide supplemental information required for making corresponding decisions in a timely manner on the contents of the resolutions to be considered, including the related background information of the agenda and other information that may be helpful for the directors to make sensible, prompt and prudent decisions.

The secretary to the Board shall, under appropriate circumstances, arrange for seeking independent professional opinion in respect of the directors’ performance of their obligations to the Company, and such expenses shall be borne by the Company. Such request shall be submitted to the secretary to the Board in writing. The secretary to the Board shall reasonably seek appropriate professionals for the provision of opinions for efficiency.

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Article 17 The directors shall prudently give their opinion upon carefully reading the relevant meeting materials and fully understanding the situations.

The directors are allowed to learn the information necessary for the decision-making from the office of the Board, the meeting convener, the manager and other senior management staff, various special committees, accounting firms and law firms and other relevant personnel and organizations before the meeting, or to suggest the moderator to invite the above-mentioned persons and the representatives of the above-mentioned organizations to attend the meeting to explain the situations.

Article 18 For any major matters to be determined by the Board, sufficient information shall be provided to the directors and the directors are entitled to request supplementary materials. When at least one-fourth of the directors or at least two external directors (an external director means a director who have no executive positions in the Company) consider that the provided materials insufficient or the reasoning is unclear, they may jointly propose to defer the Board meeting or defer the consideration on the relevant matters, the Board shall accept such proposal accordingly. Save for proposed directly at the Board meeting, the secretary to the Board shall, upon receiving such proposal jointly proposed in writing by directors to postpone the Board meeting or postpone the consideration of certain matters on agenda at the meeting, dispatch a notice to directors, supervisors and participants in attendance on a timely basis.

Article 19 The chairman of the meeting shall ask all directors present at the meeting to give their express and definite opinions about all the proposals.

Independent directors shall issue their independent opinion in accordance with laws, regulations, listing rules prevailing at places where shares of the Company are listed and other rules.

Unless approved by all the directors attending the meeting, the meeting of the Board shall not vote on the proposals not included in the notice of meeting. A proxy director shall not vote on the proposals on behalf of another director not included in the notice of meeting.

Article 20 Each resolution proposed shall be put to vote by the chairman of the meeting upon being sufficiently considered.

The Board meeting shall vote by way of disclosed ballot. Provided that the directors can fully express their opinions at the extraordinary Board meetings, decisions could be made by signing written resolutions instead of convening Board meetings, given that the resolutions to be reviewed shall be delivered to each of the directors by hand, post, fax or other means of communication and the number of directors who signed the said resolutions shall reach the number as required for passing such resolution.

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If a substantial shareholder (a substantial shareholder means a shareholder holding 10% or more of the shares of the Company) or a director has material conflict of interest in the matters to be considered, such matters shall be considered and decided on by the means of convening Board meetings (rather than written resolutions) and independent non-executive directors who do not have any material interest in such matters shall attend the Board meeting.

The election, appointment and dismissal of a company secretary shall be resolved on at Board meetings but not by written resolutions.

As for the voting on a Board resolution, each director shall have one vote only.

A director may vote for or against or abstain from voting. The directors present at the meeting shall select one of the foregoing options. If a director fails to select one of the foregoing options or selects two or more of the foregoing options, he shall be deemed to waive his voting right. If a director leaves the meeting midway without returning and fails to make an option, he shall be deemed to waive his voting right.

Article 21 When a director is connected to companies which are the subject of a resolution to be decided at a Board meeting, the connected director shall not vote on that resolution, and shall not vote on behalf of other directors on such resolution. Such Board meeting shall be deemed as having a quorum if more than one half of the non-connected directors attend the meeting. Resolutions made by the Board meeting shall be passed by more than one half of the non-connected directors. If the number of non-connected directors attending the Board meeting is less than three, the matter shall be submitted to the general meeting for consideration.

Article 22 After the directors present at the meeting have voted on the proposals, personnel of the Board office shall collect the votes cast by the directors, and deliver to the secretary to the Board for counting the votes under the supervision of a supervisor or an independent director.

When the meeting is held on-site, the chairman of the meeting shall announce the voting result on the spot; in other circumstances, the chairman of the meeting shall request the secretary of the Board to notify the directors of the voting results before the end of the next working day following the specified time for voting.

Where a director votes after the chairman of the meeting announces the voting result or after expiry of specified time limit, such vote shall not be counted.

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Article 23 Resolutions proposed at a Board meeting shall be passed as follows in order to be effective:

(1) paragraphs (6), (7) and (14) under Article 3 hereof shall be passed by over two thirds of directors;
(2) Connected transactions under Article 21 hereof shall be passed by over half of directors not connected thereto; and
(3) Matters other than as stated above shall be passed by over half of directors.

A resolution of the Board shall be passed by more directors if such requirement is stipulated by laws, regulations, listing rules prevailing in places where shares of the Company are listed or the Articles of Association.

Where the substance or implications conflict with each other among resolutions, the latter resolution shall prevail.

Article 24 The Board shall keep minutes of its decisions on the matters discussed at the meeting. The directors who attended the meeting, the secretary to the Board and the recorder shall sign the minutes of that meeting.

The directors shall be responsible for the decisions of the Board. Where a resolution of the Board is in violation of the laws, administrative regulations or the Articles of Association, thereby causing serious losses to the Company, the directors who took part in the resolution shall be liable to the Company for compensation. However, where a director can prove that he had expressed his opposition to such resolution when it was put to vote, and that such opposition was recorded in minutes of the meeting, such director shall be exempted from such liability. A director neither abstained from voting nor attending through a proxy shall not be exempted from such liability, neither shall a director who raised express objection thereon but did not vote against.

Article 25 The minutes of the Board meetings shall contain the following information:

(1) the date and venue of the meeting and the name of the convener;
(2) the names of the directors present and names of directors (proxy) acting for other directors to attend the meeting;
(3) the agenda;
(4) the main points of all directors’ speeches, their key opinion on matters relating to and voting on each resolution proposed; and
(5) the voting method of each resolution and the result (the result shall specify the number of votes for, against and abstaining).

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Article 26 In addition to the meeting minutes, the secretary to the Board may also arrange the office staff of the Board to work out a clear and concise meeting summary or make a separate resolution record based on the voting result and the formed resolutions.

Article 27 The directors present at the meeting shall sign on the minutes and resolutions of the meeting personally and on behalf of the directors appointing them to attend the meeting. If the directors have any objections to the minutes and resolutions of the meeting, they may state such objections when signing on the minutes or resolutions. Where a director neither signs on the minutes and resolutions of the meeting as set forth in the foregoing paragraph, nor states his objections in writing, he shall be deemed to completely agree to all the contents of the minutes and resolutions of the meeting.

Article 28 The Board shall procure relevant persons to implement its resolutions, monitor the execution of its resolutions and report the execution thereof at its subsequent meetings.

CHAPTER VI BOARD MEETING INFORMATION DISCLOSURE

Article 29 The Board shall comply with the requirements of the regulatory authorities and the stock exchange where the shares of the Company are listed in relation to the disclosure of information. In disclosing matters considered or resolutions made during the Board meeting which are required to be disclosed. Information relating to significant matters shall be reported to the stock exchange in a timely manner on the principle of fair information disclosure and shall be filed with relevant regulatory authorities (if applicable) for record.

Article 30 If the independent non-executive directors present independent opinions to the Board on the matters that are the matters need to be disclosed under the requirements of the regulatory authorities and the stock exchange where the shares of the Company are listed, the Company shall announce the opinions of the independent non-executive directors. When the independent non-executive directors have different opinions and reach no consensus, the Board shall disclose the opinions of the independent non-executive directors respectively.

Article 31 Prior to the disclosure of the agenda or resolutions of the Board meeting according to the preceding article, the participating directors and other members in attendance at the meeting, including the recording and service personnel, shall bear the duty of strict confidentiality. If there is any violation of such confidentiality obligation, the Company reserves the right to pursue the liability in accordance with the laws.

CHAPTER VII KEEPING RECORDS OF MINUTES

Article 32 The meeting files of the Board, including the meeting notice, meeting documents, meeting signature book, letter of proxy, audio records, ballots, meeting minutes and summary and resolutions signed and confirmed by the directors present at the meeting, and the resolution announcement, shall be kept by the secretary to the Board.

The meeting files of the Board shall be kept for over ten years.

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CHAPTER VIII SUPPLEMENTARY PROVISIONS

Article 33 The Board shall formulate these Rules, which shall be appended to the Articles of Association and, after approved at a general meeting, effective from the date on which RMB ordinary shares (A shares) of the Company are listed and commence trading. Any amendment hereto shall be proposed by the Board and approved at a general meeting before taking effect.

Article 34 Any matters not provided for herein shall be dealt with in accordance with relevant laws, regulations, listing rules prevailing in places where shares of the Company are listed and the Articles of Association.

Article 35 These Rules shall be construed by the Board as authorized by the general meeting.

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RULES OF PROCEDURES FOR SUPERVISORY COMMITTEE MEETING (DRAFT)

APPENDIX VI

Rules of Procedures for Supervisory Committee Meeting of

Dynagreen Environmental Protection Group Co., Ltd.*

(Applicable after the issue of A shares)

(As approved at the 1st extraordinary general meeting of the Company in 2016 held on 18 April 2016

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CHAPTER I GENERAL PROVISIONS

Article 1 In order to ensure the standardized operation of Dynagreen Environmental Protection Group Co., Ltd. (hereinafter referred to as the ‘‘Company’’) and enhance the efficiency and scientificity of the decision-making of the supervisory committee (hereinafter referred to as the ‘‘Supervisory Committee’’) in order to protect the interests of the Company and legitimate interests of shareholders, these rules and procedures of the Supervisory Committee (the ‘‘Rules’’) are hereby formulated in accordance with the Company Law of the People’s Republic of China, the Mandatory Provisions for the Articles of Association of Companies to be Listed Outside the PRC, the Guidelines for Articles of Association of Chinese Listed Companies and other laws and regulations as well as the Articles of Association of Dynagreen Environmental Protection Group Co., Ltd. (hereinafter referred to as the ‘‘Articles of Association’’) and listing rules prevailing in places where shares of the Company are listed.

CHAPTER II MEETINGS OF THE SUPERVISORY COMMITTEE

Article 2 The meetings of the Supervisory Committee include regular meetings and extraordinary meetings.

Article 3 The Supervisory Committee shall comprise three supervisors, one of whom shall be the chairman of the Supervisory Committee.

The appointment and dismissal of the chairman of the Supervisory Committee shall be approved by at least two-third of its members.

Article 4 Regular meetings of the Supervisory Committee shall be held at least twice a year and at least once every six (6) months.

A supervisor may propose to convene an extraordinary meeting of the supervisory committee.

Article 5 The supervisory committee shall comprise shareholder representative supervisors and employee representative supervisors. The shareholder representative supervisors shall be elected and removed by the general meeting. The number of employee representative supervisors shall be no less than one third of the total number of supervisors, and the employee representative supervisors shall be democratically elected and removed by the Company’s employees.

Article 6 Before serving a notice convening a regular meeting of the Supervisory Committee, the Supervisory Committee office shall collect resolutions to be proposed at the meeting from all supervisors and ask for opinions of staff of the Company. When collecting such resolutions and asking for opinions, the Supervisory Committee office shall explain that the

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Supervisory Committee places emphasis on the orderly operation of the Company and the monitoring of the behaviour of the directors and senior managerial staff in carrying out their duties, rather than decision-making on the Company’s operation and management.

Article 7 The Supervisory Committee shall be accountable to the general meeting and shall exercise the following functions and powers in accordance with legal requirements:

(1) to examine the Company’s financial affairs;
(2) to supervise the directors and senior management during their performance of duties to the Company, and propose the dismissal of directors or senior management members who violate the law, administrative regulations, the Articles of Association or resolutions of general meetings;
(3) to demand rectification from a director and any other senior management members when the acts of such persons are harmful to the Company’s interests;
(4) to verify financial information such as financial reports, business reports and profit distribution plans, etc. to be submitted by the board of directors to the general meetings and, should any queries arise, to engage, in the name of the Company, certified public accountants and practicing auditors to conduct a re-examination;
(5) to propose convening of extraordinary general meeting and to convene and preside over the general meeting when the board of directors fails to perform such duties;
(6) to submit proposals to the general meetings;
(7) to propose convening of extraordinary meeting of board of directors;
(8) to initiate legal action against directors and senior management members in accordance with the Company Law;
(9) to conduct investigations upon discovery of abnormality in the business operation and engage, at the cost of the Company, professional firms such as accounting firms and law firms to assist its work where necessary; and
(10) any other duties as prescribed by the Articles of Association.

Article 8 The Supervisory Committee shall formulate these Rules in order to ensure working efficiency and scientific decision-making. These Rules shall contain the convening and voting procedure of meetings of the Supervisory Committee, and shall be appended to the Articles of Association. These Rules shall be drafted by the Supervisory Committee and approved by the general meeting.

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Article 9 When a supervisor proposes to convene an extraordinary meeting of the Supervisory Committee, he or she shall submit a written proposal signed by himself or herself to the chairman of the Supervisory Committee through the office of the Supervisory Committee or direct. The written proposal shall detail the following items:

(1) The name of the supervisor submitting the proposal;
(2) The reason for submitting the proposal or the objective basis on which the proposal is submitted;
(3) The proposed time, duration, venue, and method of convening the meeting;
(4) Clear and specific motions;
(5) The contact method of the supervisor submitting the proposal and the date of the proposal.

Within three days from the office or the chairman of the Supervisory Committee receiving the written proposal from the supervisor, the office of the Supervisory Committee shall send a notice convening the extraordinary meeting of the Supervisory Committee.

CHAPTER III PROCEDURES OF MEETINGS OF SUPERVISORY COMMITTEE

Article 10 A notice of the regular meeting of the Supervisory Committee shall be given to all supervisors in writing at least 10 days before the meeting is held and a notice of the extraordinary meeting of the Supervisory Committee shall be given to all supervisors in writing at least three days before the meeting is held.

A notice of the Supervisory Committee meeting shall include the following contents:

(1) the date, venue, and duration of the meeting;
(2) the reasons and agenda;
(3) the date of issuance of notice.

Article 11 The meeting of the Supervisory Committee shall be convened and presided over by the chairman of the Supervisory Committee. Where the chairman of the Supervisory Committee is unable to discharge the duty or will not discharge his duty, the meeting shall be convened and presided over by a supervisor elected by at least half of the supervisors.

Article 12 The meeting of the Supervisory Committee shall be convened on site as a general principle.

In case of emergency, the convening of and the voting at the Supervisory Committee meeting may also be conducted by way of conference call or other similar communication facilities (including but not limited to voting by trans-functional signature, video, fax or vote through email,

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etc.) provided that the meeting convener (moderator) explains the specific emergency situation to the participating supervisors. In the case of voting in the absence of an on-site meeting, the supervisors shall sign and fax their written opinions and voting intentions on the relevant matters to the Supervisory Committee office. The supervisors shall not just give their opinion on the issues to be voted, but also provide their written opinion and reasons for casting their votes.

The whole process of the meeting of the Supervisory Committee shall be recorded if necessary.

Article 13 The quorum of a meeting of the Supervisory Committee shall be more than half of the supervisors.

Voting at the Supervisory Committee meeting shall be carried out by disclosed ballot and each supervisor shall have one vote.

A supervisor shall attend meetings of the Supervisory Committee in person. If a supervisor is unable to attend such meeting for any reason, he/she shall appoint another supervisor to attend the meeting on his/her behalf in writing. The letter of authorization shall specify the extent of authorization.

Resolutions at the meeting of the Supervisory Committee shall be passed by at least two-third of the supervisors’ votes.

Article 14 The chairman of the meeting shall ask all supervisors present at the meeting to give their express opinions about all proposals.

The chairman of the meeting of the meeting shall invite the directors, senior managerial staff, other staff of the Company or relevant staff of intermediaries to come and answer queries according to supervisors’ proposals.

Article 15 Voting at the Supervisory Committee meeting shall be carried out by disclosed ballot and each supervisor shall have one vote.

A supervisor may vote for or against or abstain from voting. The supervisors present at the meeting shall select one of the foregoing options. If a supervisor fails to select one of the foregoing options or selects two or more of the foregoing options, the chairman of the meeting shall request the relevant supervisor to reselect. Where the supervisor refuses to make a selection, he shall be deemed to waive his voting right. If a supervisor leaves the meeting midway without returning and fails to select the voting intention, he shall be deemed to waive his voting right.

Resolutions at the meeting of the supervisory committee shall be passed by at least two-third of the supervisors’ votes.

Article 16 Decisions made at a meeting of the Supervisory Committee shall be recorded in the minutes of such meeting. Supervisors attending the meeting shall sign on the minutes of meeting. Supervisors are entitled to request that an explanation of their comments made at the meetings be noted in the minutes.

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Where a supervisor neither signs as set forth in the foregoing paragraph, nor states his objections in writing, he shall be deemed to completely agree to all the contents of the minutes of the meeting.

Article 17 Minutes of meetings of the Supervisory Committee shall be maintained as corporate archives for at least ten (10) years.

Article 18 The Supervisory Committee shall procure relevant persons to implement its resolutions, and report the execution thereof at its subsequent meetings.

Article 19 Any reasonable expenses incurred by the Supervisory Committee for engagement of professionals such as lawyers, certified public accountant, practicing auditors, etc., to perform its duties shall be borne by the Company.

CHAPTER IV SUPPLEMENTARY PROVISIONS

Article 20 The Supervisory Committee shall formulate these Rules, which shall be appended to the Articles of Association and, after approved at a general meeting, effective from the date on which RMB ordinary shares (A shares) of the Company are listed and commence trading. Any amendment hereto shall be proposed by the Board and approved at a general meeting before taking effect.

Article 21 Any matters not provided for herein shall be dealt with in accordance with relevant laws, regulations, listing rules prevailing in places where shares of the Company are listed and the Articles of Association.

Article 22 Unless otherwise stated, terms used herein shall have the meanings ascribed to them in the Articles of Association.

Article 23 These Rules shall be construed by the Supervisory Committee as authorized by the general meeting.

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WORKING REGULATIONS OF INDEPENDENT DIRECTORS (DRAFT)

APPENDIX VII

CHAPTER 1 GENERAL*

Article 1 In order to further optimize the corporate governance structure and enhance regulated operations of Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Company’’), thereby facilitate the standardized operation of the Company, provide better conditions for independent non-executive directors (the ‘‘Independent Directors’’) to perform their duties, and ensure Independent Directors duly perform their duties, based on the actual condition of the Company, these Working Regulations of Independent Directors (the ‘‘Rules’’) are formulated pursuant to relevant regulations under the Company Law of the PRC (the ‘‘Company Law’’), the Guidance on Establishment of the System of Independent Directors by Listed Companies (the ‘‘Guidance Opinions’’) of the CSRC, the Articles of Association of Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Articles of Association’’), and the listing rules of the local stock exchange where the Company’s shares are listed. In case of inconsistencies between the Rules and the listing rules of the places where the Company’s shares are listed, such listing rules shall prevail.

Article 2 An Independent Director means a director who does not hold any positions in the Company other than the directorship, and has no relationship with the Company or its substantial shareholders (‘‘substantial shareholders’’ mean shareholders who individually or together hold at least 5% of the total number of voting Company’s shares) that may be prejudicial to his/her ability to make independent and objective judgement, and satisfies the requirements of independence pursuant to the Guidance Opinions.

CHAPTER 2 CONDITIONS OF EMPLOYMENT OF INDEPENDENT DIRECTORS

Article 3 Independent Directors of the Company shall satisfy the following basic requirements:

(1) Complying with laws, administrative regulations of the place where the Company’s shares are listed, the listing rules of the place where the Company’s shares are listed and other relevant regulations in relation to the character, integrity, independence and experience of Independent Directors, and possessing the qualifications of a listed company’s director;
(2) Being independent as required by laws, administrative regulations, departmental regulations of authority, the Articles of Association, as well as Article 8 of the Rules;
(3) Possessing basic knowledge of the operation of a listed company and being familiar with relevant laws, administrative regulations, as well as departmental regulations and rules of authority;
(4) Other conditions as specified in the Articles of Association.

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Article 4 No less than one-third members of the board of directors and no less than three members of the board of directors of the Company shall be Independent Directors; among which, at least one of the Independent Directors must have appropriate professional qualifications or accounting or related financial management expertise.

CHAPTER 3 INDEPENDENCE OF INDEPENDENT DIRECTORS

Article 5 An Independent Director must be independent, and must satisfy the requirements on independence of Independent Directors by the Guidance Opinions and the listing rules of the place where the Company’s shares are listed. Unless otherwise stated in the Rules, any of the following persons shall not be nominated as an Independent Director of the Company:

(1) Persons directly or indirectly holding 1% or more of the Company’s issued shares or the top ten individual shareholders of the Company and their immediate families;
(2) Persons employed by the shareholders directly or indirectly holding 5% or more of the Company’s issued shares or the top five shareholders of the Company and those persons’ immediate families;
(3) such person has acquired an interest in any securities of the Company as a gift, or by means of other financial assistance, from a connected party of the Company or the Company itself. However, without prejudice to Item (1), such person will still be considered independent if he/she receives shares or interests in securities from the Company or its subsidiaries (but not from connected parties) as part of his/her director’s fee or pursuant to share option schemes established in accordance with the listing rules of the place where the Company’s shares are listed;
(4) such person is a director, partner or principal of a professional adviser which currently provides or has within one year immediately prior to the date of his proposed appointment provided services, or is an employee of such professional adviser who is or has been involved in providing such services during the same period, to:
the Company, its controlling shareholder or any of their respective subsidiaries or connected parties; or
any person who was a controlling shareholder of the Company within one year immediately prior to the date of the proposed appointment, or any of its associates.
(5) such person has a material interest in any principal business activity of or is involved in any material commercial transaction with the Company, its controlling shareholder or their respective subsidiaries or with any connected parties of the Company;
(6) such person is on the board of directors specifically to protect the interests of an entity whose interests are not the same as those of the shareholders as a whole;

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(7) such person is or was connected with a director, the chief executive or a substantial shareholder of the Company within two years immediately prior to the date of his proposed appointment, including:
any person cohabiting as a spouse with, and any child, step-child, parent, stepparent, brother, sister, step-brother and step-sister of, a director, the chief executive or a substantial shareholder of the Company;
a father-in-law, mother-in-law, son-in-law, daughter-in-law, grandparent, grandchild, uncle, aunt, cousin, brother-in-law, sister-in-law, nephew and niece of the director, the chief executive or the substantial shareholder;
in the above cases, the Company will need to provide the Hong Kong Stock Exchange with all relevant information to enable the Hong Kong Stock Exchange to make a determination in connection to the independence of the director.
(8) such person is, or has at any time during the two years immediately prior to the date of his/her proposed appointment been, an executive or director (other than an Independent Director) of the Company, of its controlling shareholder or of any of their respective subsidiaries or of any connected persons of the Company;
(9) such person is financially dependent on the Company, its controlling shareholder or any of their respective subsidiaries or connected parties of the Company;
(10) an Independent Director shall not serve as an Independent Director of more than five domestic listed companies concurrently;
(11) other person who shall not serve as Independent Director as specified in the Articles of Association and the relevant regulations of the place where the Company’s shares are listed.

In this Article, a ‘‘substantial shareholder’’ refers to a person who has the right to exercise or control 10% or more of the right to vote at general meetings of the Company or any subsidiaries.

If there are changes in the circumstances and the independence of an Independent Director may be affected, he/she shall notify the Company and the Hong Kong Stock Exchange as soon as practicable and shall confirm his/her independence with the Company every year. The Company shall also make the confirmation regarding the independence of its Independent Directors in the annual report.

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CHAPTER 4 NOMINATION, ELECTION AND CHANGE OF INDEPENDENT DIRECTORS

Article 6 The Company’s board of directors, Supervisory Committee and shareholders individually or jointly holding more than 3% of the Company’s issued shares with voting rights have the right to nominate candidates for Independent Directors, whose appointment shall be subject to the election and decision at a general meeting.

Article 7 The election of Independent Directors shall comply with the following procedures:

(1) The nominators of candidates of Independent Directors shall obtain the consent of the nominees prior to the nomination, obtain a comprehensive understanding of the occupation, academic qualification, professional title, detailed work experience, all parttime jobs of the nominees, and be responsible for providing written materials about these conditions to the Company. The candidates shall provide a written confirmation to the Company, pursuant to which the candidate shall agree to accept the nomination, warrant the truthfulness and completeness of the information which was publicly disclosed and agree to perform the duties of directors conscientiously upon being elected as a director.
(2) The nominators of Independent Directors shall express opinions to the qualification and independence of the nominees of Independent Directors, and the nominees shall issue a public declaration that they personally have no relationship with the Company that may prejudice their independent and objective judgment.
(3) Where the candidates of Independent Directors are nominated before convening the meeting of the board of directors or the Supervisory Committee, the written materials about the nominees of the nominees described in paragraph (1) and (2) under this Article shall be publicized together with the resolutions of the board of directors or the Supervisory Committee or the notice of the shareholders’ general meeting.
(4) Where the shareholders with nomination rights nominate the candidates of Independent Directors to the general meeting of the Company, the reasons for the nomination of the candidates of Independent Directors and the written notification of the acceptance willingness of nominees, together with the written materials about the nominees and the written confirmation of the nominees described in paragraph (1) and (2) under this Article, shall be delivered to the Company no less than seven (7) days before holding the general meeting (calculated from the date of delivering the notification of the meeting about the election by the Company).

Article 8 An Independent Director shall have a term of office of 3 years, which is the same as that of other directors of the Company. An Independent Director may be re-elected upon expiry of the term, provided that he/she may not stay in his/her position consecutively for more than six years.

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Article 9 Independent Director shall attend meetings of the board of directors. If an Independent Director fails to attend meetings of the board of directors in person for three consecutive meetings, the board of directors shall propose to the general meeting to replace him/ her.

Article 10 Except for the situations in which a person shall not act as a director under relevant laws, regulations or the listing rules of the local stock exchange where the Company’s shares are listed, the office of an Independent Director cannot be terminated without any reason before expiration. In case an Independent Director is dismissed before the expiry of his/her term, the Company shall disclose the matter as a special issue. Should an Independent Director consider he/she is dismissed without reasonable cause, he/she can make a public declaration.

Article 11 Independent Directors may tender his/her resignation before expiration of their terms of office by submitting to the board a written resignation report, explaining any circumstances relating to their resignation which they consider as necessary to draw to the attention of the shareholders and creditors of the Company.

If the resignation of an Independent Director results in the composition of Independent Directors falling below the minimum requirement as stipulated by the regulatory authorities, the stock exchange and the Articles of Association, the Company shall notify the regulatory authorities or the stock exchange in accordance with the relevant requirements immediately and the Board shall convene a general meeting within three months after the resignation of that Independent Director for election of a replacement. The resignation report of the Independent Director shall only be in effect at the appointment of the new Independent Director that fills his or her vacancy. The resigning Independent Director shall perform his/her duties pursuant to the laws, the administrative regulations and the requirements of the Articles of Association until the newly elected Independent Director assumes the position. Save for the abovementioned circumstances, the resignation of an Independent Director shall take effect upon receipt of the resignation letter by the Board.

Article 12 If there is any circumstance where any Independent Director is not qualified to act as an Independent Director or is otherwise unfit for discharging his duties as an Independent Director or any other reasons, thereby causing the number of Independent Directors to be below the quorum stipulated by the listing rules of the place where the Company’s shares are listed, the Company shall inform the relevant securities regulatory authorities or the stock exchange immediately and publish an announcement pursuant to the listing rules of the place where the Company’s shares are listed, to declare the relevant details and reasons. The Company shall convene a general meeting to elect such number of the Independent Directors to make up the minimum within three months from the date when the relevant incompliance occurred.

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CHAPTER 5 DUTIES AND POWERS OF INDEPENDENT DIRECTORS

Article 13 In order to fully exercise the functions of Independent Directors, in addition to the powers conferred by laws and administrative regulations including the Company Law and the listing rules of the place where the Company’s shares are listed, as well as the Articles of Association, the Company has delegated the following specific authorities to Independent Directors:

(1) Major connected transactions (as defined by the standard promulgated by regulatory authority of the place where the Company’s shares are listed from time to time) shall be approved by Independent Directors before submissions to the board of directors for consideration. Prior to making any judgment, Independent Directors may hire an intermediary institution to prepare an independent financial consultancy report as the basis of their judgment;
(2) To propose to the board of directors the appointment or dismissal of accounting firms;
(3) To propose to the board of directors to convene extraordinary general meetings;
(4) To propose to the board of directors to convene meetings of the board of directors;
(5) To engage independently external auditors and consulting firms;
(6) To publicly solicit voting rights from shareholders prior to general meetings in accordance with the requirements under applicable laws, regulations and/or the listing rules of the place where the Company’s shares are listed.

To exercise the above powers, at least half of all Independent Director’s approval shall be obtained.

The expenses incurred by the Independent Directors in the engagement of intermediaries and other expenses in the performance of their duties and powers shall be borne by the Company.

In the event that the abovementioned proposals have not been adopted or the above powers cannot be exercised normally, the Company shall disclose such situations in accordance with relevant rules.

Article 14 Apart from exercising the abovementioned duties, Independent Directors shall express independent opinions in board or general meetings on the following matters:

(1) nomination and dismissal of Directors;
(2) appointment or dismissal of the senior officers;
(3) remuneration of the Company’s Directors and senior officers;

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(4) any existing or new material (determined in accordance with the standards issued from time to time by the regulatory authorities of the listing place) borrowings or payables and receivables by shareholders or de facto controllers of the Company or any of their respective connected parties and whether the Company has adopted any effective measures to recover the debts;
(5) issues which in the opinion of Independent Directors may harm the interests of small and medium-sized shareholders;
(6) in the work report at the annual general meeting, Independent Directors shall give illustration and express independent opinions on the accumulated and current external guarantees situation of the Company and the implementation of the relevant laws, regulations and normative documents;
(7) when the Company undertake material acquisitions, disposal and asset swap, Independent Directors shall issue their independent opinions on whether such asset transaction is beneficial to the interests of the Company and all shareholders, and make special reminders on whether connected transactions or competitions with peers would occur after the reorganization of the Company;
(8) other matters as provided by the Articles of Association.

Article 15 Independent Directors shall, with regard to Article 13 (except the matters described in paragraph (6) and (7)) above, expressly give one of the following types of opinions: agree, have reservations (together with supporting reasons), object (together with supporting reasons) or unable to give an opinion (together with underlying reasons preventing the director from giving an opinion). Where the matters described under Article 13 above are matters need to be disclosed pursuant to the requirements of the listing rules of the place where the Company’s shares are listed, the Company shall announce the opinions of the Independent Directors. When the Independent Directors have different opinions and reach no consensus, the board of directors shall disclose the opinions of the Independent Directors respectively.

CHAPTER 6 OBLIGATIONS OF INDEPENDENT DIRECTORS

Article 16 Independent Directors owe fiduciary and diligence duties to the Company and all shareholders. Independent Directors shall faithfully carry out their duties, safeguard the Company’s overall interest, as well as ensuring that the legal interests of significant and minority shareholders are protected in accordance with relevant laws and regulations, the listing rules of the local stock exchange where the Company’s shares are listed, the Guidance Opinions, the Articles of Association and the Regulations.

Article 17 Independent Directors shall carry out their duties independently free from the influence of the Company’s substantial shareholders, de facto controllers or other entities or persons that have interests in the Company.

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Article 18 Independent Directors shall ensure they can devote sufficient time and effort in performing their duties effectively.

Article 19 Independent Directors shall attend meetings of the board of directors on schedule. They shall understand the production and operation of the Company in a timely manner, and actively investigate necessary circumstances and obtain relevant information for decision-making.

Article 20 Independent Directors shall present a work report at the annual general meeting of the Company to present the condition of the performance of their duties.

Article 21 Independent Directors shall duly perform their duties in the process of preparing and disclosing the annual report of the Company.

Article 22 Each Independent Director shall confirm his/her holding of the Company’s security interests after the end of each financial year.

Article 23 In the event of resignation or termination of the tenure of an Independent Director, his/her obligations to the Company and shareholders shall not be ceased upon the submission of his/her resignation notice or within 12 months upon the effective of the foresaid notice or the termination of his/her tenure. The duty of confidence in relation to trade secrets of the Company survives the termination of their tenure, until such secrets are being disclosed publicly. The duration of other duties of an Independent Director shall be determined in accordance with the principle of fairness.

CHAPTER 7 PROTECTION FOR INDEPENDENT DIRECTORS IN THE PERFORMANCE OF DUTIES

Article 24 The Company shall provide Independent Directors with office premises and necessary office facilities.

Article 25 The office of the board of directors of the Company shall be responsible for the coordination among relevant functions and departments upon request by Independent Directors and providing Independent Directors with true and adequate background information so that they can give a reasonable basis for their independent judgments and opinions.

Article 26 The Company shall ensure that each Independent Director shall have the same right to information as other directors.

The office of the board of directors shall arrange for announcements with the stock exchange where the Company’s shares are listed in a timely manner if any independent opinion, proposal and written explanation issued by Independent Directors shall be announced.

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APPENDIX VII WORKING REGULATIONS OF INDEPENDENT DIRECTORS (DRAFT)

During the period between the issue of the notice of a meeting of the board of directors and the date of the meeting, the office of the board of directors shall be responsible for organizing the communication and liaising with Independent Directors to collect their opinions and suggestions on relevant resolutions, and inform the proposer about such opinions and suggestions in timely manner such that he/she can optimize relevant regulations proposed.

Article 27 If Independent Directors need to engage intermediaries for professional opinions in considering major connected transactions or special issues, the Company may provide Independent Directors a list of intermediaries to choose from.

Article 28 The Company shall grant Independent Directors appropriate remuneration. Standards set for such remuneration shall be formulated by the board, approved at a general meeting, and disclosed in accordance with relevant regulations. Besides the above remuneration, Independent Directors shall not obtain other additional and undisclosed benefits from the Company, its substantial shareholders or any organization or individual that has an interest in the Company.

CHAPTER 8 SUPPLEMENTARY PROVISIONS

Article 29 In the Regulations, the term ‘‘more than’’ shall include the given figure following such terms.

Article 30 The Regulations are formulated by the board of directors as an appendix to the Articles of Association. As approved by shareholders at the general meeting, the Regulations shall be effective from the date on which the ordinary RMB shares (A shares) to be issued by the Company are being listed and traded.

Article 31 Matters not covered by the Regulations shall be executed in accordance with the rules under relevant laws and regulations, relevant regulatory rules of the place where the Company’s shares are listed, and the Articles of Association. In the event that the Regulations are inconsistent with the rules under relevant laws and regulations, relevant regulatory rules of the place where the Company’s shares are listed (such as the listing rules of the local stock exchange) or the Articles of Association, they shall be executed in accordance with the foresaid rules. The Regulations shall be amended as soon as practicable, and be submitted to the board for consideration and approval.

Article 32 Relevant terms and definitions in the Regulations shall have the same meanings with those in the Articles of Association or the rules under the listing rules of the place where the Company’s shares are listed.

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CHAPTER I GENERAL PROVISIONS*

Article 1 In order to regulate the use and administration of the proceeds of Dynagreen Environmental Protection Group Co., Ltd. (hereinafter referred to as the ‘‘Company’’), enhance the efficiency and effectiveness of the use of proceeds, keep proceeds safe from relevant risks and protect the lawful interests of investors, these Regulations is hereby formulated in accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Administrative Measures for the Issuance of Securities by Listed Companies and other laws and regulations as well as the Articles of Association of Dynagreen Environmental Protection Group Co., Ltd. (hereinafter referred to as the ‘‘Articles of Association’’) and listing rules prevailing in places where the Company’s shares are listed and based on the actual circumstances of the Company. In case of inconsistencies between these Regulations and the listing rules of the places where the Company’s shares are listed, such listing rules shall prevail.

Article 2 Proceeds herein refer to the proceeds from public offering of securities (including initial public offering, placing, additional issue, issue of convertible corporate bonds, convertible bonds with warrants, etc.) and private issue of securities to investors by the Company, excluding funds raised from equity incentive plans.

Article 3 These Regulations comprise a code of conduct of the Company with respect to the use and administration of its proceeds. For the use of proceeds by subsidiaries of the Company or other corporations under the Company’s control, the Company should ensure that such subsidiaries or other controlled corporations comply with these Regulations.

Article 4 The board of directors of the Company (the ‘‘Board’’) shall establish an internal control system regarding the deposit, use and administration of proceeds, while specific provisions shall be established for aspects such as the deposit, use, changes, supervision and accountability of proceeds.

The Company shall file the internal control system regarding the deposit, use and administration of the proceeds with the stock exchanges on which the Company’s shares are listed in a timely manner and disclose such information on its website.

Article 5 Directors, supervisors and senior management of the Company shall act diligently to lead the Company to use proceeds properly, protect the safety of proceeds and refrain from participating or assisting or aiding the Company in changing the purpose of proceeds arbitrarily or in any disguised form.

Article 6 Controlling shareholder(s) and de facto controller(s) of the Company shall neither directly or indirectly appropriate or embezzle the proceeds of the Company, nor generate improper benefits by taking advantage of the proceeds and projects financed by the proceeds (the ‘‘Proceedsfinanced Project(s)’’).

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Article 7 In case of any violation hereof rendering the Company incurring costs, penalty shall be imposed on persons liable according to the then circumstances and, if necessary, such persons shall be liable for any corresponding damages under laws.

Article 8 The Board shall be responsible for the use and administration of proceeds of the Company, which shall be overseen by the supervisory committee, independent directors and relevant sponsor(s).

CHAPTER II DEPOSITING FUNDS RAISED

Article 9 The proceeds shall be deposited into a designated account. Such proceeds should be deposited into a segregated account approved by the Board (hereinafter referred to as the ‘‘Proceeds Account’’) for centralized administration. The Proceeds Account should not be used for deposits of funds other than the proceeds or for any other purposes.

Article 10 The chief financial officer of the Company shall be responsible for the ordinary administration of the proceeds, including the opening and maintenance of the Proceeds Account and administration of the depositing, use and current account thereof. The secretary to the Board shall be responsible for any legal proceedings and information disclosure relating to the administration, use and change thereof.

Article 11 The Company shall enter into tri-party administration agreement of the Proceeds Account with the sponsor(s) and the commercial bank with which the proceeds are deposited (hereinafter referred to as the ‘‘Commercial Bank’’) within 1 month upon such deposit of proceeds. The Agreement shall at least include the following:

(1) The Company shall deposit the proceeds into the Proceeds Account;
(2) The Commercial Bank shall issue monthly bank statements of the Proceeds Account to the Company, the copies of which shall be delivered to the sponsor(s);
(3) Should the Company withdraw over RMB50 million from the Proceeds Account in either a single transaction or accumulated over any 12 months’ period, and such withdrawal amounts to 20% of the gross proceeds net of issuance costs (hereinafter referred to as the ‘‘Net Proceeds’’), the Company shall inform the sponsor(s) in a timely manner;
(4) The sponsor(s) can make enquiries of information on the Proceeds Account to the Commercial Bank at any time; and
(5) Liabilities of the Company, the Commercial Bank and the sponsor(s) for breach.

The Company should file a report to the stock exchanges where the Company’s shares are listed and made relevant announcement within two trading days after the execution of the above agreement.

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Should the abovementioned agreement be terminated early due to change of sponsor(s) or the Commercial Bank, the Company shall enter into a new agreement with the relevant parties within two weeks from the date of such termination, and file a report to the stock exchanges where the Company’s shares are listed and made relevant announcement within two trading days after the execution of the new agreement.

Article 12 Once becoming aware of any non-performance of such tri-party agreement on the part of the Company or the Commercial Bank, the sponsor(s) shall promptly submit a written report to the stock exchanges where the Company’s shares are listed.

CHAPTER III USE OF PROCEEDS

Article 13 The sponsor(s) shall pay attention to the use of proceeds of the Company and progress of projects financed thereby during the period of continuous monitoring. The Company shall offer support and assistance to the sponsor(s) for its/their performance of duties.

Article 14 When applying such proceeds, the Company shall comply with the following requirements:

(1) The Company shall set out explicit requirements in regard to the application, approval authority at different levels, decision making procedures, risk administration policies and information disclosure procedures in relation of the use of proceeds;
(2) The Company shall apply the proceeds as undertaken in the use of proceeds plans as set out in the application of issuance;
(3) Should there be any development that significantly affects the normal implementation of the use of proceeds plans, the Company should report to the stock exchanges where the Company’s shares are listed and issue an announcement in a timely manner;
(4) Under certain situations (such as those below) that affect the application of proceeds in investment projects, the Company should re-examine the feasibility and estimated gain of such proceeds from the investment plans, in order to decide whether or not to continue such projects, and disclose such implementation progress, reasons of deviation and the adjusted proceeds investment projects (if any) in the latest periodic report:
Significant changes in the market condition of such investment projects;
The investment projects have been inactive for over 1 year;
The investment plans have expired and the invested amount has not reached 50% of planned investment;
Other abnormality under the investment project.

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Article 15 Proceeds of the Company shall in principle be applied to its principal activities. The Company, when using the proceeds, should not:

(1) Other than financial institutions, the investment project should not be a financial assets which are held-for-trade and available-for-sale, loans to other parties, and trusted wealth management, and directly or indirectly invest in companies which major business involves trading of marketable securities;
(2) Alternate the use of proceeds by ways of charge, trusted loans or other methods;
(3) Make available the proceeds, whether directly or indirectly, for connected parties such as the controlling shareholders, de facto controllers or provide benefits for connected parties for inappropriate gains from the proceeds investment projects;
(4) Other activities that are in violation as specified under the requirements of the proceeds administration.

Article 16 In case the Company has made investment with its funds into the Proceedsfinanced Projects prior to receiving the proceeds, the proceeds may be used to make up for the shortfall of such investment within six months from the receipt thereof. Such making-up shall be passed by the Board with a verification report issued by an accountant and express concurring opinions from the independent directors, supervisory committee and sponsor(s). The Company shall file a report to the stock exchanges where the Company’s shares are listed and made relevant announcement within two trading days after the approval of the Board.

Article 17 The proceeds which are temporarily idle may be under cash management, and the
products they invest in must meet the following conditions: (1) high safety, meeting the requirements of capital guarantee, and the issuer of the products can make a commitment on capital guarantee; and
(2) good liquidity without affecting the smooth progress of the investment plans of the proceeds.

The investment products shall not be pledged, and the special product settlement account (if applicable) shall not be used for the deposition of the funds other than proceeds or for any other purposes, and in case of opening or canceling a special product settlement account, the Company shall file with the stock exchanges where the Company’s shares are listed and make an announcement within two trading days.

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Article 18 The investment of idle proceeds in products shall be subject to the consideration and approval by the Board, with the opinions on explicit consent given by the independent directors, the supervisory committee and the sponsor(s). The Company shall make relevant announcement within two trading days after the meeting of the Board on:

(1) the basic information on the proceeds, including, among others, the time of raising, the amount and net amount of the funds raised and investment plans;
(2) the information on the use of the proceeds;
(3) the quota and duration of the idle funds for investing in products, whether there is any act of changing the purposes of the funds in disguise and the measures for ensuring the smooth progress of the projects financed by the proceeds;
(4) the income distribution manner, investment scope and safety of the investment products; and
(5) opinions issued by independent directors, the supervisory committee and the sponsor(s).

Article 19 The proceeds which are temporarily idle may be temporarily used to replenish working capital to the extent that there will be no impact on the progress of any Proceeds-financed Project. Such replenishment shall meet the following:

(1) There should not be any de facto changes in the purpose of proceeds or affect the normal implementation of the proceeds investment plan;
(2) Limited and to be applied to production and operation related to the principal activities, and should not be directly or indirectly applied to placing of new shares, subscription or investment in stocks and any derivative instruments or convertible bonds, etc.;
(3) The duration of any individual replenishment to the working capital should not exceed 12 months; and
(4) Any previous temporary replenishment falling due is repaid (if applicable).

The temporary use of idle proceeds to replenish working capital by the Company shall be subject to the consideration and approval by the Board of the Company, with the opinions on explicit consent given by independent directors, the supervisory committee and the sponsor(s). The Company shall report to the stock exchanges where the Company’s shares are listed and make announcement within two trading days after the Board meeting.

Before the expiration date of replenishing the working capital, the Company shall return certain proceeds to the Proceeds Account, and report to the stock exchanges where the Company’s shares are listed and make announcement within two trading days after the full payback of the proceeds.

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Article 20 The excess of the proceeds raised over the amount of the funds planned to raise (the ‘‘Additional Proceeds’’) may be used to permanently replenish the working capital and repay bank loans, but the cumulative amount of every 12 months shall not exceed 30% of the total amount of the Additional Proceeds and the Company shall undertake that it will not make any highrisk investments or provide financial assistance to others within 12 months after replenishing the working capital.

Article 21 For the use of the Additional Proceeds for the purpose of permanently replenishing the working capital and repayment of bank loans are subject to the consideration and approval by a Board meeting and a general meeting of the Company, with the manner of online voting provided for shareholders, and the opinions on explicit consent given by independent directors, the supervisory committee and the sponsor(s). The Company shall inform the stock exchanges where the Company’s shares are listed and make relevant announcement within two trading days after the meeting of the Board on: (1) the basic information on the proceeds, including, among others, the time of raising, the amount and net amount of the funds raised, the amount of Additional Proceeds and investment plans;

(2) the information on the use of the raised funds;
(3) the necessity of and detailed plan for the Additional Proceeds used for permanently replenishing the working capital or repaying bank loans;
(4) the undertaking of not making any high-risk investments or provide financial assistance for others within 12 months after replenishing the working capital;
(5) the impact on the Company of the use of the Additional Proceeds for permanently replenishing the working capital or repaying bank loans; and
(6) Opinion from the independent directors, supervisory committee and the sponsor(s).

Article 22 When the Company invested Additional Proceeds in projects under construction and new projects (including acquisition of assets), the investment will be limited to its principal activities. The Company shall apply the relevant regulations herein to conduct the feasibility analysis of the investment projects in a scientific and diligent manner, and carry out the obligation of disclosure in a timely manner.

Article 23 Where a single Proceeds-financed Project is completed and the Company uses the remaining raised fund of such project (including interest income) for other Proceeds-financed Projects, it shall obtain in advance the approval from the Board and express affirmative opinions from the independent directors, supervisory committee and sponsor(s). The Company shall report to the stock exchanges where the Company’s shares are listed and make announcement within two trading days after the Board meeting.

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APPENDIX VIII ADMINISTRATIVE REGULATIONS OF USE OF PROCEEDS (DRAFT)

If the balance of the proceeds (including the interest income) is less than RMB1 million or less than 5% of the committed investment amount of the proceeds of such Proceeds-financed Project, the Company may be exempted from the preceding procedures, and the use shall be disclosed in its annual report.

If the balance of the proceeds (including the interest income) of a single Proceeds-financed Project is used for projects other than the Proceeds-financed Projects (including replenishing the working capital), it shall follow relevant procedures and disclosure obligations by reference to the same for changes of Proceeds-financed Projects.

Article 24 Upon completion of all Proceeds-financed Projects, if the balance of the proceeds (including the interest income) exceeds 10% of the Net Proceeds, the use of such proceeds balance is subject to the consideration and approval of the Board and a general meeting with the opinions on explicit consent given by the independent directors, the supervisory committee and the sponsor(s). The Company shall report to the stock exchanges where the Company’s shares are listed and make an announcement within two trading days after the Board meeting.

For the proceeds balance (including the interest income) under 10% of the Net Proceeds, the use of such proceeds balance is subject to the consideration and approval of the Board and the explicit consent given by the independent directors, the supervisory committee and the sponsor(s). The Company shall report to the stock exchanges where the Company’s shares are listed and make an announcement within two trading days after the Board meeting.

For the proceeds balance (including the interest income) under RMB5 million or less than 5% of the Net Proceeds, the use of such proceeds balance is exempted from the above procedures. The use of such proceeds balance shall be disclosed in the latest periodic report.

CHAPTER IV CHANGES IN THE PURPOSE OF PROCEEDS

Article 25 The Company shall use the proceeds according to the purposes specified in the prospectus or offering document. Changes of the purpose of the proceeds of the Company must be considered and approved by the Board and at a general meeting, subject to the explicit consent of the independent directors, the supervisory committee and the sponsor(s).

In case the Company merely changes the venue of implementation of the Proceeds-financed Projects, such changes may be exempt from implementing the procedures of the previous clause but shall be subject to the consideration and approval by the Board. A report shall be filed within two trading days with the stock exchanges where the Company’s shares are listed, and the reasons for the changes and the opinion of the sponsor(s) shall be announced.

Article 26 After changes, the Proceeds-financed Projects shall invest in the principal activities.

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The Company shall scientifically and prudently carry out the feasibility analysis of the new Proceeds-financed Project to ensure such investment projects has good market prospect and profitability, effectively prevent investment risks and improve the efficiency of the use of the proceeds.

Article 27 In case the Company proposes to make changes to a Proceeds-financed Project, it shall report to the stock exchanges where the Company’s shares are listed and make an announcement on the following within two trading days from the submission to the Board for consideration:

(1) Background information of the original Proceeds-financed Project and the specific reasons of such changes;
(2) Background information, feasibility analysis and risks warning on the new Proceedsfinanced Project;
(3) The investment plan for the new Proceeds-financed Project;
(4) The explanation of whether the new Proceeds-financed Project has obtained or pending the approval of the relevant authorities (if applicable);
(5) The opinion of the independent directors, the supervisory committee and the sponsor(s) in respect of the changes to the Proceeds-financed Project;
(6) The explanation of such changes to the Proceeds-financed Project is subject to approval of a general meeting; and
(7) Any other content as required by the stock exchanges where the Company’s shares are listed.

Where the new Proceeds-financed Project involves any connected transactions, purchase of assets or external investments, the Company shall make disclosure in accordance with relevant rules.

Article 28 Where the Company changes the purpose of a Proceeds-financed Project to acquisition of assets (including equity) of the controlling shareholders or de facto controller, it shall avoid creating market competition with peers and decrease connected transactions after the said acquisition.

Article 29 Where the Company proposes to externally transfer or replace a Proceedsfinanced Project (except for Proceeds-financed Projects which have completed the entire external transfer or replacement in a material asset reconstruction implemented by the Company), it shall report to the stock exchanges where the Company’s shares are listed and make an announcement on the following within two trading days from the submission to the Board for consideration:

(1) Specific reasons for the external transfer or replacement of the Proceeds-financed Project;

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(2) The amount of proceeds invested in the project;
(3) Completion progress of the project and its realized benefit;
(4) Basic information, feasibility analysis and risk warning (if applicable) of the replacement project;
(5) The pricing basis of the transfer or replacement and relevant return;
(6) Opinions on the transfer or replacement of the Proceeds-financed Project from the independent directors, the supervisory committee and the sponsor(s);
(7) Explanation that the transfer or replacement of the Proceeds-financed Project is subject to submission to general meeting for consideration; and
(8) Other contents as required by the stock exchanges where the Company’s shares are listed.

The Company shall give due regard to the receipt and use of the consideration of the transfer, the change in ownership of the replacing assets and the continuous operation of the replacing assets, and fulfill the obligations of necessary information disclosure.

CHAPTER V ADMINISTRATION AND SUPERVISION OF USE OF PROCEEDS

Article 30 The Company shall truly, accurately and completely disclose the actual use of proceeds.

Article 31 The Board shall comprehensively review the progress of projects invested with the proceeds semi-annually, and issue a Special Report on the Deposit and the Actual Use of Proceeds of the Company (‘‘Special Report of Proceeds’’).

Where the actual progress of Proceeds-financed Projects differs from the investment plan, the Company shall explain specific reasons in the Special Report of Proceeds. When idle proceeds are used in investment products in the current period, the Company shall disclose returns for the reporting period and investment share, counterparties, product names, term and other information as at the end of the period in the Special Report of Proceeds.

The Special Report of Proceeds shall be considered and approved by the Board and the supervisory committee, and reported to the stock exchanges where the Company’s shares are listed and an announcement thereon shall be released within two trading days upon submission to the Board for consideration. In an annual audit, the Company shall engage certified public accountants to issue an attestation report on the deposit and use of proceeds of the Company, which shall be submitted to the stock exchanges where the Company’s shares are listed when the Company discloses its annual report, meanwhile such report shall be disclosed on the website of the stock exchanges where the Company’s shares are listed.

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Article 32 The independent directors, the audit committee of the Board and the supervisory committee shall continuously monitor to the administration and use of proceeds. Certified public accountants may be engaged by over half of the independent directors, the audit committee of the Board or the supervisory committee to issue an attestation report on the deposit and the use of proceeds. The Company shall use its best endeavours to cooperate and assume any necessary fees. The Board shall report to the stock exchanges where the Company’s shares are listed and release an announcement within two trading days upon the receipt of the attestation report mentioned in the preceding paragraph. If the attestation report identifies any non-compliance in administration and use of proceeds of the Company, the Board shall also announce the incompliance, the consequences of such incompliance that have occurred or may occur and actions that have taken or to be taken.

Article 33 The sponsor(s) shall conduct at least one on-site survey for the deposit and use of proceeds of the Company semi-annually. After the end of every financial year, the sponsor(s) shall issue a special verification report on the deposit and use of proceeds of the Company in the year, which shall be submitted to the stock exchanges where the Company’s shares are listed when the Company discloses its annual report, meanwhile such report shall be disclosed on the website of the stock exchanges where the Company’s shares are listed. Such report shall contain the following:

(1) Information relating to the deposit, use of proceeds and the balance of the Proceeds Account;
(2) Progress of investment projects, including the difference from the planned investment progress of proceeds;
(3) Information of the Company’s own fund of the investment project that replaces the previously invested fund with the proceeds (if applicable);
(4) The use of idle proceeds to replenish working capital and its effect (if applicable);
(5) Any use of Additional Proceeds (if applicable);
(6) Any change to use of proceeds (if applicable);
(7) Conclusive opinion relating to whether the deposit and use of proceeds by the Company is compliant with laws and regulations; and
(8) Other requirements of the stock exchanges where the Company’s shares are listed.

After each financial year end, the Board of a listed company shall disclose in the Special Report of Proceeds the conclusive opinion in the special examination report issued by the sponsor(s) and the attestation report issued by the accountant.

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CHAPTER VI SUPPLEMENTARY PROVISIONS

Article 34 The term ‘‘over’’ shall include the given figure and ‘‘less than’’ shall not when used herein.

Article 35 Matters not covered by these Regulations shall be executed as provided by relevant PRC laws and regulations and requirements of the CSRC, the stock exchanges where the Company’s shares are listed and the Articles of Association. Upon taking effect, in the event of any inconsistence with any PRC laws and regulations or requirements of the CSRC or the stock exchanges where the Company’s shares are listed, the foregoing shall prevail and these Regulations shall be amended accordingly as soon as possible through approval at a general meeting.

Article 36 These Regulations shall be construed by the Board.

Article 37 As approved by Shareholders at the general meeting, the Regulations shall be effective from the date on which the ordinary RMB shares (A shares) to be issued by the Company are being listed and traded.

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CHAPTER 1 GENERAL PROVISIONS*

Article 1 For the purpose of regulating connected transactions, controlling the risks of connected transactions and protecting the interests of Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Company’’) and its shareholders as a whole, these Rules are hereby formulated pursuant to the relevant laws, regulations and regulatory documents such as the Company Law of the People’s Republic of China, the Articles of Association of the Company (the ‘‘Articles of Association’’) and the listing rules of the place where the Company’s shares is listed.

Given that the Company is also listed on the main board of The Stock Exchange of Hong Kong Limited (the ‘‘SEHK’’), in addition to the requirements under these Rules, the Company shall strictly comply with the relevant requirements under Hong Kong securities laws such as the Rules Governing The Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘SEHK Listing Rules’’) in respect of connected transactions and connected persons.

‘‘connected transactions’’ referred to in these Rules represent connected transactions as defined in these Rules; ‘‘Connected Transactions’’ referred to in these Rules represent connected transactions under the SEHK Listing Rules. The Company shall also comply with the requirements under the listing rules of the stock exchanges where the Company’s shares are listed in respect of connected transactions/Connected Transactions.

Article 2 These Rules are applicable to the Company and its subsidiaries.

Article 3 These Rules are binding on the shareholders, directors, supervisors and senior management of the Company, all of whom shall comply with.

Article 4 Connected transactions between the Company and connected parties shall be entered into by written agreements. The entering into of such agreements shall follow the principles of equality, voluntariness, and making compensation for equal value, the content of which shall be clear and specific. Connected transactions which shall be disclosed under the listing rules and other requirements of the stock exchanges where the Company’s shares are listed, the Company shall disclose matters relating to the conclusion, amendment, termination and performance of such connected transaction agreements in accordance with the relevant regulations.

Article 5 Connected transaction activities shall follow the principles of just, fair and open, and the pricing of connected transactions shall not deviate in principle from the price or charging standard of an independent third party in the market. The Company shall fully disclose the basis for the pricing of connected transactions which should be disclosed according to the listing rules and other requirements of the stock exchanges where the Company’s shares are listed.

CHAPTER 2 DEFINITION OF CONNECTED PERSONS

Article 6 Connected parties of the Company include related legal persons and related natural persons.

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Article 7 A legal person or other organization falling into one of in the followings is a connected legal person of the Company:

(1) Any legal person or other organization directly or indirectly controlling the Company;
(2) Any legal person, except the Company or its holding subsidiaries, directly or indirectly controlled by the entity described in the above paragraph;
(3) Any legal person or other organization, except the Company or its holding subsidiaries, directly or indirectly controlled by the natural person as defined in Article 8, or in which the related natural person is holding the position of a director and senior management;
(4) Any legal person or other organization and other persons acting in concert holding more than 5% of the Company’s shares;
(5) Any legal person or other organization considered by the China Securities Regulatory Commission (hereinafter referred to as the ‘‘CSRC’’) or the stock exchanges where the Company’s shares are listed, based on the principle of substance rather than form, to have special relation with the Company, and may cause the Company’s interest to prejudice in favour of the legal person or other organization, including legal person or other organization holding 10% or more shares of the Company’s subsidiaries having a significant impact to the Company.

The Company and the entities listed in the preceding paragraph (2) being controlled by the same state-owned asset management institutions shall not constitute a related relationship, however the legal representative, general manager or more than half of the directors of that entity being also the directors, supervisors or senior management of the Company are excluded.

Article 8 A natural person falling into one of the followings is considered a related natural person of the Company:

(1) Any natural person directly or indirectly holding more than 5% of the Company’s shares;
(2) The directors, supervisors and senior management of the Company;
(3) The directors, supervisors and senior management of the related legal person defined in paragraph 1 (1) under Article 7 above;
(4) The family members having close relationship with the person described in paragraphs (1) and (2) under this Article, including the spouses, children over 18 years old and their spouses, parents and spouses’ parents, brothers and sisters and their spouses, spouse’s brothers and sisters, parents of children’s spouses;

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(5) Any natural person considered by the CSRC or the stock exchanges where the Company’s shares are listed, based on the principle of substance rather than form, to have special relationship with the Company, and may cause the Company’s interest to prejudice in favour of the natural persons, including natural persons holding 10% or more shares of the company’s subsidiaries having a significant impact to the Company.

Article 9 Any legal person, other organization or natural person falling into one of the followings is deemed to be a connected party of the Company:

(1) Agreements or arrangements entered into or made by the Company or its connected parties that will fall into any one of the circumstances as mentioned in Article 7 or Article 8 after such agreements or arrangements becoming effective or in the forthcoming 12 months;
(2) Fell into any one of the circumstances as mentioned in Article 7 or Article 8 in the past 12 months.

Article 10 According to the SEHK Listing Rules, a connected person refers to:

(1) Directors of the Company and its subsidiaries (including any persons who have acted as directors of the Company and its subsidiaries in the last 12 months before the trading day), supervisors, chief executives or substantial shareholders (hereinafter collectively referred to as the ‘‘Basic Connected Persons’’);

‘‘Substantial Shareholders’’ refer to persons who are entitled to exercise or control the exercise of 10% or more of the voting rights at the general meeting of the Company or any of its subsidiaries.

(2) Any ‘‘associate’’ of the above Basic Connected Persons:
An ‘‘associate’’ of a connected person who is an individual includes:
- (1) his spouse;
- (2) his (or his spouse’s) child (natural or adopted) or step-child under the age of 18 years (together with item 1) collectively referred to as ‘‘immediate family members’’);
- (3) the trustees, acting in their capacity as trustee of any trust of which the individual or his immediate family member is a beneficiary (or in the case of a discretionary trust, is (to his knowledge) a discretionary object);

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(4) any company which equity interest is directly or indirectly owned by the individual, his immediate family members and/or the trustees in the above item 3) acting in their capacity as trustee, and the equity interest they own together is enough for them to exercise 30% or more of the voting rights at the general meeting, or enough for them to control the majority of the board members, and any subsidiaries of the aforesaid company;
(5) any company or person who own equity in a cooperative or contractual joint venture company (whether as an independent legal person) established under the laws of China directly or indirectly together by the individual, his immediate family members and/or the trustees in the above item 3) acting in their capacity as trustee; and the individual, his immediate family members and/or the trustees in the above item 3) acting in their capacity as trustee together directly or indirectly own 30% or more interest in the paid up capital and/or paid up assets of the joint venture company or the contractual share of its profits or other income.
A connected person which is a company includes the following categories:
(1) its subsidiaries, holding company, and subsidiaries of the holding company;
(2) the trustees, acting in their capacity as trustee of any trust of which the Company is a beneficiary (or in the case of a discretionary trust, is (to its knowledge) a discretionary object);
(3) any company which equity interest is directly or indirectly owned by the Company, any other company in the above item 1) and/or the trustees in the above item 2) acting in their capacity as trustee, and the equity interest they own together is enough for them to exercise 30% or more of the voting rights at the general meeting, or enough for them to control the majority of board members, and any subsidiaries of the aforesaid company;
(4) any company or person who own equity in a cooperative or contractual joint venture company (whether as an independent legal person) established under the laws of China directly or indirectly together by the Company, any other company in the above item 1) and/or the trustees in the above item 2) acting in their capacity as trustee; and the individual, his immediate family members and/or the trustees in the above item 3) acting in their capacity as trustee together directly or indirectly own 30% or more interest in the paid up capital and/or paid up assets of the joint venture company or the contractual share of its profits or other income.

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APPENDIX IX

any person or entity who has entered, or proposes to enter, into any agreement, arrangement, understanding or undertaking (whether formal or informal and whether express or implied) with a connected person with respect to the transaction; and in the opinion of the Stock Exchange of Hong Kong Limited (‘‘SEHK’’) such person or entity should be deemed as a connected person in the transaction.
any person cohabiting with the Basic Connected Person as a spouse, or his child, step-child, parent, step-parent, brother, sister, step-brother or step-sister; and a majority-controlled company held by the aforementioned persons (that is entitled to exercise or control the exercise of 50% or more of the voting rights at the general meeting of such company or control the majority of the board members of such company.
other relatives of the Basic Connected Person, including father in-law, mother-inlaw, son-in-law, daughter-in-law, grandparent, grandchild, uncle, aunt, cousin, nephew or niece; and a majority-controlled company held by the aforementioned persons (that is entitled to exercise or control the exercise of 50% or more of the voting rights at the general meeting of such company or control the majority of the board members of such company; the association of these persons with the Basic Connected Person is such that, in the opinion of the SEHK, the proposed transaction should be deemed a Connected Transaction.
In addition to the above, other individual and legal person deemed as associates according to the SEHK Listing Rules.
(3) A non-wholly-owned subsidiary of the Company where any Basic Connected Person and their associates are entitled to, individually or together, exercise or control the exercise of 10% or more of the voting power at the general meeting of the subsidiary; and
(4) A subsidiary of the non-wholly-owned subsidiary aforementioned in paragraph (3).

According to the SEHK Listing Rules, any wholly-owned subsidiary of the Company (whether directly or indirectly owned) is not a ‘‘connected person’’.

In addition to the above-mentioned persons, a connected person also includes any individual or legal person deemed by the SEHK under its authority as a connected person.

CHAPTER 3 DEFINITION OF CONNECTED TRANSACTIONS

Article 11 A connected transaction means the transaction of the Company or its controlled subsidiaries with the connected persons of the Company that may lead to the transfer of resources or obligations, including but not limited to:

(1) acquisition or disposal of assets;

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(2) external investments (including entrusted financial management and entrusted loans);
(3) provision of financial assistance;
(4) provision of guarantees;
(5) rent or lease of assets;
(6) entrusting or being entrusted with assets and business management;
(7) donating assets or receiving donated assets;
(8) creditor’s rights or debt restructuring;
(9) entering into license agreements;
(10) transfer or acceptance of research and development projects;
(11) purchase of raw materials, fuels and power;
(12) sale of products and commodities;
(13) provision or receipt of labour services;
(14) sales consignment or sales on commission;
(15) deposits and loans in financial companies of the connected persons;
(16) co-investment with the connected persons;
(17) such other matters as defined by the CSRC or the stock exchanges where the Company’s shares are listed, based on the principle of substance rather than form, that may cause the transfer of resources or obligations through agreements, including the financial assistance and guarantee provided for companies as jointly invested with the connected persons exceeding its equity percentage or investment percentage, or waiver of right capital increase or pre-emptive rights of companies as jointly invested with the connected persons on a pro rata basis, etc.

Article 12 According to the SEHK Listing Rules, a Connected Transaction (including oneoff Connected Transaction and continuing Connected Transaction) refers to any transaction of the Company or its subsidiaries with the connected persons, including but not limited to:

(1) acquisition or disposal of assets;
(2) any transaction involving the selling, acceptance, transfer, exercise or termination of an option of the Company in order to buy or sell assets or warrants;

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(3) entering into or terminating financial leases;
(4) entering into or terminating operating leases or sub-leases, including leasing or subleasing property;
(5) providing indemnity or guarantee, or providing financial assistance;
(6) entering into any agreement or arrangement to set up a joint venture (whether a partnership or a company, or any other form of joint arrangement);
(7) issuing new securities;
(8) providing or receiving services;
(9) sharing services;
(10) buying or selling raw materials, intermediate products and/or finished goods.

Under the following circumstances, a transaction of the Company or its subsidiaries with nonconnected persons is also a Connected Transaction:

(1) The transaction involves the buying or selling its interest in another company, and the substantial shareholder of the Company being acquired or sold:
is or is proposed to be a controller of the company (‘‘controller’’ refers to the directors, chief executives or controlling shareholders of the Company and its subsidiaries); or
is, or will (as a result of the transaction) become an associate of the controller of the Company.
(2) The transaction involves acquiring an interest in another company (or an option to acquire such interest), and the Company’s controller (or associate of the controller) is or will become a shareholder of the acquired company, and the acquired interest is:
of a fixed income nature (such as preference shares involving bonds, fixed dividend);
shares to be acquired on less favourable terms than those granted by the company being acquired to the controller or the associate; or
shares which are of a different class from those held or to be granted by the company being acquired to the controller or the associate.

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(3) The controller (or his/its associate) subscribing for shares in a company of which the Company is a shareholder, and
the shares are to be subscribed on specially favourable terms;
the shares being subscribed are of a different class from those held by the Company.

Article 13 Any other type of connected transactions in accordance with the regulations of the stock exchanges where the Company’s shares are listed.

CHAPTER 4 MANAGEMENT OF CONNECTED TRANSACTIONS

Article 14 The Audit Committee of the Company shall be responsible for the management of connected transactions of the Company. The relevant department of each subsidiary responsible for connected transactions shall be decided by the respective subsidiaries.

The accounting department of the Company shall take charge in the collection of information on connected transactions in accordance with the requirements of the relevant accounting standards, and assist other departments to handle the financial data of connected transactions so as to comply with the relevant accounting principles in ensuring the accuracy and consistency of information disclosure.

Accounting departments at all levels of subsidiaries shall perform their relevant duties in the management of connected transactions under the guidance of the Company’s accounting department.

Article 15 Each department of the Company has the responsibility for the following tasks in
connected transactions within their business scope in compliance with these Rules: (1) Timely seek the opinion of the Audit Committee with regards the approval and disclosure procedures of intended connected transactions;
(2) Timely notify the Audit Committee on data and information of connected transactions after the transaction approval procedures have been fulfilled as the basis of the Company’s obligation in information disclosure.

Article 16 Management of disclosed continuing connected transactions:

A disclosed continuing connected transactions refer to the continuing connected transaction, having fulfilled the appropriate announcement and/or independent shareholders’ approval procedures and exempted by the stock exchanges where the Company’s shares are listed, which is disclosed in the prospectus, announcement or circular of the Company to trade within the scope of the approved annual cap.

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Management process of disclosed continuing connected transactions:

(1) The Company’s accounting department is responsible to provide statistical reports on disclosed continuing connected transactions to the accounting department of its subsidiaries, explain the applicable scope of various continuing connected transactions, propose reporting requirements, and is responsible for coordinating and monitoring its subsidiaries in complying with the annual amount of connected transactions;
(2) The Company’s accounting department and its subsidiaries’ accounting departments are respectively responsible to take count of the amount of continuing connected transactions actually occurred in the various business departments of the Company and its subsidiaries; the subsidiaries’ accounting departments shall submit monthly report on connected transactions to the Company’s accounting department (report a zero amount if there is no transaction);
(3) The Company’s accounting department is responsible for verifying the summary of aggregated amount of continuing connected transactions of the Company’s business departments and subsidiaries, and submit the summary to the Audit Committee for analysis and forecasting;
(4) When the statistical data indicates that certain connected transactions may exceed the annual cap, the Audit Committee should propose a handling plan as soon as possible and forecast a new cap amount, and, if necessary, seek the opinion of the stock exchanges where the Company’s shares are listed, and apply for the approval formalities with regards expanding the annual cap of connected transactions according to the relevant procedures and prepare the related announcement.

Article 17 Management of new connected transactions:

When the Company intends to carry out connected transactions, the Company should firstly fulfill the approval and disclosure procedures according to the amount of the connected transactions. Before the new connected transactions occurred in a subsidiary, the department of the subsidiary responsible for the management of connected transactions should as far as practicable notify the Company in writing in advance. The Audit Committee of the Company shall fulfill the approval and disclosure procedures according to the amount of the intended new connected transactions, after which the Company shall notify the subsidiaries to carry out the relevant connected transactions.

New connected transactions in the Company’s headquarters shall be handled by the relevant department in conjunction with the Company’s Audit Committee.

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APPENDIX IX ADMINISTRATIVE RULES OF CONNECTED TRANSACTIONS (DRAFT)

Management process for confirmation of new connected transactions in subsidiaries:

(1) Before a subsidiary enters into a new contract or carries out a new transaction, which the subsidiary’s connected transaction administrative department confirms as belonging to a connected transaction, the subsidiary should report to the Company in writing for the Company to fulfill the relevant approval and disclosure procedures; if it is difficult for the subsidiary’s connected transaction management department to confirm the nature of the transaction, the subsidiary may submit the relevant information of the transaction to the Audit Committee to confirm the nature of the transaction. The Audit Committee is responsible to notify the subsidiary of the confirmation results, pursuant to which the subsidiary fulfills the relevant obligation of written report;
(2) After the Company receives its subsidiary’s report on connected transactions, the Audit Committee shall review whether the transaction constitutes a connected transaction;
(3) After reviewing by the Company’s headquarters, if the transaction does not constitute a connected transaction, the relevant companies or departments shall be notified in writing; if the transaction constitutes a connected transaction, the relevant companies or departments should cooperate with the Audit Committee in fulfilling the relevant approval and disclosure procedures.

After fulfilling the relevant approval and disclosure procedures for the new connected transactions, the relevant departments of the Company’s headquarters or the subsidiary shall proceed with the connected transactions.

Article 18 The pricing of the Company’s connected transactions should be fair and confirmed in writing; if the stock exchanges where the Company’s shares are listed has provisions with regards the pricing of the Company’s connected transactions, such provisions should be complied with.

Article 19 The Company’s directors, supervisors, senior management, and shareholders, de facto controllers and persons acting in concert holding more than 5% of the share capital should timely notify the Company of their related relationship with the Company in accordance with the laws, regulations, regulatory documents and the listing rules and other provisions of the stock exchanges where the Company’s shares are listed.

The Company’s Audit Committee should confirm a list of connected parties and timely report to the Board of Directors and Supervisory Committee. The company should timely report or update the list of connected parties and related relationship information in accordance with the laws, regulations, regulatory documents and the listing rules and other provisions of the stock exchanges where the Company’s shares are listed.

In case of inconsistencies between these Rules and the listing rules of the places where the Company’s shares are listed, such listing rules shall prevail.

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APPENDIX IX

CHAPTER 5 DECISION-MAKING AND DISCLOSURE OF CONNECTED TRANSACTIONS

Article 20 Companies involved in matters for resolution by directors and a meeting of the board of directors which have related relationship shall not vote on such resolutions, nor exercise voting rights on behalf of other directors. Such meeting of the board of directors shall be held with the attendance of more than half of the number of non-related directors, and resolutions made by the meeting of the board of directors must be passed by more than half of the number of nonrelated directors. If the number of non-related directors present at the meeting of the board of directors is less than three, such matters should be submitted to the general meeting for consideration.

Article 21 Consideration of matters of connected transactions at meetings of the board of directors and general meetings should be carried out in accordance with the applicable laws, regulations and provisions of the stock exchanges where the Company’s shares are listed or the relevant internal rules of procedure prescribed in the Articles of Association and by the Company.

Article 22 All connected transactions of the Company should be disclosed timely, truthfully and completely, and disclosed in the annual reports according to the provisions of the stock exchanges where the Company’s shares are listed, save for those connected transactions complying with the listing rules of the stock exchanges where the Company’s shares are listed for exemption from reporting and announcement requirements.

Article 23 The Audit Committee is specifically responsible for the disclosure of connected transaction announcement.

Article 24 According to the provisions of the SEHK Listing Rules, the announcement on Connected Transaction disclosure should include the following:

(1) the transaction date;
(2) the connected relationship between the connected persons, the interest of the connected persons in the transaction;
(3) the opinion of the independent non-executive directors on the transaction (if the transaction is not subject to shareholder approval voting);
(4) the relevant cap amount and duration of the transaction if it is a continuing Connected Transaction;
(5) stating that the transaction is subject to the approval by the independent shareholders (if applicable);
(6) if issuing a circular is not required, stating whether any directors have major interest in the transaction, and if so, whether they have abstained from voting on the resolutions of the board of directors;

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APPENDIX IX ADMINISTRATIVE RULES OF CONNECTED TRANSACTIONS (DRAFT)

(7) if shareholders’ approval is required, the expected delivery date of the circular must be disclosed, if the relevant date is more than 15 days after the announcement is issued, the relevant reason must be disclosed;
(8) if the transaction involves buying assets from connected persons, the cost of buying the assets originally by the connected persons shall be set out;
(9) Other matters.

Article 25 According to the provisions of the SEHK Listing Rules, the Company should disclose in the annual report the situation of Connected Transactions submitted to the meeting of the board of directors for approval during the reporting period, including the transaction date, the parties to the transaction and a description of the connected relationship, the transaction and its purpose, the total consideration and its terms, and the nature and extent of interest of the connected persons in the transaction.

Article 26 If the stock exchanges where the Company’s shares are listed have other provisions with regards the content, decision making and disclosure of the connected transactions, such provisions should be complied with.

Article 27 All connected transactions of the Company should be disclosed timely, truthfully and completely according to the laws, regulations, listing rules of the stock exchanges where the Company’s shares are listed or other provisions and these Rules, save for those connected transactions complying with the listing rules of the stock exchanges where the Company’s shares are listed for exemption from reporting and announcement requirements.

If the laws, regulations, the stock exchanges where the Company’s shares are listed, or the Articles of Association have other provisions with regards disclosure of connected transactions, such provisions shall prevail.

CHAPTER 6 OTHER MATTERS

Article 28 With regards to consideration by the meeting of the board of directors and general meetings concerning matters of connected transactions, the secretary to the board of directors shall, in accordance with the relevant laws, regulations and regulatory documents, determine the scope of related directors and related shareholders before such meeting; if it is difficult to make judgment as to who belongs to related directors and related shareholders, professional intermediaries engaged by the Company should be consulted for determination, and also consult the stock exchanges where the Company’s shares are listed for determination after the listing.

The secretary to the board of directors shall, before the start of the meeting, notify the convener of the meeting on the list of related shareholders, and the convener of the meeting shall announce that the related directors and related shareholders should abstain from voting when considering matters concerning connected transactions.

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Article 29 Where the business personnel cannot determine whether a transaction constitutes a connected transaction and the Company’s internal approval procedures should be fulfilled, under the principle of prudence the matter should be reported to the secretary to the board of directors, who shall determine whether the transaction belongs to a connected transaction in accordance with the relevant provisions and the internal approval procedures that should be fulfilled. If the secretary to the board of directors cannot make the judgement, the secretary to the board of directors shall seek the opinion from the relevant intermediaries, and also seek the opinion from the stock exchanges where the Company’s shares are listed after the listing, in order to determine whether the transaction is a connected party transaction and the internal approval procedures that should be fulfilled.

Article 30 Where directors personally or the companies in which they are employed have related relationship (except employment contract) directly or indirectly with the Company’s existing or planned contracts, transactions or arrangements, regardless of whether the matters in general require the approval of the meetings of the board of directors or general meetings, should declare the nature and extent of the related relationship as soon as possible to the secretary to the board of directors to determine on the appropriate measures.

CHAPTER 7 SUPPLEMENTARY PROVISIONS

Article 31 These Rules have been considered and passed by the general meetings, and shall become effective from the date of the initial public offering of RMB-denominated ordinary Shares (A Shares) of the Company. The former Administrative Rules on Connected Transactions shall be rescinded upon these Rules becoming effective.

Article 32 Any matters not addressed in these Rules shall be dealt with in accordance with the relevant provisions of the laws, regulations, the stock exchanges where the Company’s shares are listed or provisions of the Articles of Association. In the event that these Rules are inconsistent with the provisions of the laws, regulations and the stock exchanges where the Company’s shares are listed promulgated and amended or provisions of the Articles of Association as legally amended after these Rules becoming effective, such laws, regulations, provisions of the stock exchanges where the Company’s shares are listed and the Articles of Association shall be complied with. These Rules shall be amended accordingly as soon as possible, and submitted for consideration and approval by the general meeting.

Article 33 Unless otherwise specified, the terms and definitions used herein shall have the same meaning ascribed thereto under the Articles of Association or the provisions of the stock exchanges where the Company’s shares are listed.

Article 34 These Rules shall be interpreted by the Audit Committee of the Company authorized by the board of directors of the Company.

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REGULATIONS OF EXTERNAL GUARANTEE (DRAFT)

APPENDIX X

CHAPTER 1 GENERAL PROVISIONS*

Article 1 In order to ensure the interests of shareholders and investors of Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Company’’), standardize the Company’s external guarantee behaviours, control the Company’s operational risk and promote the Company’s healthy and stable development, these Regulations are formulated in accordance with the Company Law of the People’s Republic of China, the Guarantee Law of the People’s Republic of China and other relevant laws and regulations, normative documents and the Articles of Association of Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Articles of Association’’), and the listing rules of the stock exchanges of the place where the Company’s shares are listed.

Article 2 These Regulations are applicable to guarantees provided by the Company to third parties, including the Company’s holding subsidiaries, as follows: the guaranteed parties applying to the Company for guarantees due to loans from financial institutions, discounted notes and financial leasing.

Article 3 The Company’s aims in formulating these Regulations is to strengthen internal controls, improve the pre-assessment, monitoring, and debt collection procedures when providing external guarantees, to prevent, wherever possible, or to minimize losses and reduce potential risks brought about by deteriorating financial situations of the guaranteed parties.

Article 4 After the listing of the Company, the Company should abide by the Securities Law of the PRC, listing rules of the stock exchanges of the place where the Company’s shares are listed, and the regulations of China Securities Regulatory Commission in its information disclosure concerning external guarantees.

CHAPTER 2 BASIC PRINCIPLES IN PROVIDING EXTERNAL GUARANTEES

Article 5 In principle, the Company will not provide guarantee to third parties, except to the Company’s holding subsidiaries. However, the Company governed by these Regulations in its review and approval procedures has the power to provide external guarantee to third parties who meet the criterion in financing matters such as loans from financial institutions, discounted notes and financial leasing, etc.

Article 6 Proposals for external guarantees must be submitted to the board of directors or the general meeting for consideration and approval. Without such approvals, directors, general manager, senior managers and branches of the Company are not permitted to enter into any guarantee contracts on behalf of the Company.

Article 7 In principle, the Company should require the guaranteed party to provide a counter-guarantee in the form of mortgages or pledges, or counter-guarantee provided by a third party recommended by the guaranteed party and approved by the Company. The party providing the counter-guarantee should have sound capabilities to bear the liability. These Regulations, however, does not govern guarantees provided by the Company to its subsidiaries.

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APPENDIX X

Article 8 The Company will provide information regarding all external guarantees to its auditors truthfully.

Article 9 The Company’s independent directors should specifically explain the accumulated and current external guarantees and the implementation of these Regulations in the annual report, and express their independent opinions.

Article 10 The Company’s board of directors and senior management should exercise prudence and strict control over credit risk arising from external guarantees, and to assume legal liability over losses arising from improper external guarantees.

CHAPTER 3 PROCEDURES FOR EXTERNAL GUARANTEES

Article 11 The departments responsible for the daily operations of external guarantees include finance department and legal department.

Article 12 Upon receiving application for guarantee from the guaranteed party, the Company should start evaluating the party’s credit status. The Company should obtain the following information from the guaranteed party, including audited balance sheet, profit and loss report and cash flow report of the recent 3 years; financial forecast, outstanding loans detail report (including payment of interests) and related contracts for the coming year; brief introduction of the senior management; list of bank credits and external guarantees; list of mortgaged and pledged assets; related contracts and feasibility reports of investment projects, etc.

Article 13 Upon receiving the application and required information from the guaranteed party, the Company’s finance department will fully analyze the credit status of the guaranteed party, and the benefits and risks of the said guarantee, and to carry out field observations of the operations, financial situation, progress of investment projects and status of its personnel of the guaranteed party so as to evaluate the profitability, solvency and growth prospects of the guaranteed party using various assessment indicators.

Article 14 Based on the results of the evaluation of the credit status of the guaranteed party, the Company’s finance department will advise the general manager, who will then report to the board of directors, on whether to provide the guarantee or not, the form the counter-guarantee should take and the amount of guarantee.

Article 15 After discussions and approval by the board of directors, the Company will
propose at the general meeting for approval the following behaviours regarding external guarantees: 1) Any additional guarantees when the total amount of external guarantees provided by the Company and its subsidiaries meets or exceeds 50% of the latest audited net assets;
2) Any additional guarantees when the total amount of external guarantees provided by the Company meets or exceeds 30% of the latest audited total assets;
3) When the guaranteed party’s debt to asset ratio exceeds 70%;

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APPENDIX X

4) Any single guarantee exceeds 10% of the latest audited net assets;
5) When the accumulated guaranteed amount of the recent 12 months exceeds 30% of the Company’s latest audited total assets;
6) When the accumulated guaranteed amount of the recent 12 months exceeds 50% of the latest audited net assets and where the absolute amount exceeds RMB50 million;
7) Guarantees provided to shareholders, de facto controllers and their connected parties;
8) Other guarantees regulated by laws, regulations, normative documents and the Articles of Association.

In addition to the above-mentioned external guarantee behaviours, all other external guarantees of the Company must be proposed to the board of directors for consideration and approval.

Article 16 External guarantees that require approval from the board of directors need to be approved by more than two-thirds of the entire board of directors and more than two-thirds of all independent directors; any guarantees that are considered connected transactions are to follow the procedures concerning connected transactions to be reviewed by the board of directors.

In case of inconsistencies between these Regulations and the listing rules of the places where the Company’s shares are listed, such listing rules shall prevail.

Article 17 Matters related to external guarantees that require approval from the general meeting need to be approved by more than half of the shareholders attending the general meeting with voting rights.

At a general meeting, shareholders, de facto controllers and their connected parties who have an interest in the guarantee being considered shall abstain from voting for any proposal regarding the guarantee; the proposal shall be approved by more than half of the shareholders attending the general meeting with voting rights but no connection with the said guarantee.

External guarantee mentioned in item (5) of paragraph one under Article 15 requires the approval from more than two-thirds of all shareholders with voting rights.

Article 18 Upon the approval of granting external guarantee at the Company’s general meetings or by the board of directors, the legal department will inspect all principal debt contracts, guarantee contracts, counter-guarantee contracts, and other related legal documents; while the finance department will arrange for the signing of guarantee contract by the principal and guaranteed party, and for the signing of counter-guarantee contract by the counter-guarantor.

Article 19 The Company’s finance department must send the guarantee contract and counterguarantee contract to the Company’s filing department within two working days of the signing of these contracts.

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APPENDIX X

CHAPTER 4 RISK CONTROL IN GUARANTEES

Article 20 When providing guarantees, the Company should exercise the principles of risk control, to strictly control the guaranteed limit while assessing the risks associated with the guaranteed party.

Article 21 The Company should strengthen the management of guarantee contracts. The contract should follow internal procedures in its safe-keeping and should be reported in a timely manner to the supervisory committee.

Article 22 Regarding project loans by the guaranteed party, the Company should require the guaranteed party to open a joint account so as to ensure that the funds will be used properly.

Article 23 The Company should require the guaranteed party to provide assets including fixed assets, equipment, machinery, housing property and personal assets of legal representatives, etc. for the purpose of mortgages or pledges to ensure the practicality of counter-guarantees.

Article 24 During the guarantee period, the Company should keep track of the financial situation of the guaranteed party and changes in the mortgage/pledged assets through regular or random inspection; and the financial department should issue payment reminders one month prior to the debt’s maturity date.

Article 25 In case the guaranteed party fail to repay the debt upon maturity, the Company’s finance department and legal department should, within 10 working days after the maturity date, file claims to the counter-guarantees. If, during the guarantee period, the guaranteed party experience organizational changes, revocation, bankruptcy, liquidation etc., the Company will exercise its right of debt recovery in accordance with legal requirements.

Article 26 The finance department should, within 5 working days after the start of debt recovery procedures, and within 2 working days after the completion of debt recovery procedures, report the debt recovery situation to the legal department.

Article 27 After the listing of the Company, the Company should disclose information in a timely manner regarding any overdue of such guarantee for 15 working days, or the bankruptcy or liquidation of the guaranteed party, or any circumstances which may seriously affect its ability to repay.

CHAPTER 5 INFORMATION DISCLOSURE REGARDING EXTERNAL GUARANTEES

Article 28 The Company will perform its obligations in information disclosure in a responsible manner according to the relevant laws, regulations and the listing rules of the stock exchanges of the place where the Company’s shares are listed. For external guarantees approved by the board of directors or general meetings, the Company will disclose such information in designated newspapers, publications and websites in a timely manner according to the listing rules of the stock exchanges of the place where the Company’s shares are listed.

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APPENDIX X

CHAPTER 6 SUPPLEMENTARY PROVISIONS

Article 29 Upon approval by ordinary resolution at the general meeting, these Regulations will take effect on the day on which the Company’s RMB ordinary shares (A shares) are listed and traded, and the Company’s existing Regulations of External Guarantee will expire on the same day.

Article 30 External guarantees provided by the Company’s holding subsidiaries are to be governed by these Regulations. Upon approval of external guarantees by the subsidiary’s board of directors or general meeting, the subsidiary should inform the Company in a timely manner so that the Company can perform its obligations in information disclosure.

Article 31 The board of directors is responsible for the interpretation of these Regulations.

Article 32 In the event that any matters which is not covered by these Regulations or otherwise contradicts the laws, regulations of monitoring organizations, or the Articles of Association, these Regulations are to be executed in compliance with the relevant legal procedures, regulations of regulatory organizations and the Articles of Association.

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APPENDIX XI ADMINISTRATIVE REGULATIONS OF INFORMATION DISCLOSURE (DRAFT)

CHAPTER 1 GENERAL PROVISIONS*

Article 1 To protect the legitimate rights and interests for investors of Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Company’’), and to ensure the truthfulness, timeliness, accuracy, completeness, fairness and confidentiality prior to disclosure of the information disclosed by the Company, these Regulations are formulated in accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, Administrative Measures for the Disclosure of Information of Listed Companies issued by China Securities Regulatory Commission (‘‘CSRC’’), Codes on Takeovers and Mergers and Share Repurchases (the ‘‘Codes’’) issued by Hong Kong Securities and Futures Commission (‘‘SFC’’) and other laws and regulations, the Articles of Association of Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Articles of Association’’), and relevant provisions such as the listing rules of the stock exchanges of the place where the Company’s shares are listed, taking into consideration of the actual conditions of the Company.

Article 2 Unless the context otherwise requires, references to ‘‘information’’ in these Regulations shall refer to:

(1) Information required to assess the status of the Company by the securities regulatory authorities in the place where the Company’s shares are listed, shareholders of the Company and holders of other listed securities of the Company;
(2) Information necessary to avoid a false market led by trading of the Company’s securities;
(3) All information that may affect the decision-making of investors or that has major influence on the transaction price of securities of the Company and their derivatives (‘‘Price-sensitive information’’), and other information that is required to be disclosed by the securities regulatory authorities in the place where the Company’s shares are listed, and the stock exchanges of the place where the Company’s shares are listed;
(4) ‘‘Inside information’’ with reference to Part XIVA of ‘‘Securities and Futures Ordinance’’ of Hong Kong.

‘‘Information disclosure’’ in these Regulations refers to the release of information including that relating to significant operations changes of the Company (such as price-sensitive information and other information that is required to be disclosed) by the Company to the securities regulatory authorities in the place where the Company’s shares are listed, the stock exchanges of the place where the Company’s shares are listed, investors and media according to rules, regulations, regulatory documents, the Company’s status or as stipulated by the securities regulatory authorities or the stock exchanges in the place where the Company’s shares are listed.

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APPENDIX XI ADMINISTRATIVE REGULATIONS OF INFORMATION DISCLOSURE (DRAFT)

Article 3 The information disclosure of the Company shall comply with laws, regulations, and regulatory rules as set out by the securities regulatory authorities or the stock exchanges in the place where the Company’s shares are listed, and shall abide by the following principles:

(1) Truthfulness. Information disclosed by the Company shall be true and reliable, and no false information shall be published.
(2) Timeliness. The Company shall disclose information timely. For information that is required to be disclosed within certain period, the disclosure shall not exceed the legal time period or the time limit as set out by the stock exchanges of the place where the Company’s shares are listed.
(3) Accuracy. Information disclosed by the Company shall be accurate and free from any inconsistencies, mismatches, or discrepancies, and disclosed information shall not contain any contradictions.
(4) Completeness. Information disclosed by the Company shall be complete to give investors a full understanding of related incidents.
(5) Fairness. Information shall be disclosed to investors fairly and symmetrically, and asymmetrical information disclosure shall be avoided.
(6) Confidentiality. The board of directors, Supervisors, Senior management of the Company, and staff who are aware of price-sensitive information by any means, all being insiders of the Company, are obliged to keep the information confidential before it is officially disclosed by the Company to the public, and insiders shall not take advantage of such information to conduct insider dealing or help others manipulate transaction prices.

Article 4 The Administrative Regulations of Information Disclosure shall apply to the following institutions and personnel (singly or jointly called ‘‘information disclosure obligors’’), except for when the related entity shall be the only obligor as stipulated by laws, regulations, and the stock exchanges of the place where the Company’s shares are listed:

(1) Directors and the board of directors of the Company;
(2) Supervisors and Supervisors of the Company;
(3) Senior management of the Company;
(4) The secretary to the board of directors of the Company and secretaries of the Company;
(5) Departments of the Company, subsidiaries of the Company, and connected persons in charge;

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(6) Controlling shareholders, actual controllers and shareholders holding more than 5% (including 5%);
(7) Other personnel or departments of companies that bear the information disclosure obligation with consideration to businesses of the companies or as stipulated by laws, regulations, and stock the Company’s shares are listed.

Article 5 Information disclosure of the Company shall be in accordance with laws, regulations, and rules set out by the stock exchanges of the place where the Company’s shares are listed including ‘‘Administrative Measures for the Disclosure of Information of Listed Companies’’, ‘‘The Codes on Takeovers and Mergers and Share Repurchases’’ of Hong Kong and ‘‘Securities and Futures Ordinance’’ of Hong Kong.

The Company shall submit and report information disclosure announcements and relevant documents for inspection to securities regulator institution where the share of the Company are registered, and such information shall be maintained in the address of the Company for public inspection.

Article 6 Designated newspapers for information disclosure of companies by the securities regulatory authorities or the stock exchanges in the place where the Company’s shares are listed are designated information disclosure newspapers as indicated by the stock exchanges of the place where the Company’s shares are listed; designated websites are information disclosure websites as indicated by the stock exchanges of the place where the Company’s shares are listed. After the Company chooses or changes designated newspapers or websites, it shall report to the stock exchanges of the place where the Company’s shares are listed in a timely manner.

Article 7 Where the securities regulatory authorities or the stock exchanges in the place where the Company’s shares are listed require that information disclosure should be made in both Chinese and English versions, information disclosure documents of the Company shall comprise both Chinese and English versions, and best endeavours shall be used to ensure the consistency between the two versions.

CHAPTER 2 CONTENT OF INFORMATION DISCLOSURE

Article 8 The Company shall, according to laws, regulations, and relevant provisions of the securities regulatory authorities or the stock exchanges in the place where the Company’s shares are listed, disclose stock prospectus and bond prospectus, listing announcements, acquisition reports, periodic reports, ad hoc reports, and monthly reports, etc.

Annual reports, interim reports and quarterly reports (if any) are periodic reports, and other reports are ad hoc ones including but not limited to official announcements, press release, circulars to shareholders, speeches made by the management to the public, and news released through the Company website etc.

Preparation and disclosure of the abovementioned information disclosure documents shall comply with relevant provisions of the securities regulatory authorities or the stock exchanges in the place where the Company’s shares are listed.

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Article 9 The Company shall not publish the information through the Company website or other media prior to the release of the same in designated media, and the Company shall not evade its obligations in publishing a report or making an announcement by making a press release or providing a response to journalists, nor evade its obligations in publishing an ad hoc report by publishing a periodic report.

Information disclosed by the Company in Hong Kong Stock Exchange shall also be disclosed at the same time in the stock exchanges of the place where the Company’s A shares are listed.

Article 10 The Company shall prepare and disclose periodic reports according to laws, regulations, and provisions of the securities regulatory authorities or the stock exchanges in the place where the Company’s shares are listed. Such periodic reports include annual reports, interim reports and quarterly reports. All information that has significant influence on the decision-making of investors shall be disclosed.

Financial statements in the annual reports of the Company shall go through audits by accounting firms with securities and futures-related qualifications.

Article 11 Disclosure of A shares periodic reports of the Company: annual reports, interim reports and quarterly reports of A shares of the Company shall be prepared and disclosed within 4 months as from the date of the end of each fiscal year, within 2 months as from the date of the end of the first half of each fiscal year, and within 1 month as from the date of the end of the 3rd month and the 9th month of each fiscal year respectively. The disclosure time of the first quarterly report shall not be earlier than the disclosure time of the annual report of the previous year.

Article 12 Disclosure of H shares periodic reports of the Company:

(1) Annual reports: annual results announcements and annual reports shall be prepared and disclosed within 3 months and 4 months respectively as from the date of the end of each fiscal year. Annual reports shall be sent to shareholders within the time limit according to requirements by the securities regulatory authorities in the place where the Company’s shares are listed, and/or be published on the Company website for references of investors.
(2) Interim reports and quarterly reports (if any): interim results announcements and interim reports shall be prepared and disclosed within 2 months as from the date of the end of the first half of each fiscal year, and Q1 and Q3 reports (if any) shall be prepared and disclosed by the end of April and October of each year respectively. The disclosure time of the first quarterly report shall not be earlier than the disclosure time of the annual report of the previous year. If otherwise as stipulated by the securities regulatory authorities in the place where the Company’s shares are listed, such provisions shall prevail.

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(3) Where results are leaked prior to the disclosure of periodic reports of the Company, or where there are speculations about the results and abnormal fluctuations is said to have occurred in securities and derivatives trading of the Company, the company shall issue clarification announcements promptly according to the actual situation.

Where the Company is expected not to be able to disclose periodic reports within the prescribed period, it shall promptly report to the securities regulatory authorities in the place where the Company’s shares are listed securities and report the reasons why such reports cannot be published on time, solutions, and the extended time limit for the disclosure.

Article 13 The board of directors and senior management of the Company shall sign written confirmation on whether the periodic reports of the Company are faithful, accurate and complete; Board of Supervisors of the Company shall review the periodic reports of the company prepared by the board of directors and provide its written opinions after review.

Where directors, supervisors and senior management cannot ensure or cannot agree with the faithfulness, accuracy or completeness of the periodic reports, reasons and opinions should be given and disclosed.

Article 14 When transactions, incidents or situation occur where ad hoc reports should be disclosed as stipulated by the stock exchanges of the place where the Company’s shares are listed, the Company shall promptly disclose in the form of ad hoc announcements in accordance with procedures, formats, content and time limits as stipulated by the stock exchanges of the place where the Company’s shares are listed.

Article 15 When significant events occur which may have major influence on the transaction prices of securities and derivatives of a listed company as stipulated by the stock exchanges of the place where the Company’s shares are listed without the knowledge of investors, the listed company shall make relevant disclosures, explaining reasons of such events, the current situation and potential impacts in accordance with provisions of the stock exchanges of the place where the Company’s shares are listed.

Article 16 When incidents occur which may result in a false market led by transactions of securities and derivatives of the Company as set out in Article 13.09 of ‘‘Listing Rules of Hong Kong Stock Exchange’’, or when ‘‘inside information’’ as set out in Part XIVA of ‘‘Securities and Futures Ordinance’’ of Hong Kong is very likely to have major impact on prices of the listed securities, or when investors are not aware of information that should be disclosed timely according to relevant laws, regulations and provisions of the securities regulatory authorities in the place where the Company’s shares are listed, unless otherwise exempted from relevant laws, regulations and provisions of the securities regulatory authorities in the place where the Company’s shares are listed, the Company shall, in accordance with provisions and requirements of the securities regulatory authorities and the stock exchanges in the place where the Company’s shares are listed, make prompt disclosures, explaining reasons of such events, the current situation and potential impacts.

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Significant events where ad hoc reports shall include but are not limited to the following events:

Major changes in the operation directions and business scope;
Decisions of the Company on major investment activities, and major acquisition and disposals of assets;
Any important agreement concluded by a listed company that might significantly affect its corporate assets, liabilities, rights and interests or operation results;
Any major debt incurred by the company or default on any major debt or any obligation to pay a large sum of compensation;
Any major deficit or significant losses in the company;
Major breakthroughs of key scientific and research projects of the Company, which are expected to have potential significant influence on the production and operations of the Company;
Material changes on the external conditions of the company’s production operation;
Any change of chairman of the board of directors, directors, supervisors, financial controllers, the secretary to the board of directors, and president; or impossibility to perform duties of the chairman of the Board or the president;
Any considerable change on the control of the company or on the shareholding of the actual controllers of shareholders that holds more than 5% of the corporate stock, controlling shareholders or actual controller of the Company;
Any decision on capital reduction, merger, split-up, dissolution or application for bankruptcy; or falling in bankruptcy process or being ordered to close down in accordance with law;
Cancellation or invalidation of any resolution of the shareholders’ assembly or the board of directors in relation to an important litigation or arbitration in which the company is involved;
Investigation on any alleged offences conducted by the relevant authorities or any criminal punishment or major administrative punishment imposed against the Company; or any investigation or coercive measures conducted or imposed against the directors, supervisors or senior management of the Company as a consequence of alleged violation of law or disciplinary rules;
Any newly promulgated law, regulation, provisions or industrial policy that might significantly affect the Company;

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Any resolution of the board of directors on new stock offering plan or any other refinancing plan or any share rights incentive plan, which shall be disclosed in accordance with relevant laws, regulations and ‘‘Listing Rules of Hong Kong Stock Exchange’’;
Any court resolution prohibiting the controlling shareholders from transferring its shares; or any closedown, pledge, freezing of assets, judicially auction, custody, entrustment or voting rights legal limitation on the shares held by any shareholder that holds more than 5% of the corporate stock;
Breaking down of the main or all businesses;
Granting of important external guarantee;
Any extraneous income that might considerably affect the assets, liabilities, rights and interests or operation results of the company such as a large sum of government subsidy;
Any changes on auditors, settlement date of a fiscal year, accounting policies or accounting estimates; engaging and dismissal of accounting firms;
Any changes on secretaries of the Company or compliance advisors;
Any order of the relevant authorities or resolution of the board of directors issued or adopted in order to correct or amend errors, disclosure failing to comply with rules or false representations contained in the information previously disclosed;
Where the Company foresees a loss or any major change to its operating results, a timely business result forecast must be made;
Any media coverage of the Company and the transaction of securities and derivatives of the Company. Where abnormal abnormality occurs in the Company’s securities and derivatives transactions or when media coverage may have a significant impact on the Company’s securities and derivatives trading, the Company should figure out the real situation, and treat relevant news stories as significant events after confirmation;
Connected transactions (excluding connected transactions that have been exempted according to listings rules of the stock exchanges of the place where the Company’s shares are listed);
Any pledges of operating assets or equity of the Company;
Financing activities of the Company including issuance of bonds;
Any restructuring of the Company or controlling shareholders that has major influence on the businesses of the Company;

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Any other significant events that shall be disclosed as prescribed by applicable laws, regulations and provisions of the securities regulatory authorities and the stock exchanges of the place where the Company’s shares are listed.

The Company shall perform timely its duty of disclosure on major events as soon as any of the following circumstances occurs:

When a resolution of the board of directors or Board of Supervisors on the major event is adopted;
When a letter of intent or agreement on the major events is executed by relevant parties; or
When the directors, supervisors or senior management including the general manager and financial director learn and report the major event.

Where any of the following situations take place before the occurrence of the circumstances mentioned in the foregoing paragraph, the Company shall timely disclose the current status and the risk factors that might affect the progress of the major event:

When it is difficult to keep this major event confidential;
When the information about the major event has been already leaked or relevant hearsay has appeared in the market; or
When transactions on company’s securities or derivatives show abnormal movements.

If after the disclosure of the major event, the evolution or change thereof might considerably affect the transaction prices of the securities and derivatives of the Company, then such information as circumstances of evolution or change and the possible effect shall also be timely disclosed.

Where affiliates of the Company incur major events as mentioned in Article 16 of these Regulations, or when these companies incur events which may considerably affect the transaction prices of the securities and derivatives of the Company, the situation shall be promptly reported to the information disclosure management department of the Company to perform duty of disclosure.

Directors, supervisors and senior management of the Company appointed in holding subsidiaries of the Company shall timely and accurately report to the information disclosure management department of the Company about events of the holding subsidiaries which may considerably affect the transaction prices of the securities and derivatives of the Company, including but not limited to planned equity transfer, asset restructuring or other significant events as stipulated in Section 2 of Article 16, and collaborate with the Company to appropriately carry out information disclosure.

Where controlling shareholders of the Company incur events that may considerably affect the transaction prices of the securities and derivatives of the Company, the Company shall promptly conduct information disclosure.

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Where the information of the Company planned to be disclosed belongs to state secrets, commercial secrets or other circumstances as recognized by the securities regulatory authorities in the place where the Company’s shares are listed, and where the disclosure in accordance with relevant regulations or the performance of relevant obligations may lead to a breach of confidentiality obligations or the interest of the Company, the Company may apply for exemptions from such information disclosure obligations to the securities regulatory authorities in the place where the Company’s shares are listed.

CHAPTER 3 REQUIREMENTS ON INFORMATION DISCLOSURE

Article 17 The information disclosure of the Company shall be led by the board of directors. The board of directors shall be responsible for supervising the enforcement of the Administrative Regulations of Information Disclosure of the Company, conducting annual reviews on the enforcement, and publish review opinions in the internal control part of the annual reports of the Company.

All directors of the board of directors of the Company shall be diligent and duteous to ensure the faithfulness, accuracy, completeness, no false records, severely misleading statements or major omissions of the information disclosure, and be jointly or severally liable for their commitments.

Without the permission of the board of directors or authorization of the chairman, directors shall not represent the Company or the board of directors personally to disclose any information that has not been public.

The directors shall follow closely and continuously the Company’s production management status, financial status and the major events that have already occurred or are likely to occur as well as the influences thereof; and shall actively investigate and obtain the information required for the decision-making. The information disclosure management department of the Company shall actively provide to the directors with the information required for the decision-making.

Article 18 Board of Supervisors and Supervisors personally shall not represent the Company or the board of directors to disclose any information that has not been public to shareholders or the press, except for disclosure otherwise required by laws, regulations, and listing rules of the stock exchanges of the place where the Company’s shares are listed.

The Supervisors shall oversee the fulfillment of the duties of disclosure of the directors and senior management of the Company; and follow closely the status of disclosure. Whoever learns any illegal issues in the disclosures shall initiate the corresponding investigation and propose the solution.

The written opinions of the board of supervisors on periodic reports shall express whether the process of preparation and verification conforms to the law, administrative regulations and provisions of the securities regulatory authorities in the place where the Company’s shares are listed, and whether the contents of the report truthfully, accurately and completely reflect the actual situation of the Company.

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Article 19 The general manager, deputy general manager, chief financial officer and other senior administrative officers of the Company bears the following responsibilities concerning the information disclosure of the Company:

(1) To report timely to the board of directors on significant events about the operations or financial status of the Company, developments or changes of events that have been disclosed and other relevant information.
(2) To provide faithful, accurate and complete information to the board of directors for the fulfillment of relevant obligations on information disclosure.

Article 20 Directors, supervisors, senior management, shareholders holding more than 5% of the shares, controlling shareholders, and actual controllers shall timely file with the office of the board of directors a name list of the connected parties of the Company and a statement of the affiliation. The Company shall comply with the procedures established for the consideration of connected transactions and shall strictly fulfill the rules on the exclusion of the involved shareholders in voting the respective connected transactions. None of the parties to such transactions may circumvent the process of consideration of connected transactions and the process of disclosure of the Company by concealment of such affiliation relationship or adoption of any other means.

Article 21 The secretary to the board of directors is in charge of the daily management of the information disclosure of the Company, and shall arrange timely disclosure according to applicable laws, regulations and provisions, review related documents, oversee information disclosure procedures, follow up media coverage of the Company, seek confirmation on media coverage relating to price-sensitive information of the Company, and organize trainings of directors, supervisors, and senior management of the Company on information disclosure.

The secretary to the board of directors is entitled to attend general meetings, the board of directors’ meetings, Board of Supervisors’ meetings and relevant meetings of the senior management, to learn the business and financial status of the company and to consult all the documents related to the disclosures. Information disclosure obligors of the Company and other personnel bearing information disclosure obligations shall actively collaborate with the secretary to the board of directors in information disclosure.

Article 22 The office of the board of directors is the information disclosure management department of the Company, and is in charge of daily operations of the Company on information disclosure. Led by the secretary to the board of directors, the office of the board of directors shall conduct daily organization, management and coordination of the information disclosure of the Company, collect and arrange information from periodic reports and ad hoc reports disclosed as announcements, and draft reports, announcements, or reporting documents in accordance with applicable laws, regulations and requirements, publish upon approval in resolutions of the board of directors, or with the approval of the chairman and the signature of the secretary to the board of directors, and be responsible for contacting the securities regulatory authorities in the place where the Company’s shares are listed, and investors relations and the information disclosure.

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Different departments of the Company and heads of subsidiaries are the first obligors of the information disclosure of the Company, and shall supervise the strict implementation of information disclosure management an reports measures, ad shall designate a person responsible for coordination and organization of the information disclosure of the Company in charge of the collection, verification, reports and delivery of related information of their departments or companies. Designated information contacts of subsidiaries shall timely report and deliver pricesensitive information that should be disclosed to corresponding offices of the Company, and the information contacts of corresponding offices of the Company shall report and deliver information that should be disclosed to the office of the board of directors.

Article 23 The information disclosure obligors of the Company shall strictly follow applicable laws and regulations and requirements of these Regulations, actively inform the Company of the existence of any events that need to be disclosed, collaborate with the Company to fulfill its information disclosure obligations, and abide by information disclosure discipline. Where information disclosure obligors of the Company and other staff have doubts whether certain event belongs to information that needs to be disclosed, they should promptly consult information disclosure management department of the Company.

Article 24 The Company shall carry out regular trainings of information disclosure obligors on administrative regulations of information disclosure and practices. The information disclosure management department of the Company shall be responsible for organizing trainings on information disclosure.

Article 25 The actual controllers, controlling shareholders, or shareholders that individually hold more than 5% of the Company’s stock by means of entrustments or trusts shall designate information contacts, organize and collect basic information of their affiliations, timely inform the Company about the existence of events related to the Company that need to be disclosed, and assist the Company to perform the duty of disclosure.

When any of the following events occur, the shareholders or actual controllers of the Company shall, on their own initiative, report it to the board of directors and assist the Company to fulfill its duty of disclosure:

(1) Any change on the shareholding, or on the interests or short positions in the stocks or debentures of the Company of the controlling shareholders, actual controllers or any shareholders that holds more than 5% of the corporate stock;
(2) Any pledges on the shares held by a shareholder that individually holds more than 5% of the corporate stock or by controlling shareholders;
(3) Planning on significant assets or business restructuring with respect to the Company; or
(4) Other circumstances prescribed by relevant laws, regulations and provisions of the securities regulatory authorities in the place where the Company’s shares are listed.

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Where prior to the disclosure discloseable information, the relevant information has been leaked in the mass media or where the transactions on the securities and derivatives of the company have experienced abnormal movements, the shareholders or actual controllers of the Company shall timely and accurately assist it for announcement. Where price-sensitive information has been leaked, the Company shall make announcements immediately.

CHAPTER 4 INFORMATION DISCLOSURE PROCEDURES

Article 26 Disclosure procedures of periodic reports:

(1) The information disclosure management department shall be in charge of the preparation of the first draft of periodic reports.
(2) The financial department of the Company shall be in charge of the preparation of annual and interim announcements related to periodic reports, and the information disclosure department shall be responsible for providing other parts except for financial information.
(3) Departments of the Company and subsidiaries shall, in accordance with requirements for the drafting of periodic reports of the Company, conduct researches with due diligence, provide related information within the prescribed time, and review and verify information concerning their respective departments to be disclosed in the reports.
(4) After the completion of preparation of the periodic reports and announcements, the executive director of the Company or the secretary to the board of directors shall review the first draft of periodic reports, and related departments shall supplement or update information according to the review comments.
(5) The office of the board of directors should revise the first drafts, report to the chairman of the Company for consideration, and formulate the approved draft of periodic reports upon receiving approval from the chairman.
(6) The audit committee shall meet, audit periodic reports and formulate audit comments.
(7) Periodic reports shall be delivered to the board of directors and the supervisory committee of the Company for consideration 7 days prior to the convening of meetings of the board of directors and the Supervisory committee. The board of directors shall hold meetings, review periodic reports and form resolutions.
(8) Directors and senior management shall sign written confirmations on periodic reports. The Board of Supervisors shall propose written review comments. Where the directors, supervisors, or senior management cannot ensure or disagree with the truthfulness, accuracy or completeness of the periodic reports, relevant reasons and comments should be presented and disclosed.

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(9) The office of the board of directors shall, according to comments of the board of directors, finish compiling periodic reports, and disclose them on designated websites within prescribed period upon obtaining signature from the chairman and the corporate seal. If it is expected to announce, suggest or pay dividends, or to approve of profits or losses of any year, interim or other periods in the meetings of the board of directors, the Company shall notify the Hong Kong Stock Exchange with the planned date of the meeting 7 days prior to the convening of meetings of the board of directors.
(10) The Company shall, on the date of disclosure, publish information disclosure documents including periodic reports on the Company’s website and on the Hong Kong Stock Exchange website in accordance with the requirements of regulatory authorities in the place where the Company’s shares are listed for the reference of information disclosure obligors and the public. Information disclosure obligors shall promptly consult the Company’s website to follow up the disclosure process.
(11) Financial statements of annual reports, and other periodic reports announcing the payment of dividends shall go through audits by qualified accounting firms; where the financial statements of periodic reports receive non-standard audit reports, the board of directors of the Company shall make a special explanation on related events of these audit comments.

Article 27 Disclosure procedures of ad hoc reports:

(1) Departments, subsidiaries and related information disclosure obligors of the company, upon knowing about the occurrence of significant events or other events that should be disclosed according to Section 2 of Article 16 of these Regulations, shall report to the office of the board of directors in writing on the date of knowing; where a written report cannot be made on the date of knowing, reports shall be made by phone calls or emails, and a written report shall be submitted on the second day. Upon receiving such reports, shall promptly consult connected parties to understand the situation, collect information, and report to the secretary to the board of directors with the least delay possible. The secretary to the board of directors shall present the reports to the chairman immediately after receiving such reports. After receiving the reports, the chairman can excise the discretion according to his or her mandates or report to the board of directors to formulate comments and urge the secretary to the board of directors to arrange the disclosure of ad hoc reports;
(2) Functional departments and subsidiaries of the Company shall provide required documents and information for the information disclosure timely, accurately, and completely. The office of the board of directors, according to the actual situation, makes a schedule for the preparation and disclosure of the ad hoc reports, and arrange for the drafting of the ad hoc reports.

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(3) The ad hoc reports shall go through reviews by the board of directors or its authorized person; for events that do not need to be reviewed by the board of directors, they shall be disclosed upon receiving approval from the chairman and signature of the secretary of the board of directors. For events that need to be approved by general meetings, the board of directors or Board of Supervisors, information shall be disclosed after going through the required review and approval procedures according to the Articles of Association and related rules of procedure.
(4) The office of the board of directors shall be responsible for sending ad hoc reports to the Hong Kong Stock Exchange (if necessary), and publish such reports on designated websites within the prescribed period. For ad hoc reports that need to be approved by the board of directors, Board of Supervisors, and/or general meetings, such reports shall be presented to the stock exchanges on the date of convening of related meetings (if the date of convening is a non-trading day, such presentation should be postponed to the next trading day), and shall be published on designated websites within the prescribed period.
(5) The Company shall promptly publish information disclosure documents including periodic reports on the Company’s website and on the Hong Kong Stock Exchange website in accordance with the requirements of regulatory authorities in the place where the Company’s shares are listed for the reference of information disclosure obligors and the public. Information disclosure obligors shall promptly consult the Company’s website to follow up the disclosure process.

Where significant events that have been disclosed may significantly affect the developments or changes of trading prices of the securities or derivatives of the Company, the Company shall timely disclose developments or changes, and potential impacts.

Article 28 The Company’s internal legal affairs department is responsible for legal reviews on the above-mentioned periodic reports and ad hoc reports to ensure their legality and compliance.

Article 29 Where errors, omissions or misleading statements are found after relevant announcements are disclosed or documents are published, the secretary to the board of directors shall promptly arrange for correcting, supplementing or clarification announcements.

Article 30 Responding procedures to inquiries of the Hong Kong Stock Exchange are as follows:

(1) The authorized representative of the Company or, upon receiving announcements for clarification from the Hong Kong Stock Exchange, report immediately to the secretary to the board of directors and the chairman, and update directors with relevant information;
(2) The office of the board of directors shall immediately consult related departments and sections for the situation, and draft announcements or written responding documents;

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(3) Announcements or written responding documents should be commented and revised by intermediaries and presented to the secretary to the board of directors for consideration;
(4) According to the nature of the inquires, the office of the board of directors shall notify related directors to respond to the inquiries of the Hong Kong Stock Exchange or present the announcements or written responding documents to the related directors for consideration and verification, and such announcements shall be reviewed by the chairman;
(5) Where a disclosure is required, the office of the board of directors shall contact the Hong Kong Stock Exchange, and arrange for the publishing of related documents to the Company’s website and the Hong Kong Stock Exchange website; where no disclosure is required, the written responses shall be faxed directly to the Hong Kong Stock Exchange.

CHAPTER 5 COMMUNICATIONS WITH INVESTORS, SECURITIES ANALYSTS, AND THE MEDIA

Article 31 The information disclosure of the Company shall be published by means designated by the securities regulatory authorities in the place where the Company’s shares are listed. The Company shall set up a website that contains the information disclosure section, investor hotlines, faxes, emails, and other contacts for inquiries of shareholders, and announce such measures in periodic reports. The publishing time of the periodic reports (announcements) and ad hoc reports on the Company’s website or other media shall not precede the publishing time on designated media (including the website of the stock exchanges) by the securities regulatory authorities in the place where the Company’s shares are listed.

Article 32 The Company shall not evade its obligations in publishing a report or making an announcement by making a press release or providing a response to journalists, nor evade its obligations in publishing an ad hoc report by publishing a periodic report.

Article 33 Interviews concerning price-sensitive information of the Company shall be arranged by the information disclosure management department.

For information not concerning sensitive financial information or commercial secrets, but may significantly affect the decision-making of shareholders or other stakeholders, including but not limited to significant activities of the Company such as press releases, signing ceremonies, commencement ceremonies, and for information concerning the development strategy, operations philosophy, production operations, project construction, scientific and technological advances and significant joint venture and cooperation projects of the Company, the Company may conduct voluntary information disclosure. Such voluntary information disclosure can refer to the procedures of disclosure of periodic reports and ad hoc reports. The Company adopts a spokesperson system where the spokesperson is responsible for the daily disclosure of information to the media.

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Article 34 Directors, Supervisors, the general manager, the chief accountant and other senior management shall, before contacting investors, securities analysts, or receiving interviews, actively consult the secretary to the board of directors about relevant information disclosure to avoid providing any price-sensitive information of the Company that has not been published.

CHAPTER 6 CONFIDENTIALITY MEASURES AND CORRESPONDING RESPONSIBILITIES

Article 35 For information disclosure obligors of the Company and insider who are aware of or control price-sensitive information which has not been disclosed by the Company, are obliged to keep the information confidential during their work, and shall not leak the information by any means. Prior to the information disclosure, the insiders of price-sensitive information shall be limited to the minimized level, and if the information is leaked, or relevant hearsay has appeared in the market that it is difficult to keep this major event confidential or transactions on the Company’s securities or derivatives show abnormal movements prior to the official disclosure by the company, the information disclosure obligors shall promptly notify the office of the board of directors for related information disclosures.

Article 36 No person with knowledge of inside information or person obtaining the inside information through illegal means shall, prior to a lawful disclosure of inside information, take advantage of such information through means prohibited by relevant laws, regulations or rules of securities regulatory authorities in the place where the Company’s shares are listed, including but not limited to non-publishing or leakage of such information, no uses of such information to trade on or recommend others to trade on securities and derivatives of the Company, no reference of such information in investment values analysis reports, research reports or other documents, and no provision or dissemination of false or misleading information of the Company for investors.

Persons with knowledge of inside information include but are not limited to:

(1) Directors, supervisors and senior administrative officers of the Company;
(2) Controlling shareholders, actual controllers, shareholders that hold more than 5% of the corporate stock and their directors, supervisors and senior management;
(3) Holding subsidiaries of the Company and their directors, supervisors and senior administrative officers;
(4) Other persons who can obtain related inside information of the Company because of the functions of their companies.
(5) Other persons as prescribed by related laws, regulations and provisions of the securities regulatory authorities in the place where the Company’s shares are listed.

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Article 37 The Company shall sign confidentiality agreements with intermediaries such as accounting firms and law firms engaged by the Company, and cooperative units. Where the pricesensitive information of the Company is leaked because of the losses or responsibilities of these organizations, which incur losses or negative impacts on the Company, the Company shall hold them liable according to the law.

Article 38 Information disclosure obligors who intentionally or negligently violate these Regulations shall be ordered to correct, and held liable in accordance with the relevant provisions of the Company, including but not limited to criticizing, warning, dismissal of duties, termination of labour contracts and other penalties.

CHAPTER 7 SUPPLEMENTARY PROVISIONS

Article 39 ‘‘More than’’ in these Regulations includes the figure itself.

Article 40 These Regulations have been reviewed and approved by the general meetings and entered in to force and implementation on the date of listing for transaction of the RMB ordinary shares (A-share) issued by the Company, and the previous ‘‘Administrative Regulations of Information Disclosure’’ simultaneously expired. If the Company is required to perform relative filing or disclosure obligations after these Regulations are passed as stipulated by related laws, regulations and provisions of the securities regulatory authorities in the place where the Company’s shares are listed, such provisions shall prevail.

Article 41 The board of directors shall be responsible for the interpretation of these Regulations.

Article 42 Other matters not included in these Regulations shall be carried out according to related laws, regulations, provisions of the securities regulatory authorities in the place where the Company’s shares are listed, and the Articles of Association; where these Regulations have contradictions with related laws, regulations, provisions of the securities regulatory authorities in the place where the Company’s shares are listed, and the Articles of Association, relevant laws, regulations, provisions of the securities regulatory authorities in the place where the Company’s shares are listed, and the Articles of Association shall prevail, and these Regulations shall be revised with the least delay possible, and represented to general meetings for consideration and approval.

Article 43 Terms and definitions in these Regulations are in accordance with terms and definitions as set out in the Articles of Association, and listing rules of the stock exchanges of the place where the Company’s shares are listed.

Article 44 Where these Regulations has both Chinese and English versions, in case of discrepancies between the two versions, the Chinese version shall apply and prevail.

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CHAPTER 1 GENERAL PROVISIONS*

Article 1 In order to strengthen information communications between Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Company’’) and investors as well as potential investors (collectively, ‘‘Investors’’), enhance Investors’ understanding and recognition of the Company, facilitate the establishment of a long-term, stable and good relationship between the Company and Investors, improve the corporate governance structure and effectively protect the legitimate rights and interests of Investors, especially public investors, these Rules are formulated in accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Guidelines on Listed Companies and Investor Relations, the listing rules of the stock exchanges on which the Company’s shares are listed, the Articles of Association of Dynagreen Environmental Protection Group Co., Ltd. as well as other relevant laws and regulations, and based on the actual situation of the Company. In case there are other rules of the regulatory authorities and the stock exchanges in the place where the Company’s shares are listed, such rules shall be followed.

Article 2 Investor relations management refers to the act of management in which the Company strengthens communications between the Company and Investors as well as potential investors, and enhances Investors’ understanding of the listed company through various forms of investor relations activities.

Article 3 The purposes of investor relations management shall be:

(1) to promote a good relationship between the Company and Investors, and to further enhance Investors’ understanding and familiarity of the Company;
(2) to establish a stable and quality Investor base for securing long-term market support;
(3) to create a corporate culture which serves and respects Investors;
(4) to promote an investment philosophy which both maximizes the overall interests of the Company and grows the wealth of shareholders;
(5) to increase the transparency of information disclosure by the Company for improving the corporate governance.

Article 4 The basic principles of investor relations management:

(1) the principle for full disclosure of information. In addition to the mandatory disclosure of information, the Company may take the initiative to disclose other information of concern to Investors.
(2) the principle for compliance disclosure of information. The Company shall comply with national laws and regulations as well as information disclosure requirements of the securities regulatory authorities and the stock exchanges in the place where the Company is listed for information disclosure by listed companies to ensure that information
This document is originally prepared in Chinese and this English version is not formally adopted in the shareholders’ general meeting of the Company and is for reference only. In case of any inconsistency between the Chinese version and the English version, the Chinese version shall prevail.

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disclosure is true, accurate, complete and timely. In carrying out investor relations, attention shall be paid to the confidentiality of information not yet published and other internal information. Once such information is leaked, the Company shall disclose it in a timely manner in accordance with relevant rules.

(3) the principle of equal opportunity for Investors. The Company shall treat all shareholders of the Company and potential investors fairly in order not to be selective about information disclosure.
(4) the principle of honesty and trustworthiness. The Company’s investor relations shall be objective, true and accurate, and try not to be over publicized and misleading.
(5) the principle of efficiency and low consumption. When selecting the methods of investor relations, the Company shall give full consideration to improving communication efficiency and reducing communication costs.
(6) the principle of interactive communication. The Companies shall take the initiative to listen to Investors’ opinions and suggestions for conducting two-way communication between the Company and Investors to create positive interaction.

Article 5 The Company shall pay particular attention to the confidentiality of information not yet published and internal information in carry out investor relations activities to avoid and prevent the leakage of secrets as a result thereof and the causing of insider dealing in relation thereto.

CHAPTER 2 ITEMS, SCOPE AND METHOD OF INVESTOR RELATIONS MANAGEMENT

Article 6 In investor relations management, the major items of communication between the Company and Investors shall include:

(1) the Company’s development strategy, including the Company’s development direction, development planning, competition strategy and business policy, etc;
(2) statutory information disclosures and their descriptions, including periodic reports, temporary announcements and explanation sessions on annual reports, etc.;
(3) information about the business management which may be disclosed by the Company according to the law, including the status of production and operation, financial status, research and development of new products or technologies, results of operations, dividend distribution, etc.;

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(4) significant matters which may be disclosed by the Company according to the law, including the Company’s major investment and the changes in such investment, asset restructuring, mergers and acquisitions, cooperation with external parties, guarantees for external parties, significant contracts, connected transactions, significant litigation or arbitration, changes in the management, changes in major shareholders and other information;
(5) the building of corporate culture;
(6) other relevant information of the Company.

Article 7 The methods of communication between the Company and Investors shall include, but not limited to: announcements (including periodic reports and temporary announcements and notices), shareholders’ meetings, the Company’s website, the website of the stock exchanges on which Company’s shares are listed or the website as designated by the stock exchanges, meetings of analysts or explanation sessions on results, one-to-one communication, mailing of information, advice by telephone, e-mails, faxes, on-site visits, interviews and reports by media, road shows and other legal and effective methods.

Article 8 The information to be disclosed in accordance with laws, regulations and the listing rules of the stock exchanges on which the Company’s shares are listed shall be published immediately in the newspapers and on the website designated by the Company for disclosure of information. The Company shall not publish its undisclosed significant information in nondesignated newspapers and websites for disclosure of information or in other places.

Article 9 The Company shall communicate with Investors timely, in-depth and broadly through a variety of ways as much as possible, and shall pay particular attention to the use of the Internet to improve communication efficiency and reduce communication costs.

The Company shall enrich and timely update its website content. It may post press releases, company profiles, business products or services, discloseable statutory information, feature articles, executives’ speeches, stock quotes and other information of concern to Investors on the Company’s website.

Article 10 The target groups for investor relations management shall include, but not limited to, the following institutions and persons:

(1) Investors;
(2) securities analysts and fund managers;
(3) various types of media;
(4) securities regulatory authorities, stock exchanges and other relevant regulatory agencies.

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CHAPTER 3 ORGANIZATION AND IMPLEMENTATION OF INVESTOR RELATIONS MANAGEMENT

Article 11 The Secretary to the Board of Directors shall be in charge of the Company’s investor relations management services. The Office of the Board of Directors shall be the functional department for investor relations management, which shall be led by the Secretary to the Board of Directors and in charge of the daily affairs of the Company’s investor relations management. In addition, no persons may be engaged in investor relations activities without permission by the Secretary to the Board of Directors.

The Secretary to the Board of Directors shall be in charge of the Company’s overall investor relations management. Having a comprehensive, in-depth understanding of the Company’s operations and management, business conditions, development strategies, etc., he/she shall be in charge of planning, scheduling and organizing all kinds of investor relations management activities.

Article 12 The responsibilities for investor relations management shall primarily include:

(1) analysis and research. Conduct a statistical analysis of the number, composition and changes of Investors and potential investors; continue to monitor the comments, suggestions, reports, and other information of Investors and the media, and give timely feedback to the Board of Directors and the management of the Company.
(2) communication and contact. Compile the information needed by Investors and publish it; organize analyst seminars as well as other meetings and roadshows to accept advice by analysts, Investors and the media; entertain Investors’ visits; maintain regular contact with institutional investors as well as small and medium-sized investors to increase Investors’ involvement in the Company.
(3) public relations. Establish and maintain good public relations with the stock exchanges, trade associations, media, other listed companies and related institutions. After the occurrence of significant matters such as the involvement in a lawsuit, a major restructuring, changes in key personnel, extraordinary movements in stock trading and significant changes in the business environment, work with the relevant departments of the Company on proposing and implementing effective plans to handle these matters, and be proactive in maintaining the Company’s public image.
(4) other work which contributes to improving investor relations.

Article 13 The specific responsibilities discharged by the Office of the Board of Directors for investor relations shall primarily include:

(1) to collect the Company’s business, financial and other related information, and make timely and full disclosure in accordance with laws and regulations as well as the requirements under the listing rules of the stock exchanges on which the Company’s shares are listed and the relevant rules for investor relations management;

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(2) to make preparations for annual general meetings, extraordinary general meetings, meetings of the Board of Directors and the Board of Supervisors, and prepare materials for such meetings;
(3) to be in charge of the preparation, design, printing and dispatch of the Company’s annual, interim and quarterly reports;
(4) to be in charge of drafting temporary reports and various announcements;
(5) to communicate with Investors and answer their questions by means of telephone, fax, e- mail, site visits, visits and otherwise;
(6) to organize analyst meetings, explanation sessions on results, road shows and other events for communicating with Investors;
(7) to create a special section for investor relations management on the Company’s website for disclosing relevant information of the Company to facilitate Investors to make inquiries and raise questions;
(8) to receive Investors’ visits and maintain regular contact with institutional investors, securities analysts and small and medium-sized investors for increasing Investors’ awareness about the Company;
(9) to strengthen communication with financial media for reflecting the actual situation of the Company objectively and fairly through media reports;
(10) to be in charge of arranging for the Company’s senior management staff and related staff to participate in various activities to communicate with Investors, and to attend media interviews, etc;
(11) to conduct a statistical analysis of the number, composition and changes of Investors and potential investors; continue to monitor the comments, suggestions, reports and other information of Investors and the media, and give timely feedback to the management of the Company;
(12) to maintain close relations with regulatory authorities, trade associations, stock exchanges in the place where the Company’s shares are listed, securities registration and clearing company and other relevant departments;
(13) to maintain good communication and cooperation with the investor relations management departments of other listed companies as well as investor relations consultants;
(14) to carry out survey and research on the status of the Company’s investor relations management, and to compile periodic or ad hoc research reports which reflect the status of the Company’s investor relations management to be used as reference by the management;

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(15) to track the laws and regulations for information disclosure and investor relations management as well as the regulatory rules of the stock exchanges on which the Company’s shares are listed, and to formulate and modify the rules relating to the Company’s information disclosure and investor relations management to be reported to the Company for approval and implementation;
(16) other work which contributes to improving investor relations.

Article 14 The staff of the Company who are engaged in investor relations management shall possess the following qualities and skills:

(1) be familiar with the stock market and have an understanding of the operating mechanism of the stock market;
(2) have a comprehensive understanding of all aspects of the Company, including the industry, products, technology, operations, management, development, marketing, finance, personnel, etc.;
(3) have a good knowledge structure, be familiar with the laws and regulations related to the Company’s corporate governance and financial accounting, and with the operating mechanism of the stock market;
(4) have good communication and coordination capabilities;
(5) have a good character, be honest and trustworthy, and have a high degree of responsibility.

Article 15 On the premise that no production or operations are prejudiced and no trade secrets are leaked, other departments of the Company, the subsidiaries controlled by the Company and all the employees of the Company shall be obliged to assist the Secretary to the Board of Directors and the relevant functional departments in carrying out relevant investor relations management.

Except as expressly authorized and trained, other directors, supervisors, senior management staff and employees of the Company may not speak on behalf of the Company in investor relations activities.

Article 16 The securities investment unit of the Company shall assign staff to be specially in charge of the reception to receive visitors. Before the reception of visitors, it shall ask the visitors to cooperate in filing records on Investors and visitors, and ask the visitors to sign the relevant letters of undertaking for establishing a standardized archive for visits by Investors.

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Article 17 The Company shall establish a complete archive system for carrying out investor relations activities. The archive on investor relations activities shall include at least the following particulars:

(1) the staff involved in investor relations activities as well as the time and place of such activities;
(2) the particulars discussed in the investor relations activities;
(3) the process for handling the leakage of undisclosed significant information and assumption of liability therefor (if any);
(4) other particulars.

Article 18 The Company shall try not to carry out any investor relations activities within thirty days prior to the disclosure of a periodic report to prevent the leakage of undisclosed significant information. Article 19 The Company shall conduct training in the knowledge of investor relations management in an appropriate manner for the employees of the Company, in particular directors, supervisors and senior management staff, department heads and persons-in-charge of the subsidiaries controlled by the Company. Specialized training sessions shall be organized as well when carrying out major activities for promoting investor relations.

Article 20 The Company shall set up a dedicated telephone line and fax line for providing advice to Investors to ensure smooth communication between the Company and Investors, and instruct someone to listen to these telephone calls and answer questions from Investors on the Company’s business situation. If there is a change in the Company’s Investor inquiry telephone line, an announcement shall be made promptly regarding the changed inquiry telephone line.

Article 21 For the media publicity and promotion of the Company’s business, the relevant business department of the Company shall provide a sample which shall be released to the public only after it is verified by the Secretary to the Board of Directors.

Interviews shall be allowed only after the media, which take the initiative to come to the Company to do media coverage, have submitted their interview plans to the Secretary to the Board of Directors in advance for verification and finalization. Written materials to be reported shall be publicized openly to the public only after they have been submitted to the Secretary to the Board of Directors for verification.

Article 22 With respect to the maintenance of public relations, the Company shall establish a good communication relationship with the securities regulatory authorities and other relevant departments; timely solve problems of concern to the securities regulatory authorities and stock exchanges; convey the relevant opinions to the Company’s directors, supervisors and senior management staff; and strive to establish a good platform for exchange and cooperation with other companies.

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Article 23 If the Company financially commissions an analyst or other independent agencies to publish a report on investment value analysis, the words ‘‘This report was commissioned by the Company’’ shall be marked in a prominent place in the report when the report is published.

Article 24 The Company shall determine in advance the scope of answerable questions before holding explanation sessions on results, analyst meetings and road shows. If such questions are related to undisclosed significant information or if undisclosed significant information may be deduced from such questions, the Company shall refuse to answer such questions and may not leak undisclosed significant information.

Article 25 In investor relations activities, once the Company publishes in any way significant information which shall be disclosed according to relevant laws, regulations and rules, it shall promptly report the same to the regulatory authorities and make a formal disclosure before the market opens on the next trading day.

CHAPTER 4 SUPPLEMENTARY PROVISIONS

Article 26 Matters not covered herein shall be handled in accordance with relevant laws, regulations, regulatory documents, the Articles of Association and the Company’s Administrative Regulations of Information Disclosure. In case of any conflicts between these Rules and the relevant laws and regulations, the listing rules of the stock exchanges on which the Company’s shares are listed, other regulatory rules or the Articles of Association, such relevant laws and regulations, listing rules of the stock exchanges on which the Company’s shares are listed, other regulatory rules or Articles of Association shall prevail. These Rules shall be amended accordingly and as soon as practicable, and submitted for consideration and approval at a shareholders’ meeting.

Article 27 These Rules shall be interpreted by the Board of the Directors of the Company.

Article 28 These Rules were considered and approved at the general meeting, and came into force and were implemented on the day on which the RMB ordinary shares (A shares) issued by the Company were listed and traded.

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IMPLEMENTATION RULES FOR ONLINE VOTING (DRAFT)

APPENDIX XIII

CHAPTER 1 GENERAL PROVISIONS*

Article 1 To regulate the online voting behaviours at general meetings of Dynagreen Environmental Protection Group Co., Ltd. (the ‘‘Company’’) and protect the legitimate rights and interests of the investors, these Rules are formulated in accordance with the Company Law of the People’s Republic of China and the Securities Law of the People’s Republic of China and other relevant laws and regulations, as well as the provisions of the stock exchanges on which the Company’s shares are listed. In event of any specific provisions promulgated by the securities regulatory authorities or stock exchanges in the place where the Company’s shares are listed, those provisions shall prevail.

Article 2 In the event that the Company adopts the online voting system for general meetings designated by the stock exchanges on which the Company’s shares are listed (the ‘‘online voting system’’) to allow its shareholders to exercise their voting rights via online voting, these Rules shall apply. Article 3 The online voting system designated by the stock exchanges on which the Company’s shares are listed includes the following voting platforms:

(1) Trading system voting platform;
(2) Internet voting platform.

Article 4 In the event that the general meetings are convened by the Company, the shareholders should be provided with online voting in accordance with the relevant provisions to fulfill the obligations of making notices and announcements regarding the general meeting for organization and preparation for the online voting at the general meeting.

Article 5 In the event that the Company provides the shareholders with the option of online voting, the Company shall comply with the requirements regarding the interim announcement format stipulated by the stock exchanges on which the Company’s shares are listed, use the relevant announcement-preparing software required by the stock exchanges on which the Company’s shares are listed to prepare the announcement regarding the general meeting, and make disclosure in accordance with the provisions.

Article 6 Shareholders who are registered on the record date of the and entitled to attend the meeting to exercise their voting rights may exercise the rights through the online voting system designated by the stock exchanges on which the Company’s shares are listed in accordance with the provisions of the Rules.

Article 7 The Company and the companies designated by the stock exchanges on which the Company’s shares are listed (the ‘‘information company’’) shall enter into a service agreement, in which the latter is commissioned to provide service related to the online voting at the Company’s general meeting and the services and corresponding rights and obligations are specified.

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CHAPTER 2 NOTICE AND PREPARATION OF ONLINE VOTING

Article 8 In the event that the Company provides the shareholders with online voting, the notice of the general meeting shall be prepared in accordance with Article 5 of the Rules to state the followings regarding the online voting:

(1) The type and session of the general meeting;
(2) The time for on-site and online voting;
(3) The type of shareholders who attend the meeting;
(4) The record date or the last trading date;
(5) The resolutions to be considered;
(6) The procedures of online voting;
(7) Other necessary information regarding the online voting.

Article 9 The convener of the general meeting shall prepare an announcement in a timely manner according to Article 5 of the Rules to supplement relevant information for disclosure if:

(1) the general meeting is postponed or cancelled;
(2) ad-hoc resolutions have been added;
(3) resolutions stated in the notice of the general meeting have been cancelled;
(4) the information regarding the online poll is supplemented or amended.

Article 10 In the event that the Company adopts the cumulative voting mechanism for the election of its directors, the candidates shall be listed in the notice of the general meeting according to the following categories for the poll:

(1) Candidates of non-independent directors;
(2) Candidates of independent directors.

Article 11 When the Company submits the announcements disclosing the provisions of Article 8 and Article 9 of the Rules through the information disclosure electronic system designated by the stock exchanges on which the Company’s shares are listed, the Company shall verify, confirm and guarantee the accuracy and completeness of the information regarding the online poll.

Article 12 The Company shall provide the information company with data of all the shareholders registered on the record date, including their names, account numbers, numbers of shares they hold two trading days before the general meeting in convened.

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There shall be at least two trading days between the general meeting record date and the starting date of the online poll.

Article 13 The Company shall log onto the company information service platform designated by the stock exchanges on which the Company’s shares are listed to re-verify and re-confirm the accuracy and completeness of the information regarding the online poll one trading day before the starting date of the poll at the general meeting.

Article 14 The following persons holding the shares in the name of others who are required to seek advice from the actual shareholders in advance pursuant to the provisions of the relevant Rules may commission the information company to request such shareholders to indicate how they wish to vote on the matters to be considered at the general meeting through the vote indications request system of the general meeting:

(1) Securities companies which hold client credit trading guarantee securities accounts for margin trading;
(2) CSF which holds guarantee securities account for refinancing;
(3) Qualified foreign institutional investors (QFII);
(4) Hong Kong Securities Clearing Company Limited (the ‘‘HKSCC’’);
(5) Other persons holding shares in the name of others recognized by China Securities Regulatory Commission and the stock exchanges on which the Company’s shares are listed.

The advice-seeking hours are from 9:15 to 15:00, one trading day before the starting date of the voting at the general meeting (seeking date).

CHAPTER 3 METHODS AND PROCEDURE OF ONLINE VOTING

Article 15 In the event that the Company adopts the online voting system designated by the stock exchanges on which the Company’s shares are listed to provide shareholders with online voting, the on-site general meeting shall be convened on the trading day of the stock exchanges on which the Company’s shares are listed.

Article 16 In the event that the shareholders of the Company vote online through the voting platform designated by the stock exchanges on which the Company’s shares are listed, the shareholders can vote online through logging onto the trading terminal of the designated securities company.

The period for online voting conducted on the voting platform designated by the stock exchanges on which the Company’s shares are listed is the trading period of such stock exchanges on the date of the general meeting.

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Article 17 In the event that the shareholders of the Company vote on the Internet voting platform designated by the stock exchanges on which the Company’s shares are listed, the shareholders can log onto the Internet voting platform designated by the stock exchanges on which the Company’s shares are listed and vote online after authentication.

The online voting hours through the Internet voting platform designated by the stock exchanges on which the Company’s shares are listed are from 9:15 to 15:00 on the date of the general meeting.

Article 18 For shareholders with multiple shareholder accounts, the voting rights they are entitled to are the sum of the number of ordinary shares of the same category and the number of preferred shares of the same variety held in all shareholder accounts in their names.

Article 19 The Company confirms if multiple shareholder accounts are held by the same shareholder according to the following information provided by the securities depository and clearing corporation:

(1) The information of the Yimatong securities account;
(2) The name of the shareholders;
(3) Valid identification number.

For the registered information stipulated aforementioned, the information stated on the record date will prevail.

Article 20 Other than the cumulative voting mechanism, the general meeting shall vote on all the resolutions one by one. In event of different resolutions on the same matter, the resolutions shall be voted on in an order of their proposed time.

The shareholders who attend the general meeting shall vote for or against or abstain from voting on the submitted resolutions, except the persons who hold shares in the name of others in Article 14 of the Rules shall exercise their voting rights according to the wishes on how to vote on the same resolution as collected from the actual shareholders.

Article 21 Shareholders with multiple shareholder accounts may vote online through any one of their shareholder accounts. After voting, the ordinary shares of the same class and the preferred shares of the same variety held under all of their shareholder accounts shall be deemed to have cast a vote of the same opinion respectively.

For shareholders with multiple shareholder accounts who repeatedly vote through multiple shareholder accounts, the first voting result from the shares of all classes and varieties shall prevail for the ordinary shares of the same class and the preferred shares of the same variety held under all of their shareholder accounts.

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Article 22 Shareholders who attend the general meeting are entitled to votes of the same number as the number of director candidates under each resolution group for every share held by them for resolutions adopting the cumulative voting mechanism. The shareholders may cast all their votes on one candidate or split them on a few candidates.

Shareholders shall vote up to a limit of the number of votes in each resolution group. In the event that the number of votes cast by the shareholder exceeds the number of the votes he/she holds, or the shareholder casts votes in a number exceeding the number of candidates in the competitive election, the vote on such resolution shall be deemed invalid.

Shareholders with multiple shareholder accounts may vote online through any one of their accounts. The number of votes they are entitled to is calculated on the basis of the total shares of the same class under all of their shareholder accounts.

Article 23 The securities companies and CSF stipulated in Article 14 of the Rules who exercise their voting rights as persons holding shares in the name of other persons through the online voting system designated by the stock exchanges on which the Company’s shares are listed are required to exercise their voting rights on the margin trading and refinancing voting platforms by the information company. The voting hours are from 9:15 to 15:00 on the date of the general meeting.

Article 24 The qualified foreign institutional investors and HKSCC stipulated in Article 14 of the Rules who exercise their voting rights as persons holding shares in the name of other persons through the online voting system designated by the stock exchanges on which the Company’s shares are listed shall see the detailed operation of their voting comply with other provisions set forth by the stock exchanges on which the Company’s shares are listed.

Article 25 If a shareholder casts a repeated vote on-site and online in the online voting platform as designated by the stock exchanges on which the Company’s shares are listed or by other means, the former vote shall prevail.

CHAPTER 4 STATISTICS AND INQUIRY OF THE ONLINE VOTING RESULTS

Article 26 Shareholders who vote online for parts of the resolutions considered at the general meeting are deemed to have attended the general meeting, and the number of voting rights they hold is included in the number of voting rights held by the shareholders who attend the general meeting. For resolutions that the shareholder has yet to vote on or vote without following the provisions of the Rules, the number of voting rights held by him/her shall be counted as abstention.

Article 27 Upon the completion of the online poll of the general meeting, the information company shall submit the online poll results and other details to the Company after obtaining the online voting data from the online voting system designated by the stock exchanges on which the Company’s shares are listed.

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The information company commissioned by the Company to combine the voting results from the on-site and online polls shall have the data of the on-site poll sent in a timely manner by the Company. After the information company completes the combination of statistics, it shall submit the online voting statistics, on-site voting statistics, combined voting statistics and the relevant details to the Company.

Article 28 The information company shall provide the Company with all the voting records for the Company to compile statistics on the poll results at the general meeting according to the relevant provisions, Articles of Association of the Company and the counting principles disclosed in the notice of the general meeting if:

(1) the shareholders who should avoid voting or promise to discard their voting rights have voted online;
(2) the general meeting has different proposals on the same matter;
(3) the shareholders who hold preferred shares have voted online.

Article 29 In the event that the Company shall combine and disclose the statistics of the attendance and voting of the shareholders of ordinary shares and preferred shares, shareholders of domestic shares and foreign shares as well as the small and medium-sized investors, the Company may commission the information company to provide the corresponding statistics service.

Article 30 The Company and the lawyers commissioned by the Company shall confirm that the counting of votes comply with the relevant regulations and finalize the poll results on such basis. Disputes regarding the voting statistics should be raised to the stock exchanges on which the Company’s shares are listed and the information company.

Article 31 Upon the conclusion of the general meeting, the convener shall prepare the announcement of the resolution of the general meeting according to the Articles of Association of the Company and Article 5 of the Rules, and disclose it in a timely manner.

Where the general meeting considers significant matters affecting the interests of the small and medium-sized investors, the voting of other shareholders shall be treated individually when compiling the statistics and disclosed in the announcement of the resolution of the general meeting, except the voting of the following shareholders:

(1) The directors, supervisors and senior management personnel of the Company;
(2) Shareholders who hold 5% or more of the Company’s shares individually or collectively.

Article 32 From the second day upon the completion of the on-site poll at the general meeting, the shareholders may check their valid voting results on the information company’s website in a manner stipulated by the website.

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CHAPTER 5 SUPPLEMENTARY PROVISIONS

Article 33 Upon approval at the general meeting, these Rules will take effect on the day on which the Company’s Renminbi ordinary shares (A Shares) are listed and traded.

Article 34 The Rules are subject to the Board’s interpretation.

Article 35 Any matters not mentioned in the Rules shall be settled according to the relevant supervision rules of the relevant law, regulations, listing rules of the stock exchanges on which the Company’s shares are listed, guidelines and provisions of the ‘‘Articles of Association of the Company’’. In event of conflicts between the Rules and the relevant supervision rules of the relevant law, regulations, listing rules of the stock exchanges on which the Company’s shares are listed, guidelines and provisions of the ‘‘Articles of Association of the Company’’, the relevant supervision rules of the relevant law, regulations, listing rules of the stock exchanges on which the Company’s shares are listed, guidelines and provisions of the ‘‘Articles of Association of the Company’’ shall apply, and the Rules shall be amended correspondingly and expeditiously for the approval of the general meeting.

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LETTER OF UNDERTAKING RELATING TO REPURCHASE OF NEW A SHARES AND REPARATION

APPENDIX XIV

According to the laws and regulations and policy requirements, Dynagreen Environmental Protection Group Co., Ltd. (hereinafter refer to as the ‘‘Company’’) has made the following undertaking on statements and representations as sets out in the prospectus:

If the prospectus of Dynagreen Environmental Protection Group Co., Ltd. has any false statements, misleading statements or material omission, or has any material or substantial impact on judging whether the Company shall comply with the requirements of the laws and regulations, the Company shall repurchase all new A share under the initial public offering according to the law. The Company will repurchase all new A shares through legal methods (such as offers), and the repurchase price for A shares shall be no less than the price of new A shares under this new share issue plus interest of demand deposits of the bank from the date of the listing to the issue date of repurchase offer. If there are any false statements, misleading representations or material omissions, causing investors suffering loss in security transactions, the Company will assume civil compensation responsibility to compensate the loss of investors according to relevant laws and regulations. The amount for the loss of compensation shall be limited to the direct actual loss occurred, excluding indirect loss. Specific compensation standards, compensation subject scope, compensation amount and other details, when actual situation above occurs, subject to the final determined compensation plan or effective decision by judicial institutions.

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LETTER OF UNDERTAKING IN RESPECT OF THE PERFORMANCE OF VARIOUS UNDERTAKINGS

APPENDIX XV

Regarding the performance of various undertakings of Dynagreen Environmental Protection Group Co., Ltd. (hereinafter referred to as the ‘‘Company’’ or the ‘‘Issuer’’) during the course of the initial public offering and listing of A Shares of the Company, the Company hereby undertakes as follows:

(1) If the responsible parties of the Issuer and its controlling shareholders, directors, supervisors and senior management of the Company do not perform the matters that they have undertaken publicly, the Company shall make an announcement to inform the situations within 5 trading days after the non-performance of the undertaking is confirmed. The time of confirmation of the above matters shall be the earlier of:
The time when the CSRC, the stock exchanges and other regulatory authorities make the confirmation;
The time when the sponsor makes the confirmation;
The time when the independent directors make the confirmation;
The time when the supervisory committee makes the confirmation;
The time when the key management become or should be aware.
(2) If the Company does not perform the matters that they have undertaken in public, the Company shall make an announcement to inform the situations within 5 trading days after the non-performance of undertaking is confirmed, the legal representative of the Company will make an explanation openly and apologize to the investors in the newspaper designated by the CSRC.
(3) If the controlling shareholders of the Company do not perform the matters that they have publicly undertaken, the Company shall make an announcement to inform the situations within 5 trading days after the non-performance of undertaking is confirmed, the Company shall procure the controlling shareholders and ultimate controlling persons to make an explanation openly and apologize to the investors in the newspaper designated by the CSRC. If the Company distributes dividends to the shareholders in the year when the fact is confirmed, the controlling shareholders shall voluntarily yield up their dividends to the Company for custody as a guarantee for performing the undertaking. If the dividend distribution of that year is completed, the controlling shareholders shall voluntarily give their dividends of the next year to the Company for custody as a guarantee for performing the undertaking.
(4) If the directors, supervisors and senior management of the Company do not perform the matters that they have undertaken in public, the Company shall adopt the deduction of performance remuneration, salary cut, demotion, job suspension, dismissal and other punishment of those directors, supervisors and senior management staff who have not performed their undertaking.
(5) The Company will disclose the situations of the performance of the matters that its controlling shareholders, directors, supervisors and senior management staff have undertaken in public and the situations of the remedies and corrections when such undertakings are not performed.

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APPENDIX XVI

The Company intends to apply for the initial public offering and listing of Renminbi ordinary shares (A shares). In accordance with the Opinions of the General Office of the State Council on Further Strengthening the Protection of Legitimate Rights and Interests of Small and Medium-Sized Investors in Capital Market (Guo Ban Fa [2013] No. 110), the Several Opinions of the State Council on Further Promoting the Healthy Development of Capital Market (Guo Fa [2014] No. 17), the Guiding Opinions on Matters Relating to the Diluted Immediate Returns Arising from Initial Public Offering, Refinancing and Major Asset Restructuring ([2015] No. 31) published by the CSRC and other relevant regulations, in order to protect the interests of small and medium-sized investors, the Company hereby illustrates the impact of the diluted immediate return on the Company’s main financial indicators as a result of the initial public offering of A shares and the measures to be adopted by the Company:

(I) EARNINGS PER SHARE OF THE COMPANY BEFORE AND AFTER THE INITIAL PUBLIC OFFERING OF A SHARES

Earnings per share of the Company before initial public offering of A shares

	Earnings per share	Earnings per share
		(RMB/share)
Profit during the reporting period	2015	2014	2013
Net profit attributable to the ordinary shareholders
of the Company	0.22	0.16	0.22
Net profit attributable to the ordinary shareholders
of the Company after extraordinary profit or loss	0.18	0.15	0.19

2. Earnings per share of the Company after initial public offering of A shares

Currently, the total share capital of the Company is 1,045,000,000 shares. The number of new shares proposed to be issued pursuant to this initial public offering of A shares will be 116.20 million shares. After the issuance is completed, the Company’s total share capital and equity attributable to shareholders of the parent company will be increased. The anticipated benefits of projects using the proceeds may not be fully realized in the short time as the construction and operation of such projects requires some time. In addition, the earnings per share of the Company will be diluted in the short term as a result of the increase in the share capital and net assets of the Company upon the receipt of the proceeds.

(II) THE NECESSITY AND RATIONALE OF THIS INITIAL PUBLIC OFFERING OF A SHARES PROPOSED BY THE BOARD

As a leading enterprise in the waste-to-energy industry in the PRC, the Company is among the first to engage in the industrial application of waste treatment in the PRC, and one of the earliest enterprises to build, upgrade and further develop advanced international incinerator technologies for waste treatment in the PRC. In addition to the listing of its H shares, the Company aims to achieve

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APPENDIX XVI

the dual-listing of its A shares in the PRC and H shares in Hong Kong by being listed domestically, thus establishing synergetic capital platforms at home and abroad, improving brand awareness and satisfying the funding needs for development through abundant financial instruments.

Capitalizing on the listing of its A shares, the Company will introduce strategic investors to support the long-term development of its business, and further improve operational transparency and efficiency of decision making by optimizing its corporate systems and corporate governance structure in compliance with domestic and overseas requirements and strengthening information disclosure and corporate social responsibility.

The Company has a sound business layout, remarkable performance of principal business and strong profitability, and has established relatively robust corporate systems and corporate governance structure to satisfy domestic and overseas regulatory requirements. The general meetings, the Board and the Supervisory Committee have executed their rights and performed their obligations in strict compliance with relevant laws and regulations to standardize their operations. The Company has achieved steady growth of business results attributable to its clear shareholding structure, stringent and standardized management, and efficient and orderly operations. Asset size, financial indicators and other conditions of the Company have met the requirements for the issuance and listing of A shares.

(III) RELATION BETWEEN PROJECTS USING THE PROCEEDS AND EXISTING BUSINESS OF THE COMPANY, AND DETAILS OF STAFF, TECHNOLOGY, MARKET AND OTHER PREPARATIONS FOR SUCH PROJECTS

1. Relation between projects using the proceeds and existing business of the Company

As a leading WTE enterprise in the PRC, the Company focuses on the treatment of municipal solid waste and its principal business includes investment, technical consulting, construction, operation and maintenance of WTE plants treating municipal solid waste. The Company was honored as one of the top ten influential enterprises in the PRC solid waste treatment industry in 2012 by solidwaste.com.cn. The Company’s project operation and project construction services primarily involve in the construction and operations of WTE projects on a BOT basis for local municipal authorities in small and medium-sized PRC cities.

The proceeds will be invested in Tianjin Ninghe Straw-fired Power Project, Tianjin Ninghe Biomass Power Project and Bengbu WTE Project based on the priority of each project and will be used to replenish the working capital of the Company to carry out its principal business.

Attributable to the substantial increase in the need for environmentally sustainable municipal solid waste treatment, the PRC government has adopted various policies favouring the WTE industry, bringing about significant opportunities for the business development and expansion of the Company. The proceeds raised from the initial public offering of A shares

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APPENDIX XVI

will enhance the scale of production and operations and the research and development capabilities of the Company, thus comprehensively strengthening its core competitiveness, reducing financing pressure and increasing market share.

2. Details of staff, technology, market and other preparations for the Company’s projects using the proceeds

The Company is among the first to explore industrial application for waste treatment in the PRC, and has developed WTE technologies well suited to the PRC waste treatment market based on more than ten years of practical experience in the PRC, specifically tailoring widely employed international incinerator technologies for the typical composition of municipal solid waste in the PRC. The ‘‘multiple drive expeller grate waste incinerator’’ technology of the Company has been selected by the Ministry of Housing and Urban-Rural Development of the PRC as a core industrial technology to promote for use. The Company has efficient and reliable technologies and generate emissions which are significantly below the current limits of national emission standards.

The projects of the Company have a broad geographic coverage encompassing the Yangtze River Delta regions, Bohai economic rim and the Pearl River Delta region, in addition to Hubei, Guizhou and Shanxi provinces. The technologies and operations of the Company have met international standards, and the Company is the first in the WTE industry of the PRC to receive accreditation under the Clean Development Mechanism of the United Nations.

The senior management team of the Company has extensive experience in business management, market development, technology development and the construction, operation and management of WTE plants, combined with an in-depth understanding of the PRC waste treatment industry. The president of the Company, Mr. Qiao Dewei, was recognized as an environmental governance industry leader in a 2011 survey of the top 100 industry leaders in Shenzhen. The majority of the management has been working together for nearly ten years. Under the guidance of the senior management team, the Company has benefitted significantly from the accumulated expertise and hands-on experience of the highly qualifies technical personnel which ensure the competitive edge in project quality and in research and development. The strong management team will enable the Company to continue to improve the operational efficiency, the product quality and the ability to satisfy the requirements of clients.

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APPENDIX XVI

(IV) RECOVERY MEASURES ON THE DILUTED IMMEDIATE RETURN

To recover the probable decrease in the immediate return of investors resulting from the initial public offering and the listing of the Company, the Company has undertaken to improve its profitability and minimize the impact of the issuance and listing of shares on the earnings per share by implementing the following measures:

1. Expediting business expansion to improve profitability of the Company

Capitalizing on the overall competitive advantage built on its existing business, the Company will, in line with the national policies, expand the WTE business by strengthening its core competencies of research and development as well as innovation, and enhance brand value and brand influence to reinforce its leading in the WTE industry and increase market share, thus improving the profitability of the Company.

2. Enhancing the overall management capabilities of the Company to improve the utilization of capital

To improve operational efficiency and profitability, the Company will take measures to enhance the utilization of capital by strengthening budget management and reducing fees and expenses, comprehensively and effectively controlling the operational and management risks of the Company. In addition, the Company will optimize its remuneration and incentive mechanisms, recruit talents from the market, stimulate the enthusiasm of employees to the full extent, and increase the creating awareness of employees to unleash their creativity. By implementing aforesaid measures, the Company will comprehensively enhance its operational efficiency, cut the cost and further improve its business results.

3. Accelerating the projects using the proceeds and strengthening proceeds management

Projects using the proceeds raised from the issuance of shares of the Company are in line with national industrial policies and corporate development strategies, and therefore have promising market potential and economic benefits. Taking into account its actual situations and needs, the Company will proactively push forward the construction of the projects using the proceeds, commence the operations of the projects on schedule to realize expected profit and increase project revenues and shareholder return, so as to reduce the risk of diluted immediate shareholder return arising from the issuance. The Company will strictly comply with the relevant laws and regulations in relation to the management and use of raised fund by depositing the proceeds into the bank account designated by the Board and using them for designated purpose, and tighten up the management and use of the proceeds to ensure full and effective use of them.

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APPENDIX XVI

4. Optimizing profit distribution mechanism to increase investors’ return

The Company has formulated the Future Dividend Return Plan for Shareholders of Dynagreen Environmental Protection Group Co., Ltd. in pursuant to the relevant regulations set out by the CSRC to define the principles, forms, conditions, proportion, decision-making procedures and mechanism, and other matters of dividend distribution, hence establishing a relatively comprehensive profit distribution system. In the future, the Company will further optimize the profit distribution mechanism in accordance with the requirements of the CSRC and the actual situations of the Company to increase investors’ return.

(V) UNDERTAKINGS OF RELEVANT RESPONSIBLE BODIES

Undertakings given by directors and senior management of the issuer in relation to recovery measures on the diluted immediate return

Directors and senior management of the issuer have undertaken that:

(1) they shall not transfer benefits to other enterprises or individuals at nil consideration or under unfair terms, nor shall they jeopardize the interest of the Company by other means;
(2) they shall fully support and cooperate in the Company’s regulation of duty-related spending of directors and senior management, and shall ensure that all their dutyrelated spending is within their duties and responsibilities; they are subject to stringent supervision of the Company to avoid waste or excessive spending;
(3) they shall abide by the relevant laws and rules, regulations set out by the regulatory authorities including the CSRC and the stock exchanges, and conduct code set out in the articles of association, and shall not appropriate the Company’s assets for investment or consumption irrelevant to their duties;
(4) they shall exercise their best efforts to facilitate the implementation of the Company’s recovery measures on the diluted immediate return;
(5) they shall procure the remuneration system formulated by the Board or the remuneration committee to be correlated with the implementation of the Company’s recovery measures on the diluted return, and shall vote for the resolutions regarding such system to be considered by the Board or the general meetings (if they are entitled to vote or have voting rights);
(6) in the event of any share option incentive scheme to be implemented by the Company in the future, they shall procure the conditions for exercising options under such scheme to be correlated to the implementation of the Company’s recovery measures on the diluted return, and shall vote for the resolutions regarding such scheme to be considered by the Board or the general meetings (if they are entitled to vote or have voting rights);

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APPENDIX XVI

(7) in the event of any violation of aforesaid undertakings, they shall explain and apologize at the general meetings and on the newspapers specified by the CSRC; they are willing to accept the self-regulatory measures imposed by the stock exchanges and the industrial association that the Company joins in; they shall be liable for all the losses suffered by the Company or shareholders arising from the violation of undertakings.
Undertakings given by controlling shareholders and actual controller in relation to recovery measures on the diluted immediate return

Controlling shareholders and Beijing State-owned Assets Management Co., Ltd., the actual controller of the issuer have undertaken that:

(1) in any event, they shall not abuse their positions as controlling shareholders or the actual control, and shall not exceed their powers to interfere in operation and management of the Company; and they shall not misappropriate the interest of the Company.
(2) they shall perform their obligations of controlling shareholders or actual controller, faithfully and diligently perform their duties, and safeguard the legitimate rights and interest of the Company.
(3) they shall not transfer benefits to other enterprises or individuals at nil consideration or under unfair terms, nor shall they jeopardize the interest of the Company by other means.
(4) they shall abide by the budget management of the Company; they shall ensure that all their duty-related spending is within their duties and responsibilities; they are subject to stringent supervision of the Company to avoid waste or excessive spending.
(5) they shall not appropriate the Company’s assets for investment or consumption irrelevant to their duties.
(6) they shall exercise their best efforts to facilitate the implementation of the Company’s recovery measures on the diluted immediate return.
(7) they shall procure the remuneration system formulated by the Board or the remuneration committee to be correlated to the implementation of the Company’s recovery measures on the diluted return.
(8) they shall procure the conditions for exercising options under the share option incentive scheme proposed by the Company in the future (if any) to be correlated to the implementation of the Company’s recovery measures on the diluted return.

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APPENDIX XVI

(9) they shall support and vote for the resolutions regarding an item to be correlated to the implementation of the Company’s recovery measures on the diluted return (if they are entitled to vote).
(10) from the date on which the aforesaid undertakings are given, in the event that additional requirements are imposed by the regulatory authorities on the regulations concerning recovery measures on diluted return and related undertakings and the aforesaid undertakings fall short of meeting such requirements, they shall give supplementary undertakings in accordance with such requirements.
(11) in the event of any violation of aforesaid undertakings, they shall explain and apologize at the general meetings and on the newspapers specified by the CSRC; they are willing to accept the self-regulatory measures imposed by the stock exchanges and the industrial association that the Company joins in; they shall be liable for all the losses suffered by the Company or shareholders arising from the violation of undertakings in accordance with laws.

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CONNECTED TRANSACTIONS OF THE COMPANY IN 2013, 2014 AND 2015

APPENDIX XVII

Connected transactions of Dynagreen Environmental Protection Group Co., Ltd. in 2013, 2014 and 2015 are as follows:

An entrusted loan was obtained from Beijing Venture Capital Co., Ltd. in October 2013, which amounted to RMB200 million for a term of 6 months from 9 October 2013 to 9 April 2014 bearing interest at 5.6%. Such loan was repaid on schedule with interest paid amounting to RMB5,662,222.22 in April 2014.
An entrusted loan amounting to RMB210 million was repaid to Beijing State-Owned Assets Management Co., Ltd. in June 2013. Such loan was borrowed in December 2012 for a term of 6 months bearing interest at the benchmark rate. An entrusted loan amounting to RMB210 million was obtained from Beijing State-Owned Assets Management Co., Ltd. in June 2013 for a term of 1 year from 28 June 2013 to 28 June 2014 bearing interest at the benchmark rate. Such loan was prepaid in December 2013. Loan interest of RMB12,207,041.10 was paid to Beijing State-Owned Assets Management Co., Ltd. in 2013.
A loan was obtained from Beijing State-Owned Assets Management Co., Ltd. in August 2015, which amounted to RMB100 million for a term of 1 year from 3 August 2015 to 3 August 2016 bearing interest at 4.85%. Such loan was prepaid in December 2015 with interest paid amounting to RMB1,940,000.00.
Changzhou Project Company paid various expenses to Changzhou Zhengyuan Environmental Protection Resources Utilization Co., Ltd. from 2013 to 2015 as follows:

	Management	Slag treatment	Gas supply
Item	fee	fee	service fee
2013	1.00 million	2.50 million	820,000
2014	1.00 million	2.50 million	1.27 million
2015	1.00 million	2.50 million	1.55 million

Beijing State-Owned Assets Management Co., Ltd. provided guarantee for a loan of the Company of 622.99 million from the Asian Development Bank for a term of 10 years in December 2013.

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BIOGRAPHY OF MR. GUO YITAO

APPENDIX XVIII

Mr. Guo Yitao (‘‘Mr. Guo’’), aged 43, has served as the business manager of the strategy development department, senior business manager of the strategy development department (legal affairs), vice president and general manager of the strategy development department and general manager of the strategy management and the strategy development department of Beijing Stateowned Assets Management Co., Ltd. since March 2005. Mr. Guo served as a clerk, senior clerk and office senior clerk of the Finance Bureau of Huidian District, Beijing from July 1996 to July 2001. Mr. Guo served as an analyst of the investment research centre, senior investment manager of investment department and senior analyst of investment research center of Hongyuan Securities Co., Ltd. between August 2001 and March 2005.

Mr. Guo graduated from Beijing Forestry University and obtained a bachelor degree in accounting in July 1993. He obtained a master degree in financial accounting in July 1996 and obtained a PhD degree in forestry economic management in July 2010.

Mr. Guo does not hold any position in the Company or any of its subsidiaries.

Mr. Guo currently does not receive any remuneration from the Company. After Mr. Guo becomes a non-executive director, he will not receive any remuneration of the Company in 2016.

Save as disclosed in this Circular, to the knowledge of the Directors, Mr. Guo does not hold any directorship in other public companies, the securities of which are listed on any securities market in Mainland China, Hong Kong or overseas in the last three years, nor does he have any relationship with any Director, the substantial shareholder or the senior management of the Company. Mr. Guo does not have any interest in the shares of the Company or its associated companies within the meaning of Part XV of the Hong Kong Securities and Futures Ordinance.

Save as disclosed above, there is no other information in relation to the appointment of Mr. Guo that needs to be disclosed pursuant to any of the requirements set out in Rule 13.51(2) (h) to (v) of the Hong Kong Listing Rules, nor are there any other matters that need to be brought to the attention of the shareholders of the Company. Mr. Guo has not been penalized by the China Securities Regulatory Commission or other relevant departments or stock exchanges.

The term of the above proposed appointment shall be three years commencing from the approval of his appointment at the EGM.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

綠色動力環保集團股份有限公司 Dynagreen Environmental Protection Group Co., Ltd.[*]

(a joint stock limited liability company incorporated in the People’s Republic of China)

(Stock Code: 1330)

NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING FOR THE YEAR 2016

NOTICE IS HEREBY GIVEN that the First Extraordinary General Meeting for the year 2016 (the ‘‘EGM’’) of Dynagreen Environmental Protection Group Co., Ltd.* (the ‘‘Company’’) will be held at 16th Floor, Block B, Fukai Building, No.19 Finance Street, Xicheng District, Beijing, the PRC on Monday, 18 April 2016 at 10:00 a.m. for the purposes of considering and, if deemed appropriate, approving the following resolutions. In this notice, unless the context otherwise requires, capitalized terms used herein shall have the same meanings as defined in the Company’s circular (the ‘‘Circular’’) dated 3 March 2016.

RESOLUTIONS TO BE CONSIDERED AND APPROVED AT THE EGM

As special resolutions

Resolution on the application for the initial public offering and listing of RMB ordinary shares (A shares)
Resolution on the use of proceeds from the initial public offering of A shares
Resolution on the authorization to the board of directors to deal with matters relating to the issue and listing of A shares by the Company in its absolute discretion
Resolution on the plan on distribution of accumulated and undistributed profits before the initial public offering of A shares
Resolution on the amendments to the Articles of Association (Draft) of Dynagreen Environmental Protection Group Co., Ltd.

As ordinary resolutions

Resolution on the feasibility of proposed investment projects
Resolution on the formulation of the Company Share Price Stabilization Measures for the Three Years after Listing of the Shares of the Company

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Resolution on the letter of undertaking relating to repurchase of new A shares and reparation
Resolution on the letter of undertaking in respect of the performance of various undertakings
Resolution on the three-year shareholders’ profit distribution plan
Resolution on the remedial measures for dilution of current returns
Resolution on the Administrative Regulations of Use of Proceeds (Draft) of Dynagreen Environmental Protection Group Co., Ltd.
Resolution on the Administrative Rules for Connected Transactions (Draft) of Dynagreen Environmental Protection Group Co., Ltd.
Resolution on the Regulations of External Guarantee (Draft) of Dynagreen Environmental Protection Group Co., Ltd.
Resolution on the Administrative Regulations of Information Disclosure (Draft) of Dynagreen Environmental Protection Group Co., Ltd.
Resolution on the Administrative Rules of Investor Relations (Draft) of Dynagreen Environmental Protection Group Co., Ltd.
Resolution on the Implementation Rules for Online Voting (Draft) of Dynagreen Environmental Protection Group Co., Ltd.
Resolution on the ratification of the connected transactions of the Company for 2013, 2014 and 2015
Resolution on the appointment of a director of the Company

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Details of the above resolutions proposed at the EGM are contained in the Circular, which is available on the website of Hong Kong Exchanges and Clearing Limited (www.hkex.com.hk) and the website of the Company (www.dynagreen.com.cn).

By Order of the Board

Dynagreen Environmental Protection Group Co., Ltd.* Zhi Jun Chairman

Shenzhen, PRC

3 March 2016

As at the date of this notice, the non-executive Directors are Mr. Zhi Jun, Ms. Sun Jing, Mr. Liu Shuguang and Mr. Ma Xiaopeng, the executive Directors are Mr. Qiao Dewei and Mr. Hu Shengyong and the independent non-executive Directors are Ms. Chen Xin, Mr. Kwan Kai Cheong and Mr. Ou Yuezhou.

Notes:

ATTENDEES OF THE EGM

1. Eligibility for attending the EGM

For the purpose of ascertaining Shareholders who are entitled to attend and vote at the EGM, the H Share register of members of the Company will be closed from Saturday, 19 March 2016 to Monday, 18 April 2016 (both days inclusive). Holders of H Shares who wish to attend the EGM shall lodge their share certificates accompanied with the transfer documents to the H Share Registrar of the Company, Tricor Investor Services Limited (address: Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong), before 4:30 p.m. on Friday, 18 March 2016 for registration.

2. Proxy

(a) A member eligible to attend and vote at the EGM is entitled to appoint, in written form, one or more proxies to attend and vote on its behalf. A proxy need not be a shareholder of the Company.
(b) A proxy should be appointed by a written instrument signed by the appointer or its attorney duly authorized in writing. If the form of proxy is signed by the attorney of the appointer, the power of attorney authorizing that attorney to sign or the authorization document(s) must be notarized.
(c) To be valid, the power of attorney or other authorization document(s) which have been notarized together with the completed form of proxy must be delivered to the place of business or H Share Registrar of the Company. In the case of holders of Domestic Shares, the related documents should be sent to the place of business, 2nd Floor, Northeastern Wing, Jiuzhou Electronic Building, 007 Keji South 12th Street, Nanshan District, Shenzhen, the PRC (or via fax no.: (+86) 755 3363 1220), and in the case of holders of H Shares, the related documents should be sent to Tricor Investor Services Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, not less than 24 hours before the time designated for holding of the EGM.
(d) A Shareholder or his proxy may exercise the right to vote by poll.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Registration procedures for attending the EGM
(a) A Shareholder or his proxy shall produce proof of identity when attending the meeting. If a Shareholder is a legal person, its legal representative or other persons authorized by the board of directors or other governing body of such Shareholder, he/she may attend the EGM by producing a copy of the resolution of the board of directors or other governing body of such Shareholder appointing such persons to attend the meeting.
(b) Holders of H Shares and Domestic Shares intending to attend the EGM should return the reply slip and the related documents for attending the EGM to the Company on or before Monday, 28 March 2016.
(c) Shareholder may send the above reply slip to the Company in person, by post or by fax. In the case of holders of Domestic Shares, the reply slip and the related documents should be sent to the Company, 2nd Floor, Northeastern Wing, Jiuzhou Electronic Building, 007 Keji South 12th Street, Nanshan District, Shenzhen, the PRC (or via fax no.: (+86) 755 3363 1220), and in the case of holders of H Shares, the related documents should be sent to Tricor Investor Services Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

4. Miscellaneous

(a) The EGM will not last for more than half a day. Shareholders who attend the EGM in person or by proxy shall bear their own travelling and accommodation expenses.
(b) The address of the Share Registrar of H Shares of the Company, Tricor Investor Services Limited is at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(c) The registered office of the Company is at:

2nd Floor Northeastern Wing, Jiuzhou Electronic Building, 007 Keji South 12th Street, Nanshan District, Shenzhen, the PRC

Post Code: 518057 Telephone No.: (+86) 755 3363 1256 Facsimile No.: (+86) 755 3363 1220

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NOTICE OF CLASS MEETING FOR HOLDERS OF H SHARES

綠色動力環保集團股份有限公司 Dynagreen Environmental Protection Group Co., Ltd.[*]

(a joint stock limited liability company incorporated in the People’s Republic of China)

(Stock Code: 1330)

NOTICE OF THE FIRST CLASS MEETING FOR HOLDERS OF H SHARES FOR THE YEAR 2016

NOTICE IS HEREBY GIVEN that the First Class Meeting for Holders of H Shares for the year 2016 (the ‘‘Class Meeting for Holders of H Shares’’) of Dynagreen Environmental Protection Group Co., Ltd.* (the ‘‘Company’’) will be held at 16th Floor, Block B, Fukai Building, No.19 Finance Street, Xicheng District, Beijing, the PRC on Monday, 18 April 2016 immediately after the conclusion of the Extraordinary General Meeting of the Company for the purposes of considering and, if deemed appropriate, approving the following resolutions. In this notice, unless the context otherwise requires, capitalized terms used herein shall have the same meanings as defined in the Company’s circular (the ‘‘Circular’’) dated 3 March 2016.

RESOLUTIONS TO BE CONSIDERED AND APPROVED AT THE CLASS MEETING FOR HOLDERS OF H SHARES

As special resolutions

Resolution on the application for the initial public offering and listing of RMB ordinary shares (A shares)
Resolution on the use of proceeds from the initial public offering of A shares
Resolution on the authorization to the board of directors to deal with matters relating to the issue and listing of A shares by the Company in its absolute discretion
Resolution on the plan on distribution of accumulated and undistributed profits before the initial public offering of A shares

As ordinary resolutions

Resolution on the formulation of the Company Share Price Stabilization Measures for the Three Years after Listing of the Shares of the Company
Resolution on the letter of undertaking relating to repurchase of new A shares and reparation
Resolution on the letter of undertaking in respect of the performance of various undertakings

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NOTICE OF CLASS MEETING FOR HOLDERS OF H SHARES

Resolution on the three-year shareholders’ profit distribution plan

Details of the above resolutions proposed at the Class Meeting for Holders of H Shares are contained in the Circular, which is available on the website of Hong Kong Exchanges and Clearing Limited (www.hkex.com.hk) and the website of the Company (www.dynagreen.com.cn).

By Order of the Board

Dynagreen Environmental Protection Group Co., Ltd.* Zhi Jun Chairman

Shenzhen, PRC

3 March 2016

Notes:

ATTENDEES OF THE CLASS MEETING FOR HOLDERS OF H SHARES

1. Eligibility for attending the Class Meeting for Holders of H Shares

For the purpose of ascertaining Shareholders who are entitled to attend and vote at the Class Meeting for Holders of H Shares, the H Share register of members of the Company will be closed from Saturday, 19 March 2016 to Monday, 18 April 2016 (both days inclusive). Holders of H Shares who wish to attend the Class Meeting for Holders of H Shares shall lodge their share certificates accompanied with the transfer documents to the H Share Registrar of the Company, Tricor Investor Services Limited (address: Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong), before 4:30 p.m. on Friday, 18 March 2016 for registration.

2. Proxy

(a) A member eligible to attend and vote at the Class Meeting for Holders of H Shares is entitled to appoint, in written form, one or more proxies to attend and vote on its behalf. A proxy need not be a shareholder of the Company.
(b) A proxy should be appointed by a written instrument signed by the appointer or its attorney duly authorized in writing. If the form of proxy is signed by the attorney of the appointer, the power of attorney authorizing that attorney to sign or the authorization document(s) must be notarized.
(c) To be valid, the power of attorney or other authorization document(s) which have been notarized together with the completed form of proxy must be delivered to the H Share Registrar or the place of business in Hong Kong of the Company. For holders of H Shares, the related documents should be sent to the H Share Registrar of the Company, Tricor Investor Services Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, or the place of business in Hong Kong of the Company, 1/F, Siu Ping Commercial Building, 104 Jervois Street, Sheung Wan, Hong Kong not less than 24 hours before the time designated for holding of the Class Meeting for Holders of H Shares.
(d) A Shareholder or his proxy may exercise the right to vote by poll.

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NOTICE OF CLASS MEETING FOR HOLDERS OF H SHARES

Registration procedures for attending the Class Meeting for Holders of H Shares
(a) A Shareholder or his proxy shall produce proof of identity when attending the meeting. If a Shareholder is a legal person, its legal representative or other persons authorized by the board of directors or other governing body of such Shareholder, he/she may attend the Class Meeting for Holders of H Shares by producing a copy of the resolution of the board of directors or other governing body of such Shareholder appointing such persons to attend the meeting.
(b) Holders of H Shares intending to attend the Class Meeting for Holders of H Shares should return the reply slip and the related documents for attending the Class Meeting for Holders of H Shares to the Company on or before Monday, 28 March 2016.
(c) Shareholder may send the above reply slip to the Company in person, by post or by fax. For holders of H Shares, the reply slip and the related documents should be sent to the H Share Registrar of the Company, Tricor Investor Services Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong or the place of business of the Company in Hong Kong, 1/F, Siu Ping Commercial Building, 104 Jervois Street, Sheung Wan, Hong Kong (or via fax no: (+86) 755 3363 1220).

4. Miscellaneous

(a) The Class Meeting for Holders of H Shares will not last for more than half a day. Shareholders who attend the Class Meeting for Holders of H Shares in person or by proxy shall bear their own travelling and accommodation expenses.
(b) The address of the Share Registrar of H Shares of the Company, Tricor Investor Services Limited is at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

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NOTICE OF CLASS MEETING FOR HOLDERS OF DOMESTIC SHARES

綠色動力環保集團股份有限公司 Dynagreen Environmental Protection Group Co., Ltd.[*]

(a joint stock limited liability company incorporated in the People’s Republic of China)

(Stock Code: 1330)

NOTICE OF THE FIRST CLASS MEETING FOR HOLDERS OF DOMESTIC SHARES FOR THE YEAR 2016

NOTICE IS HEREBY GIVEN that the First Class Meeting for Holders of Domestic Shares for the year 2016 (the ‘‘Class Meeting for Holders of Domestic Shares’’) of Dynagreen Environmental Protection Group Co., Ltd.* (the ‘‘Company’’) will be held at 16th Floor, Block B, Fukai Building, No.19 Finance Street, Xicheng District, Beijing, the PRC on Monday, 18 April 2016 immediately after the conclusion of the First Class Meeting for Holders of H Shares of the Company for the purposes of considering and, if deemed appropriate, approving the following resolutions. In this notice, unless the context otherwise requires, capitalized terms used herein shall have the same meanings as defined in the Company’s circular (the ‘‘Circular’’) dated 3 March 2016.

RESOLUTIONS TO BE CONSIDERED AND APPROVED AT THE CLASS MEETING FOR HOLDERS OF DOMESTIC SHARES

As special resolutions

Resolution on the application for the initial public offering and listing of RMB ordinary shares (A shares)
Resolution on the use of proceeds from the initial public offering of A shares
Resolution on the authorization to the board of directors to deal with matters relating to the issue and listing of A shares by the Company in its absolute discretion
Resolution on the plan on distribution of accumulated and undistributed profits before the initial public offering of A shares

As ordinary resolutions

Resolution on the formulation of the Company Share Price Stabilization Measures for the Three Years after Listing of the Shares of the Company
Resolution on the letter of undertaking relating to repurchase of new A shares and reparation
Resolution on the letter of undertaking in respect of the performance of various undertakings

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NOTICE OF CLASS MEETING FOR HOLDERS OF DOMESTIC SHARES

8. Resolution on the three-year shareholders’ profit distribution plan

Details of the above resolutions proposed at the Class Meeting for Holders of Domestic Shares are contained in the Circular, which is available on the website of Hong Kong Exchanges and Clearing Limited (www.hkex.com.hk) and the website of the Company (www.dynagreen.com.cn).

By Order of the Board Dynagreen Environmental Protection Group Co., Ltd.* Zhi Jun Chairman

Shenzhen, PRC

3 March 2016

Notes:

ATTENDEES OF THE CLASS MEETING FOR HOLDERS OF DOMESTIC SHARES

1. Eligibility for attending the Class Meeting for Holders of Domestic Shares

For the purpose of ascertaining Shareholders who are entitled to attend and vote at the Class Meeting for Holders of Domestic Shares, the domestic share register of members of the Company will be closed from Saturday, 19 March 2016 to Monday, 18 April 2016 (both days inclusive). Holders of domestic shares who wish to attend the Class Meeting for Holders of Domestic Shares shall lodge their share certificates accompanied with the transfer documents to the Company (address: 2nd Floor, Northeastern Wing, Jiuzhou Electronic Building, 007 Keji South 12th Street, Nanshan District, Shenzhen, 518057, the PRC (or via fax no.: (+86) 755 3363 1220), before 4:30 p.m. on Friday, 18 March 2016.

2. Proxy

(a) A member eligible to attend and vote at the Class Meeting for Holders of Domestic Shares is entitled to appoint, in written form, one or more proxies to attend and vote on its behalf. A proxy need not be a shareholder of the Company.
(b) A proxy should be appointed by a written instrument signed by the appointer or its attorney duly authorized in writing. If the form of proxy is signed by the attorney of the appointer, the power of attorney authorizing that attorney to sign or the authorization document(s) must be notarized.
(c) To be valid, the power of attorney or other authorization document(s) which have been notarized together with the completed form of proxy must be delivered to the Company at 2nd Floor, Northeastern Wing, Jiuzhou Electronic Building, 007 Keji South 12th Street, Nanshan District, Shenzhen, the PRC (or via fax no.: (+86) 755 3363 1220).
(d) A Shareholder or his proxy may exercise the right to vote by poll.

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NOTICE OF CLASS MEETING FOR HOLDERS OF DOMESTIC SHARES

Registration procedures for attending the Class Meeting for Holders of Domestic Shares
(a) A Shareholder or his proxy shall produce proof of identity when attending the meeting. If a Shareholder is a legal person, its legal representative or other persons authorized by the board of directors or other governing body of such Shareholder, he/she may attend the Class Meeting for Holders of Domestic Shares by producing a copy of the resolution of the board of directors or other governing body of such Shareholder appointing such persons to attend the meeting.
(b) Holders of Domestic Shares intending to attend the Class Meeting for Holders of Domestic Shares should return the reply slip and the related documents for attending the Class Meeting for Holders of Domestic Shares to the Company on or before Monday, 28 March 2016.
(c) Shareholder may send the above reply slip to the Company in person, by post or by fax. For holders of Domestic Shares, the reply slip and the related documents should be sent to the Company, 2nd Floor, Northeastern Wing, Jiuzhou Electronic Building, 007 Keji South 12th Street, Nanshan District, Shenzhen, the PRC (or via fax no.: (+86) 755 3363 1220).

4. Miscellaneous

(a) The Class Meeting for Holders of Domestic Shares will not last for more than half a day. Shareholders who attend the Class Meeting for Holders of Domestic Shares in person or by proxy shall bear their own travelling and accommodation expenses.
(b) The registered office of the Company is at:

2nd Floor Northeastern Wing, Jiuzhou Electronic Building, 007 Keji South 12th Street, Nanshan District, Shenzhen, the PRC Post Code: 518057 Telephone No.: (+86) 755 3363 1256 Facsimile No.: (+86) 755 3363 1220

– 242 –

AI assistant

Dynagreen Environmental Protection Group Co., Ltd. — Proxy Solicitation & Information Statement 2016

49855_rns_2016-03-02_4acd8921-5ccb-45b7-bc54-84d6c0e3760a.pdf

綠 色 動力 環 保 集 團 股 份 有 限 公 司 Dynagreen Environmental Protection Group Co., Ltd.[*]

(1) PROPOSED A SHARE ISSUE

CONTENTS

DEFINITIONS

綠 色 動力 環 保 集 團 股 份 有 限 公 司 Dynagreen Environmental Protection Group Co., Ltd.[*]

(1) PROPOSED A SHARE ISSUE

I INTRODUCTION

II. APPLICATION FOR INITIAL PUBLIC OFFERING AND LISTING OF RMB ORDINARY SHARES (A SHARES)

III. USE OF PROCEEDS FROM INITIAL PUBLIC OFFERING OF A SHARES

IV. AUTHORIZATION TO THE BOARD TO DEAL WITH MATTERS RELATING TO THE ISSUE AND LISTING OF A SHARES BY THE COMPANY IN ITS ABSOLUTE DISCRETION

V. THE PLAN ON DISTRIBUTION OF ACCUMULATED AND UNDISTRIBUTED PROFITS BEFORE INITIAL PUBLIC OFFERING OF A SHARES

VI. ADOPTION OF COMPANY SHARE PRICE STABILIZATION MEASURES FOR THE THREE YEARS AFTER LISTING, THE THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN, NEW ARTICLES AND INTERNAL RULES

VII. THE FEASIBILITY OF PROPOSED INVESTMENT PROJECTS

(I) Tianjin Ninghe Straw-fired Power Project

(II) Tianjin Ninghe Biomass Power Project

(III) Bengbu Solid Waste Incineration Power Generation Plant Project

VIII. LETTER OF UNDERTAKING

IX. THE REMEDIAL MEASURES FOR DILUTION OF CURRENT RETURNS

X. REASONS FOR AND BENEFITS OF THE PROPOSED A SHARE ISSUE

XI. EFFECT OF PROPOSED A SHARE ISSUE ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

XII. CONFIRMATION OF CONNECTED TRANSACTIONS OF THE COMPANY IN 2013, 2014 AND 2015

XIII. PROPOSED APPOINTMENT OF DIRECTOR

XIV. GENERAL INFORMATION

XV. EGM, CLASS MEETING FOR HOLDERS OF H SHARES AND CLASS MEETING FOR HOLDERS OF DOMESTIC SHARES AND PROXY ARRANGEMENT

XVI. RECOMMENDATION

I. CONDITIONS FOR ACTIVATING MEASURES FOR STABILIZING SHARE PRICE

II. SPECIFIC MEASURES FOR STABILIZATION OF SHARE PRICES

(1) Repurchase of Shares by the Company

(3) Increase of shareholdings by directors and senior management of the Company under employment of the Company and who are receiving remuneration and compensation (not including independent directors)

III. PROTECTIVE MEASURES FOR THE IMPLEMENTATION OF THESE MEASURES

(1) Punishment measures for the Company’s breach of these measures

(2) Punishment measures for the Company’s Controlling shareholder’s breach of these measures

IV. THESE MEASURES SHALL TAKE EFFECT FOR 3 YEARS FROM THE DAY OF CONSIDERATION AND APPROVAL BY THE GENERAL MEETING AND THE INITIAL PUBLIC OFFERING AND LISTING OF A SHARES.

THE THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

I. FACTORS CONSIDERED IN FORMULATING SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

II. PRINCIPLES FOR FORMULATION OF SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

III. THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN AFTER LISTING

THE THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

THE THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

IV. DECISION-MAKING MECHANISM ON SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

THE THREE-YEAR SHAREHOLDERS’ PROFIT DISTRIBUTION PLAN

V. OTHERS

Articles of Association

of

Dynagreen Environmental Protection Group Co., Ltd.*

(Applicable after the issue of A shares)

CONTENTS

CHAPTER 1 GENERAL

CHAPTER 2 OPERATIONAL OBJECTIVES AND SCOPE OF BUSINESS

CHAPTER 3 SHARES, REGISTERED CAPITAL AND TRANSFER OF SHARES

Article 24 The registered capital of the Company is RMB1,045,000,000 at present.

CHAPTER 4 INCREASE, REDUCTION AND REPURCHASE OF SHARES

CHAPTER 5 FINANCIAL ASSISTANCE FOR PURCHASE OF COMPANY SHARES

CHAPTER 6 SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS

CHAPTER 7 RIGHTS AND OBLIGATIONS OF SHAREHOLDERS

CHAPTER 8 GENERAL MEETING

SECTION 1 GENERAL PROVISIONS ON GENERAL MEETING

SECTION 2 PROPOSING AND CONVENING OF GENERAL MEETING

SECTION 3 PROPOSALS AND NOTICES OF GENERAL MEETING

SECTION 4 CONVENING GENERAL MEETING

SECTION 5 VOTING AND RESOLUTIONS AT GENERAL MEETINGS

CHAPTER 9 SPECIAL PROCEDURES FOR VOTING AT CLASS MEETING

CHAPTER 10 BOARD OF DIRECTORS

SECTION 1 DIRECTORS

SECTION 2 INDEPENDENT DIRECTORS

SECTION 3 BOARD OF DIRECTORS

CHAPTER 11 SECRETARY TO THE BOARD OF DIRECTORS

CHAPTER 12 COMPANY SECRETARY

CHAPTER 13 GENERAL MANAGER

CHAPTER 14 SUPERVISORY COMMITTEE

SECTION 1 SUPERVISORS

SECTION 2 SUPERVISORY COMMITTEE

CHAPTER 15 QUALIFICATIONS AND OBLIGATIONS OF THE COMPANY’S DIRECTORS, SUPERVISORS AND OTHER SENIOR MANAGEMENT MEMBERS

CHAPTER 16 FINANCIAL ACCOUNTING SYSTEM AND DISTRIBUTION OF PROFITS

(3) Decision-making mechanism

CHAPTER 17 APPOINTMENT OF AN ACCOUNTING FIRM

CHAPTER 18 MERGER, DIVISION, DISSOLUTION AND LIQUIDATION

Dynagreen Environmental Protection Group Co., Ltd. Proxy Solicitation & Information Statement 2016

綠色動力環保集團股份有限公司 Dynagreen Environmental Protection Group Co., Ltd.[*]

綠色動力環保集團股份有限公司 Dynagreen Environmental Protection Group Co., Ltd.[*]