THIS 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 a 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 the Company, you should at once hand this circular, together with the accompanying form of proxy to the purchaser or the transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or 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.

This circular is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

Flat Glass Group Co., Ltd.

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

(stock code: 6865)

(1) PROPOSED A SHARE OFFERING (2) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND CORPORATE GOVERNANCE RULES

(3) PROPOSED CHANGE OF INDEPENDENT NON-EXECUTIVE DIRECTOR AND PROPOSED CHANGE OF COMPOSITION OF BOARD COMMITTEES

(4) PROPOSED INTERIM DIVIDEND FOR THE SIX MONTHS ENDED 30 JUNE 2016 AND (5) NOTICES OF EGM AND CLASS MEETINGS

Notices convening the EGM and the Class Meetings to be held at the Conference Room, 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the People’s Republic of China, on Monday, 21 November 2016 are set out on pages EGM-1 to NH-3 of this circular. Forms of proxy for use at the EGM and the Class Meetings are also enclosed with this circular. If you intend to attend the relevant meeting(s) by proxy, you are required to complete and return the enclosed form(s) of proxy in accordance with the instructions printed thereon to the Company’s H shares registrar in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong (for holders of H Shares), or to the Company’s registered office in the PRC at 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the People’s Republic of China (for holders of Domestic Shares) as soon as possible but in any event by not later than 24 hours before the time appointed for holding of the relevant meeting(s) or any adjournment thereof. Completion and return of the form(s) of proxy shall not preclude you from attending and voting in person at the relevant meeting(s) or any adjourned meeting(s) should you so wish.

Shareholders who intend to attend the meeting(s) in person or by proxy should complete and return the relevant reply slip(s) in accordance with the instructions printed thereon as soon as possible and in any event no later than 20 days before the date appointed for holding such meeting(s) or any adjournment thereof.

5 October 2016

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX I—USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND FEASIBILITY ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX II—PROPOSED AMENDMENTS TO THE ARTICLES . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX III—PROPOSED AMENDMENTS TO CORPORATE GOVERNANCE RULES APPENDIX III.A—THE RULES OF PROCEDURES OF GENERAL MEETINGS . . . . . . . . . . . . APPENDIX III.B—THE RULES OF PROCEDURES OF BOARD MEETINGS . . . . . . . . . . . . . . APPENDIX III.C—THE RULES OF PROCEDURES OF MEETINGS OF SUPERVISORS . . . . . APPENDIX III.D—THE IMPLEMENTATION RULES OF THE CUMULATIVE VOTING SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX III.E—THE INVESTMENT MANAGEMENT POLICY . . . . . . . . . . . . . . . . . . . . . . . APPENDIX III.F—THE RELATED PARTIES TRANSACTIONS DECISION POLICY . . . . . . . APPENDIX III.G—THE WORKING INSTRUCTIONS FOR INDEPENDENT DIRECTORS . . . APPENDIX III.H—THE PROVISION OF EXTERNAL GUARANTEES POLICY . . . . . . . . . . . . APPENDIX III.I—THE USE OF PROCEEDS MANAGEMENT POLICY . . . . . . . . . . . . . . . . . . . APPENDIX III.J—THE FUNDS TO AND FROM RELATED PARTIES MANAGEMENT POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX IV—PROPOSED PRICE STABILISING PLAN FOR THE A SHARES WITHIN THREE YEARS AFTER THE PROPOSED A SHARE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX V—PROPOSED UNDERTAKINGS IN CONNECTION WITH THE PROPOSED A SHARE OFFERING AND RELATED RESTRICTIVE MEASURES . . . . . . . . . . . . . . . . . . . . . . . APPENDIX VI—PROPOSAL ON DILUTION OF IMMEDIATE RETURNS AS A RESULT OF THE PROPOSED A SHARE OFFERING, RELATED REMEDIAL MEASURES AND UNDERTAKING BY THE RELEVANT PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX VII—PROPOSED DIVIDEND DISTRIBUTION PLAN FOR THE THREE YEARS AFTER THE PROPOSED A SHARE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX VIII—DETAILS OF DR. CUI XIAOZHONG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NOTICE OF DOMESTIC SHAREHOLDERS’ CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . NOTICE OF H SHAREHOLDERS’ CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Page
	1 4 I-1 II-1 IIIA-1 IIIB-1 IIIC-1 IIID-1 IIIE-1 IIIF-1 IIIG-1 IIIH-1 III_I-1 IIIJ-1 IV-1 V-1 VI-1 VII-1 VIII-1 EGM-1 ND-1 NH-1

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX I—USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND
FEASIBILITY ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX II—PROPOSED AMENDMENTS TO THE ARTICLES . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX III—PROPOSED AMENDMENTS TO CORPORATE GOVERNANCE RULES
APPENDIX III.A—THE RULES OF PROCEDURES OF GENERAL MEETINGS . . . . . . . . . . . .
APPENDIX III.B—THE RULES OF PROCEDURES OF BOARD MEETINGS . . . . . . . . . . . . . .
APPENDIX III.C—THE RULES OF PROCEDURES OF MEETINGS OF SUPERVISORS . . . . .
APPENDIX III.D—THE IMPLEMENTATION RULES OF THE CUMULATIVE VOTING
SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX III.E—THE INVESTMENT MANAGEMENT POLICY . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX III.F—THE RELATED PARTIES TRANSACTIONS DECISION POLICY . . . . . . .
APPENDIX III.G—THE WORKING INSTRUCTIONS FOR INDEPENDENT DIRECTORS . . .
APPENDIX III.H—THE PROVISION OF EXTERNAL GUARANTEES POLICY . . . . . . . . . . . .
APPENDIX III.I—THE USE OF PROCEEDS MANAGEMENT POLICY . . . . . . . . . . . . . . . . . . .
APPENDIX III.J—THE FUNDS TO AND FROM RELATED PARTIES MANAGEMENT
POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX IV—PROPOSED PRICE STABILISING PLAN FOR THE A SHARES WITHIN THREE
YEARS AFTER THE PROPOSED A SHARE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX V—PROPOSED UNDERTAKINGS IN CONNECTION WITH THE PROPOSED
A SHARE OFFERING AND RELATED RESTRICTIVE MEASURES . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX VI—PROPOSAL ON DILUTION OF IMMEDIATE RETURNS AS A RESULT OF
THE PROPOSED A SHARE OFFERING, RELATED REMEDIAL MEASURES AND
UNDERTAKING BY THE RELEVANT PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX VII—PROPOSED DIVIDEND DISTRIBUTION PLAN FOR THE THREE YEARS
AFTER THE PROPOSED A SHARE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX VIII—DETAILS OF DR. CUI XIAOZHONG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NOTICE OF DOMESTIC SHAREHOLDERS’ CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NOTICE OF H SHAREHOLDERS’ CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

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4
I-1
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IIIA-1
IIIB-1
IIIC-1
IIID-1
IIIE-1
IIIF-1
IIIG-1
IIIH-1
III_I-1
IIIJ-1
IV-1
V-1
VI-1
VII-1
VIII-1
EGM-1
ND-1
NH-1

DEFINITIONS

In this circular, the following expressions have the meanings set out below unless the context requires otherwise.

“A Share(s)”

ordinary share(s) proposed to be issued by the Company pursuant to the Proposed A Share Offering and subscribed for in RMB

“Articles”

the articles of association of the Company

“Audit Committee” the audit committee of the Board
“Board” the board of Directors
“Board Meeting” meeting of the Board held on 25 August 2016 (after trading hours)
“Class Meeting(s)” the H Shareholders’ Class Meeting and/or the Domestic Shareholders’ Class Meeting (as the case may be)
“Company” Flat Glass Group Co., Ltd. ( ), a joint stock company established in the PRC with limited liability, the H Shares of which are listed on the main board of the Stock Exchange

“Core Connected Person(s)” has the meaning ascribed to it in the Listing Rules

“CSRC” China Securities Regulatory Commission of the PRC
“Director(s)” the director(s) of the Company

“Domestic Share(s)” ordinary share(s) in the capital of the Company with a nominal value of RMB0.25 each, which are subscribed for or credited as paid up in Renminbi by PRC nationals and/or PRC corporate entities

“Domestic Shareholder(s)” holder(s) of Domestic Shares

“Domestic Shareholders’ Class Meeting” means the class meeting of the Domestic Shareholders, to be held at the Conference Room, 1999 Yuhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the PRC on Monday, 21 November 2016 or any adjournment therefore, or immediately after the conclusion of the EGM, whichever is later

“EGM”

the extraordinary general meeting of the Company to be held at the Conference Room, 1999 Yuhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the PRC at 9:00 a.m. on Monday, 21 November 2016 or any adjournment therefore

“Group” the Company and its subsidiaries

“H Share(s)”

overseas listed foreign invested ordinary share(s) in the capital of the Company with a nominal value of RMB0.25 each, which are subscribed for and traded in Hong Kong dollars and listed on the Stock Exchange

“H Shareholders’ Class Meeting”

means the class meeting of the H Shareholders to be held at the Conference Room, 1999 Yuhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the PRC on Monday, 21 November 2016 or any adjournment therefore, or immediately after the conclusion of the Domestic Shareholders’ Class Meeting, whichever is later

DEFINITIONS

“Hong Kong”	the Hong Kong Special Administrative Region	of the PRC	of the PRC
“Latest Practicable Date”	30 September 2016, being the latest practicable date prior to the				date
	of this circular for the purpose of ascertaining certain information
	contained in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“Low-E glass”	low-emissivity glass
“Nomination Committee”	the nomination committee of the Board
“PRC”	the People’s Republic of China, for the		purpose	of	this
	announcement, excluding Hong Kong,	the	Macau	Special
	Administrative Region of the PRC and Taiwan
“Proposed A Share Offering”	the Company’s proposed initial public offering		of not more		than
	200,000,000 A Shares, which are proposed to		be listed on		the
	Shanghai Stock Exchange
“Prospectus”	the prospectus of the Company dated 16 November		2015
“PV”	photovoltaic
“Remuneration Committee”	the remuneration committee of the Board
“Restricted Persons”	has the meaning ascribed to it on page 8 of this	circular
“Risk Management Committee”	the risk management committee of the Board
“RMB”	Renminbi, the lawful currency of the PRC
“SFO”	Securities and Futures Ordinance (Chapter	571	of the	Laws of
	Hong Kong)
“Share(s)”	the Domestic Share(s) and/or the H Share(s)
“Shareholder(s)”	holder(s) of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Strategic Development Committee”	the strategic development committee of the Board
“%”	per cent.

In this circular, unless the context otherwise requires, the terms “connected person(s)”, “connected transaction(s)”, “controlling shareholder(s)” and “substantial shareholder(s)”, if used, shall have the meanings given to such terms in the Listing Rules, as modified by the Stock Exchange from time to time.

Certain amounts and percentage figures set out in this circular have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables and the currency conversion or percentage equivalents may not be an arithmetic sum of such figures.

DEFINITIONS

Reference to the singular number include references to the plural and vice versa and references to one gender include every gender.

The English names of Chinese entities marked with “*” are translations of their Chinese names and are included in this circular for identification purpose only, and should not be regarded as their official English translation. In the event of any inconsistency, the Chinese names prevails.

LETTER FROM THE BOARD

Flat Glass Group Co., Ltd.

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

(stock code: 6865)

Executive Directors: Registered office, headquarters and Mr. Ruan Hongliang (Chairman) principal place of business in the PRC: Ms. Jiang Jinhua 1999 Yunhe Road Mr. Wei Yezhong Xiuzhou District Mr. Shen Qifu Jiaxing Zhejiang Province PRC Independent non-executive Directors: Principal place of business in Hong Kong: Ms. Pan Yushuang 18/F Tesbury Centre Mr. Li Shilong 28 Queen’s Road East Mr. Ng Ki Hung Wanchai Hong Kong

5 October 2016

To the Shareholders,

Dear Sir/Madam,

(1) PROPOSED A SHARE OFFERING

(2) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND CORPORATE GOVERNANCE RULES

(3) PROPOSED CHANGE OF INDEPENDENT NON-EXECUTIVE DIRECTOR AND PROPOSED CHANGE OF COMPOSITION OF BOARD COMMITTEES (4) PROPOSED INTERIM DIVIDEND FOR THE SIX MONTHS ENDED 30 JUNE 2016 AND (5) NOTICE OF EGM AND CLASS MEETINGS

INTRODUCTION

Reference is made to the announcements dated 25 August 2016 and 26 August 2016 published by the Company in relation to the Proposed A Share Offering and the proposed change of independent non-executive Director.

Reference is also made to the announcement of the Company dated 24 August 2016 relating to the interim results of the Group for the six months ended 30 June 2016 and the proposed interim dividend for the six months ended 30 June 2016.

LETTER FROM THE BOARD

On 24 August 2016 and 25 August 2016, the Board approved and resolved to submit to the EGM and Class Meetings (as the case may be) for approval of the following resolutions in relation to the Proposed A Share Offering, the proposed change of independent non-executive Director and the proposed interim dividend for the six months ended 30 June 2016:

SPECIAL RESOLUTIONS

(1) Proposed A Share Offering;
(2) proposal on granting authorisation to the Board to handle matters in relation to the Proposed A Share Offering;
(3) use of proceeds from the Proposed A Share Offering;
(4) distribution plan of the accumulated undistributed profits before the Proposed A Share Offering;
(5)
amendments to the Articles;
(6) price stabilising for the A Shares within three years after the Proposed A Share Offering;
(7) undertakings in connection with the Proposed A Share Offering and related restrictive measures;
(8) proposal on dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures;
(9) undertakings from the Directors and senior management of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures;
(10) undertakings from the actual controllers of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures;
(11) dividend distribution plan for the three years after the Proposed A Share Offering;

ORDINARY RESOLUTIONS

(12) the rules of procedures of general meetings;
(13) the rules of procedures of Board meetings;
(14) the implementation rules of the cumulative voting system;
(15) the investment management policy;
(16) the related parties transactions decision policy;
(17) the working instructions for independent directors;
(18) the provision of external guarantees policy;
(19) the use of proceeds management policy;
(20) the funds to and from related parties management policy;

LETTER FROM THE BOARD

(21) appointment of Dr. Cui Xiaozhong as an independent non-executive Director of the Company; and
(22) declaration of an interim dividend of RMB5.5 cents per ordinary share for the six months ended 30 June 2016 to the Shareholders.

In addition, the board of supervisors of the Company also resolved on 25 August 2016 to submit certain amendments to the rules of procedures of the meetings of supervisors to the EGM for consideration and approval by the Shareholders.

The purpose of this circular is to provide you with relevant information to enable you to make informed decision on whether to vote for or against the above resolutions to be proposed at the EGM and the Class Meetings (as the case may be).

PROPOSED A SHARE OFFERING

The Company will apply to CSRC and other relevant regulatory authorities for an initial public offering and listing of the Company’s A Shares in order to satisfy the long term capital needs for the sustainable business development, promote the smooth implementation of the development strategies and enhance the capital resources of the Company.

Details of the Proposed A Share Offering are set out below:

Class of shares to be issued

New A Shares, being domestic listed ordinary shares denominated in RMB. Existing Domestic Shareholders will not be selling any of its shareholdings in the Proposed A Share Offering.

Nominal value per share RMB0.25
Place of listing Shanghai Stock Exchange
Offer size

The total number of A Shares to be issued will be not more than 200,000,000 A Shares, representing (i) approximately 11.1% of the total existing issued share capital of the Company before the issue, and 10.0% of total enlarged issued share capital of the Company after the issue; (ii) approximately 14.8% of the existing issued Domestic Shares of the Company before the issue, and approximately 12.9% of the enlarged issued Domestic Shares of the Company after the issue, assuming that there are no other changes to the issued share capital of the Company.

The final number of A Shares proposed to be issued will be determined by the Board (as authorized by the Shareholders at the EGM and the Class Meetings), prevailing market conditions, communications with the regulatory authorities and discussions with the sponsor(s) and lead underwriter(s).

Pricing methodology

The A Shares shall be priced in compliance with all applicable laws, rules and regulations, including the Measures for the Administration of Securities Issuance and Underwriting ( ) promulgated by the CSRC, which stipulates that the issue price of securities under an initial public offering can be determined through offline price consultations with investors, or through direct

LETTER FROM THE BOARD

independent consultations between the issuer and the underwriter(s), or such other legal and practical means. Each offline investor shall submit one price quotation only, which shall also include the intended amount of subscription at that price. After receiving offline investors’ offers, the issuer and the underwriter(s) shall omit the portion of the highest quotations of the total subscription amount. The omitted portion shall not be less than 10% of the total amount of intended subscriptions by all the offline investors. The remaining offers and amount of intended subscriptions will then be used as one of the factors taken onto account to determine the issue price. The offline investors so omitted shall be excluded in the offline subscriptions. Pursuant to the above requirements and taking into account the interests of the existing Shareholders as a whole, the market conditions of the capital markets and the actual situation of the Company at the time of the Proposed A Share Offering, the issue price of the A Shares will be determined by the Company and the lead underwriter(s) with reference to the results of the price consultation process with potential investors or such other legal and practicable means.

Furthermore, according to the applicable laws and regulations of the PRC, the issue price of the A Shares shall not be less than the nominal value per A Share, being RMB0.25.

In any event, the issue price of the A Shares generally shall not be less than the audited net asset value per Share as stated in the audited financial statements of the Company for the financial year immediately preceding the Proposed A Share Offering in line with the PRC market practice, and shall be in compliance with the Listing Rules, including the requirements of Rule 13.36(5) of the Listing Rules, which provides that the issue price shall not represent a discount of 20% or more to the benchmarked price of the H Shares, which means the higher of:

(a) the closing price on the date of the relevant placing agreement or other agreement involving the Proposed A Share Offering; and
(b) the average closing price in the 5 trading days immediately prior to the earliest of:
(i) the date of announcement of the placing or the proposed transaction or arrangement involving the Proposed A Share Offering;
(ii) the date of the placing agreement or other agreement involving the Proposed A Share Offering; and
(iii) the date on which the issue price is fixed.

LETTER FROM THE BOARD

Based on the audited financial statements of the Company for the year ended 31 December 2015, as of 31 December 2015, the audited net asset value per Share was approximately RMB1.43.

Save as disclosed in this circular, to the best knowledge and information of the Company and as advised by its advisers to the Proposed A Share Offering, there are no other restrictions on the issue price for the issue of A Shares under the Proposed A Share Offering as at the Latest Practicable Date.

Target subscribers

The target subscribers of the A Shares are natural persons, legal persons and other institutional investors who satisfy the relevant qualification requirements of the CSRC and have opened A share securities accounts with the Shanghai Stock Exchange (excluding those prohibited by the relevant PRC laws and regulations and other regulatory requirements applicable to the Company).

According to Article 11 of the Initial Public Offering Shares Issuance Placement Rules ( ) of the PRC, the Company and its underwriters are prohibited from allocating the A Shares in its initial offering to certain parties, including but not limited to, (i) the Company, its shareholders, actual controllers, Directors, supervisors, and senior management, and any companies which any of them has direct and indirect actual control, joint control or in which they have material influence and the controlling shareholders of such companies, its subsidiaries or any other subsidiaries that such companies control, and other employees of the Company; (ii) close family members of the natural persons in (i), including spouses, children and their spouses, parents and parents-inlaw, brothers, sisters and their spouses, brothers-in-law and sisters-inlaw, parents of sons-in-law and daughters-in-law (the “ Restricted Persons ”), for their subscription. The Company and its underwriter(s) shall strictly follow all applicable PRC laws and regulations in allocating the A Shares to potential subscribers under the Proposed A Share Offering.

Furthermore, prior to the issuance of A Shares, the Company will provide a list of related parties (as defined under the relevant listing rules of the Shanghai Stock Exchange) of the Company to its sponsor to the Proposed A Share Offering. The Company will also include all connected persons (as defined under Chapter 14A of the Listing Rules) of the Company to the related parties list. Its sponsor will then review the list and submit the list to the Shanghai Stock Exchange and the underwriter(s) to the Proposed A Share Offering. All persons listed on this list, including the related parties (as defined under the listing rules of the Shanghai Stock Exchange) and connected persons

LETTER FROM THE BOARD

(as defined under Chapter 14A of the Listing Rules) of the Company will not be permitted to subscribe for any A Shares in the Proposed A Share Offering. The Directors believe such measures can ensure no A Shares under the Proposed A Share Offering will be allocated to and subscribed by the connected persons of the Company (as defined under Chapter 14A of the Listing Rules).

Method of offering The Proposed A Share Offering will be conducted through a combination of placings to target subscribers at a price to be determined between the Company and the subscribers on an offline basis and fixed price online applications, or through any other methods as permitted by the CSRC.
Validity period of the The validity period of the resolutions for the Proposed A Share resolutions Offering is 12 months from the date when the resolution is approved by the Shareholders at the EGM and the Class Meetings.

The resolution for the Proposed A Share Offering will be voted item by item and to be approved by way of special resolution(s) at the EGM and the Class Meetings. Further, the Proposed A Share Offering will be made pursuant to the specific mandate to be sought at the EGM and the Class Meetings. As at the Latest Practicable Date, the lead underwriter for the Proposed A Share Offering is yet to be appointed. The Directors confirm that the lead underwriter(s) for the Proposed A Share Offering when appointed will be independent from the Company.

Based on the advice of the Company’s professional advisors to the Proposed A Share Offering and the progress of the Company’s preparation for the Proposed A Share Offering as at the Latest Practicable Date, the Company expects to obtain the listing approval from the CSRC and complete the Proposed A Share Offering by June 2019.

The Proposed A Share Offering and other related resolutions below are conditional and subject to market conditions and obtaining Shareholders’ approval as ordinary resolutions or special resolutions (as the case may be) at the EGM and the Class Meetings (as the case may be) and necessary approvals from the CSRC and other relevant regulatory authorities.

OTHER RESOLUTIONS RELATING TO THE PROPOSED A SHARE OFFERING

1. Proposal on granting authorisation to the Board to handle matters in relation to the Proposed A Share Offering

In relation to the Proposed A Share Offering, it is proposed that the Board be authorized:

(a) to appoint relevant intermediaries for the Proposed A Share Offering, to negotiate and finalise their respective remuneration, and to sign the engagement letter or appointment letter;
(b) to implement the Proposed A Share Offering and listing proposal in accordance with the relevant laws, rules and regulations and the resolutions to be passed in the EGM and Class Meetings;

LETTER FROM THE BOARD

(c) to handle all matters in relation to the Proposed A Share Offering and listing proposal in accordance with the resolutions to be passed in the EGM and Class Meetings, approval from the CSRC and the prevailing market conditions, including but not limited to finalising the offering timetable after negotiating with the relevant parties, the offer size, the offer price, the target subscribers and pricing methodology;
(d) to handle submissions in relation to the Proposed A Share Offering, including but not limited to (i) applying for vetting, registration and filing with, and obtaining approval and consent from relevant government agencies and regulatory authorities in, and out of, the PRC; and (ii) approving, signing, executing, modifying and delivering all agreements, contracts or the necessary documents relating to the Proposed A Share Offering, including but not limited to the prospectus, agreement with the sponsor(s), underwriting agreement, listing agreement, announcements and circulars;
(e) to (i) revise and amend the relevant provisions of the Articles, rules of procedures and other corporate governance codes from time to time relating to, as necessary or appropriate for the Proposed A Share Offering; and (ii) revise the Articles based on the results of the Proposed A Share Offering, and to handle the approvals and registrations of the relevant amendments with the industry and commerce authorities, and to make the filings with the relevant authorities;
(f) to amend the Articles, rules of procedures and policies based on the comments of the CSRC, the stock exchange and other government agencies, or to amend as appropriate if such rules and policies conflict with the standardised documents of the CSRC, the stock exchange and other government agencies;
(g) to adjust the Proposed A Share Offering according to its implementation situation, prevailing market conditions, adjustments of governmental policies and comments from regulatory departments. During the validity period of the resolution for the Proposed A Share Offering, in the event of any changes to the rules and regulations in relation to offering of new shares or vetting requirements, the Proposed A Share Offering shall be adjusted in accordance with such changes, and the Board shall be authorized to consider and approve the same;
(h) matters relating to the implementation of the investment projects for the use of proceeds, including (i) prior to the net proceeds from the Proposed A Share Offering having been credited, to fund the investment projects based on their respective progress through internal source of funding or bank loans; (ii) after the net proceeds from the Proposed A Share Offering having been credited, to use the net proceeds to repay the funds or loans referred to in (i) above; (iii) to adjust the investment projects based on the actual situation during implementation of the projects or based on the comments from the relevant government authorities, including but not limited to adjusting the amount of the net proceeds to be used, the actual entity to implement the investment projects, the implementation project, and the implementation method in the confirmed scope of the investment projects for the use of proceeds; (iv) to confirm the dedicated bank account for the deposit of the net proceeds; (v) to implement the plan for the use of proceeds upon completion of the Proposed A Share Offering; (vi) to execute all major contracts involved when implementing the plan for the use of proceeds; (vii) in the case if the net proceeds are insufficient to fund the investment projects, to fund the investment projects through bank loans or internal source of funding; (viii) to determine the use of proceeds

LETTER FROM THE BOARD

if there will be any balance after implementing the plan for the use of proceeds; (ix) to reduce the number of investment projects, the use of proceeds and the amount of proceeds within the scope of the use of proceeds as approved by the Shareholders at the EGM and the Class Meetings based on the actual situation or the comments from the relevant government authorities;

(i) to implement all other matters as necessary, appropriate or suitable relating to the Proposed A Share Offering in accordance with the relevant laws and regulations; and
(j) provided that the above (a) to (i) authorisations have been approved by the Shareholders at the EGM and the Class Meetings, to grant the chairman of the Board or any other relevant person as designated by the chairman of the Board such full authorisations.

The validity period of the authorisations is 12 months from the date when the resolution is approved by the Shareholders by way of special resolution at the EGM and the Class Meetings.

2. Use of proceeds from the Proposed A Share Offering

It is estimated that the funds raised from the Proposed A Share Offering, after deducting listing expenses, will not exceed RMB1,840.0 million. The following table sets forth the plan for the use of proceeds from the Proposed A Share Offering:

1. 2. 3. 4.	Project The annual production capacity of 900,000 tons of glass as covers for PV modules project of a subsidiary of the Company, Anhui Flat Solar Glass Co., Ltd. ( )(1) The annual production capacity of 100,000 tons on-line low emissivity (Low-E) coated glass project of the Company(2) The technological modification of the 150,000 tons of PV glass manufacturing facilities of a subsidiary of the Company, Zhejiang Jiafu Glass Co., Ltd. ( )(3) The 85 megawatts of distributed PV power generation project of a subsidiary of the Company, Jiaxing Flat New Energy Technology Co., Ltd.* ( )(4) Total	Amount of proceeds to be used (RMB)
		1,330,000,000 220,000,000 155,000,000 135,000,000
		1,840,000,000

Notes:

The entire project is estimated to cost approximately RMB2,086,620,000, of which, approximately RMB1,330,000,000 will be funded by the proceeds from the Proposed A Share Offering. The proceeds will be used for the establishment of eight PV raw glass production lines with two 1,000-ton PV glass furnaces and ten PV glass processing line with a total annual processing capacity of 75.0 million square meters of PV glass, being part of the said project.
The proceeds will be used for the conversion of an existing 600-ton float glass furnace to an on-line Low-E production line with an annual production capacity of 100,000 tons.
The proceeds will be used for the conversion of the two existing 300-ton PV glass furnaces to one 600-ton photovoltaic glass furnace.
The entire project is estimated to cost approximately RMB600,000,000, of which, approximately RMB135,000,000 will be funded by the proceeds from the Proposed A Share Offering. The proceeds will be used to construct total capacity of 20 megawatts of distributed PV systems.

Prior to the completion of the Proposed A Share Offering, the Company can fund the above investment projects based on the actual situation and progress by internal resources or bank loans, and can repay such funds and loans by the proceeds raised in Proposed A Share Offering. If there is any shortfall in funding these projects by the proceeds in the Proposed A Share Offering, the Company will fund such shortfall by its internal resources and bank loans.

LETTER FROM THE BOARD

The Company has also formulated a feasibility analysis report on the use of proceeds from the Proposed A Share Offering, summary of which are set out in Appendix I to this circular.

The above resolution will be approved by way of special resolution at the EGM and the Class Meetings.

3. Distribution plan of the accumulated undistributed profits before the Proposed A Share Offering

Taking into consideration of the existing and new shareholders’ interests, the accumulated undistributed profits of the Company before the Proposed A Share Offering should be shared among all the Shareholders (including holders of H Shares, Domestic Shares and A Shares) in proportion to their respective shareholdings after the completion of the Proposed A Share Offering.

The above resolution will be approved by way of special resolution at the EGM and the Class Meetings.

4. Proposed amendments to the Articles

In accordance with the relevant laws and regulations of the PRC, the Board proposes to make certain amendments to the Articles, including, the revision of certain terminologies. The proposed amendments, if approved by the Shareholders at the EGM and the Class Meetings, and will come into effect upon the listing of the A Shares.

Please refer to Appendix II to this circular for details of the proposed amendments to the Articles.

The above resolution will be approved by way of special resolution at the EGM and the Class Meetings.

5. Proposed amendments to certain corporate governance rules

To further optimise the corporate governance structure of the Company for the purpose of the Proposed A Share Offering, the Board proposes to amend certain corporate governance rules, including, but not limited to:

(a) rules of procedures of the general meetings;
(b) rules of procedures of the Board meetings;
(c) implementation rules of the cumulative voting system;
(d) investment management policy;
(e) related parties transactions decision policy;
(f) working instructions for independent directors;
(g) provision of external guarantees policy;
(h) use of proceeds management policy; and
(i) funds to and from related parties management policy.

LETTER FROM THE BOARD

Please refer to Appendix III to this circular for details of the proposed amendments to the above corporate governance rules.

The proposed amendments to the above corporate governance rules will be approved by way of ordinary resolutions at the EGM, and if approved, will come into effect upon the listing of the A Shares.

The corporate governance rules mentioned above are formulated in accordance with relevant laws, regulations and listing rules of the PRC, some provisions of which may be different from the requirements of the Listing Rules. In the event that the requirements of the Listing Rules and the corporate governance rules mentioned above are different, the Company will comply with all relevant listing rules on which the Shares are listed, whichever is stricter or impose greater obligation.

6. Price stabilising plan for the A Shares within three years after the Proposed A Share Offering

In order to effectively protect the interests of the Shareholders and enhance the investment confidence of the investors, the Company has formulated a price stabilising plan for the A Shares within three years after the Proposed A Share Offering in accordance with the relevant laws and regulations of the PRC.

Please refer to Appendix IV to this circular for details of the proposed price stabilising plan.

The above resolution will be approved by way of special resolution at the EGM and the Class Meetings.

7. Undertakings in connection with the Proposed A Share Offering and related restrictive measures

In accordance with the relevant laws and regulations of the PRC including the Opinions on Further Promoting the Reform of the Initial Public Offering System ( ) promulgated by the CSRC, the Company proposes to make certain undertakings in relation to the application for the initial public offering and listing, and formulate certain restrictive measures in the event that the Company is unable to fulfill such undertakings.

Please refer to Appendix V to this circular for details of the proposed undertakings and related restrictive measures.

The above resolution will be approved by way of special resolution at the EGM and the Class Meetings.

LETTER FROM THE BOARD

8. Proposal on dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures

The Company has considered the impacts of the Proposed A Share Offering on dilution of immediate return and formulated certain remedial measures on recovery of return, in accordance with the relevant laws and regulations of the PRC including the Guiding Opinions on Matters relating to the Dilution of Immediate Returns in Initial Public Offering, Refinancing and Major Assets Restructuring (Zheng Jian Hui Gong Gao [2015] No. 31) ( ( )) promulgated by the CSRC.

Please refer to Appendix VI to this circular for further information of the possible dilution of immediate returns as a result of the Proposed A Share Offering and the related remedial measures.

The above resolution will be approved by way of special resolution at the EGM and the Class Meetings.

9. Undertakings from the Directors and senior management of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures

Pursuant to the Guiding Opinions on Matters relating to the Dilution of Returns for the Current Period due to Initial Public Offering, Refinancing and Major Asset Restructuring (Zheng Jian Hui Gong Gao [2015] No. 31) ( ( )), to ensure the Company’s remedial measures on recovery of return can be effectively implemented, the Directors and senior management of the Company will give certain undertakings to the Company.

Please refer to Appendix VI to this circular for further information of the possible dilution of immediate returns as a result of the Proposed A Share Offering, related remedial measures and undertakings.

The above resolution will be approved by way of special resolution at the EGM and the Class Meetings.

10. Undertakings from the actual controllers of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures

Pursuant to the Guiding Opinions on Matters relating to the Dilution of Returns for the Current Period due to Initial Public Offering, Refinancing and Major Asset Restructuring (Zheng Jian Hui Gong Gao [2015] No. 31) ( ( )), to ensure the Company’s remedial measures on recovery of return can be effectively implemented, the actual controllers of the Company will give certain undertakings to the Company.

LETTER FROM THE BOARD

The above resolution will be approved by way of special resolution at the EGM and the Class Meetings.

11. Dividend distribution plan for the three years after the Proposed A Share Offering

In order to further strengthen and improve the profit distribution policy, and to offer continuous, stable and reasonable investment returns to the Shareholders, the Company has formulated the dividend return plan after the Proposed A Share Offering based on the relevant rules and regulations as well as the Articles, and taking into full account of its actual operations and the needs of future development. It will also be proposed at the EGM and the Class Meetings that the Board be authorized to adjust such plan based on any changes in laws, regulations, regulatory documents and related policies or the opinions of the regulatory authorities in, and out of, the PRC.

Please refer to Appendix VII to this circular for the details of the dividend distribution plan.

The above resolution will be approved by way of special resolution at the EGM and the Class Meetings.

OTHER INFORMATION FOR THE PROPOSED A SHARE OFFERING

Reasons and benefits of the A Share Offering

The Directors consider that the Proposed A Share Offering will satisfy the long term capital needs for the sustainable business development, promote the smooth implementation of the development strategies and enhance the capital resources of the Company.

Having considered, among other things, the foregoing reasons for the Proposed A Share Offering, the Directors consider that the Proposed A Share Offering is in the interest of the Company and the Shareholders as a whole.

Fund raising activities since the initial public offering of H Shares

Apart from the issue of a total of 450,000,000 H Shares under the initial public offering of H Shares in November 2015, during the period from the date of listing of the H Shares on the Stock Exchange on 26 November 2015 to the Latest Practicable Date, no fund raising activities involving equity securities had been conducted by the Company.

Use of Proceeds from the initial public offering of H Shares

The Company issued a total of 450,000,000 H Shares in the initial public offering of H Shares in November 2015, and the total net proceeds raised were approximately RMB779.1 million after deducting the offering expenses.

The Company reports that, as at the Latest Practicable Date, the funds raised from the initial public offering of H Shares had been used in accordance with the disclosure in the Prospectus, details of which are set out in the section headed “Future Plans and Use of Proceeds” of the Prospectus.

LETTER FROM THE BOARD

Effects of the A Share Offering on the shareholding structure of the Company

For reference and illustration purposes only, assuming that (i) a total of 200,000,000 A Shares are to be issued under the Proposed A Share Offering, and (ii) there are no other changes to the issued share capital of the Company, the shareholding structure of the Company (a) as at the Latest Practicable Date, and (b) immediately after completion of the Proposed A Share Offering are set out as follows:

Non-public Shareholders – Domestic Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . Public Shareholders – new A Shares to be issued . . . . . . . . . . . . . . . . . . . . – H Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(a) as at the Latest Practicable Date Number of Shares % 1,350,000,000 75.00 — — 450,000,000 25.00 1,800,000,000 100.00	(b) immediately after completion of the Proposed A Share Offering	(b) immediately after completion of the Proposed A Share Offering
	Number of Shares 1,350,000,000 — 450,000,000 1,800,000,000	Number of Shares 1,350,000,000 200,000,000 450,000,000 2,000,000,000	% 67.50 10.00 22.50
			100.00

Public Float

As at the Latest Practicable Date, based on the publicly available information and to the best knowledge, information and belief of the Directors, 25% of the total issued Shares are held by the public, and the Company has satisfied the requirement on public float as prescribed in the Listing Rules. Under the relevant PRC laws and regulations, no A Shares under the Proposed A Share Offering may be allocated to and subscribed by the Restricted Persons, who include the Core Connected Persons of the Company. Therefore, based on the information available as at the Latest Practicable Date, upon completion of the Proposed A Share Offering, the total number of shares of the Company to be held by the public on all regulated markets (namely, the Stock Exchange and the Shanghai Stock Exchange) will be 32.50% of the Company’s total number of issued shares, which will be above the minimum public float requirement of 25% as stipulated under Rule 8.08(1) of the Listing Rules. In any event, the Company will continue to monitor the trades to be placed by its Core Connected Persons, who are required to inform the Company of any trades of the shares of the Company to be placed by them, and undertakes that it will continue to comply with the public float requirement as prescribed in the Listing Rules during the application process and after completion of the Proposed A Share Offering. The Company further confirms that no connected transactions under Chapter 14A of the Listing Rules will arise from the Proposed A Share Offering.

PROPOSED CHANGE OF INDEPENDENT NON-EXECUTIVE DIRECTOR AND CHANGE OF COMPOSITION OF BOARD COMMITTEES

Resignation of independent non-executive Director

As disclosed in the announcement of the Company dated 25 August 2016, Ms. Pan Yushuang has tendered her resignation as an independent non-executive Director to spend more time on her other business endeavours. Her resignation will take effect from the conclusion of the EGM and at the EGM, a new independent non-executive Director will be elected and appointed to fill the vacancy of the Board. Following her resignation, Ms. Pan will also cease to be a member of each of the Audit Committee, Remuneration Committee, Nomination Committee, Strategic Development Committee and Risk Management Committee and the chairman of each of the Audit Committee and the Remuneration Committee, with effect from the same time.

LETTER FROM THE BOARD

Ms. Pan has confirmed that she has no disagreement with the Board and there is no matter in respect of her resignation that needs to be brought to the attention of the shareholders of the Company.

Proposed appointment of independent non-executive Director

To fill the vacancy of the Board due to the resignation of Ms. Pan, the Board has resolved at the Board Meeting to nominate Dr. Cui Xiaozhong as the candidate of the new independent non-executive Director with a term of appointment from the date of approval of his appointment by the Shareholders at the EGM until the end of the current session of the Board on 30 September 2018.

Dr. Cui has also been nominated as a candidate of a member of each of the Audit Committee, Remuneration Committee, Nomination Committee, Strategic Development Committee and Risk Management Committee and the chairman of each of the Audit Committee and the Remuneration Committee.

Details of Dr. Cui are set out in Appendix VIII to this circular.

The above resolution will be approved by way of ordinary resolution at the EGM.

INTERIM DIVIDEND

As stated in the announcement of the Company dated 24 August 2016 relating to the interim results of the Group for the six months ended 30 June 2016 and the announcement of the Company dated 4 October 2016 on further details of the proposed interim dividend for the six months ended 30 June 2016, the Board recommended the payment of an interim dividend of RMB5.5 cents per ordinary share (before tax) (equivalent to approximately HK$6.4 cents per ordinary share (before tax)) for the six months ended 30 June 2016 (the “ 2016 Interim Dividend ”) to Shareholders. Shareholders whose names appear on the register of members of the Company on 29 November 2016 (Tuesday) will be entitled to the 2016 Interim Dividend.

2016 Interim Dividend on domestic shares will be paid in RMB and 2016 Interim Dividend on H shares will be paid in Hong Kong dollars. The exchange rate for the 2016 Interim Dividend to be paid in Hong Kong dollars will be the mean of the exchange rates of Hong Kong dollars to RMB as announced by the People’s Bank of China during the five business days prior to the date of the EGM.

The 2016 Interim Dividend is subject to approval by the Shareholders at the EGM and a resolution will be proposed to the Shareholders for voting at the EGM. If the resolution for the proposed 2016 Interim Dividend is passed at the EGM, the proposed 2016 Interim Dividend will be payable on or before 30 December 2016 (Friday).

CLOSURE OF REGISTER OF MEMBERS

To determine Shareholders’ entitlement to attend and vote at the EGM and the Class Meetings, the register of members of the Company will be closed from 21 October 2016 (Friday) to 21 November 2016 (Monday) (both days inclusive), during which period no transfer of Shares will be effected. The record date for entitlement to attend and vote at the EGM and the Class Meetings is 21 November 2016 (Monday). In order to be qualified to attend and vote at the EGM and the Class Meetings, all transfers documents accompanied by the relevant Share certificates must be lodged with the Company’s H share

LETTER FROM THE BOARD

registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong (for holders of H Shares), or to the Company’s registered office in the PRC at 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the PRC (for holders of Domestic Shares) no later than 4:30 p.m. on 20 October 2016 (Thursday).

Subject to the approval of the proposed 2016 Interim Dividend by the Shareholders at the EGM, the register of members of the Company will be closed from 25 November 2016 (Friday) to 29 November 2016 (Tuesday) (both days inclusive) for the purpose of determining shareholders’ entitlement to the proposed 2016 Interim Dividend. The record date for entitlement to the proposed 2016 Interim Dividend is 29 November 2016 (Tuesday). In order to qualify for receiving the proposed 2016 Interim Dividend, all transfer documents must be lodged with the Company’s H share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong (for holders of H Shares), or to the Company’s registered office in the PRC at 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the PRC (for holders of Domestic Shares), for registration before 4:30 p.m. on 24 November 2016 (Thursday).

NOTICES OF THE EGM AND CLASS MEETINGS

The EGM will be held at the Conference Room, 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the PRC at 9:00 a.m. on Monday, 21 November 2016. The Domestic Shareholders’ Class Meeting will be held immediately after the conclusion of the EGM at the same place, and the H Shareholders’ Class Meeting will be held immediately after the conclusion of the Domestic Shareholders’ Class Meeting at the same place. Notices of the EGM and the Class Meetings are set out on pages EGM-1 to NH-3 of this circular.

REPLY SLIP AND PROXY FORM

If you are eligible and intend to attend the EGM and/or the Class Meetings, please complete and return the reply slip(s), in accordance with the instructions printed thereon as soon as possible and in any event no later than 20 days before the date appointed for holding such meeting(s) or any adjournment thereof.

Shareholders who intend to attend the EGM and/or the Class Meetings by proxy are required to complete and return the proxy form(s), in accordance with the instructions printed thereon as soon as possible and in any event not later than 24 hours before the time appointed for the holding of such meeting(s) or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at such meeting(s) or any adjournment thereof should you so wish.

VOTING BY POLL AT THE EGM AND THE CLASS MEETINGS

Pursuant to Rule 13.39(4) of the Listing Rules, the resolutions to be proposed at the EGM and the Class Meetings as set out in the notices of the EGM and the Class Meetings in this circular must be taken by poll. The chairman of the EGM and the Class Meetings will therefore demand a poll for every such resolution put to the vote at the EGM and the Class Meetings. On a poll, every Shareholder present in person or by proxy or (being a corporation) by its duly authorized representative shall have one vote for each Share of the Company registered in his or her name in the register of Shareholders. A Shareholder entitled to more than one vote need not use all his or her votes or cast all the votes he or she uses in the same way.

LETTER FROM THE BOARD

No shareholder is required to abstain from voting for the resolutions proposed at the EGM and the Class Meetings, except for the following:

(a) the following Shareholders, being the executive Directors or senior management of the Company, shall abstain from voting for the proposed resolution numbered 9 under the section headed “Other Resolutions Relating to the Proposed A Share Offering” in this circular:
Mr. Ruan Hongliang, the chairman of the Board and an executive Director, Ms. Jiang Jinhua, an executive director, Ms. Ruan Zeyun, the chief financial officer and Board secretary of the Company and Mr. Zhao Xiaofei, the deputy general manager of the Company, who, being parties acting in concert pursuant to a concert party agreement dated 19 September 2016, are interested in approximately 62.15% of the total issued share capital of the Company as at the Latest Practicable Date;
Mr. Wei Yezhong, an executive Director, who is interested in approximately 1.07% of the total issued share capital of the Company as at the Latest Practicable Date;
Mr. Shen Qifu, an executive Director, who is interested in approximately 0.71% of the total issued share capital of the Company as at the Latest Practicable Date; and
Mr. Wei Zhiming, the deputy general manager of the Company, who is interested in approximately 0.71% of the total issued share capital of the Company as at the Latest Practicable Date; and
(b) the concert parties, namely, Mr. Ruan Hongliang, Ms. Jiang Jinhua, Ms. Ruan Zeyun and Mr. Zhao Xiaofei, by virtue of whom being interested in approximately 62.15% of the total issued share capital of the Company in aggregate as at the Latest Practicable Date and thus being considered as the actual controllers of the Company pursuant to the relevant PRC rules and regulations, shall abstain from voting for the proposed resolution numbered 10 under the section headed “Other Resolutions Relating to the Proposed A Share Offering” in this circular.

RECOMMENDATION

The Board considers that all resolutions set out in the notices of the EGM and the Class Meetings for Shareholders’ consideration and approval are in the best interests of the Company and its Shareholders. As such, the Board recommends the Shareholders to vote in favor of the resolutions set out in the notice of the EGM and the Class Meetings which are to be proposed at the EGM and the Class Meetings.

Yours faithfully, By order of the Board of Flat Glass Group Co., Ltd. Ruan Hongliang Chairman

APPENDIX I USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND FEASIBILITY ANALYSIS

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND FEASIBILITY ANALYSIS

I. THE PROCEEDS FROM THE PROPOSED A SHARE OFFERING:

No. 1 2 3 4	Name of Project The annual production capacity of 900,000 tons of glass as covers for PV modules project of a subsidiary of the Company, Anhui Flat Solar Glass Co., Ltd. ( )(1) The annual production capacity of 100,000 tons on-line low- emissivity (Low-E) coated glass project of the Company(2) The technological modification of the 150,000 tons of PV glass manufacturing facilities of a subsidiary of the Company, Zhejiang Jiafu Glass Co., Ltd. ( )(3) The 85 megawatts of distributed PV power generation project of a subsidiary of the Company, Jiaxing Flat New Energy Technology Co., Ltd.* ( )(4) Total	Total investment (RMB) 2,086,620,000 225,000,000 155,000,000 600,000,000 3,066,620,000	Proceeds proposed to be used (RMB)
			1,330,000,000 220,000,000 155,000,000 135,000,000
			1,840,000,000

Notes:

The entire project is estimated to cost approximately RMB2,086,620,000, of which, approximately RMB1,330,000,000 will be funded by the proceeds from the Proposed A Share Offering. The proceeds will be used for the establishment of eight PV raw glass production lines with two 1,000-ton PV glass furnaces and ten PV glass processing line with a total annual processing capacity of 75.0 million square meters of PV glass, being part of the said project.
The proceeds will be used for the conversion of an existing 600-ton float glass furnace to an on-line Low-E production line with an annual production capacity of 100,000 tons.
The proceeds will be used for the conversion of the two existing 300-ton PV glass furnaces to one 600-ton photovoltaic glass furnace.
The entire project is estimated to cost approximately RMB600,000,000, of which, approximately RMB135,000,000 will be funded by the proceeds from the Proposed A Share Offering. The proceeds will be used to construct total capacity of 20 megawatts of distributed PV systems.

II. BACKGROUND AND NECESSITY OF UNDERTAKING INVESTMENT PROJECTS WITH THE PROCEEDS FROM THE PROPOSED A SHARE OFFERING

1. Background of the Proposed A Share Offering

The Company is principally engaged in the design, development, production and sales of PV glass. The Company also manufactures and sell float glass, household glass and architectural glass. The glass production facilities including glass furnaces require a large amount of investment.

The Company will apply to CSRC and other relevant regulatory authorities for an initial public offering and listing of the Company’s A Shares in order to satisfy the long term capital needs for the

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APPENDIX I USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND FEASIBILITY ANALYSIS

sustainable business development, promote the smooth implementation of the development strategies and enhance the capital resources of the Company.

2. Necessity of undertaking investment projects with the proceeds from the Proposed A Share Offering

(1) Expand the Group’s production capabilities domestically
- The production facilities of the Group are currently located in Jiaxing, Zhejiang Province, PRC. According to a market research report of Frost & Sullivan, outside of the Yaugtze River Delta, major PV module factories are located in Eastern and Central China. The demand for the Group’s PV glass produced by its PV module factories, which are located in Central China, is increasing over the recent years, while the quality of the products have increased. As disclosed in the Prospectus, the Company plans to establish PV glass processing facilities in Anhui Province as its preliminary launch in the area. In order to meet customer demand of higher quality and the expected increase in demand of the Company’s products in Central China, the Company plans to undertake the project of “annual production capacity of 900,000 tons of glass as covers for PV modules project” to further leverage on the Group’s existing business presence in Anhui Province, which is located closer to Central China as compared to Jiaxing, to (i) better serve the Group’s customers who are located in Central China or in close proximity to Central China; (ii) enhance the profitability of the Group; (iii) lower the shipment costs of the Group for delivering the products to such customers; and (iv) increase the Group’s market penetration in these areas.
(2) Continue to optimize the product mix of the Group

The Company plans to continue to optimize its product mix so that it can readily adapt to the changing market conditions and reduce any adverse impact on the Group’s operations. Meanwhile, the Company aims at increasing profitability by allocating more production capacity to products with high gross profit margins. The PRC government is also encouraging the increased use of energy-efficient materials such as Low-E glass which are more environmental-friendly. According to the Twelve Five-year Plan for Construction Materials Industry ( ) and the Twelve Fiveyear Plan for New Materials Industry ( ) issued by the Ministry of Industry and Information Technology of the PRC on 8 November 2011 and on 4 January 2012, respectively, the development of energy efficient safety glass products is one of the key development areas, and the use of Low-E glass is encouraged. In addition, since 2013, the Group has experienced a growing demand for its Low-E glass products. Accordingly, the Group plans to adjust its product mix to take advantage of the growth opportunity in the market of energy-efficient materials and to meet the increasing customer demand. Therefore, the Company intends to undertake the “annual production capacity of 100,000 tons on-line Low-E coated glass project” in Jiaxing, Zhejiang Province.

(3) Increase the production efficiency of the Group

As at the Latest Practicable Date, the Company’s PV glass furnaces include two furnaces each with a daily maximum production capacity of 300 tons, one furnace with a daily maximum production capacity of 490 tons and two furnaces each with a daily maximum production capacity of 600 tons. Of these furnaces, three have a daily

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APPENDIX I

USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND FEASIBILITY ANALYSIS

maximum production capacity of approximately 500 tons or above, which are considered large-scale and are energy efficient. Based on the Group’s operating experience, a large-scale furnace of approximately 500 tons of daily maximum capacity and above can reduce unit energy consumption by up to approximately 20% as compared to a smaller furnace with approximately 300 tons of daily maximum production capacity. In order to enhance the efficiency of the fuel the Group requires for its operations, the Company intends to undertake the “technological modification of the 150,000 tons of PV glass manufacturing facilities project”. The Company believes this modification and upgrade will allow the Group to produce PV glass on a more costefficient manner and enable the Group to further lower emission of pollutants and thus, become more environmental-friendly.

(4) Integrate the Group’s industry chain

As at the Latest Practicable Date, the Company has completed the installation of 18.4 megawatts of distributed PV systems. All of these distributed PV systems are installed on the rooftops of the Company’s production facilities and the power generated by such distributed PV systems is solely used by the Company. With the Company’s experience in installing and operating distributed PV system and to support the Company’s development in the PV industry, the Company has obtained the government’s approval for the installation of an additional 85 megawatts of distributed PV systems. Distributed PV systems mainly involve the procurement of PV modules from suppliers of PV modules, including the Company’s customers. The Directors believe that procurement of PV modules from the Company’s downstream customers will strengthen the relationship and cooperation between the Company and its customers, thereby will further strengthen the Company’s influence in the PV industry. As the Company has limited available space for further rooftop installation, the new distributed PV systems will be installed on the rooftops of other enterprises in Jiaxing City, Zhejiang Province, PRC. The Company intends to sell the electricity generated by the distributed PV systems directly to these enterprises at negotiated prices, which are expected to be higher than the cost of the Company’s PV power generation but lower than that currently paid by these enterprises to electricity companies. According to the feasibility study of this project, the income provided by this project will not significantly alter the business segments and their revenue contributions.

As at the Latest Practicable Date, the Company has commenced initial negotiations with enterprises in Jiaxing City, Zhejiang Province, PRC regarding the installation of distributed PV systems on their rooftops and the sale of electricity generated by the same to these enterprises, but has not entered into any binding agreement with such enterprises with respect to such arrangements.

III. BASIC INFORMATION OF THE INVESTMENT PROJECTS USING THE PROCEEDS FROM THE A SHARE OFFERING

The proceeds from the raised from the proposed A Share Offering, after deducting listing expenses, will not exceed RMB1,840.0 million, and will be applied to the following projects: (i) the annual production capacity of 900,000 tons of glass as covers for PV modules project of a subsidiary of the Company, Anhui Flat Solar Glass Co., Ltd.; (ii) the annual production capacity of 100,000 tons on-

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APPENDIX I

USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND FEASIBILITY ANALYSIS

line low-emissivity (Low-E) coated glass project of the Company; (iii) the technological modification of the 150,000 tons of PV glass manufacturing facilities of a subsidiary of the Company, Zhejiang Jiafu Glass Co., Ltd.; and (iv) the 85 megawatts of distributed PV power generation project of a subsidiary of the Company, Jiaxing Flat New Energy Technology Co., Ltd..

Specific details of each of the investment projects using the proceeds from the A Share Offering:

(i) The annual production capacity of 900,000 tons of glass as covers for PV modules project of a subsidiary of the Company, Anhui Flat Solar Glass Co., Ltd. : The proceeds will be used for the establishment of eight PV raw glass production lines with two 1,000-ton PV glass furnaces and ten PV glass processing line with a total annual processing capacity of 75.0 million square meters of PV glass. Such investment will be applied mainly to the infrastructure and equipment purchase. The project will be completed within 3 years. As at the Latest Practicable Date, the Group has obtained the approval from the relevant PRC government authorities for this project. The Group has entered into an agreement with the local government authority in respect of the land to construct the facilities and has completed the construction design and started to plan orders for the relevant equipment;
(ii) The annual production capacity of 100,000 tons on-line low-emissivity (Low-E) coated glass project of the Company : The proceeds will be used for the conversion of an existing 600-ton float glass furnace to an on-line Low-E production line with an annual production capacity of 100,000 tons. Such investment will be applied mainly to equipment purchase and furnace reconstruction. The project will be completed within 1 years. As at the Latest Practicable Date, the Group has obtained the approval from the relevant PRC government authorities for this project. The Group has completed the construction design and has started to plan orders for the relevant equipment;
(iii) The technological modification of the 150,000 tons of PV glass manufacturing facilities of a subsidiary of the Company, Zhejiang Jiafu Glass Co., Ltd. : The proceeds will be used for the conversion of the two existing 300-ton PV glass furnaces to one 600-ton photovoltaic glass furnace. Such investment will be applied mainly to equipment purchase and furnace reconstruction. The project will be completed within 1 year. As at the Latest Practicable Date, the Group has obtained the approval from the relevant PRC government authorities for this project and is carrying out preliminary design work of the project;
(iv) The 85 megawatts of distributed PV power generation project of a subsidiary of the Company, Jiaxing Flat New Energy Technology Co., Ltd. : The proceeds will be used to construct total capacity of 20 megawatts of distributed PV systems. Such investment will be applied mainly to the purchase of PV modules. The project will be completed within one year. As at the Latest Practicable Date, the Group has obtained the approval from the relevant PRC government authorities for this project. The Group has commence discussions with potential companies to install distributed PV systems on the rooftop of the production plant of such companies and is yet to enter in to any binding agreement.

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APPENDIX II

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

For the terms and conditions stated in this Articles of Association and the apostille thereof, the term “Mandatory Provision” or “MP” refers to the Mandatory Provisions for Articles of Association of Companies to be Listed Overseas (ZWF [1994] No. 21) jointly promulgated by the former State Council Securities Commission and the former State Commission for Restructuring the Economic System (hereinafter referred to as the “State Commission for System Restructuring”).

ARTICLES OF ASSOCIATION

of

FLAT GLASS GROUP CO., LTD.

Chapter 1 General Provisions

Article 1 The Articles of Association are formulated in accordance with the Company Law of the People’s Republic of China (hereinafter referred to as the “Company Law”), the Securities Law of the People’s Republic of China (hereinafter referred to as the “Securities Law”), the Special Regulations of the State Council on the Overseas Offering and Listing of Shares by Joint Stock Limited Companies (hereinafter referred to as the “Special Regulations”), the Mandatory Provisions for Articles of Association of Companies Listed Overseas (hereinafter referred to as the “Mandatory Provisions”), Guidance for Articles of Association of Listed Companies (hereinafter referred to as the “Guidance for Articles of Association”), Letter of Opinions on Supplementary Amendments to Articles of Association of Companies to be Listed in Hong Kong (hereinafter referred to as the “Opinions on Supplementary Amendments”) , Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (hereinafter referred to as the “Hong Kong Listing Rules ~~”)L~~ isting Rules of the Stock Exchange”), Notice of the Shanghai Stock Exchange on Issuing the Stock Listing Rules (hereinafter referred to as the “Listing Rules of SSE”) and the Listing Rules of Stock Exchange, collectively called the “Listing Rules”, and other relevant requirements, with an aim to safeguard the legal interests of Flat Glass Group Co., Ltd. (hereinafter referred to as the “Company” or “the Company”), its shareholders and creditors and regulate the organization and conduct of the Company. (MP1)

The Company is incorporated as a joint stock limited company in accordance with the Company Law , Special Provisions and other relevant PRC laws and administrative regulations.

The Company is a joint stock limited company established on 29 December 2005 by the promoters under the overall change ~~r~~ estructuring of original Zhejiang Flat Glass & Mirror Ltd.. The Company was registered with the Zhejiang Provincial Administration for Industry & Commerce. The Company’s unified social credit code is 913300007044053729.

The promoters of the Company are: Ruan Hongliang, Jiang Jinhua, Ruan Zeyun, Zheng Wenrong, Shen Fuquan, Zhu Quanming, Wei Yezhong, Shen Qifu, Tao Hongzhu and Wei Shutao.

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APPENDIX II

Article 2 Registered name of the Company: (MP2)

Chinese name:

English name: FLAT GLASS GROUP CO., LTD.

Article 3 Address of the Company: No. 1999, Yunhe Road, Xiuzhou District, Jiaxing City, Zhejiang Province. (MP3)

Postal Code: 314001;

Telephone number: (86573) - 82793999

Facsimile number: (86573) – 82793015.

Article 4 The legal representative of the Company is the chairman of the Board. (MP4)

Article 5 The Company is a joint stock limited company having perpetual existence. (Listed Company). (MP5)

Article 6 The Articles of Association ~~a~~ re ~~p~~ assed ~~b~~ y ~~a s~~ pecial ~~r~~ esolution ~~o~~ n ~~t~~ he general ~~m~~ eeting, and will be effective on ~~t~~ he ~~d~~ ay ~~of t~~ he ~~C~~ ompany ~~’s O~~ verseas ~~L~~ isted Foreign Shares being listed and traded on The Stock Exchange of Hong Kong ~~L~~ imited (hereinafter referred as ~~“H~~ ong Kong Stock Exchange ~~”)~~ . Upon ~~u~~ pon approval by the competent national departments and on the date on which the domestic shares of the Company are listed domestically at SSE; upon the effective day of the Articles of Association, the existing Articles of Association of the Company will lapse automatically.

From the date on which the Articles of Association came into effect, the Articles of Association constitute a legally binding document regulating our organization and activities, and the rights and obligations between the Company and each shareholder and among the shareholders themselves.

Article 7 The Articles of Association shall also be legally binding on the Company and its shareholders, Directors, Supervisors general manager and senior management, who shall have the right to make any claims and propositions regarding the Company’s affairs in accordance with the Articles of Association. (MP7)

Without violation of the regulation as prescribed in Article 191 of the Articles of Association, pursuant to the Articles of Association, the shareholders may pursue actions against the Company, other shareholders and the Company’s directors, supervisors, general manager and other senior management; pursuant to the Articles of Association, the Company may pursue actions against the shareholders. The other senior management as stated hereof refers to the Company’s vice general manager, Secretary of the Board, CFO and other senior management hired by the Board of Directors.

The actions, as referred to in the preceding paragraph, include the instituting of legal proceedings with a court or filing with an arbitral authority for arbitration.

Article 8 The Company may invest in other limited liability companies. and companies limited by shares and is liable to such companies to the extent of its capital contribution. (MP8)

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APPENDIX II

Unless otherwise specified by laws, the Company shall not be the capital contributor bearing joint liability associated with the debts of the invested enterprises.

Chapter 2 Objective and Scope of Business

Article 9 The business objective of the Company is to achieve customer orientation, faithful cooperation and mutual benefit. (MP9)

Article 10 The business scope of the Company shall be as approved by the company examination and approval authority and industrial and commercial administration authority.

The business scope of the Company includes: manufacture of special glass, mirror and glass products; wholesale of construction materials and precious metals; loading/unloading wharf cargo service; import and export business of glass, mirrors, equipment, raw materials of glass and related supplementary materials and glass furnace materials. (The Company operates with appropriate qualifications.) (MP10)

Chapter 3 Shares and Registered Capital

Article 11 The Company shall have ordinary shares at all times; with the approval of the company examination and approval authority authorized by the State Council, the Company may have other forms of shares when needed. (MP11)

Article 12 All shares issued by the Company shall have nominal values, with each share having a nominal value of RMB 0.25. (MP12)

RMB referred to in the preceding paragraph refers to the statutory currency of the PRC.

Article 13 The stock of the Company shall take the form of shares. The Company may offer its shares to both domestic and foreign investors with the approval of the relevant securities regulatory authority under the State Council. The Company shall issue shares in a fair and just manner, and each share of the same category shall have the same right. All shares of the same category issued at the same time shall be issued under the same conditions and at the same price; any entity or individual shall pay the same price for each share. (MP13)

Foreign investors referred to in the preceding paragraph shall mean those investors in foreign countries, Hong Kong, Macau or Taiwan who subscribe for shares of the Company. Domestic investors shall mean those investors in the PRC, excluding the aforementioned regions, who subscribe for shares of the Company.

Article 14 Shares that the Company issues to domestic investors for subscription in RMB shall be known as domestic shares. Shares that the Company issues to foreign investors for subscription in foreign currencies as well as shares holding by foreign investors and shares transferred by shareholders holding domestic shares in the Company shall be known as foreign shares. Foreign shares offered and listed overseas shall be called overseas listed foreign shares. All stocks traded on domestic stock exchange are domestic shares listed domestically. (MP14)

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APPENDIX II

Foreign currency referred to in the preceding paragraph refers to the statutory currency, other than RMB, of another country or region, which is recognized by the foreign exchange authority of the state and can be used to pay the Company for the shares.

The overseas listed foreign shares offered by the Company on the Hong Kong Stock Exchange shall be called H shares, i.e., shares which have been admitted for listing on the Hong Kong Stock Exchange, the nominal value of which is denominated in RMB and which are subscribed for and traded in Hong Kong dollars. Upon approval by the State Council or the securities regulatory authority under the State Council and agree by the Hong Kong Stock Exchange, the domestic shares may transfer to H shares which may be circulated on the Hong Kong Stock Exchange.

Both holders of domestic shares and holders of foreign shares are ordinary shareholders and shall have the same rights and obligations. The domestic shares issued by the Company and the foreign shares listed overseas shall have the same right with respect of any part in mode of dividend or any other form.

Article 15 Approved by the company-approval department authorized by the State Council, the Company issued 70,000,000 shares (with nominal value of RMB 1 per share), all of which have been subscribed and held by the promoters at the time of the Company’s incorporation. (MP15)

The promoters of the Company are comprised of ten natural persons such as Mr. Ruan Hongliang. When the Company was promoted as a stock corporation, the registered capital of the Company was RMB 70 million and the total share capital was 70,000,000 shares, the shareholdings of the promoters were as follows:

No. 1 2 3 4 5 6 7 8 9 10	Name of shareholder Ruan Hongliang Jiang Jinhua Ruan Zeyun Zheng Wenrong Shen Fuquan Zhu Quanming Wei Yezhong Shen Qifu Tao Hongzhu Wei Shutao Total	Amount of capital contributed (RMB’000) 24,500 17,500 17,500 3,150 2,100 2,100 1,050 700 700 700 70,000	Percentage of contribution (%) 35.0 25.0 25.0 4.5 3.0 3.0 1.5 1.0 1.0 1.0 100	Contribution method Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash	Date of contribution
					December 2005 December 2005 December 2005 December 2005 December 2005 December 2005 December 2005 December 2005 December 2005 December 2005

Article 16 The total number of ordinary shares issued by the Company upon approval at the time of the Company’s incorporation is 30 million (RMB 1 per share), which have been subscribed by Ruan Hongliang and other thirteen shareholders in April 2007. The total number of share is changed to 100 million; the Company took over Jiaxing City Fute Safety Glass Co., Ltd in August 2008 and the total number of share is changed to 100.5 million; in July 2009, the conversion of undistributed profit into share capital changed the total number of share into 107.535 million; in September 2009, 4.965 million shares were issued to Ruan Zeyun and other nine persons (RMB 1 per share), with the total number of share capital is 112.50 million shares; in December 2010, 7.3 million ordinary shares (RMB 1 per share) were issued to Boxin Growth (Tianjin) Equity Investment Fund Partnership

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APPENDIX II

(Limited Partnership) and other four investment institutions, with the total number of share capital of 119.8 million; in March 2011, the Company caused the conversion of undistributed profit into share capital which changed the Company’s registered capital into 239.6 million shares; in June 2011, the Company caused the conversion of undistributed profit into share capital which changed the Company’s registered capital into 359.4 million; and in July 2014, the registered capital was decreased into 21.9 million shares, with the total number of share capital into 337.5 million.

Upon approved by the securities regulatory authority under the State Council, the Company may issue not more than 450 million overseas-listed foreign shares and initial public offering on Hong Kong Stock Exchange with nominal value of RMB 0.25 per share.

After completion of the above mentioned issuance (including full exercise of over-allotment option), the structure of shares is: 1,350,000,000 ordinary shares. Of which: 439,358,400 shares were issued to the promoter Ruan Hongliang; 350,532,000 shares were issued to the promoter Ruan Zeyun; 324,081,600 shares were issued to the promoter Jiang Jinhua; 57,780,000 shares were issued to the promoter Zheng Wenrong; 38,520,000 shares were issued to the promoter Shen Fuquan; 38,520,000 shares were issued to the promoter Zhu Quanming; 19,260,000 shares were issued to the promoter Wei Yezhong; 12,840,000 shares were issued to the promoter Tao Hongzhu; 12,840,000 shares were issued to the promoter Shen Qifu; 56,268,000 shares were issued to other holders of domestic shares; and 450,000,000 shares were issued to overseas-listed foreign shares Shareholders. The total share capital of the Company is 1,800,000,000 shares.” (MP16)

Approved by the securities regulatory agency under the State Council, the Company may issue the common stock with [Š] shares. The equity structure of the Company is: [Š] shares of common stock, including [Š] shares of domestically listed domestic shares (A-shares), accounting for [Š] % of the total number of shares; [Š] shares of overseas listed foreign shares (H-shares), accounting for [Š] % of the total number of shares.

Article 17 The domestically listed domestic shares shall be under depository by the relevant organ satisfying the relevant provisions. The H-shares issued by the Company are mainly under the custodian by securities registration and settlement company in Hong Kong or held by shareholder in its own name.

Article 17 ~~1~~ 8 The Board of the Company may make arrangement for the Company’s separate issuance of overseas listed foreign shares and domestically listed domestic shares according to the issue scheme approved by the securities regulatory authority under the State Council. (MP17)

According to the aforesaid scheme for separate issuance of overseas listed foreign shares and domestically listed domestic shares, the Company may issue the shares separately within 15 months after approval of the securities regulatory authority under the State Council.

Article 18 ~~1~~ 9 If the Company separately issues overseas listed foreign shares and domestically listed domestic shares within the total number specified in the issue scheme, the said shares shall be issued respectively at one time; if it is impossible for the shares to be issued at one time for special reasons, the shares may be issued by several times upon approval by the securities regulatory authorities of the State Council. (MP18)

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APPENDIX II

Article 19 Upon completion of the aforesaid issuance of overseas listed ~~f~~ oreign ~~2~~ 0 The Company’s registered capital is RMB 450,000,00. After issue of A-shares, the registered capital of the Company is RMB 450,000,000 ~~.~~ is will be increased to RMB [Š]. The change of its registered capital shall be registered at the competent Administration for Industry and Commerce. (MP19)

Article 2 ~~0~~ 21 The Company may increase capital based on the needs of operation and development and in accordance with the laws, administrative regulations, departmental rules, listing rules issued by the place where the stocks are traded and the Articles of Association. (MP20)

The Company may increase its capital by:

(I) Offer of new shares to unspecified investors;
(II) Placement of new shares to existing shareholders;

(III) Offer of new shares to existing shareholders;

(IV) Offer of new shares to specified investors;
(V) Conversion of capital reserve into share capital; or

(VI) Other means stipulated by laws and administrative regulations and approved by the securities authority under the State Council.

Issuance of new shares by the Company shall be subject to approval as specified in the Articles of Association and follow the procedure specified in the relevant laws and administrative regulations of the state and the place of listing for the shares of the Company.

The Company shall register the change of registered capital or equity with the industrial and commercial administration authority and make announcement according to the Listing Rules.

Article 21 ~~2~~ 2 Save as otherwise specified by laws, administrative regulations and as otherwise required by the Hong Kong Stock Exchange, the Company’s shares may be transferred freely and shall not be subject to any lien. (MP21)

Transfer of the overseas-listed foreig ~~n s~~ hares ~~l~~ isted ~~o~~ n ~~t~~ he ~~H~~ ong ~~K~~ ong ~~S~~ toc ~~k~~ Exchange ~~C~~ ompany’s shares shall be registered with a Hong Kong securities registry entrusted by the Company. The Company shall indicate and promote stock transfer registration; refuse the subscription, purchase or transfer of shares by any individual holder’s name for registration, unless such individual holder submits the transfer form bearing signatures to the stock transfer registration agency.

Article 2 ~~2~~ Subjec ~~t to t~~ he ~~a~~ pproval ~~f~~ ro ~~m e~~ xamination ~~a~~ nd ~~a~~ pproval ~~a~~ uthorities authorized by the State Council, the stocks holding by domestic share ~~s~~ hareholders shall have the right to cause listing o ~~r~~ transfer the stocks at overseas ~~s~~ ecurities exchange ~~s~~ tock. ~~S~~ uch ~~l~~ istin ~~g or t~~ ransfer ~~s~~ hall ~~n~~ o ~~t n~~ eed ~~v~~ otin ~~g~~ at the company ~~’s c~~ lass meeting; ~~h~~ owever, ~~it s~~ hall ~~c~~ omply ~~w~~ ith ~~t~~ he ~~s~~ upervision ~~p~~ rocedure, ~~r~~ egulations and requirements of overseas securities exchange ~~s~~ tock. ~~2~~ 3 Where any director, supervisor and senior management or any shareholder who holds more than 5% of the shares of the Company, sells the stocks of the Company as held within 6 months after purchase, or purchases any stock as sold within

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APPENDIX II

6 months thereafter, the proceeds as generated therefrom shall be incorporated into the profits of the Company. The board of directors of the Company shall take back the proceeds. However, where a securities company holds more than 5% of the shares of the Company, which are the residual stocks after sale by proxy as purchased thereby, the sale of the foregoing stocks shall not be limited by the term of 6 months.

Where the board of directors of the Company fails to implement the provisions as prescribed in the preceding paragraph herein, the shareholders concerned have the right to require the board of directors to implement them within 30 days. Where the board of directors fail to implement them within the aforesaid term, the shareholders shall have the right to directly file a lawsuit with the people’s court in their own names for the interests of the Company.

Chapter 4 Decrease and Buyback of Shares

Article 23 ~~2~~ 4 The Company may decrease its registered capital in accordance with the Articles of Association. The Company shall decrease its registered capital pursuant to the Company Law , other relevant regulations and the Articles of Association. (MP22)

Article 2 ~~4~~ 25 The Company shall prepare a balance sheet and a list of property inventory when decreasing its registered capital.

The Company shall notify all creditors within 10 days after adoption of the resolution to decrease the registered capital and shall make announcements in newspapers within 30 days. The creditors shall have the right to require the Company to repay debts or provide corresponding guarantees for debt repayment within 30 days after receipt of the notice or within 45 ~~9~~ 0 days after the first announcement if the creditors haven’t received the notice.

The Company’s registered capital shall not, upon the decrease of capital, be less than the statutory minimum limit. (MP23)

Article 25 ~~2~~ 6 The Company may, in the following circumstances, buy back its outstanding shares following the legal procedure specified in the Articles of Association, administrative regulations, Listing Rules and with approval from the regulatory authority of the state:

(I) When cancelling shares for decrease of the registered capital of the Company;
(II) When merging with other companies holding shares of the Company;

(III) When awarding shares to employees of the Company;

(IV) When shareholders objecting to resolutions of the general meeting concerning merger or division of the Company require the Company to buy their shares; or

(V) In other circumstances stipulated by laws and administrative regulations. (MP24)

Article 2 ~~6~~ 27 The Company may buy back its shares in any of the following ways upon approval by the regulatory authority of the state:

(I) Issuing a buyback offer to all shareholders according to an equal percentage;

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APPENDIX II

(II) Buying back through open transaction in the stock exchange;
(III) Buying back through agreement outside the stock exchange; or
(IV) Other modes as approved by the competent authority concerned. (MP25)

Article 2 ~~7~~ 28 In buying back shares through agreement outside the stock exchange, the Company shall seek prior approval at a general meeting in accordance with the Articles of Association. With prior approval at the general meeting in the same way, the Company may cancel or change the contract already concluded in the aforesaid manner or waive any right under the contract. (MP26)

The share buyback contract mentioned in the preceding paragraph includes (but is not limited to) agreement to undertake share buyback obligations and obtain share buyback rights.

The Company shall not transfer the share buyback contract or any right thereunder.

As far as the Company’s right to repurchase the redeemable shares is concerned:

(I) The price shall not exceed certain upper limit if such shares are not repurchased in the market or by bidding;

(II) Whereas in the event of repurchase by bidding, relative bids must be equally issued to all its shareholders.

Article 28 ~~2~~ 9 Buyback of the Company’s shares for reasons set out in (I) to (III) of Article 24 ~~2~~ 6 of the Articles of Association shall be subject to resolution at a general meeting. After the Company has bought back its shares in accordance with Article 2 ~~4~~ 26 of the Articles of Association, such shares shall be cancelled within 10 days after buyback in the circumstance set out in (I), or shall be transferred or cancelled within six months in the circumstances set out in (II) and (IV).

Shares bought back by the Company as per (III) of Article 24 ~~2~~ 6 of the Articles of Association shall not exceed 5% of the total outstanding shares of the Company; the buyback cost shall be covered by the after-tax profit of the Company; and the shares bought back shall be transferred to employees within one year.

After buying back shares according to laws, the Company shall deregister the said shares before the deadline specified by the relevant laws and administrative regulations, and have the change of the registered capital registered with the original company registration authority.

The aggregate par value of the cancelled shares shall be deducted from the Company’s registered capital. ~~,~~ except for the shares purchased by the Company subject to the provisions as stipulated in paragraph (III) of Article 26. (MP27)

Article 29 ~~3~~ 0 Unless the Company is under liquidation, the Company shall observe the following regulations when buying back its outstanding shares:

(I) If the Company buys back shares at nominal value, the payment shall be deducted from the book balance of distributable profit of the Company and the proceeds from issuance of new shares for buying back old shares;

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APPENDIX II

(II) If the Company buys back shares above nominal value, the part equivalent to the nominal value shall be deducted from the book balance of distributable profit of the Company and the proceeds from issuance of new shares for buying back old shares; the part above the par value shall be processed as follows:

Deducted from the book balance of distributable profit of the Company if the shares bought back were issued at par value;
Deducted from the book balance of distributable profit of the Company and the proceeds from issuance of new shares for buying back old shares if the shares bought back were issued above par value; but the amount deducted from the proceeds from issuance of new shares shall not exceed the total premium obtained at the time of issuance of the shares bought back and shall not exceed the amount (including premium from issuance of new shares) in the premium account (or capital reserve account) of the Company at the time of buyback;

(III) The monies paid by the Company for the following purposes shall be deducted from the distributable profits of the Company:

Acquiring the right to buy back its shares;
Changing the share buyback contract;
Cancelling its obligations under the share buyback contract.

(IV) After the par value of the cancelled shares is deducted from the registered capital of the Company pursuant to relevant regulations, the amount deducted from the distributable profit for paying the par value of the shares bought back shall be stated in the premium account (or capital reserve account) of the Company.

Chapter 5 Financial Assistance to Acquire Shares of the Company

Article 3 ~~0~~ 31 The Company or its subsidiaries shall not at any time or in any form provide any financial assistance to purchasers or potential purchasers of the Company’s shares. The aforesaid purchasers include persons directly or indirectly undertaking obligations because of the purchase of the Company’s shares.

The Company or its subsidiaries shall not at any time or in any form provide any financial assistance to the aforesaid obligors for the purpose of reducing or discharging their obligations.

The provisions herein do not apply to the circumstances set out in Article 31 ~~3~~ 3 of this Chapter. (MP29)

Article 3 ~~1~~ 32 Financial assistance referred to in this Chapter includes (but is not limited to) the following: (MP30)

(I) Gift;

(II) Guarantee (including the case where the guarantor undertakes liability or provides property to ensure fulfillment of obligations by the obligor), compensation (excluding compensation for the Company’s own error), termination or waiver of rights;

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APPENDIX II

(III) Provision of loan or execution of contract under which the Company fulfils obligations prior to other parties, change of the said loan and the parties to the contract, and transfer of the said loan and rights under the contract; and

(IV) Provision of any other form of financial assistance when the Company is insolvent has no net assets or its net assets are likely to decrease significantly.

Obligations referred to herein include the obligations undertaken by the obligor for entering into a contract or making an arrangement (regardless whether the said contract or arrangement is enforceable or whether it is undertaken by the obligor individually or jointly with others) or for changing his financial position in any form.

Article 3 ~~2~~ 33 The following acts are not deemed as prohibited under Article 30 ~~3~~ 1 of this Chapter: (MP31)

(I) The Company provides the relevant financial assistance truthfully in the interest of the Company and the said financial assistance is not mainly intended to buy back the Company’s shares or the said financial assistance is part of a general plan of the Company;

(II) The Company distributes its properties as dividends in accordance with the law

(III) The Company distributes shares as dividends;

(IV) The Company decreases the registered capital, buys back shares and adjusts the equity structure in accordance with the Articles of Association;

(V) The Company, within its business scope, provides loan for its normal business operations (but such financial assistance shall not give rise to a decrease of the net assets of the Company, or despite a decrease, such financial assistance is deducted from the distributable profit of the Company); and

(VI) The Company provides loan for the employee stock ownership plan (but such financial assistance shall not give rise to a decrease of the net assets of the Company, or despite a decrease, such financial assistance is deducted from the distributable profit of the Company).

Chapter 6 Shares and Shareholders’ Register

Article 3 ~~3~~ 34 Shares refers to the certificate proving that the shares issued by the Company are held by shareholders. The Company’s shares are all registered shares. (MP32)

Matters specified in the Company’s shares shall include:

(I) Company name;
(II) Date of incorporation of the Company;
(III) Shareholder’s name and address;

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APPENDIX II

(IV) (III) Type of shares held by each shareholder, par value and number of shares represented;

(V) (IV) ~~S~~ toc ~~k n~~ umber ~~;~~ Number of stock held by each shareholder and the date on which the stock is acquired;

(VI) (V) ~~O~~ ther matters to be specified pursuant to the Company Law, Special Provisions, Article 19A.52 of Listing Rules of Stock Exchange and as required by the stock exchange on which the Company’s shares are listed.

During the period when overseas foreign shares are listed on the Hong Kong Stock Exchange, the Company shall ensure all listing documents and ownership certificates of all its shares listed on the Hong Kong Stock Exchange (including overseas foreign shares listed on the Hong Kong Stock Exchange) shall include the following statements, and shall instruct and promote its share registrar to reject any subscription, purchase or transfer of the shares registered in the name of any individual holder, unless and until the said individual holder has submitted to the said share registrar the signed form relating to the said shares, which form shall include the following statements:

(I) The share buyer agrees with the Company and each of its shareholders, and the Company agrees with each shareholder to observe and comply with the Company Law, Special Provisions, other relevant laws, administrative regulations and the Articles of Association.

(II) The share buyer agrees with the Company and the Company’s each shareholder, director, supervisor, general manager and senior executive, and the Company acting on its behalf and for each director, supervisor, general manager and senior executive agrees with each shareholder, to refer all disputes or claims arising from the Articles of Association or from the rights or obligations specified in the Company Law or other relevant laws or administrative regulations with respect to the Company’s affairs to arbitration in accordance with the Articles of Association, and that any reference to arbitration shall be deemed to authorize the arbitration tribunal to conduct a public hearing in open session and to publish its arbitration award, and the arbitration award shall be final and conclusive.

(III) The share buyer agrees with the Company and each of its shareholders that the shares of the Company can be transferred freely by the holders.

The share buyer authorizes the Company to conclude contract on his behalf with each director, general manager and senior executive, who shall undertake to observe and fulfill duties for shareholders as specified in the Articles of Association.

Article 3 ~~4~~ 35 The Company’s stocks may be transferred, gifted ~~g~~ ave as a gift, inherited and pledged pursuit to the relevant laws, administrative regulations, department rules and the Article ~~A~~ rticles of Association.

The transfer of stocks requires registration at the stock registration organ entrusted by the Company.

Article 35 ~~3~~ 6 The Company does not accept the shares of the Company as the subject matter of any pledge.

Article 3 ~~6~~ 37 Shares shall be signed by the chairman of the Board. Other relevant senior executives of the Company shall also sign the shares if required by the stock exchange with which the

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Company’s shares are listed. The shares shall come into effect after stamping or printing of the corporate seal on the shares. The shares shall only be stamped with the corporate seal under the authorization of the Board. The signature of the chairman or other relevant senior executive of the Company may also be printed on the shares. (MP33)

Article 3 ~~7~~ 38 The Company shall establish a shareholders’ register recording the following matters: (MP34)

(I) Names (titles), addresses (domiciles), occupations or features of the shareholders;
(II) Type and number of shares held by the shareholders;
(III) Monies paid or payable for the shares held by the shareholders;
(IV) The serial numbers of the shares held by the shareholders;
(V) Date on which the shareholders are registered as shareholders; and
(VI) Date on which the shareholders terminate as shareholders.

The shareholders’ register is a sufficient evidence of the shareholders’ shareholdings in the Company unless there is evidence to the contrary.

Article 3 ~~8~~ 39 The Company may keep overseas the register of holders of overseas listed foreign shares and entrust it to the care of an overseas agency in accordance with the understanding and agreement reached between the securities regulatory authority under the State Council and the overseas securities regulatory authority. The original register of holders of Hong Kong-listed foreign shares shall be kept in Hong Kong.

A copy of the register of holders of overseas listed foreign shares shall be made available at the Company’s domicile; the appointed foreign agency shall at any time ensure the original and the copy of the register of holders of overseas-listed foreign shares are consistent.

In the event that the records in the original and the copy of the register of holders of overseaslisted foreign shares are inconsistent, the original shall prevail. (MP35)

Article 39 ~~4~~ 0 The Company shall keep a complete shareholders’ register. (MP36)

The shareholders’ register shall include the following parts:

(I) Shareholders’ register kept at the domicile of the Company, save as specified in (II) and (III) herein;

(II) The Company’s register of holders of overseas listed foreign shares kept in the place of the overseas stock exchange where the shares are listed; and

(III) Shareholders’ register that the Board decides to keep in other place for the purpose of listing the shares of the Company.

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Article ~~4~~ 0 Article 41 The respective parts of the shareholders’ register shall not overlap each other. In the event of transfer of shares registered in a specific part of the shareholders’ register, the said shares shall not be registered in any other part of the shareholders’ register in the duration of the registration of the said shares. This article does not apply to registration of change of the shareholders’ register when new shares are issued subject to Article 20 of the Article of Association.

Alterations or corrections to each section of the register of shareholders shall be made in accordance with the laws of the place where each section of the register of shareholders is kept. (MP37)

Article 42 All overseas-listed foreign shares listed on the Hong Kong Stock Exchange for which full payment has been made may be transferred freely in accordance with the Articles of Association; save under the following conditions, the Board may refuse to recognize any transfer instrument without providing any reason:

(I) The transfer instrument and other instruments relating to the ownership of any share or affecting transfer of the share ownership shall be registered, and relevant payment shall be made to the Company according to the expense standard specified in the Listing Rules of ~~t~~ he ~~H~~ ong ~~K~~ ong Stock Exchange to register the documents of share transfer and other share ownership documents with respect to or influence the ownership of the shares;

(II) The transfer instrument only involves overseas-listed foreign shares listed in Hong Kong;

(III) Stamp tax has been paid for the transfer instrument;

(IV) Relevant shares and other evidence reasonably required by the Board to prove that the transferor has the right to transfer the said shares have been submitted;

(V) If the shares are intended to be transferred to joint holders, the number of the registered joint shareholders shall not exceed four; and

(VI) The relevant shares are not subject to lien of any company.

Should the Company refuse to register any transfer of shares, it shall, within two months from the date of the formal application for the transfer, provide the transferor and the transferee with a written notice stating its refusal of registration of such transfer.

Transfer of all overseas listed foreign shares listed in Hong Kong shall be executed with a written transfer instrument in a general or common format or any other format accepted by the Board; the said transfer instrument may be signed by hand without the seal. If the transferor or the transferee is a recognized clearing house as defined in relevant ordinances that take effect from time to time in accordance with Hong Kong laws (“recognized clearing house”) or proxy thereof as defined in Regulation of Hong Kong Securities and Futures (Chapter 571 of Hong Kong law), the transfer form can be signed by hand or print. All transfer instruments shall be kept at the legal address of the Company or other place designated by the Board from time to time.

Article 4 ~~1~~ 43 The shares held by proposers must not be transferred within 1 year after the establishment of the Company. Shares already issued by the Company before public offering shall not be transferred within one year after the shares of the Company are listed on the stock exchange.

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The directors, supervisors and senior executives shall report to the Company about their shareholdings and changes thereof and shall not transfer more than 25% of their shares per annum during their terms of office; the shares they hold in the Company shall not be transferred within one year after the shares of the Company are listed. The aforesaid persons shall not transfer their shares in the Company within half a year after they terminate service with the Company, except for the regulations with respect to transfer restrains of shares listed overseas as prescribed in the relevant regulations of the stock exchange at the location where the Company’s shares are listed.

Article 42 ~~4~~ 4 Change of the shareholders’ register arising from share transfer shall not be registered within 30 days before convening of a general meeting or within five days prior to the benchmark date on which the Company decides to distribute dividends. (MP38)

Article 4 ~~3~~ 45 If the Company convenes a general meeting, distributes dividends, conducts liquidation or executes any other act requiring recognition of equity, the Board shall designate a certain date as equity determination date, at the end of which the shareholders in the register shall be shareholders of the Company. (MP39)

Article 44 ~~4~~ 6 If any person objects to the shareholders’ register and asks to have his name (title) recorded in or deleted from the shareholders’ register, the said person may apply to the court with jurisdiction to correct the shareholders’ register. (MP40)

Article 45 ~~4~~ 7 If any shareholder in the shareholders’ register or any person requesting to have his name (title) recorded in the shareholders’ register has lost his shares (i.e. “the original shares”), the said shareholder or person may apply to the Company to reissue new shares for the said shares (i.e. “the relevant shares”). Regarding exercise of right to issue warrants to anonymous holders, the Company shall not issue any new warrant to replace the lost one, unless it is sure beyond reasonable doubt that the original warrant has been destroyed.

Application for reissuance of lost shares held by holders of domestic shares shall be processed in accordance with the Company Law .

Application for reissuance of lost shares by holders of overseas listed foreign shares may be processed pursuant to the law, regulation of the stock exchange or other relevant regulation of the place where the original of the shareholders’ register of overseas listed foreign shares is kept.

Application for reissuance of lost shares held by holders of overseas listed foreign shares listed in Hong Kong shall meet the following requirements:

(I) The applicant shall submit an application with the standard format designated by the Company and attach a notarial deed or statutory statement. The content of the notarial deed or statutory statement shall include the reason for application, information about how the shares are lost, and a statement that no other person may request to be registered as shareholder for the relevant shares.

(II) Before deciding to reissue new shares, the Company has not received a statement that anybody other than the applicant requests to be registered as shareholder for the said shares.

(III) After deciding to reissue new shares to the applicant, the Company shall publish announcement of reissuance of new shares on the newspapers designated by the Board; the announcement period is 90 days, with at least one announcement in 30 days.

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(IV) Before publishing the announcement of reissuance of new shares, the Company shall submit a copy of the to-be-published announcement to the stock exchange with which the Company is listed, and may publish the announcement only after receiving a reply from the said stock exchange confirming that the said announcement has been displayed in the stock exchange. The duration of display of the said announcement in the stock exchange is 90 days.

If the application for reissuing shares is not approved by the registered holder of the relevant shares, the Company shall mail a copy of the to-be-published announcement to the said shareholder.

(V) If, after expiry of the 90-day period of announcement and display specified in (III) and (IV) of this Article, the Company has not received any objection to reissuance of shares, the Company may reissue new shares as requested by the applicant.

(VI) When the Company reissues new shares pursuant to this Article, the Company shall immediately deregister the original shares, and record such deregistration and reissuance in the shareholders’ register.

(VII) All the expenses for deregistering the original shares and reissuing new shares shall be borne by the applicant. The Company may refuse to take any action before the applicant provides any reasonable guarantee. (MP41)

Article 4 ~~6~~ 48 After the Company reissues new shares in accordance with the Articles of Association, the name (title) of the bona fide purchaser of the aforesaid new shares or the shareholder later registered as owner of the said shares (if he is a bona fide purchaser) shall not be deleted from the shareholders’ register. (MP42)

Article 47 ~~4~~ 9 The Company shall have no obligation to compensate any person for any loss arising from deregistration of the original shares or reissuance of new shares, unless the said person can prove that the Company has committed any fraud. (MP43)

Chapter 7 Rights and Obligations of Shareholders

Article 4 ~~8~~ 50 Shareholders of the Company are persons lawfully holding shares of the Company, with names (titles) recorded in shareholders’ register.

The shareholders enjoy rights and fulfill obligations as per the type and number of shares they hold; shares of the same type represent the same rights and the same obligations. (MP44)

The Company shall not exercise any right to freeze or otherwise damage the rights attached to any shares directly or indirectly held by any person only on the ground that the said person has not disclosed his equity to the Company.

Where two or more persons are registered as joint shareholders of any shares, they shall be deemed as the joint holders of the said shares subject to the following restrictions:

(I) The Company shall not need to register more than four persons as joint shareholders of any shares;

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(II) The joint shareholders of any shares shall jointly and individually assume the responsibility for amounts of fees payable for relevant shares;

(III) In the event that any shareholder among the joint shareholders deceases, only the other remaining joint shareholders shall be deemed by the Company as the owners of the relevant shares. However, the Board may, for the purpose of modifying the shareholders’ register, require the provision of a death certificate of the relevant shareholder as it deems appropriate; and

(IV) Among the joint shareholders of any shares, only the joint shareholder listed first in the shareholders’ register has the right to take relevant shares from the Company and receive notices of the Company, and any notice served to the said person shall be deemed as having been served to all the joint shareholders of the relevant shares.

Article 49 ~~5~~ 1 The ordinary shareholders of the Company shall be entitled to the following rights: (MP45)

(I) To receive dividends and other profit distributions in proportion to the shares they hold;

(II) To request, call, convene and attend general meetings either in person or by proxy in accordance with laws and exercise the voting right;

(III) To supervise, present suggestions on or make inquiries about the business activities of the Company;

(IV) To transfer, give as gift or mortgage shares in accordance with the laws, administrative regulations and the Articles of Association;

(V) The shareholders shall have the right to obtain relevant information in accordance with laws, administrative regulations and the Articles of Association, pursuit to the written documents with respect to the type of shares holding in the Company and number of shares holding and upon the identification of the status of the shareholders by the Company, including:

Obtaining the copy of the Articles of Association after payment of production cost;
Being entitled to access and copy after payment of reasonable expenses;
(1) Copies of all shareholders’ registers;

(2) Personal information of the Company’s directors, supervisors, manager and other senior executives, including:

(a) Present and former names and aliases;
(b) Principal address (domicile);
(c) Nationality;
(d) Full-time and all part-time occupations and duties;
(e) Identity certificates and numbers thereof.

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(3) Report of status of the issued share capital of the Company;

(4) Reports of the total par value, number of shares, and the highest and lowest prices of each class of shares bought back by the Company since the last fiscal year, and the total expense paid by the Company for this purpose;

(5) Counterfoils of corporate bonds;

(6) The latest audited financial statements of the Company, and the reports of directors, auditors, and supervisors;

(7) Copy of the latest annual inspection report filed with the industry and commerce authority of China or other competent authorities;

(8) Minutes of the general meetings (for reference of shareholders only).

The Company shall keep at its Hong Kong address the documents as referred to in (1) to (8) above (exclusive (2)) and any other applicable document as per the requirements of the Listing Rules of Stock Exchange for free reference of the public and shareholders.

(VI) In the event of termination or liquidation of the Company, to participate in the distribution of the remaining assets of the Company as per their shares;

(VII) For shareholders objecting to resolutions of the general meeting concerning merger or division of the Company, to require the Company to buy their shares;

(VIII) The shareholders separately or aggregately holding more than three percent of the shares of the Company shall have the right to submit temporary proposals to the Board meeting ten days in advance and submit the written documents to the Board;

(IX) To exercise other rights specified by laws, administrative regulations and the Articles of Association.

Article 50 ~~5~~ 2 In the event that a shareholder wants to access the relevant information as described in Article 48 of this Article of Association, or to obtain information, he shall provide a written document to the Company proving the class and number of shares of the Company he holds. Such information shall be provided to the shareholder at his request after the Company verifies the identity of the shareholder.

All shareholders shall fulfill their confidentiality obligation to the Company while exercising the above mentioned right to know and reasonably use the Company’s information. The shareholders shall bear the compensation liability in case of any damage of the Company caused by violation.

Article 5 ~~1~~ 53 The ordinary shareholders of the Company shall have the following obligations: (MP46)

(I) To observe the Articles of Association;
(II) To pay subscription funds as per the shares subscribed and the method of subscription;

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(III) Cannot give up those shares except as prescribed by the law and administrative regulations;

(IV) Cannot abuse his rights as a shareholder to damage the Company’s or other shareholders’ interests; cannot abuse the legal personality of the Company and the limited liability of the shareholders to damage the interests of creditors;

A shareholder who abuses his shareholders’ rights, resulting in losses to the Company and other shareholders, should be liable for compensation in accordance with law.

Shareholders who abuse the legal personality of the Company and limited liability of shareholders, in order to escape from liability, thereby seriously damaging the interests of creditors, should be jointly and severally responsible to bear the Company’s debts.

(V) (III) To fulfill other obligations stipulated by laws, administrative regulations and the Articles of Association.

Shareholders do not have the obligation to increase any share capital unless under the conditions accepted by the subscribers at the time of subscription.

Article 5 ~~2~~ 54 If a shareholder holding 5% or more voting rights of the Company provides security using those shares, he should report to the Company in writing on the day of such occurrence.

Article 55 The controlling shareholder or actual controller of the Company cannot use his associated relationship to damage the Company’s interests. If this requirement is contravened, resulting in damage to the Company, he should be responsible to compensate.

The controlling shareholders and actual controllers have a duty of honesty towards the Company and shareholders holding the public community shares of the Company. The controlling shareholders should strictly exercise his rights as a provider of capital. The controlling shareholders cannot make use of methods such as the distribution of profits, restructuring of assets, external investment, misappropriation of assets, borrowing, or providing guarantee, in order to damage the legal interests of the Company and shareholders of public community shares. He cannot make use of his controlling position to damage the legal interests of the Company and shareholders of public community shares.

Article 56 Save for the obligations under the laws, administrative regulations or the Listing Rules of Stock Exchange with which the Company’s shares are listed, the controlling shareholders, in exercising their rights as shareholders, shall not make any decision detrimental to the interests of all or some shareholders as a result of the exercise of their voting rights on the following issues: (MP47)

(I) Exempting directors and supervisors from the obligation to act honestly in the best interest of the Company in good faith;

(II) Allowing directors and supervisors (for the interests of their own or others) to seize from the Company its asset in any way, including (but not limited to) any opportunity favorable to the Company;

(III) Allowing directors and supervisors (for the interests of their own or others) to seize from other shareholders their personal rights and interests, including (but not limited to) any right to profit

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distribution and right to vote, but excluding corporate reorganization submitted for adoption at the general meeting pursuant to the Articles of Association.

Article 5 ~~3~~ 57 A controlling shareholder, as referred to in the preceding article, is a person who has any of the following conditions: (MP48)

(I) When acting alone or acting in concert with other persons, such a person can select more than half of the Company’s directors;

(II) When acting alone or acting in concert with other persons, such a person can exercise more than 30% (inclusive) of the voting rights of the Company or control the exercising of more than 30% (inclusive) of the voting rights of the Company;

(III) When acting alone or acting in concert with other persons, such a person holds more than 30% (inclusive) of the outstanding shares of the Company;

(IV) When acting alone or acting in concert with other persons, such a person has de facto control of the Company by other methods.

The term “acting in concert” means that two or more persons conclude an unanimously consent in mode of agreement (regardless of oral or written form) to acquire the Company’s right to vote via one of the two persons in order to achieve or enhance the aim to control of the Company.

Chapter 8 General Meetings

Article 54 ~~5~~ 8 The general meeting shall be the authority of power of the Company and shall exercise its functions and powers according to law. (MP49)

Article 55 ~~5~~ 9 A general meeting shall exercise the following functions and powers: (MP50)

(I) To decide the business operation guideline and investment plan for the Company;

(II) To elect and replace directors and to decide on matters relating to remuneration of the directors;

(III) To elect and replace supervisors who are not the employee representative and to decide on matters relating to remuneration of the supervisors;

(IV) To examine and approve reports of the Board;
(V) To examine and approve reports of the board of supervisors;

(VI) To examine and approve the annual financial budgets and final accounting plans of the Company;

(VII) To examine and approve the Company’s profit distribution plan and loss recovery plan;

(VIII) To resolve on increase or decrease of the registered capital of the Company;

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(IX) To resolve on the merger, division, dissolution, liquidation or transformation of the Company;

(X) To resolve on the issuance of corporate bonds;

(XI) To resolve on the appointment, removal or non-reappointment of certified public accountants of the Company;

(XII) To amend the Articles of Association;

(XIII) To examine proposals made by shareholders severally or jointly representing more than 3% (inclusive) of the voting shares of the Company;

(XIV) Other guarantee matters as prescribed in Article 55 ~~6~~ 0 approved;

(XV) To examine the Company’s purchase or disposal of major assets within one year or matters with the amount guaranteed exceeding 30% of the total assets of the Company;

(XVI) To examine and approve changes in the use of proceeds;(I ~~)~~

(XVII) To examine and approve equity incentive plan;

(XVIII) To examine other matters on which resolutions shall be made by a shareholders’ general meeting as required by laws, administrative regulations, departmental rules, regulatory rules of the place of listing or these Articles of Association.

(XIX) To examine other matters as requested in the Listing Rules .

On the premise of not violation of any laws and regulations and the statutory regulations as prescribed in Listing Rules of Stock Exchange, the general meetings may grant authorization or entrust the Board of Directors to handle the matters with respect to such authorization and appointment.

Article 5 ~~6~~ 60 The following external guarantees by the Company shall be considered and approved by a shareholders’ general meeting.

(I) Any guarantee provided after the total amount of external guarantees by the Company and its holding subsidiaries meet or exceed fifty percent of the latest audited net assets;

(II ~~) A~~ ny guarantee provided after the total amount of external guarantees by ~~t~~ he Company meet or exceed thirty percent of the latest audited net ~~a~~ ssets;

(II) (III) ~~A~~ ny guarantee provided for a target party whose asset-liability ratio is over seventy percent;

(III) (IV) Any guarantee with a single guaranteed amount in excess of ten percent of the latest audited net assets;

(IV) Any guarantee exceeding 30% of the total audited assets of the latest period cumulatively calculated within twelve continuous months subject to the guarantee amount;

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(V) Any guarantee exceeding 50% of the total audited assets of the latest period cumulatively calculated within twelve continuous months subject to the guarantee amount and the absolute amount is more than RMB 50 million Yuan;

(VI) (V) Any guarantee provided to shareholders, de facto controllers and their related parties.

Article 57 ~~6~~ 1 The Company may not enter into any contract with anyone other than a director, supervisor, manager or other senior executive to have all or significant part of the Company’s business in the care of the said person, unless approved by the shareholders at a general meeting beforehand by way of special resolution. (MP51)

Article 58 ~~6~~ 2 General meetings are classified into annual general meetings and extraordinary general meetings. General meetings shall be convened by the Board. Annual general meetings shall be convened once a year within six months after the end of the preceding fiscal year. (MP52)

In any of the following circumstances, the Board shall convene an extraordinary general meeting within two months:

(I) The number of directors falls short of the minimum number required by the Company Law or is less than two-thirds of the number required by the Articles of Association;

(II) The unrecovered losses of the Company amount to one-third of the total amount of its paidup share capital;

(III) When shareholder(s), individually or jointly, holding 10% or more of the Company’s issued and outstanding shares carrying voting rights request(s) in writing the convening of an extraordinary general meeting;

(IV) The Board deems it necessary, or the board of supervisors proposes, to convene an extraordinary general meeting;

(V) The two or mor ~~e~~ half of independent non-executive directors propose convening the meeting;

(VI) In any other circumstance so specified in laws, administrative regulations, departmental regulations, the Listing Rules of Stock Exchange and the Articles of Association.

Article 5 ~~9~~ 63 Where the Company convenes a general meeting, a written notice shall be given 45 days prior to the date of the meeting to notify all the shareholders in the shareholders’ register of the issues to be considered at the meeting, and the date and venue of the meeting. Any shareholder intending to attend the meeting shall deliver to the Company a written reply showing his intention to attend at least 20 days before the meeting. (MP53)

Article 6 ~~0~~ 64 Where the Company convenes a general meeting, shareholders individually o ~~r~~ jointl ~~y~~ holding more than three ~~f~~ ive percent of shares of the Company (inclusive) may bring forward provisional proposals and submit the same in writing to the convenor. The convenor shall issue a supplementary notice o ~~f s~~ hareholders ~~’~~ general ~~m~~ eeting ~~w~~ ithi ~~n t~~ wo ~~d~~ ays ~~of r~~ eceiving ~~t~~ he ~~p~~ roposals ~~to~~ publish particulars ~~o~~ f ~~t~~ he provisional proposals, and ~~C~~ ompany shall submit the provisional proposals to the shareholders’ general meeting for consideration. (MP54)

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Article 61 65 Based on the written replies received 20 days before a general meeting, the Company shall calculate the number of voting shares represented by the shareholders who have intention to attend the general meeting. If the shareholders who intend to attend such meeting represent more than half of the total number of shares which have the right to vote at such meeting, the Company may hold the general meeting; otherwise, the Company shall, within five days, inform the shareholders again of the matters to be considered, and the date and venue of the general meeting by means of public announcement. The Company may then hold the general meeting after such public announcement has been made.

Proposals not set out in the notice of annual general meeting or temporary shareholders meter shall not be voted on or resolved at the meeting. (MP55)

Article 62 ~~6~~ 6 The notice of a general meeting shall meet the following requirements: (MP56)

(I) Is in written form;
(II) Specifies the venue, date and time of the meeting;
(III) States matters to be discussed at the meeting;

(IV) Provides such necessary information and explanations for shareholders to make an informed judgment on the matters to be considered. Without limitation to the generality of the foregoing, where a proposal is made with respect to the merger of the Company with another company, the repurchase of shares, the restructuring of share capital, or other reorganization of the Company, the terms of the proposed transaction must be provided in detail along with copies of the proposed contract (if any), and the reason(s) and effect of such proposal must be properly explained;

(V) Contains a disclosure of the nature and extent of the material interests of any director, supervisor, manager or other senior executives in the proposed transaction and the effect which the proposed transaction will have on them in their capacity as shareholders insofar as it is different from the effect on interests of shareholders of the same class;

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

Contains a clear statement that a shareholder entitled to attend and vote at such meeting is entitled to appoint one or more proxies to attend and vote at such(I ~~)~~ meeting on his behalf and that such proxy need not be a shareholder of the Company;

(VII) Specifies the time and venue for serving the power of attorney for the voting proxy for the meeting.

(VIII) The date of registration of shareholding of the shareholders, for determining those shareholders entitled to attend the shareholders’ meeting;

(IX) The name and telephone number of the permanent contact person concerning meeting matters.

Article 63 ~~6~~ 7 The notice of general meeting shall be delivered to shareholders (whether or not they are entitled to vote at the general meeting) by any modes agreed by the local securities exchange

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where the Company’s stocks are issued (including but not limited to mailing, e-mail, fax, announcement and website of local securities exchange where the Company or the Company’s stocks are listed). The address of the addresses is as shown in the shareholders’ register. For shareholders of domestic shares, the notice of general meeting shall be delivered by mode of announcement.

Public announcement referred to in the preceding paragraph shall be published in one or more newspapers designated by the securities authority under the State Council during the period between 45 days to 50 days prior to the date of the meeting. Once the announcement has been published, all holders of domestic shares shall be deemed to have received the notice of relevant general meeting. (MP57)

Article 64 ~~6~~ 8 The accidental omission to give notice of meeting to, or non-receipt of notice of meeting by, any person entitled to receive notice shall not invalidate the meeting and the resolutions adopted at the meeting. (MP58)

Article 65 ~~6~~ 9 Any shareholder entitled to attend and vote at a general meeting of the Company shall be entitled to appoint one or more persons (whether a shareholder or otherwise) as his proxy/ proxies to attend and vote on his behalf. The said proxy may exercise the following rights as granted by the said shareholder: (MP59)

(I) The shareholder’s right to speak at the general meeting;
(II) To severally or jointly request to vote by ballot; and

(III) To exercise the right to vote by a show of hand or ballot. Where there is more than one proxy, the said proxy shall only vote by ballot.

Article 66 ~~7~~ 0 The power of attorney shall be in writing under the hand of the principal or his proxy duly authorized in writing or, if the principal is a legal person, it shall be under seal or under the hand of a director or a proxy duly authorized. Such power of attorney shall specify the number of shares to be represented by the proxy. (MP60)

Article 67 ~~7~~ 1 The power of attorney for voting shall be deposited at the domicile of the Company or such other place as specified in the notice of meeting at least 24 hours prior to the meeting at which the proxy is authorized to vote or 24 hours before the scheduled voting time. Where such a power of attorney is signed by a person authorized by the principal, the power of attorney authorizing signature or other authorization documents shall be notarized. The notarized power of attorney and other authorization documents shall, together with the power of attorney for voting, be deposited at the company’s domicile or other location as specified in the notice of the meeting.

Where the principal is a legal person, its legal representative or a person authorized by the Board or other decision making body shall attend the general meeting of the Company on his behalf. (MP61)

If the shareholder is a Recognized Clearing House (or proxy thereof) as defined in relevant regulations formulated by Hong Kong from time to time, the said shareholder may authorize one or more persons as he deems appropriate to act on his behalf at any general meeting or class general meeting; however, where several persons are thus authorized, the power of attorney shall specify the

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numbers and classes of shares involved by the said persons. The power of attorney shall be signed by the respective proxies appointed by the authorized clearing house. The persons thus authorized may attend the meetings and exercise rights on behalf of the Recognized Clearing House as if the said persons were the personal shareholders of the company.

Article 68 ~~7~~ 2 Any format issued to a shareholder by the Board of the Company for appointing a proxy shall provide the shareholder with the flexibility to instruct the proxy to vote for or against, and give directives on each of the resolutions to be decided at the meeting. Such a format shall contain a statement that, in default of directives, the proxy may vote as he thinks fit. (MP62)

Article 69 ~~7~~ 3 A vote given by a proxy in accordance with the terms of the power of attorney shall be valid notwithstanding the death, loss of capacity, revocation of the power of attorney, revocation of the authority under which the proxy was executed, or the transfer of the share(s) in respect of which the proxy is given prior to voting, provided that no written notice of such death, loss of capacity, revocation or transfer has been received by the Company before the commencement of the meeting. (MP63)

Article 70 ~~7~~ 4 Shareholders who request the convening of a temporary shareholders meeting or class meeting shall do so according to the following procedures:

(I) The shareholder(s) individually or jointly holding more than 10% of the Company’s total voting shares (inclusive) may sign one or several written requests with the same format and content to propose to the Board to convene an extraordinary general meeting or class general meeting, and specify the topics of the meeting. The Board shall convene an extraordinary or class general meeting responsively after receipt of the aforesaid written request. The aforesaid amount of shareholding is calculated as on the day when the shareholders make the written request. (MP72)

(II) If the Board cannot o ~~r~~ fails ~~to c~~ onvene ~~a~~ general ~~m~~ eeting, the Supervisory Committee shall duly convene and preside; if even the Supervisory Committee ~~c~~ annot or fails to convene and preside over a general meeting, the shareholders ~~i~~ ndividually or jointly holding more than 10% of the Company ~~’s~~ shares for more than ~~9~~ 0 consecutive days may by themselves convene and preside over a general ~~m~~ eeting. ~~b~~ oard of directors agrees to convene the extraordinary shareholders’ meeting or similar shareholder’s meeting, it will issue a notice of shareholders’ meeting or similar shareholder’s meeting within 5 days of the decision of the board of directors. If there are changes to the original request in the notice, they should be agreed by the relevant shareholders.

(III) If the board of directors does not agree to convene the extraordinary shareholders’ meeting, or does not reply within 10 days of receipt of the suggestion, shareholders individually or together holding more than 10% of the shares of the company are authorized to request to the supervisory board to hold an extraordinary shareholders’ meeting, and should be presented to the board of supervisors in writing.

(IV) If the board of supervisors agrees to convene the extraordinary shareholders’ meeting, it will issue a notice of shareholders’ meeting within 5 days of the decision of the supervisory board. If there are changes to the original request in the notice, they should be agreed by the relevant shareholders. If the supervisory board does not issue the notice of shareholders’ meeting within the prescribed period, this is treated as the board of supervisors not convening and not holding the

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shareholders’ meeting. Then shareholders who individually or together hold more than 10% of the shares for more than 90 days continuously can convene and hold the meeting by themselves.

Where the shareholders convene and preside over a meeting because the Board fails to convene the meeting pursuant to the aforesaid request, the reasonable expenses incurred shall be borne by the Company and shall be deducted from the monies payable by the Company to the defaulting directors.

Article 71 ~~7~~ 5 Shareholder(s) individually or jointly holding more than 3% of the Company’s shares may submit a written provisional motion to the convener 10 days before a general ~~a~~ n extraordinary meeting is convened; the Board shall issue a supplementary notice of general meeting within two days after receipt of the said provisional motion, to notify other shareholders and to submit the said provisional proposal to the general meeting for consideration. The content of a temporary proposal shall be determined by the general meeting, have definite topics and specific issues for resolution.

Unless otherwise provided in the preceding paragraph, the convenor may not amend the proposals set out in the notice of shareholders’ general meeting, or add new proposals after issuing an announcement on the notice of shareholders’ general meeting.

Article 7 ~~2~~ 76 General Meetings shall be convened by the Board and the chairman of the Board shall act as chairman of the meeting. If the chairman of the Board is unable or fails to perform his duties, the deputy chairman of the Board shall act as the chairman of the meeting; if the deputy chairman is unable or fails to perform his duties, more than half of the directors may elect a director to convene and act as the chairman of the meeting.

If the Board cannot or fails to convene a general meeting, the board of supervisors shall duly convene and preside; if even the Supervisory Committee cannot or fails to convene and preside over a general meeting, the shareholders individually or jointly holding more than 10% of the Company’s shares for more than 90 consecutive days may by themselves convene and preside over a general meeting. If for any reason the shareholders cannot elect a president, the shareholder (including proxy thereof) holding the most voting shares among the attending shareholders shall preside over the meeting. (MP73)

Article 73 ~~7~~ 7 Shareholders (including proxies thereof) who vote at a general meeting shall exercise their voting rights as per the number of voting shares they represent. Each share carries the right to one vote. (MP65)

However, the Company has no voting right for the shares it holds, and such part of shares shall be excluded from the total number of voting shares represented by the shareholders attending the general meeting.

Pursuant to the applicable laws and regulations and ~~,~~ the Listing Rules of the ~~s~~ tock exchange ~~S~~ tock Exchange and the Listing Rules of SSE on which the Company’s shares are listed, whereas any shareholder is required to abstain from voting on any particular resolution or restricted to voting only for or against any particular resolution, any vote cast by or on behalf of such shareholder in contravention of such requirement or restriction shall not be tallied.

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Article 7 ~~4~~ 78 When the board of supervisors or shareholders decides to convene a shareholders’ meeting by themselves, they should inform the board of directors in writing and at the same time, prepare a filing at the CSRC’s sub-office and the stock exchange situated at the Company’s residence.

Before publicly announcing the decision of the shareholders’ meeting, the convening shareholders should not hold less than 10% of the shares.

When the convening shareholder issues the notice for shareholders’ meeting and publicly announce the decision of the shareholders’ meeting, he should submit the relevant proof to the CSRC sub-office and the securities exchange at the Company’s residence.

Article 79 When a shareholders’ meeting is convened by the board of supervisors or by the shareholders, the board of directors and the secretary to the board of directors should assist. The board of directors should provide the register of shareholders on the date of registration of shareholding.

Article 80 Voting at general meetings shall be conducted by show of hands, unless the following persons require ballot voting before or after voting by show of hands: (MP66)

(I) President of the meeting;
(II) At least two shareholders with voting rights or proxies thereof; or

(III) One or more shareholders present in person or by proxy and representing 10% or more of all shares carrying the right to vote, individually or jointly, at the meeting.

Unless the said persons require voting by ballot pursuit to the application securities listing rules or other regulations as prescribed in other securities laws and regulations, the president shall announce the result of voting by show of hands on proposals, which result shall be recorded in the minutes as final evidence, without specifying the number or percentage of pros for or cons against the resolutions adopted at the meeting.

The Company shall disclose relevant votes voted as required by laws, administrative regulations, relevant regulatory authority o ~~r~~ , the Listing Rules ~~.~~ of Stock Exchange and the Listing Rules of SSE .

The request for ballot voting can be withdrawn by the proposer.

Article 7 ~~5~~ 81 If the issue required to be voted by ballot relates to election of chairman or termination of meeting, voting by ballot shall be conducted immediately; in respect of other issues required to be voted by ballot, the chairman may decide the time of voting by ballot, and the meeting may proceed to consider other issues. The voting results shall still be deemed as resolutions passed at the said meeting. (MP67)

Article 76 ~~8~~ 2 Registered vote is used by the Company for A-shares meeting. At a poll taken at a meeting, a shareholder (including the proxy thereof) entitled to two or more votes need not cast all his votes in the same manner. (MP68)

Article 7 ~~7~~ 83 For election of directors, if there are more than two candidates, each share holding by the shareholders (including their agent) has as many voting rights as the candidates for directors.

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Shareholders may cast the votes on various candidates or cast all votes on one candidate; however, explanations on the distribution of the voting right shall be provided.

Article 78 ~~8~~ 4 If pros and cons are equal, either by show of hands or by ballot, the president shall be entitled to an additional vote. (MP69)

Article 7 ~~9~~ 85 Resolutions of a general meeting shall be divided into ordinary resolutions and special resolutions. (MP64)

Ordinary resolutions shall be approved by votes representing more than half of voting rights held by shareholders (including proxies thereof) present at the general meeting.

Special resolutions shall be adopted by shareholders representing 2/3 or more of the voting rights of the shareholders (including proxies thereof) in presence.

Article 8 ~~0~~ 86 The following issues shall be approved by ordinary resolutions at a general meeting: (MP70)

(I) Work reports of the Board and the board of supervisors;

(II) Profit distribution plans and loss recovery plans formulated by the Board;

(I ~~)~~

(III) Appointment and removal of the members of the Board and the members of the board of supervisors who do not assume employee representative, their remuneration and the method of payment thereof;

(IV) Annual budgets, final accounts, balance sheets, income statements, and other financial statements of the Company; and

(V) Other issues than those that should be passed by special resolutions pursuant to laws, administrative regulations, the Listing Rules or the Articles of Association.

Article 81 ~~8~~ 7 The following issues shall be approved by special resolutions at a general meeting: (MP71)

(I) Increase or reduction in share capital of the Company and the issue of shares of any class, warrants and other similar securities;

(II) Issue of bonds of the Company;

(III) Division, merger, dissolution, liquidation or transformation of the Company;

(IV) Revision of the Articles of Association;
(V) Examination and review and implementation of equity incentive plan;

(VI) When the Company buys, or sells significant assets or guarantees an amount exceeding 30% of the most recently audited total assets within one year;

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(VII) (VI) Other issues as prescribed in laws, administrative regulations, departmental rules and local securities regulatory where the Company’s stocks are issued or the Article of Association as well as any other issue confirmed by an ordinary resolution at a general meeting that it may have material impact on the Company and accordingly shall be approved by a special resolution.

Article 8 ~~2~~ 88 When the shareholders’ general meeting considers matters relating to related parties transactions, the related shareholders shall not participate in the vote, and the number of the voting shares represented by them shall not count toward the total number of valid voting shares; the public announcement of the resolutions of the Shareholders’ General Meeting shall fully disclose the way the unrelated shareholders voted.

For approval of related parties transactions at the Company’ general meeting, the related shareholders shall, prior to the approval at the general meeting, actively submit the application for recusal; the unrelated shareholders shall have the right to submit the application for recusal against the related shareholders to the general meeting prior to approval of the relevant case at the general meeting. Such application shall be submitted in written form and indicate the reasons concerned. Prior to approval of the relevant case at the general meeting, the examination and approval of such application shall be firstly exercised.

After completion of the general meeting, in the event any other shareholder finds the participation of voting in respect of related parties transactions by the related shareholders or the shareholders have obligations to adopt such application, it shall have the right to bring a suit in accordance with the regulations of Article 7 of the Article of Association. Where the related shareholders clearly indicate recusal, other shareholders who attend in the general meeting shall approve the relevant case for examination and approval. The voting results and other resolutions passed at the general meeting are equally valid.

Article 83 ~~8~~ 9 The president of the meeting shall be responsible for determining whether a resolution has been passed pursuant to the voting results. His decision, which shall be final and conclusive, shall be announced at the meeting and recorded in the minutes. (MP74)

Article 8 ~~4~~ 90 If the president has any doubt as to the result of a resolution which has been put to vote at the general meeting, he may have the ballots counted. If the president has not counted the ballots, any shareholder who is present in person or by proxy and who objects to the result announced by the president may, immediately after the declaration of the voting result, demand that the ballots be counted and the preside shall have the ballots counted immediately. (MP75)

Article 85 ~~9~~ 1 If ballots are counted at a general meeting, the counting result shall be recorded in the meeting minutes.

Meeting minutes, together with the signature register of attending shareholders and power of attorney of attending proxies

Article 8 ~~6~~ 92 The general meeting shall file resolutions as minutes, which shall be signed by the president and the attending directors. The minutes shall be kept, together with other valid information such as the book of signatures of the shareholders present at the meeting.

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Article 8 ~~7~~ 93 The shareholders may have free-of-charge access to copies of the meeting minutes during the office hours of the Company. If any shareholder asks for copies of relevant meeting minutes, the Company shall send out the said copies within seven days after receipt of reasonable expenses.

Article 94 If a resolution is not passed, or if this shareholders’ meeting changes the decision of a former shareholders’ meeting, this should be specially noted in the announcement of decisions of the shareholders’ meeting.

Article 95 If a shareholders’ meeting approves resolutions to nominate directors or supervisors, the newly appointed directors or supervisors will take the office immediately after the end of the meeting.

Article 96 If a shareholders’ meeting approves the proposals of the distribution of dividends, bonus shares or conversion of the capital reserve into stocks, the Company shall implement the actual plans two months after the conclusion of the shareholders’ meeting.

Chapter 9 Special Voting Procedures for Class Shareholders

Article 88 ~~9~~ 7 Holders of different classes of shares are class shareholders. (MP78)

Class shareholders shall enjoy rights and fulfill obligations pursuant to the laws, administrative regulations and the Articles of Association.

If the share capital of the Company includes shares without voting rights, then the said shares shall be specified as “Without Voting Right”.

If the share capital includes shares with different voting rights, then each class of shares (except those with most preferential voting right) shall be specified as “Restricted Voting Right” or “Limited Voting Right”.

Article 8 ~~9~~ 98 Any proposed change or cancellation by the Company to the rights of class shareholders shall not come into effect unless approved by special resolutions at a general meeting and a separate general meeting convened by the class shareholders so affected in accordance with Articles 8 ~~7~~ 100 to 91 ~~.~~ 104. (MP79)

Article 9 ~~0~~ 99 In the following conditions, rights of a class of shareholders shall be deemed to have been changed or abrogated: (MP80)

(I) To increase or decrease the number of shares of such class, or to increase or decrease the number of shares of a class having voting rights, distribution rights or other privileges equal to or superior to those of the shares of such class;

(II) To change all or part of the shares of such class into shares of another class or to change all or part of the shares of another class into shares of such class or to grant the right to make the said change;

(III) To cancel or reduce rights to accrued dividends or cumulative dividends attached to shares of the said class;

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(IV) To reduce or cancel rights attached to the shares of the said class to preferentially receive dividends or to receive distributions of assets in a liquidation of the Company;

(V) To add, cancel or reduce share conversion rights, options, voting rights, transfer rights, preemptive placing rights, or rights to acquire securities of the Company attached to the shares of the said class;

(VI) To cancel or reduce rights to receive payments made by the Company in a particular currency attached to the shares of the said class;

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

(VIII) To restrict the transfer or ownership of the shares of the said class or to impose additional restrictions;

(IX) To issue rights to subscribe for, or to convert into, shares of the said class or another class;

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

(XI) To restructure the Company in such a way as to cause shareholders of different classes to bear liabilities disproportionately during the restructuring; and

(XII) To amend or cancel any clause of this Chapter.

Article 9 ~~1~~ 100 The class shareholders so affected, whether or not otherwise entitled to vote at a general meeting, shall nevertheless be entitled to vote at any class meetings with respect to matters set forth in (2) to (8), (11) to (12) of Article 88, ~~9~~ 9, but interested shareholder(s) shall not be entitled to vote in class meetings.

Interested shareholders as specified in the preceding paragraph refer to:

(I) In the event of a repurchase of shares by the Company by way of a general offer to all shareholders of the Company with the same proportion or by way of public transactions on a stock exchange pursuant to Article 25 ~~2~~ 7 of the Articles of Association, an “interested shareholder” is a controlling shareholder as defined in Article 52 ~~5~~ 7 of the Articles of Association;

(II) In the event of a buyback of shares by the Company by an off-market agreement pursuant to Article 2 ~~5~~ 27 of the Articles of Association, an “interested shareholder” is a shareholder related to the agreement; or

In the event of reorganization of the Company, an “interested shareholder” is a shareholder who assumes a relatively less proportion of obligation than that of(I ~~)~~ other shareholders of that class or who has an interest different from that of other shareholders of that class. (MP81)

Article 9 ~~2~~ 101 Resolutions of a class general meeting shall be approved by votes representing more than two-thirds of the voting rights of shareholders of that class present at the meeting who, in accordance with Article 85 ~~,~~ 100, are entitled to vote at the meeting. (MP82)

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Article 9 ~~3~~ 102 Where the Company convenes a class general meeting, a written notice shall be given 45 days prior to the date of the meeting to notify all the shareholders of the said class in the shareholders’ register of the issues to be considered at the meeting, and the date and venue of the meeting. Any shareholder intending to attend the meeting shall serve to the Company a written reply showing his intention to attend at least 20 days before the date of the meeting. The calculation of the above mentioned starting date shall not include the current date on which the meeting is convened. The quorum required by class meeting (exclusive extended meeting) that convened for the purpose of any class equity right must be at least one third holders of such class shares issued.

Where the number of voting shares represented by shareholders intending to attend the meeting amounts to more than a half of the total number of voting shares of that class, the Company may convene the class general meeting; if not, the Company shall, within five days, notify shareholders again of the issues to be considered, date and venue of the meeting in the form of public announcements. The Company may then convene the class general meeting after such announcements. (MP83)

Article 94 ~~1~~ 03 Notices of class general meetings need only be served to those shareholders entitled to vote at the said meetings.

Class general meetings shall be convened as per as similar a procedure as possible to that of general meetings. Provisions in the Articles of Association concerning the procedure for convening of general meetings also apply to class general meetings.

Article 95 ~~1~~ 04 Apart from holders of other classes of shares, holders of domestic shares and overseas listed foreign shares are deemed as shareholders of different classes.

Special voting procedures for class shareholders shall not apply in the following circumstances:

(I) With the approval by special resolutions at a general meeting (acquired unconditioned authorization or restrained by all terms and conditions through resolution), the Company recognizes, distributes and issues or issues domestic shares and overseas-listed foreign shares, at one or more occasions, a total number of shares not exceeding 20% of each of its existing issued and outstanding domestic shares and overseas listed foreign shares in every 12 months;

(II) Where the Company’s plan to issue domestic shares and overseas listed foreign shares at the time of its establishment is carried out within 15 months from the date of approval of the securities regulatory authority under the State Council;

(III) Shares already issued but not listed of the Company, after approval from the securities regulatory authority under the State Council, are converted to overseas listed shares.

Chapter 10 Board of Directors

Article 96 ~~1~~ 05 The Company shall establish a board of directors, which comprises 7 directors, including three independent non-executive directors, and shall have one chairman and one deputy chairman. (MP86)

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The members of the Board of Directors shall consist with at least three independent non ~~-~~ executive directors. Independent non-executive ~~d~~ irectors must make up at least a third of the Board and at least shall have one professional specialty in audit (have senior title or registered accounting qualification). The independent non-executive directors shall perform their duties independently and are out of control by major shareholders and actual controllers or out of influence by the Company, its major shareholders, actual controllers and any unit having conflict of interest. The independent non ~~-~~ executive directors shall faithfully perform their duties, maintenance the Company’s interests, especially pay attention to the exempt from damage of the lawful rights and interests of the social public offerings.

Article 9 ~~7~~ 106 Directors shall be elected at general meetings for a term of three years, which is renewable upon re-election when it expires. The re-election term of independent ~~n~~ on-executive directors shall not exceed nine ~~s~~ ix years. (MP87)

The independentnon-executive directors are elected by the general meeting from one or more than one candidates of nominated shareholders of one percent (including one percent) shares issued by the Board of Directors, the board of supervisors or representative company. Other directors are elected by the general meeting from one or more than one candidates of nominated shareholders of five percent (including five percent) shares issued by the Board of Directors, the Board of Supervisors or representative company.

A notice of the intention to nominate a person as director and a notice by that person indicating his acceptance of such nomination shall be given to the Company at least seven days in advance (the deadline for giving the said notice shall be calculated from the second day after Company issues the notice of election meeting and shall not be later than seven days before convening of the meeting).

The term of office of a director shall commence from the date of appointment until the expiry of the current session of the board of directors. If the term of office of a director expires but re-election is not made, the original directors shall continue to perform their duties in accordance with the laws, administrative regulations, departmental rules and the provisions of the Articles of Association until a new director is elected and assumes office.

Prior to the maturity of his/her term, a director shall not be removed without reason from his/ her office by a general meeting. Subject to all relevant laws and administrative regulations and without prejudice to any potential claim which may be made under any contract, the shareholders’ general meeting may by ordinary resolution remove any director before the expiration of his term of office.

If a director fails to attend the meeting of the board of directors in person or fails to appoint any other director to attend on his behalf as his proxy for two consecutive times, he shall be deemed to be unable to perform his duties, and the board of directors shall propose to the general meeting to dismiss him.

A director may resign prior to the expiry of his term of service. When a director intends to resign, he shall submit a written resignation to the board of directors. The independent non-executive directors shall explain their resign or the situations that may cause the attention of the Company’s shareholders and creditors at their discretion. Where shareholder’s resign falls the number of directors below as prescribed in the regulations of the Company Law or three second of the number as

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prescribed in the Article of Association, or the independent non-executive directors fall the number as prescribed in the Article of Association, the resign report of such director shall come into effect upon filling the vacancy by the next director. Where the Board fails to cause re-election within two months after resign of independent non-executive director, such independent non-executive ~~d~~ irector shall not perform his duties.

Without violation of relevant laws and regulations and the regulatory rules (includin ~~g t~~ he Listin ~~g R~~ ules ~~)~~ where the Company is listed, any director appointed to fill a casual vacancy or as an addition to the Board should hold office only until the next following annual general meeting of the Company and should then be eligible for re-election at the meeting.

Except the aforesaid circumstances, the resignation of a director shall become effective when the report of resignation is served on the board of directors.

The chairman shall be elected and removed by more than half of all the directors, shall serve a term of three years, is eligible for re-election.

Article 107 The directors are natural persons and need not hold shares of the Company.

Article 9 ~~8~~ 108 The Board shall be accountable to the general meeting and exercise the following functions and powers: (MP88)

(I) To be responsible for convening general meetings and reporting its work to the general meetings;

(II) To execute resolutions of general meetings;

(III) To resolve on the Company’s business plans and investment plans;

(IV) To prepare the Company’s annual financial budgets and final accounting plans;

(V) To prepare the Company’s profit distribution plans and loss recovery plans;

(VI) To formulate the plan for increase or reduction of the Company’s registered capital, and the plan for issue of the Company’s bonds;

(VII) To prepare plans for the Company’s merger, division and dissolution;

(VIII) To decide on the internal management structure of the Company;

(IX) To appoint or dismiss the Company’s general manager; to appoint or dismiss the Company’s vice president, chief financial officer and other senior executives as nominated by the general manager and determine their remunerations;

(X) To determine employee’s salary, welfare and reward and punishment plan;

(XI) To approve appointment or replacement the directors and shareholder representative supervisors of the Company’s wholly-owned subsidiary; appointment, replacement and recommendation of shareholders representatives, directors (candidates) and shareholder representative supervisors of the Company’s holding subsidiary and participating subsidiary;

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(XII) To work out the basic management system of the Company;

(XIII) To formulate the plan for any amendment to the Articles of Association;

(XIV) To decide on the domestic and foreign structure of the Company;

(XV) To decide on the consolidation, spin-offs and regrouping of the Company’s whollyowned subsidiary and holding subsidiary;

(XVI) To decide on the structure of the special committee of the Board and to recruit and dismiss the person in charge of the committee;

(XVII) To propose the candidates of independent non-executive directors to the general meeting and suggest removal and replacement of independent ~~n~~ on-executive directors;

(XVIII) To suggest appointment, renewal or dismiss the accounting firm to the general meeting;

(XIX) To listen to the work report of the general manager and check his work;

(XX) To manager matters in respect of disclosure of the Company’s information;

(XXI) To formulate equity incentive plan;

(XXII) The Board of Directors shall exercise the decision-making power against foreign investment (including capital increase and equity transfer of the investment enterprises), financing, risk investment, entrust financing and external guarantee beyond the resolution of the general meeting in accordance with laws, regulations and the Articles of Association;

(XXIII) To determine on other major affairs of the Company except to the matters determined at the general meeting in accordance with the Company Law and the Article of Association;

(XXIV) To determine on the Company’s risk management system, including risk assessment, financial control, internal audit and legal risk control, and implement supervision thereof;

(XXV) Other power as prescribed in the Article of Association or granted the authorization by the general meeting;

(XXVI) Other matters conferred by laws, administrative regulations, departmental rules or the Articles of Association.

The Board may resolve on the issues specified in the preceding paragraph by approval of more than half of the directors save for the issues specified in (VI), (VII) and (XIII), of which approval of more than two-thirds of the directors is required.

If the uninterested directors who attend in the meeting are less than three, the board of directors shall timely submit the relevant proposals to the shareholders’ meeting for approval. The board of directors shall state the relevant situation of approval of such proposal when submitting and recording the opinion of the uninterested directors.

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Article 99 ~~1~~ 09 The Board of Directors shall explain to the general meeting any non-standard audit opinions issued by the certified public accountants on the Company’s financial statements.

Article 100 ~~1~~ 10 The Board of Directors shall formulate the Rules of Procedures of the Board in order to ensure the Board of Directors to implement resolutions approved at general meeting of shareholders, to improve working efficiency, and to ensure scientific decision-making.

Article 101 ~~1~~ 11 The independent ~~n~~ on-executive directors shall attend the board meeting in a timely manner; understand the Company’s production and business situation; actively investigate and access to information and data needed to make decisions; submit the annual report of all independent non-executive directors to the Company’s annual general meeting and explain the situation of duty fulfillment.

Article 102 ~~1~~ 12 The Company shall establish the working system of independent non-executive directors. The secretary to the board shall actively cooperate with the independent non-executive directors to perform his duties. The Company should guarantee that the independent non-executive directors shall enjoy the same right to know; provide relevant materials and information to the independent non-executive ~~d~~ irectors in a timely manner; regularly circulate the situation of company operation and organize the independent non-executive ~~d~~ irectors for field investigation when necessary.

Article 103 ~~1~~ 13 The independent non-executive directors shall also exercise the following special powers in addition to the functions and power as prescribed in the Company Law , other relevant laws, administrative regulations and as granted in the Articles of Association.

(I) All major related parties transaction (determined in accordance with the effective rules released by the Company’s stock exchange from time to time) approved by the Board or general meeting shall be submitted to the Board for discussion after approval by the independent non-executive directors. When the Board makes any resolution on the Company’s related parties transactions, such resolution shall enter into force upon signature by the independent non-executive directors. Prior to judgment by the independent non-executive directors, it is to appoint intermediary institution to issue independent financial consultant report as the basis for judgment;

(II) To propose appointment or dismissal accounting firm to the Board;

(III) To submit an application to the board of directors for holding an interim shareholders’ meeting;

(IV) To propose the convening of board meeting;

(V) To independently appoint external audit and consulting organs;

(VI) To solicit voting right from shareholders in a public manner prior to convening the shareholders’ meeting;

When the independent non-executive directors exercise the functions and powers as prescribed in paragraph (I) and (II) of this Article, the case shall be only submitted to the Board for discussion upon consent by half of the independent ~~n~~ on-executive directors; for paragraph (III), (IV) and (VI), it shall be approved by more than half of the independent non-executive directors; for paragraph (V), it

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shall be approved by all independent non-executive ~~d~~ irectors. All fees arising from exercising the aforesaid functions and powers by the independent ~~n~~ on-executive directors shall be borne by the Company. If the above mentioned proposals are refused or the functions and powers are unable to be exercised, the Company shall disclose the information concerned.

The Board of Directors consists with compensation, examination and approval and nomination committees. The proportion of independent ~~n~~ on-executive directors shall be more than half of the members of the committee.

Article 104 ~~1~~ 14 In addition to the functions and powers as above mentioned, the independent non-executive directors shall issue their independent opinions to the Board of Directors or the shareholder’s meeting with respect to the matters as below:

(I) To nominate, appoint/remove directors;
(II) To appoint or dismissal senior management;
(III) To determine on the remuneration of the Company’s directors and senior management;

(IV) The total amount (determined subject to the effective rules released by the Company’s stock exchange form time to time) of the existing or new loan or other account currents between the Company’s shareholders, actual controller or other related enterprises is equal to the amount that must be approved by the Board of Directors or shareholder’s meeting, and whether or not effective measures have been taken by the Company to have those debts reclaimed;

(V) Matters that might cause losses to minority shareholders deemed by independent directors;

The independent non-executive directors shall present one of the following comments on the aforesaid issues in writing:

(1) Consent;
(2) Reservation and reasons thereof;
(3) Objections and reasons thereof;
(4) Inability to make comments and reasons thereof.

If some of the issues are to-be disclosed, the Company shall announce the opinions of independent non-executive directors. Where such opinions is ~~a~~ re disagreed from the each other and no unanimous opinion can be reached, the Company shall disclose opinion of each director respectively.

Article 10 ~~5~~ 115 The Board shall not dispose of or agree to dispose of any fixed assets without approval by the general meeting if the sum of the expected value of the fixed assets to be disposed of and the value derived from the disposal of fixed assets within four months before such proposal to dispose of the fixed assets exceeds 33% of the value of the fixed assets as shown on the latest audited balance sheet considered and approved by the general meeting.

Disposals of the fixed assets mentioned herein include transfer of certain asset interests, but do not include guarantee provided by pledge of fixed assets.

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The effectiveness of the Company’s disposal of the fixed assets shall not be affected by any breach of the foregoing provisions in Paragraph 1 herein. (MP89)

Article 106 ~~1~~ 16 The chairman of the Board shall exercise the following functions and powers:

(MP90)

(I) To preside over general meetings and to convene and preside over board meetings;
(II) To examine the implementation of the resolutions of the Board;
(III) To sign the securities certificates issued by the Company;
(IV) To exercise other functions and powers conferred by the Board.

The deputy chairman shall assist the chairman’s work, if the chairman is unable or fails to perform his duties, the deputy chairman shall perform his duties, if the deputy chairman is unable or fails to perform his duties, such duties shall be performed by a director who is nominated and elected by more than half of the directors.

Article 107 ~~1~~ 17 Board meetings shall be held at least two times a year and shall be convened by the chairman. Notice of the regular meeting of the Board shall be given at least 10 ~~1~~ 4 days in advance. (MP91)

An extraordinary board meeting may be held within 10 ~~5~~ days after receipt of the proposal, if:

(I) Proposed by shareholders representing more than 10% of the voting rights;
(II) Jointly proposed by more than one-third of the directors;
(III) Deemed necessary by the chairman of the Board;
(IV) Jointly proposed by more than two independent non-executive directors;
(V) Proposed by the board of supervisors;
(VI) Proposed by the general manager.

Article 108 ~~1~~ 18 The Board shall send the notice of a regular or provisional meeting by:

Notice of the regular meeting of the Board shall be given at least 10 ~~1~~ 4 days in advance and that of a provisional meeting shall be given at least five days in advance to all directors, supervisors and general manager. The office of the board is responsible for issuance the written meeting notice bearing with the seal of the office to all directors, supervisors and general manager in mode of direct service, fax, email or other modes. All notice send by non-direct manner shall be confirmed by telephone and the corresponding records shall be kept.

Where a provisional board meeting needs to be convened as soon as possible in emergency, the notice of meeting may be sent by telephone or by other oral means, not subject to the aforesaid period of notice of at least two days prior to the meeting, but the convener shall make explanations at the meeting.

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Article 10 ~~9~~ 119 Board meetings shall be held only if more than half of the directors (including directors attending the meeting on behalf of others) are present.

Every director shall have the right to one vote. Unless otherwise provided in the Articles of Association, a resolution of the Board must be passed by the majority of the directors of the Company.

If pros and cons are equal, the chairman shall be entitled to an additional vote.

Article 110 ~~1~~ 20 Directors shall attend board meetings in person. In the event that a director is unable to attend a meeting for any reason, he may appoint another director by a written power of attorney to attend the meeting on his behalf. The power of attorney shall set out the scope of the authorization.

The director attending the meeting as proxy shall exercise rights within the scope of authorization. Where a director is not present at a board meeting and fails to authorize a proxy to act on his behalf, the said director shall be deemed to have waived his rights to vote at the meeting. (MP94)

Article 11 ~~1~~ 121 Unless under the exceptional circumstances specified in laws and regulations and in respect of the following matters, Listing Rules or approved by the Hong Kong Stock Exchange, a director shall not vote on any resolution of the Board which approves the contract, transaction or arrangement or any other relevant proposals where he/she or his/her close associates (as defined in the Listing Rules of Stock Exchange) own a material interest; and shall not be included into the quorum of the meeting:

(I) Directors or their close associates (defined as the Listing Rules of Stock Exchange) lending money to the Company or any of its subsidiaries or Directors or their close associates, or induced or assumed obligation under the requirements of the Company or any of its subsidiaries or for their benefit, provide any mortgage or indemnity guarantee for Directors or their close associates;

(II) The Company or any of its subsidiaries shall provide any mortgage or indemnity guarantee for the third party in respect of the debts or obligations; in respect of debts or obligations, Directors or their close associates providing a mortgage according to an assurance or indemnity guarantee or warranty, having assumed all or part of this debt or obligation (whether respectively or jointly);

(III) For any related proposals of offer made by others or the Company for subscription or procurement of shares, bonds or other securities of the Company or other company (initiated and established by the Company or the Company has the rights and interests), Directors or their close associates having or will have rights and interests by participating in the underwriting or subunderwriting of offer;

(IV) Any proposals or arrangements related to employee benefits of the Company or any of its subsidiaries, including:

(1) Adoption, revision or implementation of employee share scheme or any share awards or stock option plan, from which any Directors or their close associates can benefit; or

(2) Adoption, revision or implementation of pension plan, retirement plan, and death or disability benefit plan related to directors, close associates of the Directors and employees of the Company or any of its subsidiaries and generally Directors (or their close associates) and persons concerned with the plan or fund are not granted special privileges or benefit; or

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(V) any contract or arrangement in which the Director or his close associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue only of his/their interest in shares or debentures or other securities of the Company.

If the number of non-connected directors attending the meetings is less than 3, the issue shall be submitted to the general meeting of the listed company for examination.

Article 11 ~~2 F~~ o ~~r m~~ atters ~~t~~ hat ~~s~~ hould ~~b~~ e ~~p~~ assed ~~a~~ t the interi ~~m~~ meeting, i ~~f~~ the board ~~h~~ as sent the resolutio ~~n~~ t ~~o~~ al ~~l~~ directors and the numbe ~~r of s~~ hareholders ~~w~~ ho affixe ~~d s~~ ignatures ~~o~~ n ~~t~~ he ~~r~~ esolution reached the numbe ~~r~~ require ~~d~~ fo ~~r~~ a resolutio ~~n a~~ s ~~p~~ rescribed in Article 107 of this Articles o ~~f~~ Association, a written agreement shall ~~b~~ e formed without the convening of the board meeting. Such written agreement shall be deemed as that it is equally valid with the resolution passed at the board meeting ~~t~~ hat convened ~~in a~~ ccording ~~to t~~ he ~~p~~ rocedure ~~a~~ s ~~d~~ escribed ~~in t~~ erms ~~a~~ nd ~~c~~ onditions ~~of t~~ he Articles o ~~f A~~ ssociation. ~~A~~ rticle ~~1~~ 13 ~~1~~ 22 The decisions on the matters considered at Board meeting shall be recorded as minutes, which shall be signed by the attending directors and recorders. Th ~~e~~ independent non-executive directors ~~’~~ opinions shall be set out in the ~~r~~ esolutions of board meetings. The Company ~~’s~~ related transaction shall only come int ~~o e~~ ffect upon signature by two more independent non-executive ~~d~~ irectors. Article 11 ~~4 T~~ he directors shall be responsible for the resolutions passed at board meetings. Any director who votes for a resolution which runs counter to the relevant laws, administrative regulations or the Articles of Association, thereby causing serious losses to the Company, shall be liable for compensation. A director who has been proved as having expressed dissenting opinions on the resolution and such opinions are recorded in the minutes of the meeting can be exempt from liability. (MP95)

Chapter 11 Secretary to the Board of Directors

Article 11 ~~5~~ 123 The Company shall have secretary to the Board of Directors, who is a senior executive of the Company and responsible for the Company and its Board of Directors.

Article 11 ~~6~~ 124 The secretary to the Company’s Board shall be a natural person who has the requisite professional knowledge and experience, and shall be appointed or removed by the Board. The major duties of the secretary shall be: (MP97)

(I ~~)~~ To ensure that the Company has complete organization documents and records;

(I) (II) To ensure that the Company legally prepares and submits reports and documents as required by relevant authorities;

(II) (III) To ensure that the shareholders’ register of the Company is established appropriately and that the persons who have the right of access to the relevant documents and records of the Company obtain the same in due time.

Article 11 ~~7~~ 125 A director or other senior executives of the Company may serve concurrently as secretary to the Board of Directors. Any accountant of the certified public accountants engaged by the Company shall not act in the capacity of the secretary to the Board of Directors.

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In the event a director also acts in the capacity of the secretary to the Board, where any act requires to be made by the director and the secretary to the Board separately, such director who also acts in the capacity of the secretary to the Board shall not make such actions in both capacities. (MP98)

Chapter 12 General Manager of the Company

Article 118 ~~1~~ 26 The Company shall have one general manager, who shall be nominated by the directors and appointed and dismissed by the Board. (MP99)

Article 119 ~~1~~ 27 The manager of the Company shall be accountable to the Board and exercise the following functions and powers: (MP100)

(I) To manage the business operations of the Company and organize to execute the resolutions of the Board;

(II) To organize to execute the Company’s annual business plans and investment plans;

(III) To prepare the plan for the internal management setup of the Company;

(IV) To prepare the layout plan of the Company’s sub-branch;

(V) To draft the basic management system of the Company;

(I ~~)~~

(VI) To formulate the basic rules of the Company;

(VII) To propose to appoint or dismiss the vice general manager, chief financial officer and other senior executives of the Company;

(VIII) To appoint or dismiss executives other than those appointed or dismissed by the Board;

(IX) To draw up the employees’ wages, welfare and rewards and determine their recruitment and dismissal;

(X) To propose to convene of interim meeting of the board;

(XI) To exercise other functions and powers conferred in the Articles of Association and by the

Board.

Article 12 ~~0~~ 128 The general manager shall be present at board meetings, and if he is not a director, shall not have any voting right at board meetings and shall have the right to receive the meeting notice and relevant documents; however, he has not right to vote at the board meetings. (MP101)

Article 12 ~~1~~ 129 In exercising functions and powers, the general manager of the Company shall fulfill the obligation of honesty and diligence in accordance with laws, administrative regulations and the Articles of Association and shall not change the resolutions made by the shareholder meeting and the Board of Directors or exceed the scope of authorization. (MP102)

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Chapter 13 the board of supervisors

Article 122 ~~1~~ 30 The company ~~C~~ ompany shall have the board of supervisors. (MP103)

Article 12 ~~3~~ 131 the board of supervisors shall comprise five members, including one chairman. The term of office of a supervisor shall be three years, and is renewable upon reelection. (MP104)

The chairman shall be appointed or removed by the votes of more than two-thirds of the members of the board of supervisors.

Article 12 ~~4~~ 132 The members of the board of supervisors shall comprise three shareholder representatives and two employee representatives. The shareholder representatives shall be elected and removed by the shareholder meeting; and the employee representatives shall be elected and removed by the employees of the Company democratically. (MP105)

Article 125 ~~1~~ 33 A director, the general manager, the secretary to the Board of Directors, financial general supervisor and other senior executives shall not serve as supervisor concurrently. (MP106)

Regular meetings of the board of supervisors shall be held at least once every six months, and shall be convened and presided over by the chairman of the board of supervisors. Any supervisor may propose that a provisional meeting of the board of supervisors be held. If the chairman of the board of supervisors fails to or is unable to perform and exercise his functions and powers, a meeting of the board of supervisors shall be convened and presided over by a supervisor jointly nominated by more than half of all supervisors.

Article 12 ~~6~~ 134 the board of supervisors shall be accountable to the general meeting and shall exercise the following powers according to laws:

(I) To review the financial operations of the Company;

(II) To supervise the performance of directors, general manager and senior executives of their duties to the Company, and propose dismissal of directors and senior executives who have violated laws, administrative regulations, the Articles of Association or the resolutions of general meetings;

(III) To demand redress from the Company’s directors, general manager and senior executives should their acts be deemed harmful to the Company’s interests;

(IV) To examine financial information such as financial reports, business reports and profit distribution plans as proposed by the Board to the general meeting, and if there are any queries, to engage certified public accountants or practicing auditors in the name of the Company to assist in the examination;

(V) To propose the convening of extraordinary general meetings and, in case the Board does not perform the obligations to convene and preside over the general meetings as prescribed in the Company Law , to convene and preside over the general meetings;

(VI) To propose motions to the general meeting;

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(I ~~)~~

(VII) To propose the convene of extraordinary meeting of the Board;

(VIII) To coordinate with directors and senior executives on behalf of the company or bring legal proceedings against the company’s directors and senior executives;

(IX) To conduct investigation if there are any unusual circumstances in the company’s operations, and if necessary, to engage an accounting firm, law firm or other professionals to assist in their work at the expenses of the company;

(X) Other issues specified in the Articles of Association.

The supervisor may attend board meetings and make inquiries or suggestions in relation to the resolutions of board meetings.

Article 12 ~~7~~ 135 The voting procedure of the board of supervisions: each supervisor shall have 1 vote for resolutions to be approved by the board of supervisors in mode of registration and written. (MP109)

The voting procedure is: the voting intentions of the divided into the following three: consent, objection or abstention. The directors attending the meeting shall choose one kind of the aforesaid opinions. If any director who has not chosen any kind of opinions or simultaneously chosen two or more kinds of opinions, the president shall require him to make a new choice. If he refuses to do so, it shall be regarded as an abstention. Any director who leaves the meeting place halfway and thus does not make a choice, it shall be regarded as an abstention.

The resolution of the board of supervisors shall be passed by the votes of more than two thirds or more of the members of the board of supervisors.

Article 12 ~~8~~ 136 The board of supervisors shall cause decisions made during the meeting to be reduced to minutes of meetings, and attending supervisors shall sign on the minutes of meetings.

Article 12 ~~9~~ 137 All reasonable fees incurred in the retaining of such professionals as lawyers, certified public accountants or practicing auditors by the board of supervisors in the exercise of its functions and powers shall be borne by the Company. (MP110)

Article 13 ~~0~~ 138 Supervisors shall honestly fulfill the supervisory duty in accordance with laws, administrative regulations and the Articles of Association.

Chapter 14 Qualifications and Duties of Directors, Supervisors, General Manager and Other Senior Executives of the Company

Article 131 ~~1~~ 39 A person shall not serve as director, supervisor, general manager or other senior executives of the Company if the said person: (MP112)

(I) Is without capacity or with limited capacity for civil conduct;

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(II) Was imposed criminal penalty due to taking graft or committing bribery, infringing upon property, embezzling property or disrupting socialism market economic order and it is less than five years since the completion of enforcement of the criminal penalty; or is deprived of political rights due to criminal offence and it is less than five years since the completion of enforcement of the penalty;

(III) Was once the director or factory manager, the manager of any company or enterprise which was bankrupted due to bad operation and was responsible for the bankruptcy of the said company or enterprise, and it is less than three years since the completion of liquidation for the bankruptcy of the said company or enterprise;

(IV) Ever was the legal representative of any company or enterprise which was revoked business license or ordered to close down due to illegal activities and was responsible for such illegal activities, and it is less than three years since the revocation of the business license;

(V) Has large outstanding personal debts;

(VI) Is under investigation by the judiciary institution for suspected violation of the criminal law, and the result is still pending;

(VII) Is not a natural person;

(VIII) Was ruled by the relevant regulatory authority that he has violated the relevant securities regulations and committed any fraudulent or dishonest act, and such ruling was made less than five years ago;

(IX) Other circumstances as prescribed in laws, administrative regulations or departmental rules.

Article 132 ~~1~~ 40 The independent non-executive ~~d~~ irectors shall comply with the following basic conditions:

(I) Qualifications serving as a director of a listing company as stipulated by laws, administrative regulations and other relevant regulations;

(II) Independence as required;

(III) Fundamental knowledge on corporate operation as well as master of relevant laws, administrative regulations, rules and stipulations;

(IV) More than five-year’s working experience in law, economy or other fields deemed necessary for qualified performance as an independent ~~n~~ on-executive director;

(V) Relevant requirements for independent non-executive director as prescribed by the Listing Rules of Stock Exchange and the Listing Rules of SSE;

(VI) Other conditions as prescribed by the Articles of Association.

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The independence of independent non-executive director refers that the following persons shall not assume the office of independent non-executive director, including:

(I) The person who holds a position in the Company or its affiliated enterprises, their direct relatives and major social relations (direct relatives refer to their spouse, father, mother and children etc.; major social relations refer to their brothers, sisters, father-in-law, mother-in-law, daughter-in-law, son-in-law, spouse of their brothers, sisters, and their spouse’s brothers and sisters etc.);

(II) The person, directly or indirectly, who holds more than 1% of the outstanding shares of the company or the natural person shareholders of the 10 largest shareholders of the company, or such shareholder’s direct relative;

(III) The person, directly or indirectly, who holds a position in a company which holds more than 5% of the outstanding shares of the company or of the unit which ranks as one of the 5 largest shareholders of the company, or such employee’s direct relative;

(IV) The persons that have the circumstances listed above in the previous year;

(V) The persons providing financial, legal or consulting services for the company or its subsidiaries; (I ~~)~~

(VI) Part-time independent non-executive ~~d~~ irector who worked in five listed companies;

(VII) Person who cannot act as independent non-executive ~~d~~ irector according to the securities regulatory authority under the State Council.

Article 13 ~~3~~ 141 The validity of an act of a director, the general manager or other senior executives on behalf of the Company for a goodwill third person is not affected by any incompliance in the appointment, election or qualification thereof. (MP113)

Article 134 ~~1~~ 42 In exercising the powers conferred by the Company, directors, supervisors, the general manager and other senior executives of the Company shall fulfill the following obligations to each shareholder in addition to the obligations under the laws, administrative regulations, the Listing Rules of Stock Exchange or the listing rules of the stock exchange ~~L~~ isting Rules of SSE on which the shares of the Company are listed: (MP114)

(I) Not to let the Company operate beyond the business scope specified in its business license;
(II) To sincerely act in the best interest of the Company;

(III) Not to seize from the Company the property in any form, including (but not limited to) opportunity favorable to the Company;

(IV) Not to seize from any shareholder any personal interests, including (but not limited to) right to profit distribution and right to vote, but excluding corporate reorganization submitted for adoption at the general meeting pursuant to the Articles of Association.

Article 135 ~~1~~ 43 In exercising rights or fulfilling obligations, the directors, supervisors, the general manager and other senior executives of the Company have the duty to act with due discretion, diligence and skill as a reasonable discreet person should do in similar circumstances.

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Article 136 ~~1~~ 44 In fulfilling duties, the directors, supervisors, the general manager and other senior executives of the Company shall observe the principle of honesty and shall not set themselves in a position where their own interests may conflict with their obligations. The principle includes (but is not limited to) the following obligations:

(I) To sincerely act in the best interest of the Company;
(I ~~)~~
(II) To exercise their rights within their terms of reference;

(III) To exercise personally the discretion vested in them and not to allow themselves to be controlled by others and, save as permitted by laws, administrative regulations or the Listing Rules or approved by a shareholders’ general meeting having knowledge of the circumstances, not to transfer the exercise of their discretion to others;

(IV) To be equitable towards shareholders of the same class and fair towards shareholders of different classes;

(V) Not to conclude any contract, conduct any transaction or make any arrangement with the Company saved as specified in the Articles of Association or the Listing Rules or unless approval is obtained by a shareholders’ general meeting;

(VI) Not to seek personal gains by using the property of the Company in any form unless approval is obtained by a shareholders’ general meeting;

(VII) Not to abuse official powers to accept bribes or other unlawful income, and not to expropriate the Company’s property in any form, including (but not limited to) opportunity favorable to the Company;

(VIII) Not to accept commissions in connection with the Company’s transactions unless approval is obtained by a shareholders’ general meeting;

(IX) To observe the Articles of Association, fulfill duties honestly, protect the interests of the Company, and not to seek personal gains by using their positions and powers in the Company;

(X) Not to compete with the Company in any form unless approval is obtained by a shareholders’ general meeting;

(XI) Not to appropriate the monies of the Company or lend the same to others, not to deposit the Company’s assets in the accounts of their own or others, and not to use the Company’s assets as security for the personal debts of the shareholders of the Company or others; and

Unless approval is obtained by a shareholders’ general meeting, not to disclose any confidential information related to the Company acquired by them during their term of office; not to use the said information save for the interest of the Company; however, they may disclose such information to a court or other competent(I ~~)~~ government authorities in the following circumstances:

Required by law;

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Required in the interests of the public; and
Required for the interests of the said directors, supervisors, the general manager and other senior executives.

The income acquired by any director, general manager, vice general manager and other senior management in violation of this Article shall be possessed by the Company; any loss caused to the Company thereof shall be assumed by the person concerned.

Article 137 ~~1~~ 45 Directors, supervisors, general manager and other senior executives of the Company shall not tell the following persons or institutions (“connected persons”) to do anything that the directors, supervisors, general manager and other senior executives cannot do:

(I) Spouses or minor offspring of directors, supervisors, general manager and other senior executives of the Company;

(II) Trustees of directors, supervisors, general manager and other senior executives of the Company or persons set out in (I) herein;

(III) Partners of directors, supervisors, general manager and other senior executives of the Company or persons set out in (I) and (II) herein;

(IV) Companies effectively and independently controlled by directors, supervisors, general manager and other senior executives of the Company or companies effectively and jointly controlled by the persons set out in (I), (II) and (III) herein or other directors, supervisors, general manager and other senior executives of the Company; and

(V) Directors, supervisors, general manager and other senior executives of the companies as set out in (IV) herein;

Article 138 ~~1~~ 46 The honesty obligation of the directors, supervisors, general manager and other senior executives of the Company shall not necessarily end with the expiry of their terms of office, and their confidentiality obligation to the Company in respect of commercial secrets shall continue after expiry of their terms of office. Other obligations may continue for such period as the principle of fairness may require depending on the amount of time which has lapsed between the termination and the act concerned and the specific circumstances under which the relationship between the Company and them was terminated. (MP118)

Article 139 ~~1~~ 47 The liability of directors, supervisors, general manager and other senior executives of the Company for breaching a given obligation may be waived by the shareholders’ general meeting which has knowledge of the circumstances, save for the circumstances specified in Article 5 ~~2~~ 56 of the Articles of Association. (MP119)

Article 140 ~~1~~ 48 If directors, supervisors, general manager and other senior executives of the Company have any direct or indirect material interests in any contract, transaction or arrangement already concluded or under planning with the Company (exclusive of engagement contract with the Company), they shall responsively disclose the nature and extent of the said interests to the Board regardless whether the relevant matters are subject to approval by the Board in normal circumstances.

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A director shall not vote on any resolution of the Board which approves the contract, transaction or arrangement or any other relevant suggestions where he/she or his/her close associates (as defined in the applicable Listing Rules of Stock Exchange which come into effect from time to time) own a material interest; and shall not be included into the quorum of the meeting.

Unless the directors, supervisors, general manager and other senior executives of the Company having material interests have disclosed to the Board as per aforesaid paragraph herein, and the said transaction is approved at the Board meeting at which they are not included into the quorum and do not vote, the Company shall have the right to cancel the said contract, transaction or arrangement, save for the circumstance in which the other parties are goodwill parties uninformed of the default of the relevant directors, supervisors, managers and other senior executives.

If the connected persons or associates of the directors, supervisors, general manager and other senior executives of the Company have any interests in a given contract, transaction or arrangement, the said directors, supervisors, general manager and other senior executives shall also be deemed as having interests. (MP120)

Article 141 ~~1~~ 49 If, before the Company concludes relevant contract, transaction or arrangement for the first time, the directors, supervisors, general manager and other senior executives of the Company have notified the Board in writing that they will have interests in the contract, transaction or arrangement concluded by the Company in the future because of the reasons set out in the notice, they shall be deemed as having executed disclosure as specified in the preceding paragraph of this chapter to the extent specified in the notice. (MP121)

Article 142 ~~1~~ 50 The Company shall not pay taxes in any form for its directors, supervisors, general manager and other senior executives. (MP122)

Article 143 ~~1~~ 51 The Company shall not directly or indirectly provide loan or loan guarantee to the directors, supervisors, general manager and other senior executives of the Company or its parent company, or to the connected persons of the aforesaid persons.

The preceding paragraph does not apply to the following circumstances:

(I) The Company provides loan or loan guarantee for its subsidiaries;

(II) The Company, in accordance with the engagement contracts approved at the general meeting, provides loan, loan guarantee or other monies to the directors, supervisors, general manager and other senior executives of the Company so that they may pay the expenses incurred for the Company or for fulfilling their duties for the Company; and

(III) If the normal business scope of the Company includes provision of loan and loan guarantee, the Company may provide loan and loan guarantee to relevant directors, supervisors, general manager and other senior executives and their connected persons, but the conditions for providing loan or loan guarantee shall be normal business conditions. (MP123)

Article 14 ~~4~~ 152 If the Company provides loan in violation of the preceding article, the recipient of the loan shall return the same immediately to the Company regardless of the loan conditions. (MP124)

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Article 145 ~~1~~ 53 The Company shall not be forced to execute loan guarantee provided in violation of Paragraph 1 of Article 143 ~~1~~ 51 except in the following circumstances:

(I) The loan provider does not know that it has provided loan to the connected persons of the directors, supervisors, general manager and other senior executives of the Company or its parent company;

(II) The guarantee provided by the Company has been sold by the loan provider lawfully to a goodwill buyer. (MP125)

(I ~~)~~ Article 146 ~~1~~ 54 The guarantee as referred to in the preceding articles includes the act of the guarantor to undertake the responsibility or provide property to ensure that the obligor fulfils the obligations. (MP126)

Article 147 ~~1~~ 55 If the directors, supervisors, general manager or other senior executives fail to fulfill the obligations to the Company, the Company shall have the right to take the following actions in addition to the rights and remedial measures under the relevant laws and administrative regulations: (MP127)

(I) Require the relevant directors, supervisors, general manager or other senior executives to compensate the Company for the losses arising from their neglect of duty;

(II) Cancel the contracts or transactions concluded between the Company and the relevant directors, supervisors, general manager or other senior executives, or between the Company and a third person (if the third person knows or is supposed to know that the directors, supervisors, general manager or other senior executives representing the Company have breached their obligations to the Company);

(III) Require the relevant directors, supervisors, general manager or other senior executives to surrender gains arising from breach of obligations;

(IV) Recover monies, including (but not limited to) commissions, received by the relevant directors, supervisors, general manager or other senior executives but receivable by the Company;

(V) Require the relevant directors, supervisors, general manager or other senior executives to surrender interests earned or likely to be earned from monies payable to the Company

Article 148 ~~1~~ 56 The Company shall conclude written contracts with its directors and supervisors in relation to their remunerations, subject to prior approval at a general meeting. The aforesaid remunerations include: (MP128)

(I) Remunerations as directors, supervisors or senior management of the Company;

(II) Remunerations as directors, supervisors or senior management of subsidiaries of the Company;

Remunerations for providing other services for the Company and(I ~~)~~ subsidiaries thereof;

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(III) Compensations for the said directors or supervisors for losing their positions or for retirement.

Save as specified in the aforesaid contracts, the directors or supervisors shall not pursue legal action against the Company for the aforesaid interests.

The above mentioned written contract shall cover at least the following matters:

(I) Directors, supervisors or senior executives shall undertake to the Company to observe Company Law , Special Provisions , the Articles of Association, and Code on Takeovers and Mergers and Code on Share Repurchase approved, and agree that the Company is entitled to remedial measures under the Articles of Association and that the said contracts and their positions as director, supervisor or senior executive shall not be transferred;

(II) Directors, supervisors or senior executives shall undertake to the Company representing respective shareholders to fulfill their due duties for the shareholders as specified in the Articles of Association;

(III) Arbitration clauses specified in Chapter 21 of the Articles of Association.

Article 14 ~~9~~ 157 The Company shall specify in the contracts concluded with the directors or supervisors in relation to remunerations that if the Company is acquired, the directors or supervisors of the Company have the right to seek compensations or other monies for losing their positions or for retirement under the conditions approved at the general meeting. (MP129)

(I) Tender offer of any person to all the shareholders; or

(II) Tender offer of any person to become a controlling shareholder of the Company. The definition of a controlling shareholder is the same as that in Article 53 ~~5~~ 7 of the Articles of Association.

Any monies received by the relevant directors or supervisors in violation of the provisions herein shall belong to those who sell their shares in response to the aforesaid tender offer, and the said directors or supervisors shall bear the expenses for distributing the said monies in proportion, which shall not be deducted from the said monies.

Chapter 15 Financial Accounting System and Profit Distribution

Article 150 ~~1~~ 58 The Company shall formulate its financial accounting system in accordance with relevant laws, administrative regulations and the PRC accounting standards formulated by the competent financial authority of the State Council. (MP130)

Article 15 ~~1~~ 159 The fiscal year of the Company is Gregorian calendar year, i.e. from 1 January to 31 December every year.

The Company shall use Renminbi as the recording currency and the accounts shall be written in Chinese.

The Company shall prepare financial reports at the end of each fiscal year, which shall be audited according to law. (MP131)

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Article 15 ~~2~~ 160 The Board of the Company shall, at each annual general meeting, submit to the shareholders the financial reports prepared by the Company in accordance with the relevant laws, administrative regulations, normative documents issued by local governments and competent authorities. (MP132)

Article 153 ~~1~~ 61 The financial reports of the Company shall be kept in the Company and accessible to the shareholders 20 days before convening of the annual general meeting. Every shareholder of the Company shall have the right to access the aforesaid financial reports.

The Company shall, at least 21 days before convening of the annual general meeting, send by prepaid mail to all holders of overseas listed foreign shares the aforesaid reports or directors’ reports and the balance sheet (including each document required by laws and regulations to be attached to the balance sheet) and income statement or income and expenditure statement; and the addresses of addressees shall be those recorded in the shareholders’ register. (MP133)

Article 154 ~~1~~ 62 The financial statements of the Company shall be prepared in accordance with the PRC accounting standards and regulations as well as the international accounting standards or the accounting standards of the overseas listing place. If the financial statements prepared under the two accounting standards are discrepant significantly, such discrepancy shall be explained in the notes to the financial statements. The Company shall distribute the after-tax profit of the relevant fiscal year as per the less of the after-tax profits in the aforesaid two financial statements. (MP134)

Article 15 ~~5~~ 163 The interim results or financial data announced or disclosed by the Company shall be prepared in accordance with the PRC accounting standards and regulations as well as the international accounting standards or the accounting standards of the overseas listing place. (MP135)

Article 15 ~~6~~ In accordance with the provisions of Listing Rules, the ~~1~~ 64 The Company shall release the annual performance announcement within three months after the end of a fiscal year and issue the interim results announcement within two months after the end of the first six months of each fiscal year; release annual report on internal magazine within four months after the end of a fiscal year; and publish interim report on internal magazine within three months after the end of the first six months of each fiscal year. (MP136)

Article 15 ~~7~~ 165 The Company shall not establish account books other than the statutory account books. (MP137)

Article 15 ~~8~~ 166 When the Company distributes its after-tax profits of the current year, it shall withdraw 10% of the profits as its statutory common reserve fund. Such recusal may be stopped when the statutory common reserve fund of the Company has accumulated to over 50% of the registered capital of the Company.

If the statutory common reserve fund is insufficient to make up for the losses of the preceding year, the profits of the current year shall first be used to make up for the said losses before any statutory common reserve fund is withdrawn as per the preceding paragraph.

After statutory common reserve fund is withdrawn out of the after-tax profits, discretionary common reserve fund may also be withdrawn out of the same as per a resolution made at a general meeting.

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After the Company has made up its losses and made allocations to its statutory reserve fund, the remaining profits are distributed in proportion to the number of shares held by the shareholders.

If the Board of Shareholders, general meeting or the Board, in violation of the provisions in the preceding paragraph, distributes profits to shareholders before the Company makes up for losses and withdraws statutory common reserve fund, the shareholders shall return the profits thus distributed to the Company.

The shares of the Company held by the Company shall not be subject to profit distribution.

Article 159 ~~1~~ 67 Capital reserve includes the following:

(I) Premium arising from issue above the par value of shares;

(II) Other revenues required by the competent financial authority under the State Council to be stated as capital reserve. (MP138)

Article 16 ~~0~~ 168 The Company’s reserve fund shall be used to make up the Company’s losses, to expand the production and operation of the Company or to increase the capital of the Company by means of conversion. However, the Company shall not use its capital reserve fund to make up its losses.

When the statutory reserve fund is converted into share capital, the amount remaining in the reserve shall not be less than 25% of the Company’s registered capital prior to the increase.

Article 161 ~~1~~ 69 The Company may distribute dividends of the following forms:

(I) Cash;

(II) Shares;

(III) Other forms approved in laws, administrative regulations, departmental rules or Listing

Rules .

Article ~~1~~ 62 Th ~~e~~ cash dividends and othe ~~r~~ amounts ~~p~~ aid ~~b~~ y ~~t~~ he ~~C~~ ompany ~~to i~~ ts ~~s~~ hareholders ~~of~~ domestic ~~s~~ hares ~~s~~ hall ~~b~~ e ~~d~~ istribute ~~d in f~~ or ~~m of R~~ enminbi. ~~T~~ h ~~e c~~ ash dividends ~~a~~ nd ~~o~~ the ~~r a~~ mounts ~~p~~ aid b ~~y t~~ he Company ~~to i~~ ts ~~s~~ hareholders ~~of o~~ verseas ~~l~~ isted foreign shares shall be calculated and declared i ~~n~~ form of Renminbi and paid ~~i~~ n foreig ~~n c~~ urrency. ~~A~~ l ~~l f~~ oreig ~~n c~~ urrency ~~r~~ equire ~~d s~~ hall ~~b~~ e ~~h~~ andled ~~in~~ accordance ~~w~~ ith the relevant provisions of state foreign exchange ~~a~~ dministration ~~.~~

Article 170 The policy of profits distribution of the Company is:

(I) If the Company realizes continuous and stable profit distribution policy, the distribution of the profit shall be deemed as reasonable and stable return on investment of the investors and give consideration to the Company’s long term and sustainable development. The distribution of the profit shall not exceed the scope of cumulative distributable profit.

(II) The Company’s profit distribution policy and the concrete dividend distribution plan shall be formulated by the board of directors and reported to the general meeting of shareholders after

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approval; when the board of directors formulates the profit distribution policy and dividend distribution scheme, it shall take fully consideration of the opinions of the independent directors, the board of supervisors and the public investors.

(III) The Company distributes the dividend in form of cash dividend, stock dividend or a combination mode.

(IV) The Company distributes the profits on an annual basis (namely the after-tax profit after the Company makes up the loss and withdraws the common reserve funds). According to the profitability, the Company may distribute the interim cash dividend which does not to be audited.

(V) The Company should actively distribute the profit in cash. The profit distributed in form of cash annually must not be less than 20% of the profits available for distribution realized in that year. For cash-bashed distribution, the Company must consider whether the cash is able to meet the needs of the Company’s normal operation and long-term development after such distribution in order to ensure that the distribution scheme conforms to the overall interest of all shareholders:

(1) The Company’s development stage is of mature period without significant capital expenditure arrangement. In addition, when the profit is distributed, the minimum proportion of cash dividend in this distribution activity shall be 80%;

(2) The Company’s development stage is of mature period without significant capital expenditure arrangement. In addition, when the profit is distributed, the minimum proportion of cash dividend in this distribution activity shall be 40%;

(3) The Company’s development stage is of mature period without significant capital expenditure arrangement. In addition, when the profit is distributed, the minimum proportion of cash dividend in this distribution activity shall be 20%;

If the Company’s development stage is difficult to be distinguished but with significant capital expenditure arrangement, it is available to handle the case subject to the provisions as above mentioned.

Under special circumstances, if the profit distribution plan may not be determined according to the established cash dividend policy or the minimum cash dividend ratio, it is to disclose the specific reason in the annual report and the clear opinions of the independent directors. If the stock exchange where the Company’s shares are listed has special provisions against the approval of the plan-based voting system and mode of the shareholders’ meeting, such provisions shall prevail.

(VI) If there is any distributable profit after cash-based distribution and the board of directors thinks that stock-based distribution may meet the overall interests of all shareholders, the stock-based distribution may be adopted; when the Company confirms the specific amount of such distribution, it is to fully consider that if the general capital after such distribution may adapt to the present scale of operation of the Company and consider the effect on future cost of creditor’s rights financing in order to ensure that the distribution plan conforms to the overall interests of all shareholders.

(VII) If the Company gains profit in last fiscal year but the board of directors fails to put forward cash profit distribution plan at the end of last fiscal year, it is to explain the reason in the

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regular report why the profit has not been distributed and the usages of the profits failed to be used for distribution and reserved at the Company. The independent directors shall give independent opinions to this.

(VIII) The Company shall explain in detail in the annual report of the situation of formulation and implementation of the cash dividend policy.

(IX) If the profit distribution policy is adjusted by the Company subject to the external business environment or its own operating conditions, the adjusted policy shall not violate the relevant provisions released by the CSRC and the stock exchange; the proposal in respect of policy adjustment must be approved by the Company’s board of directors and the board of supervisors before providence to the general meeting of shareholders. The shareholders meeting may be convened on site or via the network. The independent director shall give independent opinions to this.

(X) If any shareholder illegally occupies the company’s funds, the Company shall deduct the cash profit of such shareholder to repay the money concerned.

Article 171 The cash dividends and other amounts paid by the Company to its shareholders of domestic shares shall be distributed in form of Renminbi. The cash dividends and other amounts paid by the Company to its shareholders of overseas listed foreign shares shall be calculated and declared in form of Renminbi and paid in foreign currency. All foreign currency required shall be handled in accordance with the relevant provisions of state foreign exchange administration.

Monies paid for any shares before dunning shall have dividends, but the holders of shares are not entitled to dividends announced later for the said monies.

Article 16 ~~3~~ 172 The dividends shall be distributed to shareholders by the Company in accordance with the regulations of China Tax Law. The tax payable of income from shareholder’s dividends shall be withheld subject to the distributed amount.

Article 164 ~~1~~ 73 The Company shall appoint collection agents for holders of overseas listed foreign shares. The collection agents shall, on behalf of the related shareholders, collect dividends distributed by the Company for the overseas listed foreign shares and other payables.

The collection agents appointed by the Company shall meet the requirements of the laws or the stock exchange of the listing place.

The collection agents appointed by the Company for holders of foreign shares listed on the Hong Kong Stock Exchange shall be trust companies registered pursuant to Trustee Ordinance of Hong Kong. (MP140)

For receiving of dividends by shareholders, provided that the relevant regulations of securities exchange stock are observed, the Company may exercise the right to seize dividends not collected, but the said right shall not be exercised before expiry of the applicable validity period.

The Company shall have the right to stop sending dividend coupons by post to a holder of overseas listed foreign shares when the dividend coupons are not cashed for two consecutive times. However, the Company may also exercise such a right when the dividend coupons are returned after they are sent to the addressee for the first time.

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The Company shall have the right to sell the shares of the holders of overseas listed foreign shares who cannot be reached in a manner deemed as appropriate by the Board, but it shall comply with the following conditions:

(I) Dividends have been distributed for the said shares for at least three times in 12 years, but are not claimed in the said period; and

(II) Upon expiry of the 12-year period, the Company shall announce its intent to sell the shares in one or more newspapers at the listing place of the Company, and notify the stock exchange on which the said shares are listed.

(I ) Chapter 16 Appointment of Certified Public Accountants

Article 165 ~~1~~ 74 The Company shall appoint qualified independent certified public accountants to audit the annual financial reports and other financial reports of the Company. For the purpose of this Article of Association, the certified public accountants entrusted by the Company at any time shall act as the accountant.

The Company’s first public accounting firm shall be appointed by the founding assembly prior to the first annual shareholders meeting. The tenure of such accounting firm shall be terminated at the end of the first annual shareholders meeting.

If the founding assembly fails to exercise the functions and powers, the Board of Directors shall exercise the functions and powers. (MP141)

Article 166 ~~1~~ 75 The term of appointment of certified public accountants for the Company shall be from conclusion of one annual general meeting to conclusion of the next annual general meeting. (MP142)

Article 16 ~~7~~ 176 The certified public accountants appointed by the Company shall have the following rights: (MP143)

(I) To access the account books, records or vouchers of the Company at any time, and to ask directors, general manager or other senior executives to provide relevant documents and explanations;

(II) To ask the Company to take every action possible to obtain documents and explanations from its subsidiaries needed for the certified public accountants to perform their duties;

(III) To be present at general meetings, get notice of general meeting that any shareholder has the right to receive or other information relating to general meetings, and deliver speeches at any general meeting in relation to the matters concerning the certified public accountants.

Article 168 ~~1~~ 77 In the event of vacancy of certified public accountants, the Board may appoint certified public accountants to fill the said vacancy before convening of a general meeting. During duration of the said vacancy, if the Company has any incumbent certified public accountants, the said certified public accountants may still fulfill their duties. (MP144)

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Article 169 ~~1~~ 78 Regardless of the terms in the contract concluded between the certified public accountants and the Company, the general meeting may, through an ordinary resolution, dismiss the said certified public accountants before expiry of the term thereof. In the event of any rights claimed by the certified public accountants against the Company, the said rights shall not be affected. (MP145)

Article 17 ~~0~~ 179 The remunerations of the certified public accountants or the method for determining the same shall be subject to the decision of the general meeting. The remunerations of the certified public accountants appointed by the Board shall be determined by the Board. (MP146)

Article 17 ~~1~~ 180 Appointment, dismissal or non-appointment of certified public accountants by the Company shall be subject to decision at the general meeting and shall be filed with the securities regulatory authority under the State Council. (MP147)

The general meeting shall comply with the following provisions in passing a resolution to appoint non-incumbent certified public accountants to fill any vacancy of certified public accountants or continue appointing certified public accountants appointed by the Board to fill the vacancy or dismiss incumbent certified public accountants before the expiry of its term:

(I) The proposal for appointment or dismissal shall, before the notice of general meeting is sent, be served to certified public accountants to be appointed or to terminate service or having terminated service in the relevant fiscal year. Termination of service shall include dismissal, resignation or retirement.

(II) If the certified public accountants about to terminate service make a written statement and request the Company to notify the shareholders of the said statement, the Company shall take the following actions unless the statement is received too late:

Describe in the notice issued for the resolution that the certified public accountants about to terminate service have made a statement; and
Send to the shareholders entitled to receive the notice of general meetings a copy of the statement as an attachment to the notice in the form specified in the Articles of Association.

If the Company fails to send out the statement of the certified public accountants as per (II) herein, the relevant certified public accountants may require(I ~~)~~ that the said statement be read at the general meeting and may further lodge a complaint.

(III) Certified public accountants about to terminate service have the right to attend the following meetings:

The general meeting at which their term of appointment expires;
The general meeting for filling vacancy because of their termination of service;

and

The general meeting held because of their resignation.

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The certified public accountants about to terminate service have the right to receive all the notices of the aforesaid meetings or other information relating to the meetings, and deliver speeches at the meetings in relation to the matters concerning the certified public accountant.

Article 172 ~~1~~ 81 Where the Company dismisses or does not continue appointing the certified public accountants, a notice shall be given to the certified public accountants 15 days in advance, and the certified public accountants shall have the right to state their opinions to the general meeting. Where the certified public accountants tender their resignation, they shall state to the general meeting whether the Company has anything inappropriate. (MP148)

The certified public accountants may resign by placing a written notice of resignation at the legal address of the Company. The said notice shall take effect on the date of delivery to the legal address of the Company or on a later date specified in the notice. The said notice shall include the following statements:

A statement that their resignation does not involve any information to be disclosed to the shareholders or creditors of the Company; or
A statement of any such information to be disclosed.

The Company shall send a copy of the written notice mentioned in the preceding paragraph to relevant competent authority within 14 days after receipt of the said notice. If the notice contains the statement mentioned in the two preceding paragraphs, the Company shall keep a copy of the said statement in the Company for reference by the shareholders. The Company shall also send a copy of the aforesaid statement to every shareholder who has the right to obtain the financial reports of the Company, as per the addresses in the shareholders’ register.

If the notice of resignation of the certified public accountants contains the statement mentioned in the paragraphs herein, the certified public accountants may require the Board to convene an extraordinary general meeting to listen to their explanation about the resignation.

Chapter 17 Merger and Division of the Company

Article 17 ~~3~~ 182 In respect of the merger or division of the Company, the Board shall propose a plan and have it adopted following the procedure specified in the Articles of Association, and go through relevant examination and approval formalities pursuant to law. Any shareholder objecting to merger or division of the Company shall have the right to require the Company or the shareholders approving merger or division of the Company to buy his shares at a fair price. Resolution on merger or division of the Company shall be archived as special document for reference by the shareholders.

The aforesaid document shall also be served by post to holders of overseas listed foreign shares. (MP149)

Article 17 ~~4~~ 183 Merger of the Company may be in two forms: merger by absorption and merger by consolidation.

In the event of merger of the Company, the parties concerned shall conclude a merger agreement and prepare balance sheet and property inventory. The Company shall notify all creditors

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within 10 days after adoption of the merger resolution and shall make announcements in newspapers within 30 days. The creditor should, within 30 days of being notified, or if he does not receive the notice, then within 45 days of the public announcement, request the Company to pay off its debts or provide corresponding guarantees.

The creditor’s rights and debts of the parties concerned after merger of the Company shall be inherited by the company subsisting after merger or by the newly established company. (MP150)

Article 175 ~~1~~ 84 Where the Company is divided, its properties shall be divided accordingly.

In the event of division of the Company, the parties concerned shall conclude a division agreement and prepare balance sheet and property inventory. The Company shall notify all creditors within 10 days after adoption of the division resolution and shall make announcements in newspapers within 30 days.

The companies after division shall bear joint liability for the debts of the Company before division. However, if before the division the Company and its creditors have entered into a written contract concerning the repayment of debts, then the former provision does not apply. (MP151)

Article 176 ~~1~~ 85 Change to registered particulars arising from a merger or division of the Company shall be registered with the company registration authority according to law. If the Company is dissolved, a cancellation of its registration shall be effected according to law. If a new company is established, registration of such establishment shall be effected ~~e~~ stablished and registered according to law. (MP152)

Chapter 18 Dissolution and Liquidation of the Company

Article 17 ~~7~~ 186 The Company shall be dissolved and liquidated according to law in any of the following circumstances:

(I) Expiration of business term;
(II) The general meeting has resolved to dissolve the Company;
(III) Merger or division of the Company entails dissolution;

(IV) The Company is declared bankrupt according to law because it is unable to pay its debts as they fall due;

(V) The Company is closed down due the violation of laws and administrative regulations in accordance with laws;

(VI) If the Company gets into serious trouble in operations and management and continuation may incur material losses of the interests of the shareholders, and no solution can be found through any other channel, the shareholders holding more than 10% of the total voting rights of the Company may request the people’s court to dissolve the Company. (MP153)

Article 178 ~~1~~ 87 If there is any circumstance as stated in paragraph (I) of Article 186 of this Articles of Association, this Articles of Association shall be continue to exist through amendment.

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If this Articles of Association is amended subject to the aforesaid provisions, it must be approved by more than two-thirds of shareholders by voting.

Article 188 Where the Company dissolves pursuant to (I) and (II) of Article 186 of this Articles of Association, a liquidation group shall be set up within 15 days and the members thereof shall be decided by an ordinary resolution at a general meeting.

If the Company is dissolved pursuant to (IV) o ~~f t~~ he ~~p~~ receding ~~a~~ rticle, of Article 186 of this Articles of Association, a liquidation group comprising shareholders, relevant departments and relevant professionals shall be established by the people’s court in accordance with relevant laws to carry out the liquidation.

Article 17 ~~9~~ If the Company is dissolved pursuant to (V) of the preceding ~~a~~ rticle ~~A~~ rticle 186 of this Articles of Association, a liquidation group comprising shareholders, relevant departments and relevant professionals shall be established ~~b~~ y ~~t~~ he ~~p~~ eople ~~’s c~~ ourt ~~i~~ n ~~a~~ ccordance ~~w~~ ith ~~r~~ elevant laws to carry out the liquidatio ~~n~~ . (MP154)

Article 189 If the Board decides to liquidate the Company (save for liquidation when the Company is declared bankrupt), the notice of general meeting to be held therefor shall contain a statement that the Board has made a thorough investigation on the conditions of the Company and that the Company may repay all its debts within 12 months after commencement of liquidation.

After the resolution on liquidation is adopted at the general meeting, the functions and powers of the Board shall terminate immediately. (MP155)

The liquidation group shall, as per the instructions of the general meeting, report to the general meeting at least once a year about the revenues and expenses of the liquidation group, the businesses of the Company and the progress of liquidation, and deliver a final report to the general meeting at the end of liquidation.

Article 180 ~~1~~ 90 The liquidation group shall notify all creditors within 10 days after its establishment and shall make announcements in newspapers within 60 days. The creditors shall declare their creditor’s rights to the liquidation group within 30 days after receipt of the notice or within 45 days after announcement if the creditors haven’t received the notice. (MP156)

To declare their creditor’s rights, the creditors shall explain matters relating to their rights and provide relevant evidential documents. The liquidation group shall register the creditor’s rights according to law.

During the period of declaration, the liquidation group shall not exercise liquidation against the creditor.

Article 18 ~~1~~ 191 During liquidation, the liquidation group shall exercise the following functions and powers: (MP157)

(I) To examine and take possession of the assets of the Company and prepare a balance sheet and a property inventory;

(II) To inform creditors by notice or announcement;

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(III) To deal with the outstanding businesses of the Company relating to liquidation;
(IV) To pay off the outstanding taxes;
(V) To settle creditor’s rights and debts;
(VI) To dispose of the remaining assets of the Company after repayment of debts;
(VII) To represent the Company in civil proceedings.

Article 182 ~~1~~ 92 After the liquidation group has examined and taken possession of the assets of the Company and prepared a balance sheet and a property inventory, it shall formulate a liquidation proposal and submit it to the general meeting or the relevant competent authority for confirmation.

The assets of the Company shall be liquidated in the following order of priority:

Liquidation expenses, employees’ salaries, social insurance expenses, statutory compensations, outstanding taxes, and the Company’s debts. The assets of the Company remaining after liquidation as specified in the preceding paragraphs shall be distributed to the shareholders as per the types of their shares and their shareholding percentages.

During the liquidation, the company shall not carry out any business operation that has nothing to do with liquidation. (MP158)

Article 18 ~~3~~ 193 In the event of liquidation due to dissolution of the Company, after the liquidation group has examined and taken possession of the assets of the Company and prepared a balance sheet and a property inventory, if it discovers that the Company’s assets are insufficient to repay its debts in full, it shall immediately apply to the people’s court to declare the Company bankrupt. (MP159)

Once the people’s court makes a ruling declaring the Company bankrupt, the liquidation group shall hand over the liquidation matters to the people’s court.

Article 184 ~~A~~ fter completion of liquidation of the Company, the liquidation group shall prepare a liquidation report and income and expenditure statements and account books in respect of the liquidation period and, after verification of the Chinese certified public accountants, shall submit the same to the general meeting or the relevant competent authority for confirmation.

Article 194 The liquidation group shall, within 30 days after obtaining confirmation from the general meeting or the relevant competent authority, submit the aforesaid documentation to the company registration authority, and apply to cancel registration of the Company and announce termination of the Company. (MP160)

Article 195 Members of the liquidation group should be loyal to their duties and perform liquidation duties according to the law.

Members of the liquidation group should not make use of their duties to receive bribes or other illegal income, and cannot embezzle the Company’s assets.

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If a member of the liquidation group causes losses to the Company or creditors, deliberately or due to a significant mistake, he should be responsible to compensate.

Article 196 When the Company is declared bankrupt according to the law, the bankruptcy liquidation will be handled according to the relevant law on enterprise bankruptcy.

Chapter 19 Procedure for Amending Articles of Association

Article 185 ~~1~~ 97 The Company may amend the Articles of Association pursuant to the laws, administrative regulations, Listing Rules and the Articles of Association. (MP161)

Article 186 ~~1~~ 98 The Company shall amend the Article of Association, if:

(I) The matters as prescribed in the Article of Association conflict with the amended laws and administrative regulations after amendment of the Company Law or the relevant laws and administrative regulations;

(II) The change of the Company’s situation conflicts with the matters as prescribed in the Article of Association;

(III) The shareholder’s meeting makes resolution to amend the Article of Association.

Article 18 ~~7~~ 199 The amendment of the Article of Association shall follow the procedures as below:

(I) The Board of Directors draws up the article to amend the plan in accordance with the Article of Association;

(II) To notice the shareholders of amendment of the plan and convene shareholder’s meeting for voting;

(III) To submit the amendment contents voted at the shareholder’s meeting for pass at special resolution.

The Board of Directors shall amend the Article of Association in accordance with the resolution with respect to the amendment of the Article of Association passed as the shareholder’s meeting and the approval opinions issued by the competent organ concerned.

Article 188 ~~2~~ 00 If the amendment to the Articles of Association involves any content of Mandatory Provisions , the said amendment shall be subject to approval by the company examination and approval authority authorized by the State Council and the securities regulatory authority under the State Council; if the amendment involves registration of the Company, the involved change shall be registered pursuant to law. (MP162)

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Chapter 20 Notice

Article 189 ~~2~~ 01 The notice of the Company, mailing and other written materials including but not limited to annual report, interim report, quart report, meeting notice, listing documents, shareholder notice, form of representative appointment and temporary announcement may be served as follows:

(I) By personal delivery;
(II) By post;
(III) By fax or email;

(IV) By announcement on the website designated by the Company and ~~,~~ the Hong Kong Stock Exchange and the SSE in accordance with the laws, administrative regulations, Listing Rules of Stock Exchange and listin ~~g~~ rules o ~~f~~ the stock exchangeListing Rules of SSE at the location where the Company’s shares are listed;

(V) By newspaper and other designated media;

(VI) By other means approved by the relevant regulatory authority at the location where the Company’s shares are listed or stipulated in the Articles of Association.

Notwithstanding any other provisions contained in the Articles of Association in respect of the publishing or giving notice of any documents, circulars or other communications, the Company may choose to announce such corporate communications by means provided under item 4 of Article 1 in place of delivering written documents by hand or by post to each holder of overseas listed foreign shares, subject to relevant requirements of the securities regulatory authority at the location where the shares of the Company are listed.

Article 19 ~~0~~ 202 In the event that the relevant regulations of the securities regulatory authority of the place where the Company’s shares are listed requires such documents to be dispatched, mailed, distributed, issued, announced or by any other forms provided to the shareholders in both English and Chinese version, the Company may (in accordance with the preference of the shareholders concerned) dispatch only the English or the Chinese version to the shareholders concerned if the Company has made proper arrangements to confirm that the shareholders prefer to only receive either the English or the Chinese version and if such arrangements are within the scope and in accordance with the applicable laws and regulations.

Article 19 ~~1~~ 203 For notices of the Company delivered by hand, an acknowledgement of receipt shall be signed (or stamped) by the recipient and the date of delivery shall be the date on which the acknowledgement is signed; for notices delivered by post, the date of delivery shall be the fifth working day from the mail is delivered to the post office; for notices delivered by express, the date of delivery shall be the third working day from the notice is delivered to the express service providers; for notices delivered by email, the date of delivery shall be the date on which the email is successfully sent to the email address specified by the recipient for the first time, and for notices delivered by way of announcements, the date of delivery shall be the date of first publication.

Any notices of the Company which are made in the form of a public announcement shall be deemed to have been received by all relevant persons once it is published. Th ~~e a~~ nnouncements

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require ~~d~~ t ~~o~~ be ~~g~~ iven ~~b~~ y ~~t~~ he ~~L~~ istin ~~g R~~ ules the holders o ~~f~~ overseas listed foreig ~~n~~ shares shall be published ~~o~~ n ~~t~~ he ~~w~~ ebsite ~~of H~~ ong ~~K~~ ong Stock Exchange via the electronic system of Hong Kong Stoc ~~k~~ Exchange ~~b~~ y submitting electronic ~~v~~ ersion.

Article 192 ~~T~~ he accidental omission to give notice of meeting to, o ~~r n~~ on-receipt ~~of n~~ otice ~~of~~ meeting by ~~, a~~ ny ~~p~~ erson ~~e~~ ntitled ~~to r~~ eceive ~~n~~ otice ~~s~~ hall ~~n~~ o ~~t i~~ nvalidate ~~t~~ he meeting and the resolutions adopted at the ~~m~~ eeting.

Chapter 21 Settlement of Disputes

Article 193 ~~2~~ 04 The Company shall settle disputes following the rules below:

(I) In the event of any dispute or claim between the Company and a director, supervisor, general manager or senior executive, between a holder of overseas listed foreign shares and the Company, between a holder of overseas listed foreign shares and a director, supervisor or senior executive of the Company, and between a holder of overseas listed foreign shares and a holder of domestic shares arising from rights and obligations specified in the Articles of Association, contracts concluded according to the Articles of Association, Company Law and other relevant laws and administrative regulations and relating to the affairs of the Company, the parties concerned shall submit the said dispute or claim for arbitration.

The aforesaid dispute or claim submitted for arbitration shall be the entire dispute or claim; all the persons who complain for the same reason or who are required to participate in the settlement of the dispute or claim shall accept the arbitration award if they are the Company or its shareholders, directors, supervisors, general manager or senior executives.

Disputes relating to definition of shareholders and shareholders’ register may be settled by means other than arbitration.

(II) The applicant for arbitration may select China International Economic and Trade Arbitration Commission for arbitration following the arbitration rules thereof or select Hong Kong International Arbitration Centre for arbitration following the securities arbitration rules thereof. After the applicant for arbitration submits the dispute or claim for arbitration, the other party shall accept arbitration at the arbitral body selected by the applicant.

If the applicant for arbitration selects Hong Kong International Arbitration Centre for arbitration, either party may request that the arbitration be conducted in Shenzhen following the securities arbitration rules of Hong Kong International Arbitration Centre.

(III) Settlement of disputes or claims set out in (I) by way of arbitration shall be governed by PRC laws save as otherwise specified by laws and administrative regulations.

(IV) The arbitration award made by the arbitral body shall be final and binding on both parties. (MP163)

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APPENDIX II

Chapter 22 Supplementary Provisions

Article 19 ~~4~~ 205 The Articles of Association is written in Chinese. In case of any discrepancies among the various versions in different languages, the latest Chinese version approved by and registered with the Administration for Industry & Commerce of Fuzhou shall prevail.

Article 19 ~~5~~ 206 The phrases “more than”, “within” and “less than” as mentioned in the Articles of Association are inclusive while “exceeding”, “unsatisfied”, “beyond” and “not lower than” are exclusive.

Article 196 ~~2~~ 07 The Articles of Association shall be subject to the interpretation of the Board of the Company. Any matters not covered herein shall be approved at shareholders meeting through the Board; ~~.~~

Article 197 ~~2~~ 08 Should there be any inconsistency between the Articles of Association and relevant laws, administrative regulations, other relevant normative documents and the rules of the stock exchange on which the Company’s shares are listed in respect of the issue, the latter shall prevail.

Article 19 ~~8~~ 209 For purposes of the Articles of Association, the “accounting firm” has the same meaning as the “auditor”. (MP165)

Article 210 This Articles of Association shall come into force and be implemented upon approval by the shareholders’ meeting in form of special resolution as well as after initial issue and, and listing of RMB common share domestically listed.

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APPENDIX III.A THE RULES OF PROCEDURES OF GENERAL MEETINGS

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Rules of Procedures for General Meetings of Flat Glass Group Co., Ltd.

Chapter 1 General Provisions

Article 1

To regulate the behavior of Flat Glass Group Co., Ltd. (“the Company”) and ensure that the general meeting can exercise its functions and powers according to law, these Rules are formulated in accordance with Company Law of the People’s Republic of China (hereinafter referred to as Company Law), Securities Law of the People’s Republic of China (hereinafter referred to as Securities Law), Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (hereinafter referred to as Hong Kong Listing Rules), Listing Rules of the Shanghai Stock Exchange (hereinafter referred to as Listing Rules of SSE), Rules of general meeting of shareholders of listed companies (2014 second revision) and other relevant laws, administrative regulations and normative documents and Articles of Association of Flat Glass Group Co., Ltd. (hereinafter referred to as “Articles of Association”).

Article 2

The Company shall convene general meetings in strict accordance with the relevant provisions of the laws, administrative regulations and the Articles of Association, and shall ensure that shareholders can exercise their rights according to law.

The Board shall by due diligence perform its duties, and shall organize general meetings in a serious and timely manner. All the directors of the Company shall be diligent and responsible to ensure the normal convening of a general meeting and its lawful exercise of functions and powers.

Article 3

The general meeting shall exercise its functions and powers within the scope specified by the Company Law and the Articles of Association.

The functions and powers of the shareholders’ general meeting specified in the articles of association shall not be granted to the board of directors or to any other institution or individual. The shareholders’ general meeting may, in the form of a resolution, be granted to the board of directors on behalf of the board of directors, in addition to the specific functions and powers specified in the articles of association of the company.

Article 4

General meetings are classified into annual general meetings and extraordinary general meetings. Annual general meetings shall be convened once a year within six months after the end of the preceding fiscal year.

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APPENDIX III.A

Extraordinary general meetings shall be convened irregularly. In any of the following circumstances, the Company shall convene an extraordinary general meeting within two months from the date upon which the circumstance occurs:

(I) The number of directors falls short of the quorum stipulated in the Company Law or is less than two thirds of the number specified in the Articles of Association;
(II) The unrecovered losses of the Company amount to one third of the total amount of its share capital;
(III) Shareholder(s) holding more than 10% (inclusive) of the Company’s issued and outstanding shares carrying voting rights request(s) in writing the convening of an extraordinary general meeting;
(IV) The Board deems necessary;
(V) The Supervisory Committee proposes to convene such meeting;
(VI) More than 1/2 of the independent directors propose to convene such meeting;
(VII) Other circumstances stipulated by laws, administrative regulations, departmental rules, the Articles of Association, Hong Kong Listing Rules or Listing Rules of SSE occur.

The calculation of the proportion of the shares in the preceding paragraph (three) shall be calculated as the date on which the shareholder(s) submit(s) a written request.

Companies cannot be convened the general meeting of shareholders within the time mentioned above, which shall be reported to the local China Securities Regulatory Commission (hereinafter referred to as the China Securities Regulatory Commission (CSRC)) dispatched institutions and securities exchange, and the company should give the reasons and make an announcement in respect thereof.

Article 5

In convening a general meeting, the Company shall engage a lawyer to provide legal opinions and publish an announcement on the following issues:

(I) Whether the convening and convening procedure of the meeting comply with laws, administrative regulations and the Articles of Association;
(II) Whether the attendees and convener of the meeting are eligible;
(III) Whether the voting procedures and results of the meeting are lawful and valid;
(IV) Legal opinions on other relevant matters upon request by the Company.

Chapter 2 Convening of General Meetings

Article 6

The board of directors shall convene the general meeting of shareholders on time in accordance with the relevant requirements of the articles of association, Hong Kong Listing Rules and Listing Rules of SSE.

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Article 7

An extraordinary general meeting may be convened upon proposal by independent directors to the Board. Regarding the proposal of the independent directors to convene an extraordinary general meeting, the Board shall, pursuant to laws, administrative regulations and the Articles of Association, give a written reply on whether or not to convene the extraordinary general meeting within 10 days after receipt of the proposal.

Where the Board agrees to convene the extraordinary general meeting, it shall serve a notice of such meeting within five days after the resolution is made by the Board. Where the Board does not agree to convene the extraordinary general meeting as proposed by the independent directors, it shall give the reasons and make an announcement in respect thereof.

Article 8

The Supervisory Committee shall be entitled to propose to the Board to convene an extraordinary general meeting, and shall put forward its proposal to the Board in writing. The Board shall, pursuant to laws, administrative regulations and the Articles of Association, give a written reply on whether or not to convene the extraordinary general meeting within 10 days after receipt of the proposal.

Where the Board agrees to convene the extraordinary general meeting, it shall serve a notice of such meeting within five days after the resolution is made by the Board. Any change to the original proposal set forth in the notice shall be subject to approval by the Supervisory Committee.

If the Board does not agree to convene the extraordinary general meeting or fails to give a written reply within 10 days after receipt of the proposal, the Board shall be deemed as unable to or failing to perform the duty of convening the general meeting, and the Supervisory Committee may convene and preside over the meeting by itself.

Article 9

An extraordinary general meeting may be convened upon request by two or more shareholders severally or jointly holding more than 10% shares of the Company to the Board, and such request shall be put forward to the Board in writing. The Board shall, pursuant to laws, administrative regulations and the Articles of Association, give a written reply on whether or not to convene the extraordinary general meeting within 10 days after receipt of the request.

Where the Board agrees to convene the extraordinary general meeting, it shall serve a notice of such meeting within five days after the resolution is made by the Board. Any change to the original request set forth in the notice shall be subject to approval by the relevant shareholders.

If the Board does not agree to convene the extraordinary general meeting or fails to give a reply within 10 days after receipt of the request, shareholders severally or jointly holding more than 10% shares of the Company shall be entitled to propose to the Supervisory Committee to convene an extraordinary general meeting, and shall put forward such request to the Supervisory Committee in writing.

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APPENDIX III.A

If the Supervisory Committee agrees to convene the extraordinary general meeting, it shall serve a notice of such meeting within five days after receipt of such request. Any change to the original proposal set forth in the notice shall be approved by the relevant shareholders.

In case of failure to issue the notice of the general meeting within the term stipulated, the Supervisory Committee shall be deemed as failing to convene and preside over the general meeting. As a result of its failure to do so for more than 90 consecutive days, shareholder(s) severally or jointly holding more than 10% shares of the Company may convene and preside over such meeting by himself/themselves.

Article 10

Where the Supervisory Committee or shareholder(s) decide(s) to convene a general meeting by itself/themselves, it/they shall notify the Board in writing and it/they shall also issue the resolution of the general meeting and file with the authority appointed by CSRC at the location of the Company and the Stock Exchange at the same time.

Before the resolution of the shareholders’ meeting, the shareholders’ shareholding ratio shall not be less than 10%. When the board of supervisors and the convening of the shareholders decide to send a notice of the general meeting of shareholders and the announcement of the resolution of the shareholders’ general meeting, they shall also submit the relevant certification materials to the CSRC dispatched institutions and the local stock exchange at the same time.

Article 11

With regard to the general meeting convened by the Supervisory Committee or shareholders on its/their own initiative, the Board and its secretary or the secretary of the company shall offer cooperation. The Board shall provide a shareholders’ register as of the equity registration date. Where the Board fails to provide the shareholders’ register, the convener may apply to the securities registration and clearing authority to obtain it upon presentation of the announcement relating to the notice of the general meeting. The shareholders’ register obtained by the convener shall not be used for other purposes except for the general meeting.

Article 12

Where the Supervisory Committee or shareholder(s) convene(s) the general meeting, the expenses incurred therefrom shall be borne by the Company.

Chapter 3 Proposals and Notice of General Meetings

Article 13

The content of a proposal shall be determined by the general meeting, shall have definite topics and specific issues for resolution, and shall comply with the relevant provisions of laws, administrative regulations and the Articles of Association.

Article 14

Where the Company convenes a general meeting, the Board, Supervisory Committee, and shareholder(s) severally or jointly holding more than 3% shares of the Company may make proposals to the Company in written form.

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Matters within the scope of authority of the shareholders’ meeting of the proposal shall be included in the agenda of the meeting.

Shareholder(s) severally or jointly holding more than 3% shares of the Company may submit written provisional proposals to the convener 10 days before a general meeting is convened. The convener shall serve a supplementary notice of general meeting within two days after receipt of the proposal and announce the content of the provisional proposal.

Save as specified in the preceding paragraph, the convener shall not change the proposal set out in the notice of the general meeting or add any new proposal after the said notice is served.

Proposals not set out in the notice of general meeting or not complying with the preceding article of these Rules shall not be voted on or resolved at the general meeting.

Article 15

Where the Company convenes a general meeting, a written notice shall be given 45 days prior to the date of the meeting to notify all the shareholders in the shareholders’ register of the matters to be considered at the meeting, and the date and venue of the meeting. Any shareholder intending to attend the general meeting shall deliver to the Company a written reply showing his intention to attend 20 days before the meeting.

The duration of the aforesaid notice of the general meeting shall not include the date on which then meeting is convened.

Article 16

The Company shall, based on the written replies received 20 days prior to the date of the general meeting, calculate the number of voting shares held by shareholders intending to attend the meeting. Where the number of voting shares represented by shareholders intending to attend the meeting amounts to more than one half of the Company’s voting shares, the Company may convene the general meeting; if not, the Company shall, within five days, notify shareholders again of the matters to be considered, venue, date and time of the meeting in the form of public announcements. The Company may then convene the general meeting after such announcements.

Extraordinary shareholders’ general meeting cannot decide the matters have not been specified in the notice.

Article 17

Notice and supplementary notice of the general meeting of shareholders shall fully and completely disclose the specific content of all the proposals, and all the information or explanations required to make reasonable judgments on the matters to be discussed. The independent directors need to pass comment on the matters to be discussed, so the opinions of the independent directors should also be disclosed at the same time when the shareholders’ general meeting notice or supplementary notice be issued.

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APPENDIX III.A

Article 18

If the election of directors or supervisors is proposed to be discussed at a general meeting, the notice of such meeting shall adequately disclose the detailed information of the director or supervisor candidates in accord with Hong Kong Listing Rules and Listing Rules of SSE, which information shall at least include:

(I) Personal particulars, including educational background, work experiences, and concurrent positions;
(II) Whether one has any related connection with the listed company, its controlling shareholders and effective controllers;
(III) The amount of shares of the company one holds;
(IV) Whether one has been punished by CSRC or any other relevant department or reprimanded by the stock exchange.

Unless a director or supervisor is elected via the cumulative voting system, each candidate for director or supervisor shall be proposed via a single proposal.

Article 19

The notice of general meeting shall:

(I) Be made in writing;
(II) Specify the venue, date and time of the meeting;
(III) State matters and proposals to be discussed at the meeting;
(IV) Provide the shareholders with such information and explanation as necessary for them to make informed decisions in connection with the matters to be discussed; this principle includes (but is not limited to) where a proposal is made to merge the company, to repurchase shares of the company, to reorganize its share capital or to make any other reorganization of the company, and detailed conditions of the proposed transaction shall be provided together with contracts (if any) and the cause and effect of any such proposal shall also be properly explained;
(V) Disclose the nature and extent of the interest where any director, supervisor, president or other senior executive have a material interest in the proposed matters to be discussed; describe the difference where the impact of the matters to be discussed on such director, supervisor, president or senior executive in their capacity as shareholders is different from the impact on other shareholders of the same class;
(VI) Contain the full text of any special resolution proposed to be passed at the meeting;
(VII) Contain a clear statement that a shareholder entitled to attend and vote at such meeting is entitled to appoint one or more proxies to attend and vote at such meeting on his behalf and that such proxy need not be a shareholder;
(VIII) Specify the time and venue for serving the power of attorney for the voting proxy for the meeting;
(IX) Specify the equity registration date of shareholders entitled to attend the general meeting;

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APPENDIX III.A THE RULES OF PROCEDURES OF GENERAL MEETINGS

(X) Specify the name and telephone number of the coordinator of the meeting;

(XI) And other content of disclosure of Hong Kong Listing Rules and Listing Rules of SSE.

The interval between the equity registration date and the date of meeting may not be more than seven workdays. Once the equity registration date has been confirmed, which cannot be changed anymore.

Article 20

The notice of a general meeting shall be delivered in any permitted way of the Stock Exchange that company listed on (including, but not limited to post, e-mail, bulletin, published on the website of the company or the relevant stock exchange websites, etc.) to shareholders (whether or not they are entitled to vote at the general meeting) delivery to their addresses as shown in the shareholders’ register. For holders of unlisted shares, notices of general meetings may be issued by announcement.

The announcement referred to in the preceding paragraph shall be published in one or more newspapers designated by the regulatory securities authority under the State Council within 45 days or 50 days before the meeting convened. Once the announcement has been published, all holders of domestic listed shares shall be deemed to have received the notice of relevant general meeting.

Article 21

After the notice of general meeting is issued, the same meeting shall not be postponed or cancelled without proper reasons.

In the case of any postponement or cancellation of the meeting, the convener shall make an announcement and give the reasons therefor at least two workdays prior to the date on which the meeting is originally scheduled.

Article 22

After the notice of general meeting is issued, the proposals set out in the notice shall not be cancelled without proper reasons. In the case of cancellation, the convener shall make an announcement and give the reasons therefor at least two workdays prior to the date on which the meeting is originally scheduled.

Chapter 4 Convening of General Meetings

Article 23

Before the Company convenes the Genera meetings, a date for equity determined (the equity registration date) shall be decided by the board of directors. When the equity registration date ends, those shareholders who are registered are the shareholders of the company.

The registration of shareholders is not allowed to change 30 days before the meeting convened because of equity transfer.

Article 24

People who have rights to be notified but have not received or been notified a notice of the meeting by accident, the meeting and the decision will not be invalid because of this.

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APPENDIX III.A

Article 25

The location of the general meeting to be held should be the location of the company or the location that has been determined in the notice of the general meeting.

The general meeting shall set a venue and be held in the form of on-site meeting, and it shall be also in accordance with the provisions of laws, administrative regulations, and the China Securities Regulatory Commission or the articles of association, and the company will provide a convenience for the shareholders to participate in the general meeting under a safe, economy, convenient internet network and other ways. Shareholders who attend the general meeting in the manner mentioned above, which will be seen as attended.

When the general meeting of the Company use the internet or other methods, the voting time and the voting procedure of the internet or other methods should be stated clearly in the notice of the general meeting.

Article 26

The board of directors and the other conveners shall take necessary measures to ensure the normal order of the general meeting. The company will take measures to prevent the interference of the general meeting, affray and violations of the legitimate rights and interests of the shareholders and report the situation(s) to the relevant departments to investigate immediately.

Article 27

The shareholders may attend general meetings and exercise the voting rights by themselves, or they can also entrust a proxy to attend the meetings and exercise the voting rights within their authorization.

All shareholders in the shareholders’ register on the equity registration date or proxies thereof shall be entitled to attend general meetings, the company and the conveners cannot refuse them under any reasons.

Article 28

Shareholders attending the general meeting shall present their share account cards, identity card or other identity certificate; Proxies attending the general meeting on behalf of an individual shareholder shall also present his/her identity card and the power of attorney of the shareholder.

Article 29

Attendees register shall be prepared by the Company, which register shall state the names (or names of the corporations), identification card number and the number of voting shares held or represented, names of the principal (or names of the corporations) and so on.

Article 30

All directors, supervisors and the Secretary of the Board or the company shall attend general meetings of the Company, and other senior executives shall be present at the meetings without voting rights.

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APPENDIX III.A

Article 31

Where a general meeting is convened by the Board, the chairman of the Board shall preside the meeting. If the chairman is unable or fails to perform his duties, the deputy chairman shall convene and preside the meeting. In the event that the deputy chairman is unable or fails to perform his duties, a director shall be elected by a simple majority of directors to preside the meeting.

Article 32

A general meeting convened by the Supervisory Committee itself shall be presided over by the chairman of the Supervisory Committee. If the chairman of the Supervisory Committee cannot or does not fulfil the duty thereof, more than half of the supervisors may elect a supervisor to preside over the meeting.

Article 33

A general meeting convened by the shareholders themselves shall be presided over by a representative elected by the convener.

Article 34

When a general meeting is held and the presider violates these Rules which makes it difficult for the general meeting to continue, a person may be elected at the general meeting to act as the presider, subject to the approval of more than half of the attending shareholders with voting rights.

Article 35

The Board and the Supervisory Committee shall report their work in the preceding year at the annual general meeting.

Article 36

In addition to the case involving the Company’s commercial secrets cannot be disclosed, the directors, supervisors and senior management staff should make interpretation and illustration according to the queries of shareholders.

Article 37

The presider shall, prior to voting, declare the number of attending shareholders and their proxies as well as the total number of their voting shares, and the number of attending shareholders and their proxies and the total number of their voting shares shall be as recorded in the meeting’s register.

In addition to the presider of the meeting should make decisions under the principle of honesty and credit, allowing to make resolutions on purely procedural or administrative matters by a show of hands, On the general meeting, any proposal made by the shareholders must be carried out in the form of voting. “Procedure and administrative matters” includes: (1) not contained in the agenda of the general meeting or any supplementary shareholders of circular; and (2) referred to the presider of the meeting shall maintained the meeting in order and / or permit assembly affairs more properly to process, while let all shareholders have responsibilities of having a reasonable opportunity to express their opinions.

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Article 38

When the shareholders and the intended consideration of the general meeting are related, voting should be avoided; the voting shares held by the shareholders will not be counted into the total number of voting shares of shareholders who attend the general meeting. The announcement of the resolutions of the general meeting shall fully disclose the voting results of the non-related shareholders.

Article 39

The general meetings should consider significant matters affecting the interests of small investors; the voting of small investors should be counted separately. And the results shall be disclosed publicly timely.

The board of directors of the company, independent directors and shareholders who are qualified under relevant provisions can openly solicit the voting right of the shareholders. The purpose and information of soliciting the voting right of the shareholders should be fully disclosed. Prohibit paying or in any disguised form of compensation to solicit the voting right from the shareholders. And the company shall not limit the minimum shareholding percentage on soliciting the voting right.

Article 40

The Company has no voting right for the shares it holds, and such part of shares shall be excluded from the total number of voting shares represented by the shareholders attending the general meeting.

Article 41

Resolutions in respect of the election of two or more directors or supervisors shall be passed by way of cumulative voting pursuant to the Articles of Association or resolutions of the general meeting. When the controlling proportion of controlling shareholders of the total number of shares of the company is over 30%, the meeting shall implement the cumulative voting system.

Cumulative voting mentioned in the preceding paragraph means that when directors or supervisors are being elected at a general meeting, each share has as many voting rights as the candidates for directors or supervisors, and the shareholders’ voting rights may be used in a concentrated manner.

Article 42

Save under the cumulative voting system, the general meeting shall resolve on all the proposals separately; in the event of several proposals for the same issue, such proposals shall be voted on and resolved in the order of time at which they are submitted. Unless the general meeting is adjourned or no resolution can be made for special reasons such as force majeure, voting of such proposals shall neither be shelved nor refused at the general meeting.

Article 43

No amendment shall be made to a proposal when it is considered at a general meeting, otherwise, the relevant amendment shall be deemed as a new proposal and shall not be voted on at the general meeting.

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APPENDIX III.A

Article 44

The same voting right can only be exercised in only one form: onsite, over the network, or otherwise. Where the same voting right is exercised more than once, the voting result of the first time shall prevail.

Article 45

A shareholder attending a general meeting shall express one of the following opinions on any proposal to be voted on: pro, con or abstention.

Securities registration and clearing institutions as the name of the holder of Shanghai and Hong Kong stock, but excludes the declaration according to the actual holders.

Blank, wrong, illegible or uncast votes shall be deemed as the voters’ waiver of their voting rights, and the voting results representing the shares held by such voters shall be counted as “abstentions”.

Article 46

When proposals are voted on at the general meeting, two shareholders’ representatives shall be appointed to count, and monitor counting of, the votes. Where any shareholder has interests in any issue considered, the said shareholder or proxy thereof shall not participate in counting and monitoring of ballots.

When proposals are voted on at the general meeting, the lawyer, shareholders’ representative and supervisors’ representative shall be jointly responsible for the counting and monitoring of the ballots.

Shareholders of listed companies or proxies thereof voting over the network or otherwise shall have the right to check their voting results via the corresponding voting system.

Article 47

A general meeting shall not conclude earlier at the venue than over the network or otherwise, and the presider shall announce the voting result of every proposal and announce whether the proposal is passed or not according to the voting result.

Before the voting result is announced, the relevant parties including the listed company, counting officer, monitoring officer, major shareholders and network service provider involved at the venue, over the network or otherwise shall have the confidentiality obligation.

Article 48

Resolutions of the general meeting shall be announced in due time. The announcement shall specify the number of attending shareholders and their proxies, the total number of voting shares they represent and the proportion of these shares to the total number of the voting shares of the Company, the voting method, the voting result for every proposal and the details of each of the resolutions passed.

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APPENDIX III.A

The Company shall make statistics and report on the attendance and voting of the domestic and foreign shareholders respectively.

Article 49

Where a proposal has not been passed or the resolutions of the preceding general meeting have been changed at the current general meeting, special mention shall be made in the announcement of the resolutions of the general meeting.

Article 50

Minutes of a general meeting shall be kept by the Secretary of the Board or the company. The minutes of the meeting shall specify:

(I) the date, venue and agenda of the meeting, and the name of the convener;
(II) the names of the presider, and the directors, supervisors, president and other senior executives attending or present at the meeting;
(III) the number of shareholders and proxies attending the meeting, the total number of voting shares they represent and the proportion of these shares to the total number of shares of the Company;
(IV) the process of discussion in respect of each proposal, highlights of speeches and the voting result;
(V) details of the inquiries or suggestions of the shareholders, and the corresponding responses or explanations;
(VI) the names of the lawyer, counting officer and monitoring officer;
(VII) other contents that shall be recorded in the minutes in accordance with the Articles of Association.

The attending directors, supervisors, Secretary of the Board or the company, convener or representative thereof, and preside shall sign the minutes of the meeting, the convener shall ensure the meeting minutes are true, accurate and complete. The minutes of the meeting, the signed attendance record of those shareholders on the spot and the power of attorney for attendance by proxy, and the valid information relating to the voting over network or by other means shall be kept for 10 years.

Article 51

The convener shall ensure that the general meeting is held continuously until final resolutions have been reached. If the general meeting is terminated or fails to reach any resolution due to force majeure or for other special reasons, the convener shall take necessary action to resume the general meeting as soon as possible or directly terminate the general meeting and make a responsive announcement. Meanwhile, the convener shall report to authority appointed by CSRC in the location of the Company and the stock exchange.

Article 52

Where a proposal on election of directors or supervisors is passed at the general meeting, the directors elect or supervisors elect shall take office after announcement of the voting result.

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APPENDIX III.A

Article 53

Where a proposal on cash dividends, bonus shares or increase of share capital by way of transfer from capital reserves, the Company shall implement the specific scheme within two months after conclusion of the general meeting.

Article 54

If the resolution of the General Meeting is in violation of the laws and administrative regulations, the resolution will be invalid.

The controlling shareholders and actual controllers of the company shall not restrict or interfere with the small and medium investors in accordance with the law to exercise their right to vote, or damage to the company and the small and medium investors’ legitimate rights and interests.

The procedure of convening the General Meeting and the voting formula are in violation of laws, administrative regulations or articles of association, or the resolution is in violation of the articles of association, the shareholders may after a resolution is made, from within 60 days, request the people’s court to revoke.

Chapter 5 Supervisory Measures

Article 55

Within a prescribed time period defined by these rules, the listed companies do not to convene a general meeting without justifiable reasons, the stock exchange has rights to suspend trading and derivative products of the listed company, and require the board of directors to give explanations and make an announcement.

Article 56

If the convening and holding of the General Meeting and the disclosure of relevant information do not meet the requirements of laws, administrative regulations, the rules and articles of association, the China Securities Regulatory Commission and agency has the right to order it to make corrections, and the stock exchange to be publicly condemned; if the circumstances are serious or not to be corrected, the China Securities Regulatory Commission the relevant personnel to implement banning the entry into the securities market.

Article 57

If directors, supervisors, or secretaries of the board are in violation of the law, provisions of the administrative regulations, the rules and articles of association, and not earnestly perform their duties, the China Securities Regulatory Commission and its dispatched institution have the right to order them to make corrections, and the stock exchange will condemn them publicly; if the circumstances are serious or have not been corrected, relevant staff of the China Securities Regulatory Commission can make implements to ban the entry into the securities market.

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Chapter 6 Supplementary Provisions

Article 58

The announcement or notice of the Rules refers to the contents of the information disclosed in the designated newspapers and periodicals of China Securities Regulatory commission. Notice or announcement with a longer length, the company may choose to specify the contents of the disclosure briefly in the designated newspapers and periodicals of China Securities Regulatory commission, but the full text should also be published on the website of the China Securities Regulatory commission.

Article 59

The phrases “more than” and “within” as mentioned in these Rules are inclusive while “exceeding”, “less than” and “more than” are exclusive.

Article 60

In any of the following circumstances, the rules shall be amended to be:

(1) After the modification of the articles of association, the provisions of these rules are inconsistent with the articles of association of the amended;
(2) The General Meetings decide to amend the rules.

Article 61

The unsettle affairs of the rules are applicable to the provisions of the relevant laws, regulations, rules and regulatory documents and the articles of association. If the provisions of these rules are inconsistent with relevant laws, regulations, rules, regulations document and the articles of association and Hong Kong Listing Rules or Listing Rules of SSE, the provisions of relevant laws, regulations, rules, regulations document and the articles of association and Hong Kong Listing Rules or Listing Rules of SSE shall prevail.

Article 62

These Rules shall be subject to interpretation by the Board of the Company.

Article 63

These Rules shall come into effect upon deliberation and approval of the general meeting of the Company and after IPO of the Company within the territory of the People’s Republic of China and listing of the said shares in the stock exchange.

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APPENDIX III.B THE RULES OF PROCEDURES OF BOARD MEETINGS

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Rules of Procedure for Board Meetings of Flat Glass Group Co., Ltd.

Article 1

To regulate the discussion methods and voting procedures of the Board of Flat Glass Group Co., Ltd. (“the Company”), urge the directors and the Board to effectively perform their duties and ensure the regulated operation and scientific decision-making of the Board, these Rules of Procedure are formulated in accordance with the Company Law of the People’s Republic of China (“Company Law”), Securities Law of the People’s Republic of China (“Securities Law”), Code of Corporate Governance for Listed Companies in China, Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (hereinafter referred to as Hong Kong Listing Rules), Listing Rules of the Shanghai Stock Exchange (hereinafter referred to as Listing Rules of SSE) and Articles of Association of Flat Glass Group Co., Ltd. (hereinafter referred to as “Articles of Association”) and other relevant provisions.

Article 2 Organizational Structure

The Board shall set a Board Office for handling the daily affairs of the Board.

The secretary of the Board (same as “the secretary of the company”) should handle the daily affairs of the Board and keep the stamps of the board of directors. The board of directors may set up the audit committee, the nomination committee, the remuneration and appraisal committee and the strategic development committee and so on as the working body for the board of directors. The composition, functions and rules of procedure of the committee shall be formulated by the board of directors.

Article 3 Regular Meetings

Board meetings include regular meetings and provisional meetings.

Board meetings shall be held at least four times a year, and shall be convened by the chairman of the Board. A notice shall be sent to all the directors at least 14 days before the meeting.

Article 4 Proposals for Regular Meetings

Before sending the notice of a regular Board meeting, the secretary of the Board shall adequately consult with the directors, and shall accordingly formulate a preliminary proposal for meeting and submit the same to the chairman of the Board for consideration.

Before deciding a proposal, the chairman of the Board shall, where necessary, seek opinions of the president and other senior executives.

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Article 5 Provisional Meetings

In any of the following circumstances, the Board shall hold a provisional meeting after receiving the notice in 10 days:

(I) Proposed by the shareholders representing more than one tenth of the voting rights;
(II) Jointly proposed by more than one third of the directors;
(III) Proposed by the Supervisory Committee;
(IV) The chairman of the Board considers it necessary;
(V) Jointly proposed by more than a half independent directors;
(VI) Proposed by the executive;
(VII) Required by the securities regulating authority;
(VIII) If any other circumstance as specified in the Articles of Association occurs, Hong Kong Listing Rules and Listing Rules of SSE.

Article 6 Procedure for Proposing Provisional Meetings

A proposal for convening a provisional Board meeting as specified in the preceding article shall be made in written form, affixed with the signature (seal) of the proposer, and submitted to the chairman directly or via the secretary of the Board. A written proposal shall specify:

(I) The name of the proposer;
(II) The reasons or objective causes on which the proposal is based;
(III) The time or time limit, venue and method as suggested for holding the meeting;
(IV) The explicit and specific proposals;
(V) The contact information of the proposer and the date of proposal, etc.

The contents of the proposal shall be within the power of the Board specified in the Articles of Association, and the documents relating to the proposal shall be submitted together with the proposal itself.

The Board Office shall transfer to the chairman of the Board the aforesaid written proposal and relevant documents upon receipt of the same. Where the chairman deems the proposal not explicit or specific or the relevant documents inadequate, the chairman may require the proposer to amend or supplement the proposal.

Article 7 Convening and Presiding of Meetings

Board meetings shall be convened and presided over by the chairman; where the chairman cannot or does not fulfill the duty thereof, the vice chairman shall convene and preside; where no vice chairman is available or the vice chairman cannot or does not fulfill the duty thereof, the majority of the directors may elect a director to convene and preside.

Article 8 Meeting Notice

The Board Office shall send the written meeting notice affixed with the seal of the Board to all the directors, supervisors, the president and the Secretary of the Board by fax, email or hand delivery at

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least 14 days and 5 days before a regular Board meeting and a provisional Board meeting respectively. Where the notice is not served by direct delivery, telephone acknowledgement and relevant records shall be made.

Where a provisional Board meeting needs to be convened in emergency, the meeting notice may be sent by verbal means or telephone at any time, but the convener shall make explanations at the meeting.

Article 9 Contents of the Meeting Notice

A written meeting notice shall include at least the following details;

(I) Time and venue of the meeting;
(II) Form of the meeting;
(III) Matters (proposals) to be considered;
(IV) Convener and presider of the meeting, proposer of and written proposal for the provisional meeting;
(V) Documents needed for voting of directors;
(VI) Requirements for the directors to attend the meeting in person or by proxy;
(VII) Contact person and means of contact.

A verbal meeting notice shall at least include (I) and (II) above, and explanation for a provisional Board meeting in emergency.

Article 10 Change of the Meeting Notice

If, after the written notice of a regular Board meeting is sent, it is necessary to change the time, venue, etc. of the meeting or add, change or cancel proposals to the meeting, a written notice of change shall be sent 3 days before the original designated date for convening the meeting, to explain why and provide contents and documents relating to the new proposals. Where the notice of change is sent in less than 3 days in advance, the date of meeting shall be postponed accordingly or the meeting shall be held on schedule upon approval by all the attending directors in writing.

If, after the notice of a provisional Board meeting is sent, it is necessary to change the time, venue, etc. of the meeting or add, change or cancel proposal for the meeting, then it shall be necessary to seek the prior consent of all the attending directors and make relevant records.

Article 11 Convening of Meetings

A Board meeting shall be attended by more than half of the directors. Where any relevant director refuses or fails to attend the meeting so that the number of attendants falls short of the quorum required for convening the meeting, the chairman and the Secretary of the Board shall responsively report to the regulatory authority.

Supervisors may attend Board meetings without voting rights; the president and the Secretary of the Board shall attend Board meetings without voting rights. The chairman of the meeting may, where he deems necessary, notify other relevant persons to attend Board meetings without voting rights.

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Article 12 Attendance in Person or by Proxy

In principle, the directors shall attend Board meetings in person. Where a director is unable to attend a meeting for any reason, he shall peruse the meeting documents in advance, form definite opinions, and appoint another director in writing to attend the meeting on his behalf. The attendance by proxy shall be in conformity with the provisions of the articles of association, Hong Kong Listing Rules and the Listing Rules of SSE.

The power of attorney shall specify:

(I) The names and ID No. of the principal and proxy;
(II) Reasons for the principal’s failure to attend the meeting;
(III) Outline opinions of the principal on respective proposals;
(IV) The principal’s scope of authorization and instructions about voting intent in relation to respective proposals;
(V) Signature of the principal and proxy, date, etc.

Where any director signs the regular reports by proxy, the said director shall specify such authorization in the power of attorney.

The proxy director shall present the written power of attorney to the chairman of the meeting, and explain proxy attendance in the attendance book.

Article 13 Restriction on Proxy Attendance

Proxy attendance at Board meetings shall follow the principles below:

(I) Where related transactions are considered, a non-related director shall not appoint a related director to attend the meeting on his behalf, and a related director shall also not accept the appointment of a non-related director;
(II) An independent director shall not appoint a non-independent director to attend the meeting on his behalf, and a non-independent director shall also not accept the appointment of an independent director;
(III) A director shall not give any other director carte blanche to attend the meeting and vote on his behalf without providing his own opinions on the proposals and voting intent and the relevant director shall also not accept the carte blanche or any appointment not well defined;
(IV) One director shall not accept appointment by more than two directors, and a director shall also not appoint any other director who has been appointed by two other directors to attend the meeting and vote on his behalf.

Article 14 Convening Methods of the Meetings

Board meetings shall generally be held onsite. Whenever it is necessary, the Board meetings may be convened through video, telephone, fax or email after agreement of the convener (the presider) and proposer provided that the directors can fully give their opinions. The Board meetings may also be held on site and off site simultaneously.

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Where a Board meeting is held off site, the number of the directors present is calculated according to the directors present in the video, the directors expressing opinions in the teleconference, the number of valid votes including faxes or emails received within the specified period, or the written confirmations submitted by the directors after the meetings.

Article 15 Procedure of the Meeting Deliberation

The presider of the meeting shall ask the attending directors to provide definite opinions on respective proposals.

For any proposal requiring prior acknowledgements of independent directors, the presider of the meeting shall, before discussing the relevant proposal, appoint one independent director to read out the written acknowledgements of independent directors.

Where any director makes repeated speeches on the same proposal or speaks beyond the proposal, thereby affecting the speech of other directors or hindering the normal process of the meeting, the presider of the meeting shall immediately stop that.

The Board meeting shall not vote on any proposal not included in the notice of the meeting unless with the unanimous consent of the attending directors.

Article 16 Expression of Opinions

The directors shall carefully read documents relating to the meeting and shall express wellinformed, independent and discreet opinions.

The directors may, before the meeting, learn and inquire about information needed for decision making from relevant persons or institutions such as the Board Office, the convener of the meeting, the president and other senior executives, the accounting firm and the law firm, or may, while the meeting is underway, suggest to the presider that the aforesaid persons or institutions appear at the meeting to make relevant explanations.

Article 17 Voting at Meeting

After adequate discussion of each proposal, the presider shall ask the attending directors to vote on the proposals separately at an appropriate time.

Each attendant shall cast one vote, by open ballot or in writing.

The voting intent of a director may be pro, con or abstention. Every attending director shall choose one out of the aforesaid intents. Where any director does not make any option or makes two or more options, the preside of the meeting shall require the said director to make an option again, otherwise the said director shall be deemed as having abstained from voting; any director who has left the meeting midway without coming back and has not made any option shall be deemed as having abstained from voting.

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Article 18 Statistics of Voting Results

After voting of the attending directors, the securities affairs representative and relevant staff of the Board Office shall responsively collect ballots cast by the directors, which ballots shall be counted by the Secretary of the Board under supervision of an independent director and other supervisors.

Where the meeting is held onsite, the presider shall announce the statistics onsite; in other circumstances, the presider shall require the Secretary of the Board to announce the voting result within a workday after the prescribed voting deadline.

The ballots cast by directors after the presider announces the voting result or after the prescribed voting deadline shall not be counted.

Article 19 Forming of Resolutions

Saved as specified in Article 20 of these Rules, adoption of or resolution on any proposal shall be subject to approval of more than half of all the directors of the Company. Where the relevant laws, administrative regulations and Articles of Association have any provisions on approval by more directors, such provisions shall apply.

According to the provisions of the articles of association, the board of directors should make a resolution on security matters within its competence, in addition to more than half of all the directors’ approval, which also must be approved by more than 2/3 of the directors who attended the meeting.

If different resolutions conflict with each other in contents and meanings, the resolutions formed later in time shall prevail.

Article 20 Abstention from Voting

In any of the following circumstances, the directors shall abstain from voting on relevant proposals:

(I) Hong Kong Listing Rules and Listing Rules of SSE provide for abstention of the directors from voting;
(II) The directors themselves think they should abstain from voting;
(III) The directors are related with the enterprises involved by the proposals and shall therefore abstain from voting pursuant to the Articles of Association.

Where any director abstains from voting, the Board meeting may be held when more than half of the non-related directors attend the meeting. The resolution of the Board meeting shall be passed by more than half of the non-related directors. If the number of non-related attending directors is smaller than 3, the relevant proposal shall not be voted on but shall be submitted to the general meeting for deliberation.

Article 21 Not Acting beyond Authority

The directors shall act as authorized by the general meetings and the Articles of Association, and shall not make any resolution beyond authority.

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Article 22

About the matters of profit distribution and capital fund capitalization should be resolved at the Board meeting, but if the CPAs have not issued the formal audit report yet, the Board meeting should firstly resolve those decisions based on the draft audit report (all financial data except those involving profit distribution and capital fund capitalization have been determined) submitted by CPAs, other matters can be resolved after CPAs submit their formal audit report.

Article 23 Processing of Proposals Not Passed

Where any proposal is not passed, any Board meeting shall not deliberate any proposal with the same contents within one month if relevant conditions and factors have not changed significantly.

Article 24 Suspension of Voting

Where more than half of the attending directors or more than two independent non-executive directors think they cannot make judgments on relevant issues because the relevant proposal is not clear or specific or the meeting documents are inadequate, the presider shall require the meeting to suspend voting on the said proposal.

The director proposing suspension of voting shall provide definite requirements for the conditions to be met for resubmitting the said proposal for deliberation.

Article 25 Recordings of Meetings

Board meetings held onsite or via video or telephone may be recorded where necessary.

Article 26 Meeting Minutes

The Secretary of the Board shall arrange a clerk of the Board Office to record the minutes of the Board meeting. The meeting minutes shall include the following information:

(I) Session and time, venue and form of convening;
(II) Delivery of meeting notice;
(III) Convener and presider of the meeting;
(IV) Attendance and proxy attendance of directors;
(V) Procedure and process of the meeting;
(VI) Proposals for consideration at the meeting, main points and opinions of each director on relevant matters and intents of voting on proposals;
(VII) The voting method and result for each proposal (the voting result shall set out the respective numbers of pros, cons and abstentions);
(VIII) Other issues that the attending directors think should be included into the minutes.

Article 27 Summary of Meeting and Minutes of Resolutions

Besides the meeting minutes, the Secretary of the Board may where necessary arrange a clerk of the Board Office to make a summary of the meeting, and make separate minutes of resolutions according to the voting results.

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Article 28 Signatures of Directors

The attending directors shall sign the meeting minutes, meeting summaries and minutes of resolutions in person or on behalf of the directors appointing them to attend the meeting. Where the directors disagree over the meeting minutes, meeting summaries or minutes of regulations, they may attach written remarks when signing the same. Where necessary, they shall responsively report to the regulatory authority or announce public statements.

Where any director neither signs as per the preceding paragraph nor provides his different opinions in writing, reports to the regulatory authority or announces public statement, the said director shall be deemed as agreeing with the meeting minutes, meeting summaries or minutes of resolutions.

Article 29 Announcement of Resolutions

Resolutions made by the Board shall be announced by the Secretary of the Board pursuant to Hong Kong Listing Rules and Listing Rules of SSE. Before announcement of the resolutions, the attending directors, other attendants, and the recording and service staff shall fulfill the confidentiality obligation.

Article 30 Implementation of Resolutions

The chairman of the Board shall urge relevant personnel to execute the resolutions of the Board, supervise such execution, and report at future Board meetings how the resolutions are executed.

Article 31 Keeping of Meeting Archives

Archives of Board meetings include meeting notices, meeting documents, attendance book, powers of attorney for proxy directors, meeting recordings, votes, meeting minutes signed by the attending directors, meeting summaries, minutes of resolutions, announcements of resolutions, etc., which shall be kept by the Secretary of the Board.

Archives of Board meetings shall be kept for more than 10 years.

Article 32 Supplementary Provisions

Unsettled matters of the rules should be executive in according to the relevant provisions of the laws, regulations and normative documents. These Rules shall be subject to the interpretation of the Board. If the provisions of these rules are inconsistent with relevant laws, regulations, rules, articles of association, the Hong Kong Listing Rules and the Listing Rules of SSE, the relevant regulations, rules, articles of association, the Hong Kong Listing Rules and the Listing Rules of SSE shall prevail firstly.

In these Rules, the phrase “more than” is inclusive.

These rules will valid automatically after the General Meeting passes the proposals of the Board of Directors, but these rules and relevant company listing regulations within china mainland will come into effect on the date when the company’s initial public offerings get listed on the market within the territory of China.

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APPENDIX III.C THE RULES OF PROCEDURES OF MEETINGS OF SUPERVISORS

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Rules of Procedures of Meetings of the Supervisory Committee of Flat Glass Group Co., Ltd.

Article 1

To further regulate the discussion methods and voting procedures of the Supervisory Committee of Flat Glass Group Co., Ltd. (“the Company”), urge the supervisors and Supervisory Committee to effectively perform their supervisory duties and improve corporate governance structure of the Company, these Rules of Procedure are formulated in accordance with the Company Law of the People’s Republic of China (“Company Law”), Securities Law of the People’s Republic of China (“Securities Law”), Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (“Hong Kong Stock Exchange Listing Rules”), Rules Governing The Listing Of Stocks On Shanghai Stock Exchange (“Shanghai Stock Exchange Listing Rules”), Articles of Association of Flat Glass Group Co., Ltd. (hereinafter referred to as “Articles of Association”) and other relevant provisions.

Article 2 Office of Supervisory Committee

The Supervisory Committee shall set an office for handling the daily affairs of the Supervisory Committee.

The chairman of the Supervisory Committee shall take charge of the Office of the Supervisory Committee and keep the seal of the Supervisory Committee. The chairman of the Supervisory Committee may ask the securities affair representative or other personnel of the Company to help him handle the daily affairs of the Supervisory Committee.

Article 3 Regular and provisional meetings of the Supervisory Committee

Meetings of the Supervisory Committee include regular meetings and provisional meetings.

Regular meetings of the Supervisory Committee shall be held once every 6 months. In any of the following circumstances, the Supervisory Committee shall hold a provisional meeting within 10 days:

(I) Any supervisor proposes to hold such a meeting;
(II) The general meeting or Board meeting has passed any resolution which runs counter to relevant laws, regulations, rules, provisions and requirements of the regulatory authority, Articles of Association, resolutions of the general meeting or any other relevant provisions;
(III) Improper acts of the directors and senior executives may possibly give rise to material damages to the Company or bad impacts on the markets;

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(IV) The shareholders lodge a legal action against the Company, directors, supervisors or senior executives;
(V) The Company, directors, supervisors or senior executives are punished by the securities regulating authority or condemned in public by Shanghai Stock Exchange;
(VI) The securities regulatory authority requires holding such meeting;
(VII) If any other circumstance as specified in the Articles of Association occurs.

Article 4 Proposal for regular meetings

Before sending the notice of regular meeting of the Supervisory Committee, the chairman of the Supervisory Committee shall collect proposals from all the supervisors and shall seek opinions from all staff of the Company within 2 days at least. In collecting proposals and seeking opinions, the chairman of the Supervisory Committee shall state that the Supervisory Committee focuses on supervising the operations of the Company and the conduct of the directors and senior executives, not on making decisions on the operations and management of the Company.

Article 5 Procedure for proposing provisional meetings

Any proposal of any supervisor for convening a provisional meeting of the Supervisory Committee shall be made in written form, affixed with the signature of the said supervisor and submitted to the chairman of the Supervisory Committee. A written proposal shall specify:

(I) The name of the proposing supervisor;
(II) The reasons or objective causes on which the proposal is based;
(III) The time or time limit, venue and method as suggested for holding the meeting;
(IV) The explicit and specific proposals;
(V) The contact information of the proposing supervisor and the date of proposal, etc.

The Office of the Supervisory Committee shall issue the notice of provisional meeting of the Supervisory Committee within 3 days after the Office or chairman of the Supervisory Committee receives the written proposal of the supervisor.

Where the Office of the Supervisory Committee fails to issue the meeting notice, the proposing supervisor shall report to the regulatory authority in due time.

Article 6 Convening and presiding of meetings

Meetings of the Supervisory Committee shall be convened and presided over by the chairman of the Supervisory Committee; where the chairman of the Supervisory Committee cannot or does not fulfill the duty thereof, the vice chairman of the Supervisory Committee shall convene and preside; where not vice chairman is available or the vice chairman cannot or does not fulfill the duty thereof, the majority of the supervisors may elect a supervisor to convene and preside.

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Article 7 Meeting notice

The chairman of the Supervisory Committee shall send the written meeting notice affixed with the seal of the Supervisory Committee to all the supervisors by fax, email or delivered by hand 14 days and 5 days before a regular meeting and a provisional meeting of the Supervisory Committee respectively. Where the notice is not served by direct delivery, telephone acknowledgement and relevant records shall be made.

Where a provisional meeting of the Supervisory Committee needs to be convened in emergency, the meeting notice may be sent by verbal means or telephone at any time, but the convener shall make explanations at the meeting.

Article 8 Contents of the meeting notice

A written meeting notice shall include at least the following details:

(I) Time, venue and duration of the meeting;
(II) Matters to be considered (Proposals of the meeting);
(III) Convener and presider of the meeting, proposer of and written proposal for the provisional meeting;
(IV) Documents needed for voting of supervisors;
(V) The requirement for the supervisor to attend the meeting in person;
(VI) Contact person and means of contact.

A verbal meeting notice shall at least include (I) and (II) above, and explanation for a provisional meeting of the Supervisory Committee in emergency.

Article 9 Convening methods of the meetings

Meetings of the Supervisory Committee shall be held onsite.

In emergency, a meeting of the Supervisory Committee allows voting by means of correspondence, but the convener (presider) of the meeting shall explain to the attending supervisors the particulars about the emergency. In the case of voting by communications, the supervisors shall fax to the Office of the Supervisory Committee their written and signed opinions and voting intents on the matters to be considered. The supervisors shall not merely provide voting opinions without expressing their written opinions or reasons for voting.

Article 10 Convening of meeting

The meeting of supervisory committee will only be convened when the number of attendants is over half. Where any relevant supervisor refuses or fails to attend the meeting so that the number of attendants falls short of the quorum required for convening the meeting, other supervisors shall responsively report to the regulatory authority.

The Secretary of the Board shall be present at meetings of the Supervisory Committee.

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Article 11 Procedure of the meeting deliberation

The presider of the meeting shall ask the attending supervisors separately to provide definite opinions on respective proposals.

The presider shall, as proposed by supervisors, require directors, senior executives, and other staff of the Company or business personnel of relevant intermediary agencies to attend the meeting and answer questions.

Article 12 Resolutions of Supervisory Committee

At meetings of the Supervisory Committee, each attendant shall cast one vote, by open ballot or in writing.

The voting intent of a supervisor may be pro, con or abstention. Every attending supervisor shall choose one out of the aforesaid intents. Where any supervisor does not make any option or makes two or more options, the presider shall require the said supervisor to make an option again, otherwise the said supervisor shall be deemed as having abstained from voting; any supervisor who has left the meeting midway without coming back and has not made any option shall be deemed as having abstained from voting.

Resolutions of the meeting of the Supervisory Committee shall be approved by more than 2/3 of the members of the Supervisory Committee.

Article 13 Meeting minutes

The staff of Supervisory Committee shall keep minutes of onsite meetings. The meeting minutes shall include the following information:

(I) Session and time, venue and form of convening;
(II) Delivery of meeting notice;
(III) Convener and presider of the meeting;
(IV) Attendance of the meeting;
(V) Procedure and process of the meeting;
(VI) Proposals for consideration at the meeting, main points and opinions of each supervisor on relevant matters and intents of voting on proposals;
(VII) The voting method and result for each proposal (the voting result shall set out the respective numbers of pros, cons and abstentions);
(VIII) Other issues that the attending supervisors think should be included into the minutes.

For a meeting of Supervisory Committee held by communications, the Office of the Supervisory Committee shall sort out the meeting minutes as per the preceding provision.

Article 14 Signatures of supervisors

Attending supervisors shall sign for confirmation on the meeting minutes, meeting summaries and minutes of resolutions. Where the supervisors disagree over the meeting minutes, meeting summaries or minutes of resolutions, they may attach written remarks when signing the same. Where necessary, they shall responsively report to the regulatory authority or announce public statements.

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Where any supervisor neither signs as per the preceding paragraph nor provides his different opinions in writing, reports to the regulatory authority or announces public statement, the said supervisor shall be deemed as agreeing with the meeting minutes, meeting summaries or minutes of resolutions.

Article 15 Implementation of resolutions

The supervisors shall urge relevant personnel to execute the resolutions of the Supervisory Committee. The chairman of the Supervisory Committee shall report at future meetings of the Supervisory Committee how the resolutions are executed.

Article 16 Announcement of resolutions

The announcement of the resolution of the Supervisory Committee shall be handled by the Secretary of the Board in accordance with Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited and Rules Governing the Listing of Stocks on Shanghai Stock Exchange.

Article 17 Keeping of meeting archives

Archives of meetings of the Supervisory Committee including meeting notices, meeting documents, attendance book, meeting recordings, votes, meeting minutes signed by the attending supervisors, meeting summaries, minutes of resolutions, announcements of resolutions, etc., shall be kept by the Secretary of the Board.

Archives of meetings of the Supervisory Committee shall be kept for at least 10 years.

Article 18 Supplementary provisions

These rules shall be subject to the interpretation of the Supervisory Committee. Unsettled matters should be executed according to laws, regulations, normative documents and the relevant implementation of the “articles of association”. If the provisions of these rules are not inconsistent with relevant laws, regulations, rules and regulations document, the articles of association of the company and “the Shanghai stock exchange listing rules”, “the Stock Exchange Listing Rules”, which will be subject to relevant laws, regulations, rules and regulations document, the articles of association of the company and “the Shanghai Stock exchange listing rules”, “the Stock Exchange Listing Rules”.

In these rules, the phrase “more than” is inclusive.

These Rules shall be deliberated and approved by the general meeting of the Company, but relevant regulations within the territory of the People’s Republic of China of these rules shall come into effect after IPO of A shares of the Company within the territory of the People’s Republic of China and listing of the said shares in the stock exchange.

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APPENDIX III.D THE IMPLEMENTATION RULES OF THE CUMULATIVE VOTING SYSTEM

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Flat Glass Group Co., Ltd.

Implementation Rules for The Cumulative Voting System

Chapter I General Provisions

Article I To improve the Company’s corporate governance structure, standardize acts of electing directors and supervisors, protect and safeguard the interests and benefits of small and medium shareholders of Flat Glass Group Co., Ltd. (hereinafter referred to as the Company) and practically guarantee the rights of public shareholders to select directors and supervisors, these implementation rules are formulated in accordance with such laws and regulations and normative documents as the Company Law of the People’s Republic of China, Code of Corporate Governance for Listed Companies in China, Guidance for the Articles of Listed Company (Revised in 2014), Rules for the General Assemblies of Shareholders of Listed Companies (revised in 2014), Stock Listing Rules of the Shanghai Stock Exchange, etc., Articles of Association of Flat Glass Group Co., Ltd. (hereinafter referred to as the Articles) and relevant provisions for corporate governance.

Article II Cumulative voting as referred to in these implementation rules refers to a voting method used at the Shareholders’ Meeting to elect two or more directors (or supervisors). Each share with voting right which is held by the shareholder shall be provided with the voting rights equal to the total number of directors (or supervisors) that shall be elected at the Shareholders’ Meeting and the number of voting rights that the shareholder has shall be equal to the product of the number of shares held by the shareholder with the total number of directors (or supervisors) that shall be elected and may be used in a centralized manner, that is, the shareholder may elect one director (or supervisor) candidate by using all voting rights in a centralized manner or exercise these voting rights in a distributed manner to cast votes for the director (or supervisor) candidate and the director (or supervisor) shall be determined according to the number of winning votes.

Article III These implementation rules are applicable to the proposal for electing or changing more than two (inclusive) directors or supervisors.

Article IV Before election of directors or supervisors at the Shareholders’ Meeting, Board of Directors shall expressly state in the notice for the meeting whether the cumulative voting will be used in the election. It shall be expressly stated in the notice for the Shareholders’ Meeting for electing independent directors that the proposal on the independent director shall be on the premise that no objection is raised against the review by the securities exchange in the place where the Company is listed; election of each director or supervisor shall be listed in the notice for the Shareholders’ Meeting in the form of independent proposal.

Article V “Directors” as referred to in these implementation rules shall include independent and non-independent directors.

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“Supervisors” as referred to in these implementation rules specially refer to the supervisors acted as by shareholder representatives. Those supervisors acted as by employee representatives shall be elected or replaced by the Company’s employees democratically and relevant provisions of these implementation rules do not apply to this.

Chapter II Nomination of Director or Supervisor Candidates

Article VI The shareholders of the Board of Directors who independently or jointly hold more than 3% of the total outstanding shares with voting rights shall have right to nominate in accordance with national laws and regulations and these implementation rules the director (or supervisor) candidate or nominate to the Board of Supervisors the supervisor candidate acted as by the shareholder representative. The Board of Directors of the Company, Board of Supervisors and the shareholder holding separately or jointly more than 1% of the outstanding shares with voting rights can propose an independent director candidate. The nomination of the independent director shall comply with provisions of Guidelines for Introducing Independent Directors System to Listed Companies .

Article VII The nominator shall obtain consent from the nominee prior to nomination. The nominee shall submit to the Board of Directors of the Company his or her details, including but not limited to: name, gender, age, nationality, education level, work experiences, part-time work status, relationship with the nominator and whether the situation where he or she is not suitable for the post of the director or supervisor exist. The candidate of the independent director shall state whether he or she is qualified for acting as the independent director.

Article VIII The director or supervisor candidate shall make a written undertaking prior to holding of the Shareholder’s Meeting to agree to accept the nomination and disclose his or her details and that the details of the director or supervisor candidate to be disclosed are true and complete and shall guarantee that he or she will practically perform duties of the director or supervisor after he or she is elected. The candidate for independent director shall make statement about the relationship between him or her and the Company which affects his or her independent and objective judgment.

Article IX Upon receipt of the details of the nominee, the Board of Director of the Company shall carefully review the qualifications of the nominee in compliance with the provisions of the Company Law and the nominee who is qualified for serving as the independent director after review shall become the director or supervisor candidate and a separate proposal shall be submitted to the Shareholders’ Meeting for deliberation. Proposals not meeting provisions shall not be submitted to the Shareholders’ Meeting for deliberation, provided that this shall be explained and stated at the Shareholders’ Meeting.

Article X The single-candidate election can be implemented for electing the director or supervisor by using the cumulative voting system, that is, the number of the candidates for director or supervisor shall be equal to the number of directors or supervisors to be elected; or the multi-candidate election may be implemented, that is, the number of the candidates for director or supervisor shall be more than the number of directors or supervisors to be elected.

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APPENDIX III.D THE IMPLEMENTATION RULES OF THE CUMULATIVE VOTING SYSTEM

Chapter III Voting for or Election of Directors or Supervisors

Article XI In case of cumulative voting used, prior to voting with respect to the candidate for director or supervisor at the Shareholders’ Meeting, the chairperson of the Shareholders’ Meeting shall inform the attending shareholders expressly that the cumulative voting is applied for the candidates for director or supervisor and the Boards of Directors and Supervisors must prepare votes for applying the cumulative voting. The Secretary of Board of Directors shall explain and describe the cumulative voting method, vote filling method, etc. to ensure that the shareholders correctly exercise their right to cast votes.

Article XII Specific election procedures are as follows:

(I) Method for calculating the number of votes in cumulative voting system

The product of the number of shares with voting rights which are held by each shareholder multiplied by the number of directors or supervisors to be elected at the Shareholders’ Meeting shall be equal to the number of the cumulative votes to be cast by the shareholder;
In case of multi-round elections at the Shareholders’ Meeting, the number of cumulative votes to be cast by the shareholder shall be re-calculated based on the number of directors or supervisors to be elected in each round;
The Secretary of Board of Directors of the Company shall announce the number of cumulative votes to be cast by each shareholder prior to each round of cumulative voting and any shareholder, independent director, supervisor, scrutineer or witnessing attorney shall check the number of cumulative votes if they have objections regarding the results.

(II) To ensure that the number of directors and supervisors elected complies with provisions of Articles of Association, votes for independent directors, non-independent directors and supervisors shall be cast separately for their election to ensure the proportion of independent directors. The specific operations are as follows:

In case of election for independent directors, the number of voting rights that each shareholder has shall be equal to the product of the number of shares he or she holds which is multiplied by the number of independent directors to be elected and such votes must be only cast to the candidates for the independent director of the Company;
In case of election for non-independent directors, the number of voting rights that each shareholder has shall be equal to the product of the number of shares he or she holds which is multiplied by the number of non-independent directors to be elected and such votes must be only cast to the candidates for the non-independent director of the Company;
In case of election for directors, the number of voting rights that each shareholder is entitled to shall be equal to the product of the number of the shares he or she holds which is multiplied by the number of supervisors to be elected and such votes must be only cast to the candidates for the supervisor of the Company.

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THE IMPLEMENTATION RULES OF THE CUMULATIVE VOTING SYSTEM

APPENDIX III.D

(III) Voting Methods:

Staffs of the Shareholders’ Meeting issue votes for electing directors or supervisors. The voting shareholder must indicate the number of shares he or she holds on one vote and the number of cumulative votes cast by him or her to the director or supervisor after each director or supervisor elected.
All shareholders shall have right to cast in their will (an agent shall follow the instructions on the Power of Attorney) cumulative votes in part or whole to any candidate for director or supervisor.
The number of votes cast by each shareholder in favor of the candidate for director or supervisor must not exceed the maximum limit of the votes that he or she can cast in favor of the candidate and the number of the candidates for director or supervisor in favor of which votes are cast by the shareholder must not exceed the number of directors or supervisors to be elected; otherwise, the votes cast by the shareholder in favor of the candidate for director or supervisor will be void and such voting will be deemed as waived.
If the number of candidates for director or supervisor exceeds the number of directors or supervisors to be elected, all votes of the shareholder will be deemed as waived.
If the total number of votes used by the shareholder on the vote is smaller than the number of valid votes that he or she can cast, such vote is valid and the difference between the cumulative votes and actual votes cast shall be deemed as waived.

Article XIII Principles for Election of Directors or Supervisors:

Upon completion of voting, the scrutineer of the Shareholders’ Meeting shall count the votes. The vote counter upload the on-site voting results to the online voting service system for consolidated statistics. After the consolidated results of on-site and online statistics are obtained, the consolidated votes of each candidate for director or supervisor will be announced in the form of resolution of the Shareholders’ Meeting.
The number and structure of directors or supervisors elected at the Shareholders’ Meeting shall comply with provisions of the Articles of Association. It shall be determined whether the candidate for director or supervisor wins election based on the number of won votes, provided that the number of votes of each elected director or supervisor must exceed 1/2 of the shares with effective voting rights (based on the non-cumulative shares) which are held by shareholders at the Shareholders’ Meeting.
If the number of votes for each candidate for director or supervisor exceeds 1/2 of the shares with effective voting rights (based on the non-cumulative shares) which are held by the shareholders of the Shareholders’ Meeting and the number of candidates for director or supervisor does not exceed the number of directors or supervisors to be elected, then each candidate for director or supervisor shall be the director or supervisor. If the number of candidates for director or supervisor winning the election at the Shareholders’ Meeting exceeds the number of directors or supervisors to be elected, then the candidate with more votes shall be the director or supervisor. If the number of candidates for director or supervisor winning the election at the Shareholders’ Meeting is smaller than the number of directors or supervisors to be elected but the number of elected directors exceeds the number of the members of the Board of Directors of the Company which is as specified in the Articles of Association by more

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APPENDIX III.D THE IMPLEMENTATION RULES OF THE CUMULATIVE VOTING SYSTEM

than 2/3, then the difference shall be filled by election at the next Shareholders’ Meeting. If the If the number of candidates for director winning the election at the Shareholders’ Meeting is smaller than the number of directors to be elected and is less than 2/3 of the number of members of the Board of Directors of the Company which is as specified in the Articles of Association, a second round of election shall be run for the candidates for directors failing the election. If the above mentioned requirements are still not met after the second round of election, another Shareholders’ Meeting shall be held again within two months after the ending of this Shareholders’ Meeting to elect the deficient directors.

If the number of candidates for director or supervisor who win votes more than 1/2 of the shares with voting rights which are held by the attending shareholders is larger than the number of directors or supervisors to be elected, votes shall be sorted and the candidates with more votes shall be the directors or supervisors. If two or more candidates have the same number of votes, then the number of members of the Board of Directors exceeds the specified number if they are both elected and a second round of election shall be held for such candidates if they are not elected and the number of members of the Board of Directors is less than the specified number in the Articles of Association. If the winning candidate cannot be determined after second round of election, then another election shall be held at the next Shareholders’ Meeting. If the number of members of the Board of Directors of the Company is smaller than 2/3 of the specified number in the Articles of Association, then another Shareholders’ Meeting shall be held again within two months after the ending of this Shareholders’ Meeting to elect the deficient directors.

Chapter IV Supplementary Provisions

Article XIV Any matters not covered in these implementation rules shall be subject to relevant national laws and regulations, normative documents and provisions of Articles of Association. In the event that these implementation rules conflict with laws, administrative regulations, provisions, normative documents or Articles of Association, the latter shall prevail.

Article XV These implementation rules shall become effective as of the date when they have been adopted at the Shareholders’ Meeting and revision shall also become effective of the date when it has been adopted at the Shareholders’ Meeting.

Article XVI The Board of Directors of the Company shall be liable to interpret these implementation rules.

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APPENDIX III.E

THE INVESTMENT MANAGEMENT POLICY

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Flat Glass Group Co., Ltd.

Investment Management Policy

Chapter I General Provisions

Article I To standardize investment activities of Flat Glass Group Co., Ltd., establish an effective investment risk constraining mechanism, strengthen regulation of investment activities, make investment decisions based on scientific feasibility study, make the Company’s investment decisions more scientific and democratic, avoid haphazard investment and optimize investment structure and maximize return on investment, these rules and regulations are formulated in accordance with the Company Law of the People’s Republic of China, Stock Listing Rules of the Shanghai Stock Exchange, Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited, Articles of Association of Flat Glass Group Co., Ltd., etc.

Article II These rules and regulations shall be binding upon all shareholders, directors, supervisors, Secretary of Board of Directors and other relevant personnel of the Company.

Chapter II Investment Management

Article III Investment refers to the Company’s investment of its own funds, bank loans and funds from other channels in a new project or for expanding business size.

Investment by the Company can be direct investment in a new project or for expanding business size or securities investment for equity investment or transaction of various securities which is also called indirect investment. The fundamental purpose of investment by the Company is to obtain comprehensive economic benefits to keep the Company’s businesses sustainable and facilitate stable development of the Company.

Article IV Investment management refers to management of investment acts by the Company (including branches) and controlling companies throughout planning, investigation, negotiation, feasibility demonstration, reporting for approval, preparation, regulation and investment recovery.

Article V At time of project selection, relevant departments shall conduct market investigation during which it shall widely solicit comments from all sides; it shall conduct feasibility study and demonstration of the major significant project by leveraging efforts of social agencies to obtain comprehensive understanding and analysis of the project.

Article VI For investment project initiation and demonstration, relevant departments shall collect basic data about the investment project: market demands and supply-demand relationship,

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technical status and development prospect, fund source and return on investment, investment environment, investment method, relevant conditions, etc. Also, they shall conduct initial demonstration based on actual conditions of the investor and investee and provide relevant legal approvals, reliable data and calculation sheets to form the initial investment plan.

Article VII Investment by the Company orients to the business specialization required in the development plan of the Company or will be put in projects closely relating to the Company’s main businesses and must comply with national and local industrial policies and the Company’s medium and long-term development planning.

Article VIII Size of investment by the Company shall make ends meet, be effectively controlled and guarantee rights and interests.

Article IX Investment procedures of the Company shall be documented and legalized and internal agreement or oral agreement in any process shall be avoided.

Chapter III Investment Examination and Approval

Article X The Shareholders’ Meeting and Board of Directors of the Company are the decision organs for external investment by the Company and they make decisions on external investment by the Company within their scope of powers:

(I) An external investment shall be approved by the Board of Directors if it meets one of the following standards:

The total amount of the assets involved in transaction (the higher shall prevail if the book value and assessed value exist) accounts for more than 10% of the most recent audited net assets of the Company;
The volume of transaction (including debts and expenses borne) accounts for more than 10% of the most recent audited net assets of the Company and the absolute amount exceeds RMB 10000000;
The profit from the transaction accounts for more than 10% of the net profit of the Company which has been audited in the last fiscal year and absolute amount exceeds RMB 1000000;
The operating revenue of the subject of transaction (such as equity) in the last fiscal year accounts for more than 10% of the operating revenue which has been audited in the last fiscal year and absolute amount exceeds RMB 10000000;
The net profit of the subject of transaction (such as equity) in the last fiscal year accounts for more than 10% of the net profit of the Company which has been audited in the last fiscal year and absolute amount exceeds RMB 1000000.

If the above mentioned indexes are negative, then their absolute values shall be used in calculation.

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(II) An external investment shall be approved by the Board of Directors through deliberation and then submitted to Shareholders’ Meeting for deliberation:

The total amount of the assets involved in transaction (the higher shall prevail if the book value and assessed value exist) accounts for more than 50% of the most recent audited net assets of the Company;
The volume of transaction (including debts and expenses borne) accounts for more than 50% of the most recent audited net assets of the Company and the absolute amount exceeds RMB 50000000;
The profit from the transaction accounts for more than 50% of the net profit of the Company which has been audited in the last fiscal year and absolute amount exceeds RMB 5000000;
The operating revenue of the subject of transaction (such as equity) in the last fiscal year accounts for more than 50% of the operating revenue which has been audited in the last fiscal year and absolute amount exceeds RMB 50000000;
The net profit of the subject of transaction (such as equity) in the last fiscal year accounts for more than 50% of the net profit of the Company which has been audited in the last fiscal year and absolute amount exceeds RMB 5000000;
Calculation standards, accumulative calculation and scope relating to the application of these rules and regulations shall be subject to relevant provisions of CSRC, Stock Listing Rules of the Shanghai Stock Exchange and Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited. If the above mentioned indexes are negative, then their absolute values shall be used in calculation.

(III) Where the subject of transaction is an equity and purchase or sale of such equity will result in change to the scope of the Company’s consolidated statement, all assets and operating revenue of the Company to which such equity corresponds shall be deemed as total assets involved in the transaction as set out in Paragraph (I) and Paragraph (II) of this article and operating revenue relating to the subject of transaction.

(IV) If the subject of the transaction meeting the standard as set out in Paragraph (II) of this article is the Company’s equity, the Company shall hire an accountant firm qualified for securities and futures accounting to audit the accounting report in the last year and the as-of date of the audit must not be more than six months earlier than the date when the agreement is signed. If the subject of the transaction is other assets than equity, the Company shall hire an asset evaluation institution qualified for securities and futures evaluation to evaluate the assets and the base date of assets evaluation must not be more than one year earlier than the date when the agreement is signed.

If it is considered as necessary by Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited. For the transaction not meeting the standard as set out in Paragraph (II) of this article, the Company shall also comply with the provisions of the previous paragraph to hire relevant accountant firm or assets evaluation institution to conduct audit or evaluation.

(V) Where the Company incorporates a limited liability company or a company limited by shares through external investment and the capital may be paid up in instalments in accordance with

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APPENDIX III.E

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relevant provisions of the Company Law, the provisions of Paragraphs (I) and (II) of this article shall apply by treating the total amount of the contribution as agreed upon in the agreement as standard.

(VI) The provisions of Paragraphs (I) and (II) of this article shall apply to transactions of the same type relating to the subject of transaction incurred in twelve months in such a manner that the principle of accumulative calculation is implemented. If relevant obligations have been performed in compliance with the provisions of Paragraphs (I) and (II) of this article, such transactions will not be included in the accumulative calculation.

Article XI Other matters regarding external investment than those deliberated on by the Shareholders’ Meeting and Board of Directors shall be examined and approved by General Manager.

Article XII Where an external investment by the Company is an affiliated transaction, its deliberation rights and procedures shall be subject to relevant provisions of the Articles of Association of the Company and rules and regulations for management of affiliated transactions.

Article XIII When the Shareholders’ Meeting or Board of Directors makes a resolution on the investment matter, the shareholder or director as stakeholder of the investment shall avoid voting.

Chapter IV Investment Monitoring

Article XIV The Company shall implement the principle of a combination of investment, operation and supervision for the investment. The investment organization shall specially appoint personnel to supervise the project invested in to ensure that the project investment plan is smoothly implemented.

Article XV The Company can monitor a direct investment by the following method: the investment organization shall determine another project supervisor after the project is officially initiated and the project executor is determined, the project executor, supervisor and the Company’s leaders shall sign the project responsibility contract, the project executor shall bear direct responsibilities and supervisor shall bear joint and several responsibilities.

Article XVI The project supervisor may be served as by the member of Board of Directors, Board of Supervisors and operation team. His or her main responsibilities are: tracking and supervising thorough process of the project, urging and supervising the project executor to strengthen operation management and fund management of the project, promptly identifying and reporting problems occurring in the implementation of the project and proposing solutions and suggestions.

Article XVII The project executor shall periodically report in written the project status to the leader or management department. Upon completion of the project, he or she shall report to the Company’s leaders actual results and audit the project in compliance with relevant provisions.

Article XVIII The Company can monitor an indirect investment by the following method: a director appointed by the Company (or other personnel appointed by the Company’s General Manager) tracks and supervises the project, participates in the meeting of Board of Directors, Shareholders’ Meeting or other important meetings by the invested organization, report in written promptly the meeting results to the Company’s president and General Manager, report these to the office meeting of the Company’s General Manager and submit to the Company’s archive room for recording thoroughprocess documents formed by relevant meeting materials and relevant projects.

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Chapter V Responsibilities

Article XIX For all investment projects, regardless of their size, the project responsibility system shall be run. The investment organization shall select the leader of the project study team, its members, project executor and supervisor with care. The leader of the project study team shall be responsible for the feasibility study of the project, the project executor shall be responsible for the implementation of the project and project supervisor shall be responsible for supervising the thorough process of the project.

Article XX If the project causes losses to the Company or results in severe losses due to improper management or improper personnel appointment, responsibilities of relevant personnel shall be investigated for. If economic losses are caused due to decision error or non-strict standard maintained on the examination and approval for the project, responsibilities of relevant personnel shall be investigated for.

Article XXI If the main leaders, leader of the project study team, project executor, supervisor or other personnel of the project violate provisions, conduct neglect of duty, misuse authorities, play favouritism and commit irregularities and this causes severe losses to the Company, the administrative and legal responsibilities of responsible persons must be investigated for.

Chapter VI Supplementary Provisions

Article XXII The Board of Directors of the Company shall be liable to interpret these rules and regulations.

Article XXIII These rules and regulations shall become effective as of the date when they have been adopted at the Shareholders’ Meeting through deliberation and this also applies to revision, but provisions in these rules and regulations which relate to the company listed in the territory of China shall be implemented as of the date when the company’s shares are first publicly offered in the territory of China.

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APPENDIX III.F THE RELATED PARTIES TRANSACTIONS DECISION POLICY

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Flat Glass Group Co., Ltd.

Related Parties Transactions Decision Policy

Chapter 1 General Provisions

Article 1 In order to ensure that the related parties transactions between Flat Glass Group Co., Ltd (hereinafter referred to as “the Company”) and related parties is in compliance with the principle of fairness, justness and openness, and ensure that related parties transactions of the Company (referred to as “connected transaction” under the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Ltd, similarly hereinafter) will not cause any damage to legal interests of the Company and non-affiliated shareholders, this policy, based on practical situation of the Company, is hereby formulated in accordance with the Company Law of People’s Republic of China, Rules Governing the Listing of Securities on Shanghai Stock Exchange (hereinafter referred to as “Shanghai Stock Exchange Listing Rules”), Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Ltd (hereinafter referred to as “Listing Rules of Stock Exchange”) and the Articles of Association of Flat Glass Group Co., Ltd (hereinafter referred as “the Articles”).

Article 2 The Company shall carry out the classified management for related parties transactions, and shall perform the procedures for approval of related parties transactions and information disclosure as required and in accordance with the scope of related person confirmed based on the Shanghai Stock Exchange Listing Rules and Listing Rules of Stock Exchange, as well as other relevant laws and regulations.

Where a transaction is carried on, the Company shall, in accordance with the Shanghai Stock Exchange Listing Rules and Listing Rules of Stock Exchange, deliberate as the case may be, and shall, with the stricter provision as the criteria, judge whether the parties involved in the transaction are related persons of the Company and whether the transaction constitutes the related parties transactions, as well as applicable decision-making procedures and disclosure requirements.

Article 3 Related parties transactions between the Company and related person shall comply with relevant laws, regulations, normative documents and provisions of the Articles, and shall, at the same time, in compliance with relevant provisions of this policy.

Article 4 A written agreement shall be entered into for the related parties transactions between the Company and related person, and such written agreement shall be in the principle of equality, voluntariness, equal value and mutual benefit; the agreement contents shall be clear and specific.

Article 5 The related parties transactions shall be in the principle of fairness, justness and openness, and the price hereof shall not, in principle, exceed an independent third party’s market price or charging standard.

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APPENDIX III.F

THE RELATED PARTIES TRANSACTIONS DECISION POLICY

Chapter 2 Related parties transactions and Related Person

Article 6 Related parties transactions refers to transfer of resources or businesses between the Company and its connected person undertaking (defined in the Listing Rules of Stock Exchange), or holding subsidiary and related person. In accordance with Listing Rules of Stock Exchange, connected transaction refers to the transaction carried out with connected person and specified type of transaction carried out with the third party; such specified type of transaction can make related person obtain interests by means of equities involved in the transaction. Relevant transaction may be one-time or persistent.

Such transaction shall include those of capital nature and income nature, whether it is carried out in day-to-day business of the Company or not. Unless otherwise is specified in the Listing Rules of Stock Exchange, such transaction shall also include the following:

(1) Purchase or sell assets, including the deem-to-be-sold items specified in the Listing Rules of Stock Exchange;

(2) Give, accept, exercise, transfer or terminate the right of choice, for the purpose of purchasing or selling assets and/or subscribe for securities; choose not to exercise the right of choice, for the purpose of purchasing or selling assets and/or subscribe for securities;

If the right of choice is terminated in accordance with the previously-signed agreement, and the termination involves no penalty, damages or other compensation paid by the group, such termination shall not be deemed as a transaction.

(3) Enter into or terminate the finance lease or operating lease;

(4) Provide or accept financial aid, and such financial aid includes granting the credit, making a loan or giving compensation guarantee and warranty or mortgage concerning such loan;

(5) Sign an agreement or arrangement to establish a joint venture in any form or carry out joint venture arrangements in any other form;

(6) Issue the new securities of the Company or its affiliated companies;

(7) Make external investment (including entrusted asset management and investment in subsidiaries etc.);

(8) Provide financial aid (including entrusted loan and providing financial aid to subsidiaries

etc.);

(9) Provide guarantee (including the guarantee to subsidiaries);

(10) Rent or rent out assets;

(11) Sign a management contract (including entrusted operation and being entrusted with operation etc.);

(12) Give or receive assets;

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THE RELATED PARTIES TRANSACTIONS DECISION POLICY

APPENDIX III.F

(13) Reorganization of creditor’s rights or debts;

(14) Transfer of R&D project;
(15) Sign the licensing agreement;

(16) Waive a right (including waiver of preemptive right, priority of subscription and contribution, etc.);

(17) Purchase the raw materials, fuels and power;
(18) Sell products and goods;
(19) Provide or accept labor services;

(20) Entrust sales or be entrusted with sales;

(21) Make joint investment with related parties;

(22) Other potential transfer of resources or businesses by convention;

(23) Other matters deemed to be related parties transactions in accordance with relevant provisions.

Article 7 Related persons of the Company shall include related legal person and related natural person, definition of which shall take the Exchange Listing Rules and Listing Rules of Stock Exchange, as well as other relevant laws and regulations as the criteria.

Article 8 Pursuant to relevant provisions by Shanghai Stock Exchange where the domestic stocks are listed, legal person or other organizations involved in one of the following cases shall be deemed as related legal person of the Company:

(1) Legal person or other organization directly or indirectly controls the Company;

(2) Legal person or other organization (other than the Company and its holding subsidiaries) under direct or indirect control of the legal person referred to in the Item (1);

(3) Legal person or other organization under direct or indirect control of the related natural person in the company listed in Article 10 herein, or legal person or other organization (other than the Company and its holding subsidiaries) where the related natural person serves as the director or senior manager;

(4) Legal person or other organization and the person acting in concert holding more than 5% shares of the Company;

(5) Legal person or other organization deemed by the Company to bear a special relationship to the Company and may cause an inclination of the company benefit in accordance with relevant provisions by China Securities Regulatory Commission, Shanghai Stock Exchange or Stock Exchange of Hong Kong Ltd, or based on the principle of substance over form.

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APPENDIX III.F THE RELATED PARTIES TRANSACTIONS DECISION POLICY

Article 9 If the Company, under control of the same state-owned assets administration commission with the legal person listed in Article 8 (2), and thus constituting the case mentioned in Article 8 (2), such case shall not create an association relationship, except that the chairman, manger or more than half of the directors of the legal person also apply to the case in Article 8 (2).

Article 10 Pursuant to relevant provisions by Shanghai Stock Exchange where the domestic stocks are listed, natural person involved in one of the following cases shall be deemed as related natural person of the Company:

(1) Natural person directly or indirectly holding more than 5% shares of the Company;

(2) Director, Supervisor and senior manager of the Company;

(3) Director, Supervisor and senior manager of the legal person listed in Article 8 (1);

(4) Family members bearing close relationship to the person referred to in Item (1), (2) and (3) of this Article, including his/her spouse, parents, parents of his/her spouse, brothers and sisters and their spouses, children aged over 18 and their spouses, brothers and sisters of their spouses, as well as parents of children’s spouses;

(5) Natural person deemed by the Company to bear a special relationship to the Company and may cause an inclination of the company benefit based on the principle of substance over form or in accordance with relevant provisions.

Article 11 Pursuant to relevant provisions by Shanghai Stock Exchange where the domestic stocks are listed, legal person or natural person involved in one of the following cases shall be deemed as related person of the Company:

(1) Any legal person or natural person that will be involved in the one of the cases mentioned in Article 8 and Article 10 herein when the agreement or arrangements signed with the Company or related person of the Company come into force or in the next 12 months after such agreement or arrangements come into force;

(2) Any legal person or natural person that has been involved in one of the cases mentioned in Article 8 and Article 10 in the past 12 months.

Chapter 3 Avoidance System

Article 12 When the Board of Directors of the Company deliberates the related parties transactions matters, the related directors shall avoid the voting, and shall not perform the voting power on behalf of other directors. For the related directors who do not initiatively make the declaration and avoid, the directors who know the conditions shall require the related directors to avoid. The Board of Directors may be held when more than half of the unrelated directors are attended, while the resolutions made by the Board of Directors shall be passed for more than half of unrelated directors. Where the number of unrelated directors who attended the Board of Directors is less than three, the Company shall submit the transaction to the General Meeting of Shareholders for the deliberation.

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APPENDIX III.F THE RELATED PARTIES TRANSACTIONS DECISION POLICY

The related directors referred in the preceding clause include the following directors or the directors with one of the following situation:

(1) The counterparty;

(2) The ones who take office in counterparty, or the legal person or other organizations that can directly or indirectly control the counterparty, or the legal person or other organizations that can be directly or indirectly controlled by the counterparty;

(3) The ones who own the direct or indirect control power of the counterparty;

(4) Germane family member(s) of the counterparty or its direct or indirect controller (see the regulations on the Term (4) of the Article 10 under this policy for the concrete scope);

(5) Germane family member(s) of the counterparty or the directors, supervisors and senior managers of its direct or indirect controller (see the regulations on the Item (4) of the Article 10 under this policy for the concrete scope);

(6) Personnel who might be affected in accordance with the independent business judgment by the Company according to the relevant regulations or due to other reasons.

Article 13 When the Board of Directors deliberates the related parties transactions matters, the following shareholders shall avoid the voting:

(1) The counterparty;
(2) The ones who own the direct or indirect control power of the counterparty;
(3) The ones who are directly or indirectly controlled by the counterparty;

(4) The ones who are directly or indirectly controlled by the same legal person or natural person with the counterparty;

(5) The ones who take office in the counterparty, or the legal person or other organizations that can directly or indirectly control the counterparty, or the legal person or other organizations that can be directly or indirectly controlled by the counterparty (applicable to which the shareholder is the natural person);

(6) The ones whose voting power is restricted or affected because of the equity transfer agreement or other agreements which have not already finished the performance with the counterparty or its related person;

(7) The legal and natural person according to the relevant regulations or affirmed by the Company to whom may cause the benefit preference of the Company.

Article 14 For the related parties transactions of which the shareholders do not initiatively explain the incidence relation and have avoided, or that the notice from the Board of Directors is not marked, other shareholders may require the shareholder to explain the condition and require him to avoid.

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APPENDIX III.F THE RELATED PARTIES TRANSACTIONS DECISION POLICY

Article 15 After finishing the General Meeting of Shareholders, in case the related shareholders participating in the voting in regard to the related parties transactions matters is found, or there is the objection on whether the shareholder shall be applicable to the avoidance, other shareholders shall be entitled to file a lawsuit on the relevant resolution in People’s Court according to the provisions upon the Articles.

Article 16 The resolution of the General Meeting of Shareholders shall fully record the voting situations of the unrelated shareholders.

Chapter 4 Procedure of Related Parties Transactions

Article 17 According to the relevant provisions upon the domestic share listing location— Shanghai Stock Exchange, the related parties transactions between the Company and the related parties shall be required to perform the following procedures:

(1) The related parties transactions between the Company and the related natural person, in amount of RMB 300,000 (including RMB 300,000) to RMB 3,000,000 (including RMB 3,000,000), shall be authorized by the Board of Directors.

The related parties transactions of which amount is more than RMB 3,000,000 in the preceding clause shall be authorized by the General Meeting of Shareholders.

(2) The related parties transactions between the Company and the related legal person, of which the audited absolute value on net assets is 0.5% (including 0.5%) to 5% (including 5%) in recent period, shall be authorized by the Board of Directors.

(3) The related parties transactions between the Company and the related party, in amount of more than RMB 30,000,000, occupying more than 5% of the audited absolute value on net asset of the Company in the latest period, shall be authorized by the General Meeting of Shareholders of the Company.

(4) The proposed related transaction, between the Company and the related natural person in amount of more than RMB 300,000, or between the Company and the related legal person in amount of more than RMB 3,000,000, and occupying more than 0.5% of the audited absolute value on net asset of the Company in the latest period, shall be carried out in way of the independent directors delivering their separate opinions.

Article 18 According to the relevant provision under the overseas share listing location—Stock Exchange of Hong Kong, upon the declaration, announcement or shareholder approval procedure, the connected transaction are divided into the connected transaction of entire exemption, the connected transaction of partial exemption and the connected transaction of non-exemption:

(1) Where the transaction happens between the Company and its connected person of self layer and each of its asset ratio, profit ratio, earning ratio, cost ratio and share capital percentage (exclusive of profit ratio) is less than 0.1%, or where the transaction happens between the Company and the connected person of subsidiary layer and each of its asset ratio, profit ratio, earning ratio, cost ratio and share capital percentage (exclusive of profit ratio) is less than 5%, while each of the total cost (such as the amount belonging to the financial aid, total amount of financial aid and any pecuniary benefit paid to the connected person or co-possessing entities) is less than HKD three million (3,000,000), such

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THE RELATED PARTIES TRANSACTIONS DECISION POLICY

transactions can obtain the entire exemption, with no need of compliance with provisions in the announcement, letter of notification and approval from shareholders and declaration and annual approval made in the annual report, but with the need of compliance with provisions for signing written agreement or frame agreement.

(2) Where the transactions between the Company and connected person are beyond entire exemption scope and each of its asset ratio, profit ratio, earning ratio, cost ratio and share capital percentage (exclusive of profit ratio) is less than 5%, or each of above percentage (exclusive of profit ratio) is less than 25%, but the total costs are less than HKD 10000000, such transactions will be exempt from conforming to relevant letters (including independent financial opinions) and regulations approved in General Meeting of Shareholders, but it shall still conform to the regulations of issuing announcement, making declaration and annual audit in annual report and signing written agreement or frame agreement in respect of relevant transactions.

(3) Non-exempt connected transactions refer to any connected transaction which is not within or beyond above entire exemption scope and partial exemption scope. The related transactions must conform to regulations of declaration, announcement, shareholders’ approval and signing written agreement or frame agreement in respect of relevant transactions.

Article 19 According to the relevant regulations in domestic place of listing of shares—the Shanghai Stock Exchange, the Company shall appoint intermediary agency with relevant professional qualification of executing securities and futures to access or review the object of transaction for the significant related parties transactions between Company and related parties to be approved by General Meeting of Shareholders. Except the related parties transactions of purchase and sale or service related to daily operations for the Company, if the transaction are regulated by the relevant laws, regulations or normative documents, such transactions shall be subject to these regulations.

The Company shall appoint independent financial adviser to reasonable forward its opinions about whether the significant related parties transactions required to be approved by General Meeting of Shareholders are fair to all shareholders and issue its report.

Article 20 According to the relevant regulations in overseas place of listing of shares—The Stock Exchange of Hong Kong Limited, for the significant related parties transactions between Company and related parties to be approved by General Meeting of Shareholders, the Company must (1) establish Independent Directors Committee (the Independent Directors Committee shall be made up of independent non-executive directors who have no significant benefits in related transactions); (2) appoint independent financial adviser (such independent financial adviser shall be intermediary agency with relevant professional qualification of executing securities and futures and accepted by related transactions) to access or review the object of transaction and put forward its opinions for Independent Directors Committee and shareholders. The independent financial adviser shall give relevant opinions in accordance with written agreement and issue its report or letters in terms of above matters (including the contents specified in Article 14A.45 of Listing Rules of Stock Exchange). Except the related parties transactions of purchase and sale or service related to daily operations for the Company, if the transaction is regulated by the relevant laws, regulations or normative documents, such transactions shall be subject to these regulations.

Article 21 Under the conditions of conforming to relevant listing rules, the related parties transactions beyond the scope of approval by Board of Directors or General Meeting of Shareholders

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THE RELATED PARTIES TRANSACTIONS DECISION POLICY

APPENDIX III.F

shall be approved by Company Meeting of General Manager; the person who has benefits in such transactions shall avoid taking a vote in the meeting. The Board of Supervisors shall giving its opinions about whether the significant related parties transactions required to be approved by Board of Directors or General Meeting of Shareholders are fair and reasonable and whether the matters which damage legal interests of Company and non-related shareholders exist.

Article 22 In the event the Company gives security for related person, whether how much the amount it is, it shall be submitted to General Meeting of Shareholders for approval after being approved by Board of Directors.

In the event the Company gives security for the shareholders who hold less than 5% (not including 5%) of company shares, such security shall be executed in accordance with preceding article. The related shareholders shall avoid taking a vote in General Meeting of Shareholders.

Article 23 The Company shall not provide loan to directors, supervisors and senior managers by subsidiaries directly or indirectly.

Article 24 When related parties transactions that occurs in the Company involves “providing financial support”, “providing guarantee” and “entrusting financial management”, etc., amount occurred shall be taken as calculation standards; accumulative calculation shall be carried out within continuous 12 months according to types of transaction matters. If it reaches prescribed standards of this policy after accumulative calculation, it is applicable for provisions of this policy.

In case relevant obligations are performed according to this policy, these obligations will not be incorporated to accumulative calculation scope.

Article 25 In case the following related parties transactions occur in the Company within continuous 12 months, it shall be carried out according to applicable provisions of accumulative calculation principle:

(1) Transaction that is carried out with the same related person;

(2) Transaction that is carried out with different related people and is related to the same object of transaction.

The aforesaid same related person include other related person who is controlled by the same subject with the related person or other related person who has stock equity control relationship with each other. In case relevant obligations are performed according to this policy, these obligations will not be incorporated to accumulative calculation scope.

Under any condition, the Company shall conform to relevant listing rules and provisions of combined calculation to transaction. If there is any inconformity in above system and relevant listing rules, it shall be subject to provisions of listing rules.

Article 26 On the premise of conforming to provisions of relevant listing rules, for related parties transactions matters (called as “continuing connected transaction” in items of Listing Rules of Stock Exchange) that are carried out by the Company and related person and are related to daily operation, corresponding review procedure shall be carried out according to the following provisions:

(1) As for daily related parties transactions that occurs for the first time, the Company shall formulate written agreement with related person. According to provisions that transaction amount

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APPENDIX III.F

THE RELATED PARTIES TRANSACTIONS DECISION POLICY

involved in agreement is respectively applicable for Article 17 to Article 19, it shall be submitted to the Board of Directors and General Meeting of Shareholders for review. If agreement does not prescribe specific transaction amount, it shall be submitted to General Meeting of Shareholders for review.

Besides, duration of agreement shall be fixed and agreement shall include general commercial articles or better articles.

(2) For daily related parties transactions agreement that passed review of the Board of Directors or General Meeting of Shareholders and that is in the process of execution, if main clauses are not changed in the process of execution, the Company shall disclose actual performance condition of relevant agreement in periodic report according to requirements and explain whether it conforms to provisions of agreement; If main changes occur in main clauses or it is required to be renewed after expiration of agreement during execution process of agreement, the Company shall submit the newly revised or renewed daily related transaction agreement to the Board of Directors and General Meeting of Shareholders for review according to provisions that transaction amount of agreement is respectively applicable for Article 17 to Article 19. If agreement does not prescribe specific transaction amount, it shall be submitted to General Meeting of Shareholders for review.

(3) For considerable daily related parties transactions occurring each year, because it is necessary to frequently enter into new daily related parties transactions, it is difficult to submit each agreement to Board of Directors or the General Meeting of Shareholders for deliberation according to the provisions of item (1) of this article. The company can carry out reasonable estimation for total amount of daily related parties transactions of the current year of the company prior to the disclosure of the previous annual report. According to the estimated amount, respectively applicable provisions of Article 17 and Article 19, submit to Board of Directors or the General Meeting of Shareholders for deliberations and disclosure. If in practical implementation, amount of daily related parties transactions exceeds estimated total amount, the company shall resubmit to Board of Directors or the General Meeting of Shareholders for deliberations and disclosure according to the exceeded amount, respectively applicable provisions of Article 17 and Article 19.

(4) In any case, the company must comply with the provisions of relevant listing rules on daily related parties transactions or continuing connected transaction, including but not limited to provisions of Chapter 14 A of Listing Rules of the Stock Exchange for (i) concluding “upper limit for the whole year”, (ii) amendments relevant to “upper limit for the whole year” and the clauses of the agreement, and (iii) complying with the notice and the approval of the shareholders, etc. If there is any inconsistency between the above rules and the relevant listing rules, provisions of the relevant listing rules shall prevail.

Article 27 Daily related parties transactions agreement shall at least include transaction price, pricing principle and basis, total transaction volume or its determination method, payment method and other main clause; among them, the calculation basis of payment needing to be paid must be specified clearly. Examples of calculation basis include (if applicable): allocation of costs incurred by the parties to the agreement, unit price of goods or services provided, annual rent of the leased property, or management cost calculated according to percentage of total construction cost.

Article 28 The duration of the related parties transactions agreement signed between the company and related person shall not be more than three years, except that it is necessary to have a longer contract period under special circumstances because of the nature of the transaction. In the case

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APPENDIX III.F THE RELATED PARTIES TRANSACTIONS DECISION POLICY

of agreement more than three years, the company must appoint independent financial advisers to explain why a relatively long contract period is required for the agreement, confirming that the duration of the agreement accords with general processing method of such agreement.

Article 29 Under the premise of in compliance with the relevant provisions of the listing rules, the company and related person can be exempted from obligations according to the provisions of this chapter when reaching the following related parties transactions:

(1) One party shall receive dividend, bonus or remuneration according to resolutions of General Meeting of Shareholders;

(2) According to other condition affirmed by relevant provisions.

For provisions whether exemption is applicable for the chapter, there are different provisions in Shanghai Stock Exchange Listing Rules or Listing Rules of Stock Exchange. Make judgment subject to stricter rules of the two kinds of rules and perform relevant review and disclosure requirements.

Chapter 5 Internal Control to Related Parties Transactions

Article 30 Shareholders, directors, supervisors or senior managers with over 5% of shares in the Company shall declare change condition of relevant related natural person, related legal person to secretary of directors timely. Secretary of the Board of Directors shall update list of related parties timely to ensure that list of related parties is real, accurate and complete.

If there are transaction activities in associated subsidiaries (as defined by Listing Rules of Stock Exchange) and holding subsidiaries of the Company, relevant person in charge shall refer to list of related parties and judge whether it constitutes related parties transactions carefully. If it constitutes related parties transactions, it shall be regarded as behavior of the Company. Procedure of inspection and approval shall be performed according to this policy.

Article 31 When related parties transactions matters shall be approved by Independent Director for review of the Company in advance, relevant personnel shall submit relevant materials to Independent Director for approval in advance by Secretary of the Board of Directors at the first time. Independent Director can employ agency to provide special report as evidence of judgment.

Article 32 The Company shall perform the following responsibilities when reviewing related parties transactions matters:

(1) Know details of actual condition of object of transaction, which includes status of operation, profitability of object of transaction and whether defects of rights, such as mortgage, freezing and legal dispute, such as lawsuit and arbitration exist, etc.

(2) Know details of condition of counterparty, such as integrity record, credit status, performing ability; select counterparty carefully.

(3) Confirm transaction price according to sufficient pricing basis.

(4) Employ agency to audit or assess object of transaction according to relevant requirements or when the Company thinks it is necessary.

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APPENDIX III.F THE RELATED PARTIES TRANSACTIONS DECISION POLICY

The Company shall not review or make decision on related parties transactions matters with unclear condition of object of transaction, unconfirmed transaction price and unclear counterparty.

Article 33 Directors, supervisors and senior managers have obligation to concern whether the problems of invading interest of companies exist, such as capital embezzlement by related party. Independent Director and supervisors of the Company shall refer to capital transaction of the Company with related party for one time at least every quarter. Know whether condition, such as occupation and transferring of capital, assert and other resources of the Company by controlling shareholders and other related parties exists in the Company. If any abnormal condition is found, please notify the Board of Director of the Company to take relevant measures.

Article 34 If losses or possible losses are caused by occupation and transferring of capital, assert and other resources of the Company by related parties, the Board of Director of the Company shall take relevant protective measures, such as lawsuit and property preservation to avoid and reduce loss.

Chapter 6 Supplementary Provisions

Article 35 Unaccomplished matters of this policy shall be executed according to relevant laws, regulations, Articles of Association, provisions of Listing List of Stock Exchange and Shanghai Stock Exchange Listing Rules. If above system has any inconformity with relevant laws, regulations, Articles of Association or listing rules of stocks listing location, it shall subject to relevant laws, regulations, Articles of Association or listing rules of stocks listing location.

Article 36 “Above” involved in this policy all contains the amount; “exceed” involved in this policy all does not contain the amount.

Article 37 “Related party”, “related parties transactions” and “related person” of this policy have the same connotation with “connected party”, “related parties transactions” and “connected person” in Listing Rules of Stock Exchange.

Article 38 This policy shall be submitted to General Meeting of Shareholders for review, approval and amendment. The revision draft will take effect from the date when the Company issued stock publicly in territory of China for the first time and when the Company is listed. Previously, existing system of the Company (Connected Transaction Management System of Flat Glass Group, Co., Ltd) is still valid.

Article 39 General Meeting of Shareholders authorizes the Board of Directors to explain this policy.

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APPENDIX III.G THE WORKING INSTRUCTIONS FOR INDEPENDENT DIRECTORS

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Flat Glass Group Co., Ltd.

Working Instructions for Independent Directors

Chapter 1 General Provisions

Article 1 In order to further improve the management structure of Flat Glass Group Co., Ltd (hereinafter referred as “the Company”) and promote the standardized operation of Company,, we hereby establish related provisions on the Independent Outside Director (hereinafter referred as “Independent Director”) System (referred as “Independent Non-Executive Director” under Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, similar hereinafter) set by the Company according to related provisions in Company Law of People’s Republic of China (hereinafter referred as “Company Law”), Guideline for Corporate Governance, Directive Opinions on Establishment of Independent Director System in Listed Companies, Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Ltd (hereinafter referred as “Listing Rules of Stock Exchange”), Rules Governing the Listing of Securities on Shanghai Stock Exchange (hereinafter referred as” Shanghai Stock Exchange Listing Rules”) and the Articles of Flat Glass Group Co., Ltd (hereinafter referred as the “the Articles”).

Chapter 2 General Requirements

Article 2 Independent Director refers to the person who acts as the Director of the Company other than any other title, and who had no relation with the Company and its major shareholders that might interfere with his/her independent and objective judgment.

Article 3 The Independent Director shall be obliged for honesty and diligence to the Company and all of shareholders.

The Independent Directors shall faithfully perform their duties and safeguard overall interests of the Company, especially hold minority shareholders harmless against their legitimate rights and interests.

The Independent Directors shall independently perform their duties and shall not be affected by major shareholders and the actual controller of the Company or any unit or individuals who had a vital stake with the Company or its major shareholders or actual controllers.

Article 4 As the independent non-executive directors, the Independent Directors do not perform any specific affair of the Company. At least more than one third of Independent Directors shall be included in members of Board of Directors. The Independent Directors shall include at least one Accounting Professional. Accounting Professional referred to in this Article means the person who has qualification of title of senior accountant or CPA.

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APPENDIX III.G THE WORKING INSTRUCTIONS FOR INDEPENDENT DIRECTORS

At least one independent director (non-executive) of the Independent Directors shall always reside in Hong Kong.

Article 5 In principle, Independent Directors employed by the Company shall act as independent directors in at most 5 listed companies, and shall have sufficient time and energy to effectively perform the duties as an Independent Director.

Article 6 In any Independent Director failed to comply with independence condition or was unsuitable to perform the independent duties, which caused the number of Independent Directors of the Company inconformity with the required number in the System, the Company shall immediately notify the Stock Exchange where it listed on and publish a notice to state the details and reasons. And the Company shall appoint sufficient Independent Directors or one Independent Director who is qualified as specified in the Article 5 of the System within three months after the date of such inconformity.

Article 7 The Independent Directors shall participate in trainings as approved according to China Securities Regulatory Commission (hereinafter referred as “CSRC”) and relevant authorities, the Listing Rules of Stock Exchange and other laws and regulations.

Chapter 3 Conditions of Employment of Independent Directors

Article 8 The person who acts as Independent Director of the Company shall:

(1) Be qualified as a director of listed company according to laws, administrative regulations, the Listing Rules of Stock Exchange and other relevant provisions;

(2) Have the independence as required in Article 10 of the System;

(3) Have basic knowledge on operation of listed companies and be familiar with relevant laws, administrative regulations, rules and regulations;

(4) Have five-year or more experience in laws and economy or other professionals required for duties of an Independent Director;

(5) Have sufficient time and energy to perform the independent duties;

(6) Meet other requirements in national laws and regulations, rules and regulations and the Articles of the Company.

Article 9 The Independent Directors must be independent and no one as follows shall act as the Independent Director:

(1) The person and its immediate family members or major social relations who work in the Company or its affiliates;

(2) The person who, directly or indirectly, held 1% or more of the issued shares of the Company, or natural person shareholder out of top ten shareholders of the company or immediate family members of such shareholders;

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APPENDIX III.G THE WORKING INSTRUCTIONS FOR INDEPENDENT DIRECTORS

(3) The person or immediate family members of such person who work in the company of shareholder who, directly or indirectly, held 5% or more of the issued shares of the Company or shareholders out of the top five shareholders of the Company;

(4) The person or immediate family members of such person who work under the controlling shareholder or actual controller of the Company or affiliates of the Company;

(5) The person who provides financial, legal, consulting and other services to the Company and its controlling shareholders or their own affiliates, which including but not limited to all of project team, each staff at all levels for review, signatories of reports, the partner and main responsible person of agencies providing such service;

(6) The person whose employer had major business with the Company, its controlling shareholder or actual controller or their own affiliates, or works under the controlling shareholders who had major business with it;

(7) The person who was in either of above six cases during the last one year;

(8) There is no circumstance that qualification for acting as Independent Non-executive Director of listed company is questioned in accordance with Listing Rules of Stock Exchange Hong Kong Ltd and other relevant regulations;

(9) The person who was restricted to security market by CSRC and was still in the period of prohibition;

(10) The person who was identified in public as unsuitable to act as director, supervisor or senior manager of listed companies by the Stock Exchange;

(11) The person who was punished by CSRC within the last three years;

(12) The person who was publicly condemned or informed criticism for more than three times by the Stock Exchange within the last three years;

(13) Any other person as required in the Articles;
(14) Any other person as identified by CSRC.

Immediate family members in the preceding paragraph refers to spouse, parents and children; and the major social relations in Clause (1) above refers to brothers and sisters, parents in law, daughter or son in law, spouses of brothers and sisters and brothers and sisters of spouse.

Article 10 If any Independent Director failed to comply with independence condition or was unsuitable to perform the independent duties, which caused the number of Independent Directors of the Company inconformity with the required number in the System and the Company shall complement such number as required.

Chapter 4 Nomination, Election and Replacement of Independent Directors

Article 11 The Independent Directors shall be nominated by the Board of Directors, the Board of Supervisors, shareholders who solely or jointly hold 1% or more of issued shares of the Company, and shall be decided on election of General Meeting of Shareholders.

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APPENDIX III.G THE WORKING INSTRUCTIONS FOR INDEPENDENT DIRECTORS

Article 12 The nominator of Independent Directors shall be approved by nominees before nomination.

The nominator shall fully understand the occupation, education, job title, the detailed working experience, all and any part-time jobs of nominees and shall give opinions on their qualification and independence as an Independent Director. The nominee shall make a public statement which indicating that there is no relation between such nominee and the Company which could affect any independent objective judgment of the nominee. The Board of Directors shall disclose this as required before convening a General Meeting for election of Independent Directors.

Article 13 Before convening of a General Meeting for election of Independent Directors, the Company shall submit related materials of all nominees to CSRC, CSRC Zhejiang Regulatory Authority and the Stock Exchange where the Company listed on, complete with written opinions from Board of Directors in case that the Board of Directors had any dissent against related conditions of the nominees.

Article 14 Any nominee dissenting by CSRC or the Stock Exchange where the shares of Company were traded on might be elected as nominee of director of the Company other than the Independent Director. On convening the General Meeting to elect Independent Directors, the Board of Directors shall explain whether the nominee has been dissented by CSRC or the Stock Exchange.

Article 15 Articles 11 and 12 of the System shall be implemented at the date of initial public offering and listing of the Company.

Article 16 The term of Independent Directors shall be the same with other directors of the Company, could be re-elected and reappointed at expiry of the term, while the re-election shall not exceed six years.

Article 17 Any Independent Director failed to attend the Board meetings for three consecutive times might be replaced by the General Meeting as proposed by the Board of Directors. Notwithstanding the above case and other case of unavailable to act as directors as specified in Company Law, Listing Rules of Shanghai Stock Exchange and Listing Rules of Stock Exchange Hong Kong Ltd, no Independent Director shall be removed from office for no reason before expiry of the term. For early removal the Company shall disclose this as a special disclosure, and any Independent Director removed held that the Company had improper reason for removal could make a public statement.

Article 18 Any Independent Director could submit the resignation before expiry of the term. In such case, the related Independent Director shall submit the written resignation to the Board of Directors and state any case related to his resignation or circumstance necessary to be paid attention by the Company shareholders and creditors.

If the resignation of Independent Director caused the number of Independent Directors or Board of Directors lower than the quorum or the minimum number as required by the Articles, before accession of re-elected Independent Director, the resigned Independent Director shall continue to perform his/her duties according to laws, administrative regulations and provisions in the Articles.

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APPENDIX III.G

THE WORKING INSTRUCTIONS FOR INDEPENDENT DIRECTORS

Chapter 5 Authority of Independent Directors

Article 19 The Company shall provide the necessary conditions for independent directors to perform their duties and play their roles.

Article 20 The Independent Directors shall participate in trainings as approved by CSRC and Stock Exchange Hong Kong Ltd according to China Securities Regulatory Commission (hereinafter referred as “CSRC”) and relevant authorities, the Listing Rules of Stock Exchange and other laws and regulations.

The Independent Directors shall ensure that they have sufficient time and energy to effectively perform their duties and hold a concurrent post for at most five listed companies (including the Company).

Article 21 The Independent Director shall be obliged for honesty and diligence to the Company and all of shareholders. The Independent Directors shall faithfully perform their duties and safeguard overall interests of the Company, especially to hold minority shareholders harmless against their legitimate rights and interests according to related laws and regulations, the Articles and other relevant provisions.

Article 22 The Independent Directors shall independently perform their duties and shall not be affected by major shareholders and the actual controller of the Company or any unit or individuals who had a vital stake with the Company or its major shareholders or actual controllers.

Article 23 In order to put into full play as an Independent Director, except for those authorities granted according to the Company Law and other related laws and regulations, the Independent Directors shall also be entitled to following authorities:

(1) Those significant related parties transactions (determined subject to effective rules published from time to time when the shares of the Company were traded) shall be approved by Independent Director before submitted to Board of Directors for discussion; the resolution on related parties transactions of the Company made by the Board of Directors shall take effect unless signed by Independent Directors. Before making judgments, the Independent Directors may employ an agency to make independent financial consultancy report as the basis for such judgments. If the transaction between the Company and related person exceeds HKD 10 million and absolute value of any percentage rate (see Listing Rules of Stock Exchange Hong Kong Ltd for its definition) (excluding profit rate) in such related parties transactions exceeds 5%, the Company shall employ an independent financial consultant with qualifications related to security and futures, to evaluate or audit the object of the transactions and submit such transaction to General Meeting for review;

(2) Propose to the Board of Directors for hiring or dismissing an accounting firm;
(3) Propose to the Board of Directors for convening an Extraordinary General Meeting;
(4) Propose to convene a Board meeting;
(5) Independently hire an audit and advisory body;

(6) Collect voting rights from shareholders in public before the convening of a General Meeting.

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THE WORKING INSTRUCTIONS FOR INDEPENDENT DIRECTORS

Article 24 The significant related parties transactions of the Company, the hiring or dismissing of accounting firm shall be submitted to Board of Directors for discussion unless agreed by more than half of Independent Directors. And the convening of an Extraordinary General Meeting and a board meeting, and the collecting of voting rights from shareholders in public before the convening of a General Meeting proposed by any Independent Director shall be agreed by more than half of Independent Directors. As agreed by all of Independent Directors, the initiating Independent Director could independently hire an audit and advisory body to for audit and consultation for specific matters of the Company. All expenses related to the exercise of authorities of Independent Directors shall be paid by the Company. In case that the proposals above were not adopted or the authorities above failed to be running in normal, the Company shall disclose such issues.

Article 25 In case that the proposals above were not adopted or the authorities above failed to be running in normal, the Company shall disclose such issues.

Article 26 In the Remuneration Committee, the Audit Committee and the Nomination Committee under the Company, Independent Directors shall account for more than half of members of such committees and act as the chair person of the committees.

Article 27 The Independent Directors shall be obliged to keep business secrets of the Company in confidential.

Article 28 If slack to perform the obligations and brought loss to the Company or its shareholders, the Independent Directors shall bear some liabilities for damage.

Article 29 The Company could establish a Liability Insurance System for Independent Directors if necessary to minimize the risks caused by Independent Directors on normal performing of their duties.

Chapter 6 Independent Opinions of Independent Directors

Article 30 In addition to performing above duties, the Independent Directors could also give their independent opinions on following cases to the Board of Directors or General Meeting, which shall include but be not limited to:

(1) Nomination, appointment and removal of directors;
(2) Hire or dismissal of senior managers;
(3) Remuneration of directors and senior managers of the Company;

(4) Whether the existing or newly occurring loans or other capital transactions to the Company by the shareholders, the actual controllers and their affiliates, whose total amount (determined subject to effective rules published from time to time when the shares of the Company were traded) shall be reviewed by the Board of Directors or General Meeting, and whether the Company shall take effective measures to recover such arrears;

(5) The Board of Directors failed to make cash profit distribution plan;

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APPENDIX III.G THE WORKING INSTRUCTIONS FOR INDEPENDENT DIRECTORS

(6) In the annual report, make special statement for accumulative and current external guarantees of the Company and give their independent opinions;

(7) Matters which the Independent Directors held may damage the interests of minority shareholders;

(8) Other matters as required in national laws and regulation, the Articles and related provisions of the Stock Exchange.

All opinions from Independent Directors shall be specified in the Resolution of the Board of Directors.

Article 31 The Independent Directors could give one of following opinions on above matters, agree, reserve and the reason, disagree and the reason, unable to give any opinion and the obstacle.

Article 32 The Independent Directors shall be diligent and conscientious and ensure sufficient time to perform their duties.

Article 33 The Board meeting shall be attended by Independent Directors in person, if failed to be present for reasons, they could appoint another Independent Director in written as a representative to attend such meeting.

The Power of Attorney shall include the name, the representative matters, the authorities and validity period of the proxy. And the Power of Attorney shall make clear the specific opinion by the principal on each matter under review.

Independent Directors who attended the Board Meeting on behalf shall exercise the rights of Independent Directors to the extent authorized.

Article 34 Independent Directors should attend the Board Meeting on time, understand the operating conditions of the Company and be initiative to obtain information and files required for decision making.

Article 35 Independent Directors shall provide the General Meeting of Shareholder of the Company the Annual Work Report to explain their conditions on performance of duties.

Article 36 In case any related matter is needed to be disclosed, the Company shall publish the opinions of Independent Directors, and if such directors failed to reach an agreement on different opinions, the Board of Directors shall disclose their opinions respectively.

Chapter 7 Working Conditions of Independent Directors

Article 37 The Company shall provide the necessary working conditions for Independent Directors for effective functioning of their authorities.

Article 38 The Company shall ensure to grant right to know to Independent Directors that are the same with other directors.

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APPENDIX III.G THE WORKING INSTRUCTIONS FOR INDEPENDENT DIRECTORS

All matters decided on Board meeting shall be notified to independent directors by the Company within specified period, whilst the Company shall provide sufficient files and information and shall supplement such files if the Independent Directors considered the information to be insufficient. If two or more than two Independent Directors considered insufficient information or unclear demonstration, they could propose to the Board of Directors in written by jointly signing to delay the convening of Board meeting or delay the review of such matters, the Board of Directors shall adopt such proposals.

All information provided to Independent Directors by the Company shall be stored at least for 5 years by the Company and the Independent Directors in person.

Article 39 The Company shall regularly report the operating condition and organize Independent Directors for site visiting if necessary.

Article 40 Secretary of the Board shall actively coordinate with Independent Directors to perform their duties and shall publish all required independent opinions, proposals and written statements on time.

Article 41 Upon exercising the authorities as Independent Directors, all related person in the Company shall give active coordination, and such person shall nor refuse, obstruct or conceal, or interfere the exercise of such independent authorities.

Article 42 All expenses on hiring agency and exercising of authorities (such as official trip and communication cost) by Independent Directors shall be paid by the Company.

Article 43 The Company will provide appropriate allowance to Independent Directors. Allowance rates shall be planned by Board of Directors, be reviewed and approved by General Meeting and shall be disclosed in the Annual Report of the Company.

In addition to above allowances, no Independent Director shall receive any additional or any other interests undisclosed from the Company and its major shareholders or any agency or person interested.

Chapter 8 Supplementary Provisions

Article 44 Any matter undefined in this System shall be subject to national related laws and regulations, normative documents, the Articles and listing rules of Shanghai Stock Exchange and Hong Kong Stock Exchange.

Any conflict between the Implementing Regulations and the further national laws, administrative regulations, department rules and regulations, or revised Articles or listing rules of Shanghai Stock Exchange and Hong Kong Stock Exchange revised from time to time, shall be subject to such national laws, administrative regulations, department rules and regulations the Articles and the listing rules of Shanghai Stock Exchange and Hong Kong Stock Exchange.

Article 45 The terms “above” and “lower than” under the System are inclusive, while “exceeding” and “more than” are exclusive.

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APPENDIX III.G THE WORKING INSTRUCTIONS FOR INDEPENDENT DIRECTORS

Article 46 The System will take effect as reviewed and approved by General Meeting of the Company, including the same on revision. However, the provisions under the System that related to Listed Companies in China shall be implemented at the date of initial public offering and listing of such companies.

Article 47 The Board of Directors of the Company is responsible for interpreting the System.

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THE PROVISION OF EXTERNAL GUARANTEES POLICY

APPENDIX III.H

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Flat Glass Group Co., Ltd.

Provision of External Guarantees Policy

Chapter 1 General Provisions

Article 1 In order to standardize external guarantee behavior of Flat Glass Group Co., Ltd. (hereinafter referred to as “the Company”), and effectively control external guarantee risk of company and guarantee assets safety of the Company, the System is specifically prepared according to concerned provisions of Company Law of People’s Republic of China, Guarantee Law of People’s Republic of China, Notification on Standardizing External Guarantee Behavior of Listed Company of China Securities Regulatory Commission, Rules Governing the Listing of Securities on Shanghai Stock Exchange, Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Ltd, and other concerned laws and regulations, normative documents and Articles of Association of Flat Glass Group Co., Ltd (hereinafter referred as the “the Articles”).

Article 2 The System is applicable to the Company and holding subsidiaries of the Company.

Article 3 External guarantee in the System refers to guarantee provided by the Company to others, including guarantee of the Company to holding subsidiaries.

Total amount of external guarantee of the Company and holding subsidiaries refers to sum of total amount of external guarantee of the Company that includes guarantee of the Company to holding subsidiaries and external guarantee amount of holding subsidiaries of the Company.

Article 4 Guarantee in the System refers to guarantee, mortgage or pledge provided by the Company to others. Specific categories include loan guarantee, establishment of a letter of credit of bank, bank acceptance and trade bill, and letter of guarantee etc.

Article 5 External guarantee of the Company and holding subsidiaries shall be uniformly managed by the Company. Without approval of the Company, subordinate subsidiaries or controlled company cannot provide external guarantee and cannot provide mutual guarantee. Before subsidiaries submit external guarantee matter for approval of Board of Directors or Board of Shareholders, they shall perform written declaration to the Company ahead of 5 working days, and inform office of Board of Directors of the Company in written form to implement concerned obligation of information disclosure at the day when Board of Directors or Board of Shareholders makes the decision. External guarantee of the Company shall conform to legal, prudent, mutually beneficial and safe principle. Guarantee risk shall be strictly controlled.

Article 6 Any guarantee behavior made by the Company must gain agreement or authorization of General Meeting of Stockholders or Board of Directors.

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APPENDIX III.H

THE PROVISION OF EXTERNAL GUARANTEES POLICY

Chapter 2 Guarantee Principle

Section 1 Guarantee Condition

Article 7 The Company can provide guarantee to organization that has independent corporate capacity and that has one of following conditions:

(1) Organization needing mutual guarantee because of company business need.
(2) Organization that has important business relation with company.

Above organizations must simultaneously have relatively strong debt paying ability.

Section 2 Investigation

Article 8 Application warrantor must provide following data:

(1) Basic information of enterprise;
(2) Recent enterprise finance data and audit report;
(3) Original copy and copy of master contract concerned with borrowing;
(4) Repayment schedule and source description to guarantee debt;

(5) Counter-guarantee condition provided, including counter-guarantee way, and possibility of counter-guarantee and whether legal impediment exists;

(6) Other important information.

Article 9 Person in charge of guarantee (hereinafter referred to as “person in charge”) such as director, General Manager and other senior managers of company shall perform investigation according to basic information provided by application warrantor to affirm whether data is true.

Person in charge has duty to affirm authenticity of master contract, preventing both parties of master contract from cheating guarantee of company through malicious collusion or other fraudulent means.

Article 10 Person in charge shall investigate operation state and reputation state of application warrantor through his deposit bank and business contact organization etc., and providing guarantee for application warrantor whose operation state is worsened and reputation is not good is forbidden.

Article 11 As for other data that application warrantor has to provide according to Board of Directors or General Meeting of Stockholders, person in charge has to claim them from application warrantor.

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APPENDIX III.H

THE PROVISION OF EXTERNAL GUARANTEES POLICY

Section 3 Approval of Guarantee

Article 12 External guarantee condition of company:

(1) All external guarantee of company must gain advanced approval of Board of Directors or General Meeting of Stockholders.

(2) External guarantee which shall be approved by General Meeting of Stockholders must be submitted to Board of Directors for approval at first and then be submitted to General Meeting of Stockholders for approval.

(3) In terms of external guarantee of company, the other party must provide counter-guarantee and provider of counter-guarantee shall have practical ability of undertaking.

According to concerned data provided by the person in charge, Board of Directors shall analyze financial condition, industry prospect, management and operation condition and credit and reputation condition of application warrantor and affirm whether guarantee shall be offered or not or put forward opinion to General Meeting of Stockholders on provision of guarantee.

Article 13 The following external guarantee behaviors shall be approved by the deliberation of the General Meeting of Shareholders:

(1) Guarantee with the single guarantee amount more than 10% of the most recent audited net assets of the company;

(2) Any guarantee that is provided when the total amount of external guarantees of the company and its controlling subsidiaries is more than 50% of the most recent audited net assets of the company;

(3) Guarantee that is provided to the guarantee objective with the asset-liability ratio of more than 70%;

(4) Guarantee that is more than 30% of the most recent audited net assets of the company in accordance with the cumulative calculation principle for 12 months of the guarantee amount;

(5) Guarantee that is more than 50% of the most recent audited net assets of the company and the absolute amount is more than RMB 50 million in accordance with the cumulative calculation principle for 12 months of the guarantee amount;

(6) Guarantee that is provided for shareholders, actual controllers and their related persons;

(7) Other guarantees situations provided by the Shanghai Stock Exchange, the Stock Exchange of Hong Kong Ltd (including Listing Rules of Stock Exchange of Hong Kong Ltd (including but without limitation to Chapter 14 and Chapter 14 A thereof) and the Articles and required to be submitted to General Meetings of Shareholders for approval through deliberation. External guarantees of the company that happen within twelve months shall be in accordance with the cumulative calculation principle and to meet the requirements of this Article; as for the guarantees that have fulfilled the obligations are not included in the relevant cumulative calculation scope.

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THE PROVISION OF EXTERNAL GUARANTEES POLICY

APPENDIX III.H

Article 14 When the General Meeting of Shareholders is in the deliberation of Item 4 for Article 13, more than 2/3 of the voting rights held by the shareholders present at the meeting shall pass it.

When the General Meeting of Shareholders is in the deliberation of the guarantee proposal for shareholders, actual controllers and their related persons, the shareholders, actual controllers and their related persons shall not participate in the vote; the vote shall be passed by more than half of the voting rights held by other shareholders at the General Meeting of the Shareholders.

Article 15 In addition to the external guarantees that are stipulated to be in the deliberation of the General Meeting of the Shareholders by this system, the company’s other external guarantees shall be approved by the deliberation of the Board of Directors; when the Board of Directors is in the deliberation, more than 2/3 of the whole members of the Board of Directors shall pass it and more than 2/3 of the whole independent Directors shall pass it and make decisions. As for the guarantees that need to be in the deliberation of the General Meeting of the Shareholders, they can only be submitted to the General Meeting of Shareholders for deliberation after being approved by the special resolution form of deliberation.

Article 16 Before the Board of Directors of the company deliberates the guarantee, it shall require the application warrantor to provide counter guarantee or other effective measures to prevent the risk; if it cannot provide, guarantee for it shall be refused.

Counter guarantee or other effective measures to prevent the risk provided by the application warrantor shall be corresponding to the amount of the needed guarantee. If the application warrantor’s set counter guarantee properties are prohibit for circulation by the laws and regulations or are the nontransferable properties, the guarantee shall be refused.

Article 17 When concluding the guarantee standard contract, the person in charge shall strictly audit each obligatory term in combination with the credit information of the warrantee. When the compulsory terms cause the unexpected risks for the Company, the warrantee shall be ordered to offer corresponding counter guarantee or refuse to give guarantee.

Article 18 Before the Board of Directors of the Company makes the guarantee decision, the person in charge shall not sign or seal in the Main Contract as the warrantor.

Article 19 Board of Directors votes to determine whether to offer guarantee after the examination and discussion. The relevant director shall avoid when voting.

Article 20 The Board Secretary shall carefully record the relevant Board Meeting and the discussion and voting situation of General Meeting of Shareholders.

Article 21 Independent director shall give independent opinions when the Board of Director reviews external guarantee matters. If necessary, the accounting firm shall be employed to audit the accumulative total of the Company and external guarantee of current period. If there is any abnormality, it shall be reported to the Board of Director.

Article 22 When it is discovered that the warrantee fails to perform its repayment obligation within 15 working days after the maturity of debt, or when the warrantee goes bankrupt or liquidate, or

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THE PROVISION OF EXTERNAL GUARANTEES POLICY

APPENDIX III.H

creditor proposes the warrantor to perform guarantee obligations, the Company shall understand the debt repayment situation of warrantee timely.

Section 4 Review and Formation of Guarantee Contract

Article 23 It is thought that guarantee is necessary and it may be implemented where risk is not high passed on Board of Directors or General Meeting of Shareholders of the Company and before determining guarantee, the Company shall understand credit status of the warrantee and assess the benefits and risks of such matters guaranteed carefully including but not limited to:

(1) It is the legally established and existing enterprise legal person and the needed termination does not exist;

(2) Operating condition and financial situation are in order with stable cash flow and excellent development prospect;

(3) It has been provided with guarantee and there shall not be the situation that the creditor asks the Company to undertake joint and several guaranty liabilities;

(4) It has the mortgage (pledge) of the assets and corresponding ability of counter guarantee;
(5) Information provided is true, complete and effective;

(6) Risk prevention measures can be taken to it by the Company;

(7) There is not other law risk.

Article 24 Guarantee contract must be signed for guarantee and it must be meet relevant laws specification and matter in contract shall be clear.

Article 25 Person in charge must have been authorized by Board of Directors or General Meeting of Shareholders in the resolution of such matter guaranteed or the maximum amount of the person singing contract or such application warrantor in signing the guarantee contract.

Person in charge shall not sign the guarantee contract beyond his authority or sign the guarantee contract with amount beyond authorization of Board of Directors or General Meeting of Shareholders.

Article 26 When the guarantee contract is being signed, person in charge must review the contents related to guarantee contract and shall require the other party to remove or amend clause against the benefits of the Company obviously or that with unforeseen risks possibly.

Article 27 When mutual guarantee agreement is being signed, person in charge shall require the other party to provide relevant financial statement and other information which can reflect debt paying ability accurately and principle of equal amount shall be implemented in mutual guarantee and corresponding counter guarantee may be required to be provided by it for the exceeded parts of the other party.

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APPENDIX III.H THE PROVISION OF EXTERNAL GUARANTEES POLICY

Article 28 The following clauses in guarantee contract shall be clear:

(1) Types and amount of principal creditor’s right guaranteed;
(2) Duration of debtor to perform obligations;
(3) Method of guarantee;
(4) Scope of guarantee;
(5) Guarantee period;

(6) Other matter that the parties consider it necessary to be appointed.

Article 29 Where necessary mortgage registration is specified in laws, relevant person in charge must handle gage registration in relevant registration authority.

Chapter 3 Guarantee Risk Management

Article 30 Written contract shall be signed for external guarantee of the Company and guarantee contract shall be saved and managed by special-assigned person and the limitation period of corresponding guarantee shall be paid attention and at the same time, Board of Supervisors, the Secretary of Board of Directors and Finance Department shall be notified in time after it being signed.

After the debt guaranteed by the Company is due, person in charge shall actively supervise and urge the warrantee to perform repayment obligation within 15 working days.

Article 31 Person in charge shall pay attention to changes in production, operation, assets and liabilities of the warrantee and changes in external guarantee or other liabilities, division, merger and legal representative and changes in external business reputation to actively prevent risks. Person in charge shall report the significant adverse changes for the warrantee’s ability to repay the debt during the guaranty period to Board of Directors of the Company in time and the following works shall be well done specifically:

(1) Fund use and return condition of the warrantee shall be learnt about and grasped in time;

(2) Debt redemption condition shall be understood from the warrantee and the creditor regularly;

(3) If deterioration of finical condition of the warrantee is founded, the Company shall be reported in time and advice shall be given;

(4) If suspicion of property transfer of the warrantee for evading debts is found, the Company shall be reported immediately and risk prevention shall be implemented by cooperating with legal adviser of the Company;

(5) The warrantee shall be notified to implement debt redemption and follow-up works 2 months in advance.

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THE PROVISION OF EXTERNAL GUARANTEES POLICY

APPENDIX III.H

Article 32 If there are evidences to show that some material matter such as serious loss in business, or dissolution or separation of corporation and others was happened to one party of the Mutual Guarantee Agreement, the person in charge shall report to directorate of the Company in time and propose to terminate the Mutual Guarantee Agreement.

Article 33 If the credit was transferred to third party by creditor, the Company shall refuse to assume the guarantee liability of new added obligation, unless otherwise specified in the Contract.

Article 34 During the capital operation process of acquisition and foreign investment and others, the Company shall have a serious review for the external guarantees of acquired parties, and it will be deem to an important basis of board resolution.

Article 35 As the general warrantor, without the decision of directorate of Company, the Company shall not assume the guarantee liability in advance for the debtor before the judgment or arbitration of main contract disputes and in the case of cannot perform the obligations even with the enforceable execution of property of debtor according to law.

Article 36 After the people’s court accepts the bankruptcy case of the debtor, the relevant person in charge shall report to the Company to participate in the distribution of bankruptcy estates and exercise the right of recourse in advance for the credit which was not reported by the debtor.

Article 37 If the warrantors in the guarantee contract are two or more person, and agree to assume the guarantee liability in proportion with the creditor, they shall refuse to assume the guarantee liability which exceeds the share of Company.

Article 38 The person in charge shall timely and actively pursue the recovery of guarantees after the Company has performed the guarantee liability for the creditor.

Article 39 Those need a delay and continually guaranteed by Company after the guaranteed debt falls due shall be deemed to a new external guarantee and the guarantee shall be performed in accordance with the established procedure and applied for the examination and approval of the procedure.

Article 40 The independent directors of the Company shall have a special project description for accumulative and current situation of external guarantee in semi-annual report and annual report and put forth independent opinions. If necessary, the independent directors may engage an accounting firm to inspect.

Article 41 If the Company provides financial aid to associated and affiliated company and the Company provides guarantee for the financing of associated and affiliated company, and the asset ratio summation of the two surpasses 8% according to the definition of No 14.07(1) in Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Ltd , the Company shall release the following materials as soon as possible, in reasonable and feasible situation:

(1) Analysis is made as following in terms of individual company: the amount of financial aid that the Company provides for associated and affiliated company, the amount of capital injection that the Company promises to affiliated company and the amount of guarantee that the Company makes for the financing of associated and affiliated company;

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APPENDIX III.H THE PROVISION OF EXTERNAL GUARANTEES POLICY

(2) The item of financial aid, including rate of interest, way of payment, maturity date and collateral (if any);

(3) Financial source of capital promised to inject; and

(4) The amount of bank financing that has been used by affiliated company, which guaranteed by the Company.

In case the case, causing the Company to be required to make disclosure in accordance with this Article, still exists when semi-annual period or annual accounting year expires, the Company shall provide associated and affiliated company with consolidated balance sheet prepared on the final practical date in intermediate or annual report. Consolidated balance sheet of associated and affiliated company shall include main classification items of balance sheet and list equities occupied by the Company in associated and affiliated company.

Article 42 If the controlling shareholder pledges some or all equities of the corporate stock he/ she controls to secure debt of the Company, or secure the warranty and other responsible supports of the Company, the Company shall release the following materials as soon as possible, in reasonable and feasible situation:

(1) The amount and category of the stock pledged;
(2) The amount of debt, guarantee or support that has been pledged; and

(3) Any other details that are considered to be necessary for the understanding of the arrangement.

In case disclosure liability mentioned in this Article occurs, provided that circumstance causing occurrence of relevant liability continues to exist, information required to be disclosed in the said articles shall continue to be included in subsequent immediate report and annual report of the Company.

Chapter 4 Legal Liability

Article 43 If the company director, General Manager and other senior executives sign guarantee contract exceeding his/her power or authority without the permission, which does damage to the Company, the party involved should be investigated.

Article 44 If the person in charge, ignoring the risks, violates the provisions of laws or the system and guarantees without permission, which does damage, he/she shall bear the compensation responsibility.

Article 45 If the person in charge causes damage to the Company because of being negligent in his/her functions, he/she will be given penalty or punishment in the light of circumstances.

Chapter 5 Supplementary Provisions

Article 46 The System shall take effect upon the approval of the General Meeting of Shareholders after the adoption of Board of Directors, and the modification shall experience the same

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APPENDIX III.H THE PROVISION OF EXTERNAL GUARANTEES POLICY

procedure. If the system is in contradiction with relevant laws, regulations and rules, the stipulation in laws, regulations and rules shall prevail.

Article 47 The General Meeting of Shareholders authorizes the Board of Directors to explain the System.

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APPENDIX III.I THE USE OF PROCEEDS MANAGEMENT POLICY

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Flat Glass Group Co., Ltd.

Use of Proceeds Management Policy

Chapter I General Provisions

Article I To standardize the management and use of raised funds by Flat Glass Group Co., Ltd. (hereinafter referred to as the Company) and practically protect rights and interests of the investors, these rules and regulations are formulated based on the actual conditions of the Company in accordance with such laws and regulations and normative documents as the Company Law, Securities Law, Measures for the Administration of the Listed Company Issuing New Shares, Guideline No.2 for the Supervision of Listed Companies-Supervisory Requirements for Management and Use of Raised Funds of Listed Companies, Administrative Measures for Raising Proceeds by Companies Listed on the Shanghai Stock Exchange (Revised in 2013), etc.

Article II Raised funds as referred to in these rules and regulations refer to the funds raised from investors and intended for specific purposes by publicly issuing securities (including IPO, allotment, issuance increase, issuance of convertible bonds, issuance of split share convertible bonds, etc.) and non-publicly issuing securities at the securities exchange on which the Company’s shares are listed for transaction (hereinafter referred to as the “Securities Exchange”) and do not include funds raised by implementing the stock incentive plan.

Article III Raised funds shall be used for the purposes as listed in prospectus or specification for fund raising. A resolution must be made at the Shareholders’ Meeting for the change of purposes of raised funds which are as listed in the prospectus or specification for fund raising. The Board of Directors shall prepare a detailed fund utilization plan to ensure that use of the funds is standardized, disclosed and transparent. The Company’s directors, supervisors and senior executives shall take due diligence to urge and supervise the Company to use raised funds in a standardized manner, spontaneously maintain the security of the Company’s raised funds and shall not participate in, assist in or connive the change of purposes of raised funds by the Company without permission.

The Company’s controlling shareholders and actual controllers shall not directly or indirectly occupy or embezzle the raised funds of the listed company and shall not take advantage of raised funds and raised fund investment project of the listed company (“investment project”) to make improper profits.

Article IV The Board of Directors of the Company shall disclose the use of raised funds in compliance with the provisions of Company Law, Securities Law, Stock Trading Rules at the place where the Company is listed, etc.

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APPENDIX III.I

Chapter II Deposition of Raised Funds

Article V The principle of centralized deposition and facilitation of supervision shall be insisted on for the deposition of raised funds by the Company.

Article VI Upon availability of raised funds, the Company shall promptly handle procedures for capital verification and issue the capital verification report.

Article VII Raised funds shall be deposited in the special account (“raised fund special account”) approved by the Board of Directors to be opened for centralized management. The raised fund special account shall not contain funds other than raised funds or used for other purposes. If he Company considers that the amount of raised funds is great and it is necessary to open special accounts with more than one bank, with the approval from the Board of Directors special accounts may be opened with more than one bank.

Article VIII Within one month after receipt of the raised funds by the Company, the Company shall sign the three-party supervision agreement for deposition of raised funds in the special account with the sponsor institution and commercial bank depositing raised funds (hereinafter referred to as the “commercial bank”). The agreement shall at least include the following:

(I) The Company shall deposit raised funds in a centralized manner in the raised fund special account;

(II) The commercial bank shall provide on a monthly basis to the Company the bank statement for raised fund special account and copy to the sponsor institution;

(III) If the Company withdraws in one shot or within 12 months the cumulative amount from the raised fund special account which exceeds RMB 50000000 and reaches 20% of the net amount of the total raised funds from which issuance cost is deducted (hereinafter referred to as the “net amount of raised funds”), the Company shall promptly give notice to the sponsor institution;

(IV) The sponsor institution may query with the commercial bank for the data of the raised fund special account;

(V) Liabilities for Default by the Company, Commercial Bank and Sponsor Institution.

The Company shall, within 2 transaction days after the above mentioned agreement is signed, report the agreement to the stock exchange for filing and publish bulletins.

Article IX If the three-party supervision agreement is terminated before the validity period expires for reasons of change of the sponsor institution or commercial bank, the Company shall sign with relevant persons involved a new agreement within two weeks after the date when the three-party supervision agreement is terminated and report the new agreement to the stock exchange for filing and publish bulletins within 2 transaction days after the new agreement is signed.

Chapter III Use of Raised Funds

Article X Raised funds must be used for the investment project in the investment amount and in compliance with the investment schedule as promised in the prospectus or specification for raised funds.

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APPENDIX III.I THE USE OF PROCEEDS MANAGEMENT POLICY

Article XI The Company shall comply with the following requirements for the use of raised

funds:

(I) During investment in project by the Company, fund use must strictly comply with the Company’s rules and regulations for fund management, the Company must strictly perform procedures for examination and approval of use of funds. The applicant department must file the application for the expenditure of each raised fund and such raised fund must not be used until such application is approved by the Board of Directors, relevant documents are signed by the leader of the applicant department and reported to the financial department, project leader, chief accountant and General Manager for signature;

(II) The Company shall use the raised funds in compliance with the raised funds use plan as promised in the issuance application document;

(III) The Company shall promptly report to the stock exchange at the place where shares are listed the situation severely affecting the normal implementation of raised funds use plan and publish bulletins;

(IV) In any of the following cases, the Company shall re-demonstrate the feasibility, expected income, etc. of the raised fund investment project to decide whether to continue implementation of the project and disclose in the latest periodical report the project status, causes to abnormalities and raised fund investment project after adjustment (if any):

Significant changes in the market environment involved by the raised fund investment project occurred;
The raised fund investment project is laid up for more than 1 year;
The completion period of the raised fund investment plan is exceeded and the invested amount of the raised funds does not reach 50% of the planned amount;
Other abnormal situations occurred to the raised fund investment project.

Article XII Generally the Company’s raised funds shall be used for main businesses. The Company must not commit the following acts in the use of raised funds:

(I) The raised fund investment project is such financial investment as holding of tradable financial assets, financial assets available for sale, lending to others, entrusted asset management, etc., direct or indirect investment of companies having main businesses of trading negotiable securities;

(II) The purpose of raised funds is changed by means of pledge, entrusted loan or other means;

(III) Raised funds are occupied or embezzled by controlling shareholders, actual controllers, etc. to make improper profits by taking advantage of raised fund investment project for the associated personnel;

(IV) Other acts violating the rules and regulations for management of raised funds.

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APPENDIX III.I

Article XIII If the Company invests the funds it raised on its own in the raised funds in advance, the Company may, within 6 months after receipt of the raised funds, replace the those funds with raised funds. Replacement matters shall be approved by the Board of Directors of the Company through deliberation, the accountant firm shall issue the verification report and the independent director, Board of Supervisors and sponsor institution shall issue the express consent opinions. The Board of Directors of the Company shall report to the stock exchange within 2 transaction days such replacement and publish bulletins.

Article XIV Raised funds not in use temporarily may be subject to cash management and products invested in with such raised funds must meet the following conditions:

(I) The products shall be highly secure, meet the requirement for breakeven and the subject issuing the products can provide the commitment for breakeven;

(II) The products shall have good liquidity and must not affect normal implementation of raised fund investment plan.

The product invested in must not be pledged. Non-raised funds must not be deposited in the special settlement account for the products (if applicable) or the account must not be used for other purposes. To open or unregister the special settlement account for products, the Company shall report within 2 transaction days to the stock exchange for filing and publish bulletins.

Investment in the products with raised funds not in use temporarily shall be approved by the Board of Directors through deliberation and independent directors, Board of Supervisors and sponsor institution shall express consent opinions. The Company shall announce the following within 2 transaction days after the meeting of Board of Directors:

Basic information about raised funds, including raising time, amount of raised funds, net amount of raised funds and investment plan, etc.;
Use of raised funds;
Amount and period of raised funds not in use temporarily which are invested in products, whether acts of using raised funds for other purposes in another way exist and measures for ensuring that normal implementation of raised funds investment is not affected are available;
Type of distribution of income from invested products, investment scope and security;
Opinions issued by the independent directors, Board of Directors and sponsor institution.

Article XV On the premise that the implementation progress of the raised fund investment project is not affected, raised funds may be temporarily used for supplementing circulating funds. The use of raised funds not in use temporarily for supplementing circulating funds by the Company shall meet the following requirements:

(I) Such raised funds must be only used for production and operation relating to main businesses and must not be used for rationing and subscription of new shares through direct or indirect arrangement or for transaction of shares and their derivatives, convertible bonds, etc.;

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APPENDIX III.I THE USE OF PROCEEDS MANAGEMENT POLICY

(II) Raised funds must not be used for other purposes in another way and normal implementation of raised fund investment plan must not be affected;

(III) The time for single supplementation of circulating funds must not exceed 12 months;

(IV) Raised funds used for temporarily supplementing circulating funds in last time (if applicable) are returned.

Use of raised funds not in use temporarily for supplementing circulating funds by the Company shall be approved by the Board of Directors through deliberation, independent directors, sponsor institution and Board of Supervisors shall express opinions and the Company shall report this to Shanghai Stock Exchange and publish bulletins within 2 transaction days.

Prior to the due date for the supplemented circulating funds, the Company shall return the funds to the special account for raised funds and report this to Shanghai Stock Exchange within 2 transaction days after return of all funds and publish bulletins.

Article XVI The part of the net amount of actually raised funds in excess of the amount of planned raised funds (hereinafter referred to as “excessive funds”) may be used for permanently supplementing circulating funds and repaying bank loans, the cumulative amount over each 12 months shall not exceed 30% of the excessive funds and the Company shall undertake not to implement highly risky investment and provide financial assistance to others within 12 months after supplementation of circulating funds.

Use of excessive funds for permanently supplementing circulating funds and repaying bank loans shall be approved by the Board of Directors and Shareholders’ Meeting through deliberation, online voting shall be provided, independent directors, Board of Supervisors and sponsor institution shall issue express consent opinions and the listed company shall report within 2 transaction days after the meeting of the Board of Directors this to the stock exchange and publish bulletins:

(I) Basic information about raised funds, including raising time, amount of raised funds, net amount of raised funds, amount of excessive funds, investment plan, etc.;

(II) Use of raised funds;

(III) Necessity and detailed plan for use of excessive funds for permanently supplementing circulating funds or repaying bank loans;

(IV) The Company shall undertake not to implement highly risky investments and provide financial assistance to others within 12 months after supplementation of circulating funds;

(V) Effect of the use of excessive funds for permanently supplementing circulating funds or repaying bank loans on the Company;

(VI) Opinions issued by independent directors, Board of Supervisors and sponsor institution.

Article XVII If the Company uses excessive funds for the project in progress and new project (including acquisition of assets, etc.), such funds shall be invested in main businesses and the

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APPENDIX III.I

Company shall scientifically and in discretion conduct the feasibility analysis of the investment projects by referring to relevant provisions of Articles 20 to 25 and perform the obligation of disclosing information.

Article XVIII Upon completion of a single raised fund investment project, if the Company uses the balance of raised funds for the project (including interest income) for other raised fund investment projects, such use shall be approved by the Board of Directors, independent directors, sponsor institution and Board of Supervisors. If the amount of the balance (including interest income) is less than RMB 1000000 or less than 5% of the promised investment amount of the raised funds for the project, the procedures as mentioned in the previous paragraph may be exempted and such use shall be disclosed in the annual report.

If the Company uses the balance of raised funds used for a single raised fund investment project (including interest income) for non-raised fund investment project (including supplementing circulating funds), the Company shall perform the corresponding procedures and the obligation of disclosing information.

Article XIX Upon full completion of raised fund investment project, if the amount of the balance of the raised funds (including interest income) is more than 10% of the net amount of raised funds, the use of such balance shall be approved by the Board of Directors and Shareholders’ Meeting through deliberation and the balance of raised funds must not be used until independent directors, sponsor institution and Board of Directors issue opinions. The Company shall report, within 2 transaction days after the meeting of Board of Directors, this to the stock exchange and publish bulletins.

If the amount of balance of the raised funds (including interest income) is less than 10% of the net amount of raised funds, such use shall be approved by the Board of Directors through deliberation and independent directors, sponsor institution and Board of Directors shall issue opinions. The listed company shall report, within 2 transaction days after the meeting of Board of Directors, this to the stock exchange and publish bulletins.

If the amount of balance of raised funds (including interest income) is less than RMB 5000000 or less than 5% of the net amount of raised funds, the performance of the procedures in the previous paragraph can be exempted and such use shall be disclosed in the latest periodical report.

Chapter IV Change of Purpose of Raised Funds

Article XX If laws and regulations, listing rules at the place where shares are listed and provisions of the Articles of Association are not met, the Company shall not use raised funds for other purposes. If raised funds need to be used for other purposes due to the change in the market, such use must not be realized until it has been approved by the Board of Directors and Shareholders’ Meeting and independent directors, sponsor institution and Board of Supervisors issue express consent opinions.

If the Company only changes the place where the raised fund investment project is implemented, the procedures in the previous paragraph can be exempted, provided that such change shall be approved by the Board of Directors through deliberation and the Company shall report this to

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APPENDIX III.I THE USE OF PROCEEDS MANAGEMENT POLICY

the stock exchange within 2 transaction days and announce the causes to the change and opinions of the sponsor institution.

Article XXI The Company shall scientifically and in discretion conduct the feasibility analysis of the new raised fund investment project, confirm that the investment project has good market prospect and profitability, shall effectively prevent against investment risks and increase benefits from the use of raised funds, in principle, the company should invest the funds in its main business after the change of the raised fund investment project.

Article XXII The Company may change the raised fund investment project by reporting this to the stock exchange within 2 transaction days after submission to the Board of Directors for deliberation and publishing the following:

(I) Basic information about original raised fund investment project and causes to change;

(II) Basic information about, feasibility analysis and risk disclaimers of the new raised fund investment project;

(III) Investment plan of new raised fund investment project;

(IV) Statement that the new raised fund investment project has been or is to be approved by relevant authorities (if applicable);

(V) Opinions of independent directors, Board of Supervisors and sponsor institution on change of the raised fund investment project;

(VI) Statement that the change of the raised fund investment project needs to be submitted to the Shareholders’ Meeting for deliberation;

(VII) Other contents as required by stock exchange.

The new raised fund investment project involving related parties transactions, procurement of assets and external investment shall be also disclosed by referring to the provisions of relevant rules.

Article XXIII If the Company uses the raised fund investment project for acquiring the assets of controlling shareholders or actual controllers (including equities), it shall be ensured that horizontal competition and related parties transactions can be effectively avoided and reduced after acquisition.

Article XXIV If the Company proposes to transfer or replace the raised fund investment project to others (unless the raised fund investment project is completely transferred or replaced to others in the implementation of major assets restructuring), the Company shall report this to the stock exchange within 2 transaction days after submission to Board of Directors for deliberation and announce the following:

(I) Reasons for transfer or replacement of raised fund investment project to others;
(II) Amount of raised funds used for invested in the project;
(III) Degree of completion of project and benefits realized;

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APPENDIX III.I THE USE OF PROCEEDS MANAGEMENT POLICY

(IV) Basic information about, feasibility analysis of and risk disclaimers of replacing project (if applicable);

(V) Basis for pricing for transfer or replacement and relevant incomes;

(VI) Independent directors, Board of Supervisors and sponsor institution’s opinions on the transfer or replacement of raised fund investment project;

(VII) Statement of the raised fund investment project to be transferred or replaced which needs to be submitted to the Shareholders’ Meeting for deliberation;

(VIII) Other contents required by Shanghai Stock Exchange.

The Company shall pay sufficient attention to the receipt and use of the transfer price, change of the title ownership of the replacing assets and continuous operation of replacing assets and perform necessary obligation of disclosing information.

Chapter V Supervision and Management of Raised Funds

Article XXV The Board of Directors shall check thoroughly the progress of the raised fund investment project and issue the Special Report on Deposition and Actual Use of the Company’s Raised Funds (“Special Report on Raised Funds”) on the deposition and use of raised funds.

If he actual investment progress of the raised fund investment project is different from the investment plan, the listed company shall explain the specific reasons in Special Report on Raised Funds. If raised funds not in use temporarily are used for investing in products in the current period, the listed company shall disclose in the Special Report on Raised Funds the income of the reporting period, investment shares, signing party, product name, period, etc.

Special Report on Deposition and Actual Use of the Company’s Raised Funds shall be approved by Board of Directors and Board of Supervisors through deliberation and the Company shall report it to Shanghai Stock Exchange within 2 transaction days after submission to the Board of Directors for deliberation and publish bulletins.

During annual audit, the Company shall hire an accountant firm to issue the verification report on the deposition and use of raised funds, submit the report to the stock exchange at the time of disclosing annual report and disclose it on the website of the stock exchange.

Article XXVI The internal audit department of the company shall check the storage and use of the raised funds at least once per every quarter, and timely report the results to the audit committee of the company. The audit committee shall regularly audit the management and use of the raised funds, if they believe that the management and use are in violations, they shall immediately report the situation to the Board of Directors.

Article XXVII The sponsor institution shall conduct the on-site investigation of the deposition and use of raised funds of the listed company once every half year.

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APPENDIX III.I THE USE OF PROCEEDS MANAGEMENT POLICY

At the end of each fiscal year, the sponsor institution shall issue a special check report on the deposition and use of the annual raised funds of the Company, submit the report to Shanghai Stock Exchange when the Company discloses the annual report and disclose the report on the website of the stock exchange. The check report shall include the following:

(I) Deposition, use and special account balance of raised funds;

(II) Progress of raised fund investment project, including the difference with the progress of the raised funds investment plan;

(III) Replacement of funds raised on the Company’s own which have been invested in the raised funds investment project with raised funds (if applicable);

(IV) Status and effect of supplementation of circulating funds with raised funds not in use temporarily (if applicable);

(V) Use of excessive funds (if applicable);
(VI) Change of investment of raised funds (if applicable);

(VII) Conclusion about whether the deposition and use of the Company’s raised funds comply with requirements;

(VIII) Other requirements by the stock exchange.

At the end of each fiscal year, the Board of Directors shall disclose in Special Report on Deposition and Actual Use of the Company’s Raised Funds the special check report by the sponsor institution and conclusions issued in the verification report issued by the accountant firm.

Article XXVIII Independent directors, audit commission of Board of Directors and Board of Supervisors shall pay continuous attention to the management and use of raised funds. More than 1/2 of independent directors, audit commission of the Board of Directors or Board of Supervisors may hire an accountant firm to issue the verification report on the deposition and use of raised funds. The Company shall provide proactive cooperation and bear necessary expenses.

The Board of Directors shall, within 2 transaction days after receipt of the verification report issued by the CPA, report it to Shanghai Stock Exchange and publish bulletins. If it is concluded in the verification report that the management and use of raised funds violate rules and regulations, the Board of Directors shall publish the violations with respect to the deposition and use of raised funds, consequences that have been caused or may be caused or measures to be taken.

Article XXIX The Company shall perform the obligation of disclosing information regarding the management of raised funds in compliance with the listing rules at the place where shares are listed, Articles of Association and relevant provisions regarding information disclosure. The Secretary of Board of Directors shall be responsible for the information disclosure of the use of raised funds.

Article XXX If relevant provisions are violated to use raised funds for other purposes without permission, embezzle raised funds for investment in shares, their derivatives or convertible bonds and

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APPENDIX III.I THE USE OF PROCEEDS MANAGEMENT POLICY

fail to disclose the information regarding the use of the raised funds in compliance with provisions and this causes losses to the Company, the Company will investigate for the liabilities of relevant responsible persons.

Chapter VI Supplementary Provisions

Article XXXI If the raised fund investment project is implemented through the Company’s subsidiary or other enterprises controlled by the Company, these rules and regulations apply to the company implementing the project.

Article XXXII Any matters not covered in these rules and regulations shall be subject to national laws and regulations and relevant normative documents. In the event that relevant provisions of these rules and regulations conflict with relevant laws and regulations promulgated or revised in future, rules, Articles of Association modified in accordance with legal procedures, then the latter shall prevail.

Article XXXIII The Board of Directors of the Company shall be liable to interpret these rules and regulations.

Article XXXIV These rules and regulations shall become effective as of the date when they have been adopted at the Shareholders’ Meeting through deliberation and shall be implemented as of the date when the Company implements IPO and is listed in the territory of China.

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APPENDIX III.J THE FUNDS TO AND FROM RELATED PARTIES MANAGEMENT POLICY

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Flat Glass Group Co., Ltd.

Funds to and from Related Parties Management Policy

Chapter I General Provisions

Article I To standardize fund transactions between Flat Glass Group Co., Ltd. (hereinafter referred to as the “Company”) and controlling shareholders, actual controller and other related parties and avoid controlling shareholders, actual controllers and other related parties of the Company from taking up the Company’s funds, these rules and regulations are formulated in accordance with the Company Law of the People’s Republic of China, Stock Listing Rules of the Shanghai Stock Exchange, Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (hereinafter referred to as the Rules Governing Stock Exchange of Hong Kong), Articles of Association of Flat Glass Group Co., Ltd., etc.

Article II Fund transactions between the Company and subsidiaries, controlling shareholders, actual controllers and other related parties which are included in the consolidated accounting statement are applicable to these rules and regulations.

Unless set out in this article, the Company as referred to in these rules and regulations refers to the Company and subsidiaries included in the Company’s consolidated accounting statement.

Chapter II Matters Regarding Fund Transactions with Related Parties

Article III related parties transactions between the Company and its related parties must be implemented in strict compliance with the rules by the security exchange in the place where the Company’s shares are listed and decision-making procedures for related parties transactions of the Company.

Article IV These rules and regulations shall be strictly implemented for the transactions of operational funds between the Company and its related parties and such transactions must not be implemented until relevant examination and approval procedures are performed.

Article V The Company shall standardize and minimize related parties transactions. The Company shall strictly restrict the related parties from taking up the Company’s funds when handling transactions of operation funds between shareholders, actual controllers and related parties.

Article VI Any department or individual of the Company must not advance pay salaries, welfare, insurance, advertisement fee, etc. for controlling shareholders, actual controllers and related

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APPENDIX III.J THE FUNDS TO AND FROM RELATED PARTIES MANAGEMENT POLICY

parties with the Company’s funds, provide funds and assets free of charge, in a paid manner, directly or indirectly for the use by the Company’s related parties nor bear costs and other expenditures for each other nor agree that the Company and controlling shareholders, actual controllers and other related parties bear costs and other expenditures for each other on each other’s behalf.

Article VII Any department or individual of the Company must not provide to the controlling shareholders, actual controllers and other related parties the Company’s funds for their use by the following means:

(I) Lending the Company’s funds in a paid manner or free of charge to controlling shareholders and other related parties for use;

(II) Providing entrusted loan to related parties through a bank or a non-bank financial institution;

(III) Entrusting controlling shareholders and other related parties to perform investment activities;

(IV) Issuing a trade acceptance bill without real transaction background to the controlling shareholders and their related parties;

(V) Repaying debts for controlling shareholders and other related parties;

(VI) Other means as identified by relevant securities regulatory authorities.

Chapter III Payment Procedures and Basis for Fund Transactions with the Company’s Related Parties

Article VIII The Company’s directors, supervisors, senior executives and presidents (or executive directors) and general managers of all subsidiaries shall have legal obligations and responsibilities of maintaining the security of the Company’s funds and assets.

Article IX Operation matters involved in fund transactions between the Company and its related parties mainly include occupation of the Company’s funds which results from related parties transactions in such production and operation processes as routine procurement, sales, labor provision, etc. and occupation of the Company’s funds which results from related parties transactions in nonroutine procurement and asset sales.

Article X The financial department of the Company shall use relevant agreements, contracts, etc. as payment basis and also review whether items constituting payment basis comply with decisionmaking procedures as set out in the Articles of Association and other governing rules and file relevant decision-making documents for recording when handling payment for controlling shareholders, actual controllers and other related parties.

Article XI Where fund transactions between the Company and controlling shareholders, actual controllers and other related parties are involved in the implementation of fund management and use rules and regulations by the Company, the financial leader of the Company shall review and consent to

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APPENDIX III.J THE FUNDS TO AND FROM RELATED PARTIES MANAGEMENT POLICY

such transactions and such payment must not be made until the leader has reported it to the Board of Directors or Shareholders’ Meeting for approval in accordance with relevant provisions of the related transaction decision making rules and regulations of the Company and by referring to relevant provisions by Shanghai Stock Exchange in the place where shares are listed in China. The specific criteria and procedures are as follows:

(I) An related transaction incurred between the Company and an related natural person which amounts to RMB 300000 (inclusive) to 3000000 (inclusive) shall be approved by the Board of Directors; related parties transactions incurred which is more than RMB 3000000 shall be approved by the Shareholders’ Meeting;

(II) Related parties transactions incurred between the Company and its related legal person the amount of which accounts for 0.5% (inclusive) to 5% (inclusive) of the most recent audited net assets of the Company shall be approved by the Board of Directors;

(III) Related parties transactions incurred between the Company and its related parties the amount of which is more than RMB 30000000 and accounts for more than 5% of the absolute value of the most recent audited net assets of the Company shall be approved by Shareholders’ Meeting;

(IV) For related parties transactions proposed by the Company to be incurred with an related natural person the amount of which is more than RMB 300000 or proposed by the Company to be incurred with an related legal person the amount of which is more than RMB 3000000 and accounts for more than 0.5% of the absolute value of the most recent audited net assets of the Company, an independent director shall provide independent opinions.

Article XII The Company shall carefully check compute and count the items of fund transactions between the Company and controlling shareholders, actual controllers and its related parties and establish special financial archives.

Article XIII The Company shall hire a CPA to issue special explanations for the occupation of funds by the controlling shareholders, actual controllers and other related parties when auditing the Company’s annual accounting statement. The Company shall publish a bulletin for the special explanations.

Article XIV Relevant requirements for procedures, methods and amount of fund transaction between the Company and related parties must comply with relevant laws, regulations, Articles of Associations, rules and regulations under the Related Parties Transactions Decision Policy of the Company and provisions of these rules and regulations.

Chapter IV Penalty

Article XV The Company’s directors, supervisors and senior executives shall have legal obligations of maintaining the security of the Company’s funds.

Where the Company’s directors, supervisors, managers, financial leader and other senior executives violate the requirements of these rules and regulations in making decisions on, reviewing, examining and approving and directly handling items of the fund transactions between the Company

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APPENDIX III.J

THE FUNDS TO AND FROM RELATED PARTIES MANAGEMENT POLICY

and controlling shareholders, actual controllers and other related parties and such violation causes losses to the Company, they shall compensate for such losses. Where losses are relatively severe, they shall be removed from office by the corresponding institution or personnel and the Company shall proactively report and complaint this to relevant administrative and judiciary organs and their administrative, civil and criminal liabilities shall be investigated for by relevant authorities.

Article XVI Where the Company’s controlling shareholders, actual controllers and its related parties occupy the Company’s funds by violating relevant laws, regulations and Articles of Association of the Company, the Company shall promptly give the notice for urging return and report this to relevant authorities to require such authorities to investigate for their legal liabilities. Where such violation causes losses to the Company, the Company shall promptly require compensation and when necessary shall make claims by filing lawsuits and other legal means.

The Board of Directors shall establish the mechanism in which shares held by the controlling shareholders shall be frozen as soon as they have been occupied, that is, the Board shall immediately apply for judiciary freezing of assets if it finds that controlling shareholders occupy such assets and they shall repay the occupied assets by realizing shares if they cannot make such repayment in cash.

Article XVII Where the Company’s related parties occupy the Company’s funds by violating relevant laws, administrative regulations, department rules and regulations and other normative documents, the Company shall promptly give the notice for urging return and report this to relevant authorities to require such authorities to investigate for their legal liabilities. Where such violation causes losses to the Company, the Company shall promptly require compensation and when necessary shall make claims by filing lawsuits and other legal means.

Chapter V Supplementary Provisions

Article XVIII For matters not covered in these rules and regulations, provisions of relevant national laws, regulations and Articles of Association of the Company, Rules Governing Stock Exchange of Hong Kong and Stock Listing Rules of the Shanghai Stock Exchange shall apply. In the event that these rules and regulations conflict with laws, regulations promulgated by the state newly or Articles of Association of the Company or provisions of the listing rules in the place where shares are listed which are modified through legal procedures, the latter shall prevail and these rules and regulations shall be immediately revised and reported to Shareholders’ Meeting for adoption through deliberation. The right to interpret these rules and regulations shall be vested with the Board of Directors.

Article XIX “More than” as referred to in these rules and regulations has the inclusive meaning and “exceed” does not have the inclusive meaning.

Article XX These rules and regulations shall be implemented as of the date when they have been deliberated on and approved by the Shareholders’ Meeting and this also applies in case of revision.

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APPENDIX IV PROPOSED PRICE STABILISING PLAN FOR THE A SHARES WITHIN THREE YEARS AFTER THE PROPOSED A SHARE OFFERING

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Flat Glass Group Co., Ltd.

Price Stabilising Plan for the A Shares within Three Years after the Proposed A Share Offering

Subject to the Securities Law of People’s Republic of China and Opinions on Further Promoting of IPO System Reform by CSRC and other related laws and regulations, and for purpose to stabilize the price of A-share after listing of Flat Glass Group Co., Ltd (hereinafter referred as “the Company”), the Company hereby establishes the Proposal with following details:

I. Conditions to start measures to stabilize prices

Within three years after the date of officially listed of the A-share of the Company, if the closing price of such A-shares were lower than the net asset value per share on the latest audit of the Company (hereinafter referred as “starting conditions”) within 20 consecutive trading days (excluding trading day on full-day delist of A-share of the Company, similarly hereinafter), the Company shall start the measures to stabilize the share price according to rules under the Proposal.

Upon the rights off and ex-dividend of the Company due to distribution of cash dividends, bonus shares, conversion into share capital and issuance of new shares, the net asset per share shall be accordingly adjusted as required.

II. Related responsible subject

The related responsible subjects under the Proposal shall include the Company, the actual controller, directors and senior managers. Directors (directors herein refers in particular nonindependent directors) and senior managers required to take measures to stabilize price under the Proposal shall include not only the directors and senior managers served when the Company was listed but also those new directors and senior managers who were appointed within three years after listing of the Company.

III. Measures and sequence to stabilize price

Specific measures to stabilize prices include share repurchase by the Company, share increase by controlling shareholders and share increase by directors and senior managers. If the “starting conditions” was initiated, the above specific measures shall give priority to share repurchase by the Company, then the second priority to share increase by controlling shareholders and third priority to increases by directors and senior managers.

(1) Share repurchase by the Company

Share repurchase by the Company shall comply with Measures on Public Shares Repurchase by Listed Companies (Trail) and other related laws and regulations, and shall not cause the share distribution of the Company unable to meet listing conditions.

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APPENDIX IV PROPOSED PRICE STABILISING PLAN FOR THE A SHARES WITHIN THREE YEARS AFTER THE PROPOSED A SHARE OFFERING

The capital for Company to repurchase A-share shall be private capital and the price shall be no more than the net asset value per share on the latest audit of the Company, the repurchase method shall be A-share repurchase from public shareholders by centralized auction trading.
The capital on each single repurchase by the Company shall be no less than 10% of net profits of the shareholders from parent company as audited in last accounting year.
The accumulative capital used for repurchasing to stabilize price in each single accounting year shall be no more than 30% of net profits of the shareholders from parent company as audited in last accounting year.

(2) Increases by actual controllers

If the “starting conditions” was initiated again after one or more repurchases by the Company, and the total capital for shares repurchasing by the Company has reached to 30% of net profits of the shareholders from parent company as audited in last accounting year, the Company will stop the implementation of repurchase and cause the actual controller to increase holding of such shares, the increase prices shall be no more than the net asset value per share on the latest audit of the Company.
Increase by actual controllers shall comply with Measures on Acquisition of Listed Companies and other related laws and regulations, and shall not force the actual controller to perform their obligation on tender offer.
The capital used by actual controller on single increase shall be no less than 20% of the aftertax amount of cash dividends of the Company in last accounting year; and the capital used on increases in single accounting year shall be no more than 50% of the after-tax amount of cash dividends of the Issuer in last accounting year. The actual controller shall commit not to sell the increased shares within 6 months after completion of share-increasing plan.

(3) Increases by directors and senior managers

If the “starting conditions” was initiated again after one or more increases by the actual controller and the total capital used by actual controller to increase share holding has reach to 50% of the after-tax amount of cash dividends of the Issuer in last accounting year, the actual controller shall stop increasing such shares and cause directors and senior managers to increase, and the increasing price shall be no more than the net asset value per share on the latest audit of the Company.
The capital used by each director and senior manager on single increase shall be no less than 20% of their after-tax remuneration obtained from the Company in last accounting year; and the total capital for shares increasing by directors and senior managers in each single accounting year shall be no more than 50% of their after-tax remuneration obtained from the Company in last accounting year; directors and senior managers obliged to increase shares shall commit not to sell the increased shares within 6 months after completion of share-increasing plan.
If the “starting conditions” was initiated again after one or more increases by directors and senior managers and the accumulative capital used by such directors and senior managers has reached

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APPENDIX IV PROPOSED PRICE STABILISING PLAN FOR THE A SHARES WITHIN THREE YEARS AFTER THE PROPOSED A SHARE OFFERING

to total amount of the remuneration obtained from the Company in last accounting year during serving as directors or senior managers, such director and senior manager shall stop increasing shares holding.

IV. Starting procedure for the measures to stabilize the share prices

(1) Company repurchase

Board of Directors of the Company shall make a resolution on the repurchase of shares within 15 trading days after the achieving date of the starting condition for the above company purchase.
Board of Directors of the Company shall, within 2 working days after the resolution of the share repurchase is made, announce the resolution of the Board of Directors and the proposal for the shares repurchase, and shall issue a notice of convening the General Meeting of Shareholders.
The Company shall, in the next day after the date of the resolution of the Company’s General Meeting of Shareholders, start the repurchase, and shall be completed within 30 days after the implementation of the relevant legal procedures (if required).
After the implementation of the Company’s repurchase scheme is completed, the Company’s changes in shares shall be reported within 2 working days, and the repurchased shares shall be cancelled within 10 days in accordance with the laws and industrial and commercial change registration procedures shall be carried out.

(2) Increases by the actual controller, directors and senior managers

Board of Directors of the Company shall make an increase notice within 2 trading days after the achieving date of the increases starting condition for the actual controller, directors and senior managers.
The actual controller, directors and senior managers shall start the increases in the next day after the issuing date of the increases notice, and it shall be completed within 30 days after performing the relevant legal procedures.

V. Termination of scheme for stabilizing the share price

Since the date of announcing the scheme for stabilizing the share price, if any of the following circumstances occurs, it is regarded as the completion of the implementation of the share price stabilizing measures and the fulfilling of the commitment, and the announced share price stabilizing scheme is in termination:

The closing price of the Company’s shares is higher than the Company’s most recent audited net asset value per share in 10 consecutive trading days (after the base date for the most recent audit, if the Company’s net asset or the total number of shares change due to the distribution of profits, capital reserves conversing into capital stock, additional issuance, shares allotment, etc., net asset value per share shall be adjusted accordingly).
Continuing repurchase or share increases of the Company’s shares will lead to the Company’s equity distribution being in inconformity with the listing requirements.

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APPENDIX IV PROPOSED PRICE STABILISING PLAN FOR THE A SHARES WITHIN THREE YEARS AFTER THE PROPOSED A SHARE OFFERING

VI. Restraint measures

If the Company’s announcement of the share price stabilizing scheme measure is related to the Company’s repurchase obligations, and the Company does not fulfill the share stabilizing commitment for good reason, it shall explain openly in the information disclosure media designated by the General Meeting of Shareholders and the China Securities Regulatory Commission about the specific reasons for the failure and apologize to the shareholders and the public investors, and when in forming the annual dividend policy, it shall realize the cash dividends to all shareholders by the standard of no less than 50% of the annual distributable net profit.
If the Company’s announcement of the share price stabilizing measure is related to the Company’s share increases for the actual controller, and the actual controller does not fulfill the share stabilizing commitment for good reason, the Company shall have the right to order the actual controller to fulfill the share increases obligation within a time limit; if the actual controller does not fulfill still, the Company shall have the right to freeze the amount of the cash bonus due for the actual controller corresponding to the increases obligation for the actual controller to fulfill, till the obligation is fulfilled.
If the Company’s announcement of the share price stabilizing measure is related to share increased by directors and senior managers of the Company, and the directors and senior managers do not fulfill the share stabilizing commitment for good reason, the Company shall have the right to order the actual controller to fulfill the share increases obligation within a time limit; if the directors and senior managers do not fulfill still, the Company shall have the right to freeze the amount of the cash bonus due for the directors and senior managers corresponding to the share increases obligation for the directors and senior managers to fulfill, till the obligation is fulfilled. If the case for the directors and senior managers refusing to fulfill the share increases obligation regulated by the Proposal is serious, the actual controller or the Board of Directors, Board of Supervisors, more than half of the Independent Directors have the right to submit to the General Meeting of Shareholders agreeing to replace the relevant directors, the Board of Directors of the Company shall have the right to dismiss relevant senior managers.
The above commitments are the declaration of the real intention for the Company, the actual controller, directors, senior managers, the relevant main responsible subject is willing to be in the supervision of the supervision institutions, self-regulatory organizations and the social public; if violating the above commitments, the main responsible subject will be responsible for the law.

VII. Validity period

The Proposal is completed with the Initial Public Offering Domestic Listing RMB Common Shares (Share-A), coming to effect after listing, with the validity period for three years.

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APPENDIX V PROPOSED UNDERTAKINGS IN CONNECTION WITH THE PROPOSED A SHARE OFFERING AND RELATED RESTRICTIVE MEASURES

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Under the requirements of the Opinions on Further Promoting the IPO System Reform issued by the CSRC and other relevant regulations that require the issuer to make undertakings publicly in its public offering and listing documents, the Company shall undertake in the listing documents of the A share offering that the prospectus does not contain any false representation, misleading statement or material omission, and jointly and severally accept legal responsibility for the truthfulness, accuracy and completeness of the prospectus. Should the prospectus of the A share offering contain any false representation, misleading statement or material omission, which would have a material and substantial effect on the ability of the Company to satisfy the conditions of offering under the law, the Company shall repurchase all the new shares under the initial public offering in accordance with the law. The Company shall make an announcement on the day when the CSRC has made a final determination thereon or a ruling thereon, and formulate the share repurchase plan within 30 days thereof for the consideration and approval by the shareholders in a shareholders’ general meeting. The repurchase price shall be determined in accordance with the arithmetic average of the weighted average prices of the share in the 20 trading days prior to the date of the repurchase announcement. In case of any exrights or ex-dividend activities after the listing of the shares, the above share repurchase price and share repurchase quantity shall be adjusted accordingly.

The Company will bear the civil compensation responsibilities to compensate for the losses of the investors according to the requirements of the related laws and regulations. The maximum compensation amount of such losses shall be the direct losses actually incurred arising therefrom which the investors can provide evidence to prove them, and shall not include indirect losses. The details of the specific compensation standards, scope of compensation subjects and compensation amount etc., will be subject to the final confirmed compensation proposal or that determined by the valid judgment of the judicial authorities when the above situations actually occur.

In addition, the Company shall make undertake to: (i) strictly observe and execute the aforesaid “Price Stabilization Plan of the Price of the A Share within 3 years after its Offering and Listing”, and perform its obligations under the requirements of the plan to stabilize the share price of the Company; and (ii) strictly observe all undertakings made in the public offering of domestic RMB ordinary A shares to execute the relevant obligations and responsibilities. The Company shall, when unable to comply with each obligation and responsibility of the public undertakings, propose the restrictive measures If the undertakings fail to be fulfilled and disclose the same in the public offering and listing documents for the purpose of public supervision, which include:

I. If failed to perform the public commitments above not due to force majeure, the Company will propose new supplementary or alternative commitments (subject to approval procedures per laws, regulations and provisions in the Articles) and accept following restricting measures until the new commitments are performed or related remedial measures are implemented:

Make public explanation on specific reasons of fulfilling failure through the disclosure media designated by the General Meeting or CSRC, apologize to shareholders and public investors;

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APPENDIX V PROPOSED UNDERTAKINGS IN CONNECTION WITH THE PROPOSED A SHARE OFFERING AND RELATED RESTRICTIVE MEASURES

Within 12 months after the date when the Company fully eliminated the adverse effect due to failure on related public commitments, the Company shall not issue securities, including but not limited to shares, bonds, convertible bonds of the Company and other types approved by securities regulatory authorities;
For any loss to investors in securities trading due to the Company’s failure to fulfill related public commitments, the Company will compensate such loss to the investors according to law.

II. If failed to perform the public commitments above due to force majeure, the Company will propose new supplementary or alternative commitments (subject to approval procedures per laws, regulations and provisions in the Articles) and accept following restricting measures until the new commitments are performed or related remedial measures are implemented:

Make timely and adequate public explanation of the specific reasons on fulfilling failure through the disclosure media designated by the General Meeting or CSRC;
Explore a solution to minimize interest of investors as soon as possible and submit such solutions to the General Meeting for consideration and to protect their interests as much as possible.

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APPENDIX VI

PROPOSAL ON DILUTION OF IMMEDIATE RETURNS AS A RESULT OF THE PROPOSED A SHARE OFFERING, RELATED REMEDIAL MEASURES AND UNDERTAKING BY THE RELEVANT PARTIES

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Dilution of Immediate Return Arising from the Proposed A Share Offering, Related Remedial Measures and Undertakings by the Relevant Parties

After this offering and listing of A-share, the total share capital and net assets of the Company will increase significantly. Since this fund-raising project has a longer construction period, it will take some time to achieve earnings starting from complementation. During the period above, the Company indicators such as earnings per share and return on equity will be exposed to dilution within short time, subject to such situation, the Company has made careful analysis on the effect of such immediate return dilution and will follow and take following measures, take effective use of the fund raised this time, to further promote the business benefits of the Company, fully protect Company shareholders, especially interest of those minority shareholders and focus on value returns of medium and long term shareholders, which are as follows:

I. Risk warning on the diluted immediate return for this offering

After completion of this offering the total share capital and net assets of the Company will increase significantly, however, the fund-raising project will experience a period of construction and trial operation, meanwhile, it will take some time and process to achieve earnings on the funds raised. During such period, the shareholder returns are still mainly reflected by existing business. Thus, after completion of this offering, there still will be the risk for earnings per share and return on equity and other indicators on immediate return to be diluted within short time. The Company drew our investors to pay attention on investment risks from this.

II. Measures against the diluted immediate return of this offering by the Company

The total number of A Shares to be issued pursuant to the A Share Offering will not be more than 200,000,000, after raised funds in position, the net assets of Company will also increase significantly. Thus, this offering might cause earnings per share and return on equity of the Company decline within short time, while the immediate return diluted during such period. In order to reduce such effect, the Company committed to take following specific measure to enable the Company to return its investors after the in-position of raised funds:

(1) Operational status and development trend of existing business sections

The Company currently is focus on production and sales of four kinds of glass products, including photovoltaic glass, float glass, household glass and engineering glass, in which the sales of photovoltaic glass consists 70% and more of total sales of the Company, this glass are mainly used for sealing covers of solar cells.

The Company is a global leading photovoltaic glass manufacturer as well as the first Chinese photovoltaic glass manufacturer to adopt SPF Certification of Swiss Solar Lab. In recent years, the Company has a global market share on photovoltaic glass of about 20%. In 2014, the Company

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APPENDIX VI PROPOSAL ON DILUTION OF IMMEDIATE RETURNS AS A RESULT OF THE PROPOSED A SHARE OFFERING, RELATED REMEDIAL MEASURES AND UNDERTAKING BY THE RELEVANT PARTIES

achieved the sales on photovoltaic glass of about RMB2,078.4 million as the first in the world, while in 2015, the sales reached to RMB2,161.2 million as the second in the world.

In future, the Company will further consolidate its position in global photovoltaic glass products as a global leader.

(2) Major risks and improving measures on existing business section

The risks on photovoltaic glass products faced by the Company mainly consists of the fluctuations of photovoltaic glass industry caused by fluctuations of downstream PV modules industry, intensified market competition of photovoltaic glass industry and the risk of product substitution on crystalline silicon solar cells.

The current risks on float glass and other products faced by the Company mainly consists of the fluctuations of household and engineering glass products market caused by fluctuations of international (including China) home decoration industry and the risk of intensified market competition within the industry.

To address these risks, the Company will promote its own technical level, reduce the production cost and consolidate the position as a market leader in photovoltaic glass industry; and will continue optimizing the product structure and lifting the Company ability to resist risks caused by downstream industries, such as PV industry; developing the application of Company products in other fields and expand the application field for the Company products.

(3) Steady progress in the implementation of raised funds investment projects to improve efficiency of such raised funds

The Company will make steady progress in the initial preparation work of raised funds investment projects and will engage its own funds and market financing funds to use as project funds before the in-position of raised funds according to the progress of raised funds investment projects, for purpose to ensure smooth progress of such raised funds investment projects.

The Company will, through effective use of these raised funds, improve financing structure, promote profit level and further accelerate the release of existing project benefits to thicken future benefits, enhance capacity for sustainable development and supplement the effect of declined immediate return of shareholders.

(4) Strengthen technical innovation and enhance sustainable profitability

Attaching great importance to product research and development is an important driving force for Company growth. In future, the Company will rely on its own research and technology platform, by virtue of independent and cooperative research and development to strengthen technical innovation, further promote technical level of Company products and increase the earnings growth point of the Company as well as promote sustainable profitability of the Company.

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APPENDIX VI PROPOSAL ON DILUTION OF IMMEDIATE RETURNS AS A RESULT OF THE PROPOSED A SHARE OFFERING, RELATED REMEDIAL MEASURES AND UNDERTAKING BY THE RELEVANT PARTIES

(5) Regulate dividend behavior and return shareholders in time

The Company has agreed on the dividend policies, proportion of cash dividends and adjustment mechanism of such dividend policies after listing as specified in the Articles of Association (draft, applicable only after the Company listing) and the Plans on Dividends Return Three Years after Listing. After listing, the Company will regulate dividend behavior, return to shareholders in time and enhance the protection on medium and small investors by strictly complying with existing dividend policies.

III. Undertakings to be made by relevant parties

i. Undertakings made by Directors and senior management

The Directors and the senior management shall carry out their responsibilities faithfully and diligently, and uphold the legal interests of all Shareholders of the Company. They shall advance the performance of the remedial measures in a practical manner in accordance with relevant regulations of the CSRC and undertake as follows:

I promise not to transport benefits to other organizations or individual freely or in unfair condition, and I will not damage benefit of company with other ways.
I promise that constraint will be imposed on position-related consumption behavior of myself.
I promise that I will not use company assets to be occupied in investment and consumption activity which are not concerned with execution of duty.
I promise that salary system prepared by Board of Directors or Compensation Committee is concerned with executive condition of filling returning measures of company.
If the company implements equity motivation scheme in the future, I promise that vesting conditions of future equity motivation scheme will be concerned with executive condition of filling returning measures of company.
From the date of issuing the Promise to the date when implementation of initial public offering of A-shares of company is finished, if China Securities Regulatory Commission makes other new supervision provisions concerned with filling returning measures, and above promises cannot meet the requirement of China Securities Regulatory Commission, I promise that I will issue supplemental promise according to the newest provision of China Securities Regulatory Commission at that time.
Truly implement concerned filling returning measures prepared by the company and promise that is made by me and that is concerned with filling returning measures. If I violate such promise and bring loss to company or investor, I am willing to take on compensation responsibility to company or investor by law.

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APPENDIX VI PROPOSAL ON DILUTION OF IMMEDIATE RETURNS AS A RESULT OF THE PROPOSED A SHARE OFFERING, RELATED REMEDIAL MEASURES AND UNDERTAKING BY THE RELEVANT PARTIES

ii. Undertakings made by actual controllers

The actual controllers undertake to strictly implement the remedial measures in accordance with the relevant requirements of the CSRC as follows:

Do not exceed power or authority to intervene operation and management activities of the Company; do not invade interest of the Company; perform relevant measures for supplementary return of the Company.
From the issuance date of the Commitment Letter to the date of completion of implementation for initial public offering of A-shares of the Company, if China Securities Regulatory Commission formulates measures about supplementary return and other new regulatory provisions and aforesaid commitment cannot meet these provisions of China Securities Regulatory Commission, I make commitment that I will provide supplementary commitment according to lasted provisions of China Securities Regulatory Commission.
Implement actually relevant supplementary return measures formulated by the Company and any commitment about supplementary return measures that is formulated by me. If I violate these commitments and thus losses are caused to the Company or investors, I am willing to undertake supplementary responsibility to the Company or investors according to laws.

VI-4

APPENDIX VII PROPOSED DIVIDEND DISTRIBUTION PLAN FOR THE THREE YEARS AFTER THE PROPOSED A SHARE OFFERING

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Flat Glass Group Co., Ltd.

Dividend Distribution Plan for the Three Years after the Proposed A Share Offering

In order to further enhance the transparency of cash bonus in Flat Glass Group Co., Ltd (hereinafter referred to as “the Company”), strengthen the awareness of the Company to return to shareholders, improve and perfect the decision-making and supervision mechanism for bonus, maintain the continuity and stability of profit distribution policy, protect legal interests of investors, and provide convenience for investors to obtain stable expected return, Planning for Return and Bonus to Shareholders in the Next Three Years after Stock A is Listed (hereinafter referred to as “the Planning”) is formulated in the Company in accordance with relevant laws and regulations in the Opinions on Further Promoting the Issue System of New Shares (Z. J. H. G. G [2013] No. 42), Notice on Further Carrying out the Cash Bonus in Listed Companies (Z. J. F [2012] No. 37) and Guideline No. 3 for Supervision of Listed Companies—Cash Bonus of Listed Companies by China Securities Regulatory Commission, as well as provisions in normative documents. At the same time, practical situation of the Company, including earning capacity of the Company, operation and development planning, return to shareholders, as well as cash flow of the Company, is also taken into account for formulation of the Planning, contents of which are specified as follows:

(I) Factors taken into account for formulation of the Planning

The Company shall, starting from long-term planning and sustainable development of the Company, based on a comprehensive analysis on the industry characteristics, development strategy and business plan of the Company, shareholder’s requirements and willingness, with full consideration into practical situation and development planning of the Company, demands in project investment amounts, current and future earning performance, cash flow situation and external financing environment, formulate the Planning for return and bonus to shareholders with sustained, stable and scientific return mechanism, thus achieving an institutional arrangement for profit distribution to maintain the continuity and stability of profit distribution policy.

(II) Principles for formulation of the Planning

The Company carries out the continuous and stable profit distribution policy, in which grate significance is attached to investment return to investors and sustainable development of the Company.

(III) Cycle and relevant decision-making mechanism of the planning for return and bonus to shareholders

The Board of Directors shall, based on the profit distribution policy confirmed in the Association of Articles, formulate the planning for return and bonus to shareholders. If the Company, in accordance with its production and operation conditions, investment planning, the need of long-term development, or changes caused by external business environment or operation situation, needs to adjust the profit distribution policy, the Board of Directors shall, starting from protection of the

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APPENDIX VII PROPOSED DIVIDEND DISTRIBUTION PLAN FOR THE THREE YEARS AFTER THE PROPOSED A SHARE OFFERING

shareholders’ interests and based on practical situation of the Company, put forward a scheme for adjustment of the profit distribution policy. Such adjustment scheme shall, in advance, seek advice from the independent director, Board of Directors and shareholders (especially the minority shareholders), and communication on such scheme shall be carried out with shareholders, especially the minority shareholders through various channels, such as a telephone call, fax, e-mail and interactive platform for investors, etc. After being reviewed by the Board of Directors, the scheme shall be submitted to shareholder’s general meeting, and shall only, with two thirds of the voting power by shareholders present at the meeting, be approved. The adjusted profit distribution policy shall not violate any relevant laws and regulations, as well as provisions in normative documents.

The Company shall, at least every three years, deliberate on the planning for return and bonus to shareholders, and shall, based on the advice from independent director, Board of Directors and shareholders (especially the minority shareholders), make appropriate and necessary modifications in the existing profit distribution policy, to determine the planning for return and bonus to shareholders in this period.

(IV) Specific content of the planning for return and bonus to shareholders in three years after the Company is listed

Profit distribution form and interval

(1) The Company adopts a combination of cash, stock or cash stock for profit distribution and gives priority to profit distribution by cash. On the premise of a guarantee for cash dividend distribution, the Company can distribute profits through stock dividends. Where such stock dividends are adopted for profit distribution, authentic and reasonable factors such as corporate growth and dilution of net asset value per share shall be taken into account.

(2) In compliance with the requirement for profit distribution, the Company shall annually carry out the profit distribution, or cash bonus semi-annually.

(3) Profit distribution carried out by the Company shall not exceed the scope of accumulative profit available for distribution. On the premise of meeting the fund demand for raw material purchasing, predictable important investment plan or large capital expense, Board of Directors in the Company can, in accordance with the operating profit and cash flow of the current period, carry out the semi-annual bonus, and the specific scheme shall be submitted to shareholder’s general meeting for approval after being reviewed by the Board of Directors. If any shareholder illegally occupies the Company’s funds, the Company shall deduct the cash bonus of the shareholder to compensate for the funds occupied.

Specific conditions and minimum percentage of cash bonus

Under the circumstance that the actual net profit in the same year of the Company is positive and the accumulative undistributed profit of the Company at the end of the year is positive, the Company shall share out the bonus in cash, and the distributed profit in cash shall not be less than the 20% of actual profit available for distribution of the year.

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APPENDIX VII PROPOSED DIVIDEND DISTRIBUTION PLAN FOR THE THREE YEARS AFTER THE PROPOSED A SHARE OFFERING

When the Company plans to share out the bonus in cash, the following conditions shall be met simultaneously.

(1) The actual distributive profit (namely the remaining after-tax profit after covering the deficit and withdrawing the accumulation fund) in the year is positive and the cash is sufficient. The implementation of cash bonus will not affect the follow-up going concern of the Company;

(2) Audit authority issues the auditing report of standard and clean opinions for the annual financial report of the Company;

(3) The Company has no main investment plan;

(4) Cash bonus will not breach the laws, regulations, rules, government normative documents, applicable rules and the agreement and documents binding on the Company and Subsidiary Company.

If the Company makes distribution in bonds share, the Board of Directors shall comprehensively consider the industry features, development stages, its own business pattern, profit level and whether there is major capital expenditure arrangement. The following situations shall be distinguished and differentiation cash bonus policy shall be put forward:

(1) If the development stage of the Company belongs to mature period and there is no main capital expenditure arrangement, the percentage of cash bonus shall account for 80% at least in the profit distribution during distribution of profit.

(2) If the development stage of the Company belongs to mature period and there is main capital expenditure arrangement, the percentage of cash bonus shall account for 40% at least in the profit distribution during distribution of profit.

(3) If the development stage of the Company belongs to growth period and there is main capital expenditure arrangement, the percentage of cash bonus shall account for 20% at least in the profit distribution during distribution of profit.

If the development stage of the Company is not easy to distinguish but there is main capital expenditure, the profit distribution can be handled according to the provision of preceding paragraph.

In particular cases, the profit distribution plan could not be determined according to the fixed cash bonus policy or the minimum cash bonus percentage, the specific reasons and the clear opinions of independent director shall be disclosed in the annual report. If the stock exchange in the listed place of company share has particular regulation for the voting mechanism and method of General Meeting of Shareholders auditing the profit distribution scheme, the profit distribution shall conform to the regulation.

Formulation and implementation of profit distribution scheme

After the completion of each accounting year, the Board of Directors will put forward profit distribution scheme and submit it to General Meeting of Shareholders for review. When the General Meeting of Shareholders reviews, the opinions of independent directors, Board of Supervisors and shareholders (particularly the minority shareholders) shall be taken full consideration. The communication and exchange with the shareholders, particularly the minority shareholders shall be

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APPENDIX VII PROPOSED DIVIDEND DISTRIBUTION PLAN FOR THE THREE YEARS AFTER THE PROPOSED A SHARE OFFERING

conducted through various channels, such as telephone, fax, E-mail, interactive platform of investors relations. The suggestions and appeals of minority shareholders shall be fully followed and the concerned issues of minority shareholders shall be timely answered. After the General Meeting of Shareholders makes resolutions on the profit distribution scheme, the Board of Directors of the Company shall complete the distribution matters of dividend on share (or shares) within 2 months after the General Meeting of Shareholders.

(V) Use arrangement of undistributed profit

The remaining undistributed profit of the Company is mainly used for such capital expenditure as technical transformation, foreign investment, acquisition of assets or stock equity, procurement of equipment and supplement of circulating fund so as to gradually expand production and operation scale, optimize financial structure, promote the rapid development of the Company and realize the future objective of planning and development in a planned orderly way and finally maximizing the shareholders’ interests.

(VI) The Planning goes into effect since the approval date of review of General Meeting of Shareholders and for modification as well.

(VII) The Planning shall be interpreted by the Board of Directors of the Company.

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APPENDIX VIII

DETAILS OF DR. CUI XIAOZHONG

The following are details of Dr. Cui Xiaozhong, who will be proposed to be appointed as an independent non-executive Director at the EGM:

Biography of Dr. Cui Xiaozhong

Dr. Cui Xiaozhong ( ) , aged 46, has over 20 years of experience in accounting and auditing. Dr. Cui graduated from Nanjing Normal University ( ) in Nanjing, Jiangsu Province, the PRC, in March 1996 with a bachelor’s degree majoring in accounting. Dr. Cui furthered his studies in Dongbei University of Finance and Economics ( ) in Dalian, Liaoning Province, the PRC, where he graduated with a master’s degree and a doctorate degree in accounting in March 2007 and June 2010, respectively. Since June 2010, Dr. Cui has been a lecturer at Jiaxing University ( ), where he principally lectures in accounting and auditing related courses for bachelor’s degree students in the university. Since July 2016, he has been the chief adviser on internal control ( ) of Jiaxing Vocational Technical College ( ). Dr. Cui is an independent non-executive director, the chairman of the audit committee and deputy chairman of the remuneration and appraisal committee of Zhejiang Chenguang Cable Co., Ltd. ( ), a company listed on the National Equities Exchange and Quotations ( ) market in the PRC (stock code: 834639).

Saved as disclosed above, Dr. Cui has not been a director of any other companies listed in Hong Kong or overseas for the last three years.

Terms of service

As at the date of this announcement, Dr. Cui has not entered into any letter of appointment with the Company. Dr. Cui will enter into a letter of appointment with the Company with the term of appointment taking effect from the date of approval of his appointment by the Shareholders at the EGM until the end of the current session of the Board on 30 September 2018.

Pursuant to the terms of the letter of appointment, Dr. Cui will receive a director’s fee of RMB80,000 per annum (equivalent to approximately HK$93,200), which is recommended by the Remuneration Committee and determined by the Board with reference to his duties and responsibilities within the Company, remuneration paid by comparable companies for independent non-executive directors, and current remuneration of other independent non-executive Directors.

Relationship with other Directors, senior management, or substantial or controlling shareholders of the Company

Dr. Cui does not have any relationship with any Directors, senior management, or substantial or controlling shareholders of the Company.

Interest in the shares of the Company

As at the date of this announcement, Dr. Cui does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong).

Positions in other members of the Group

Subject to the Shareholders’ approval of the appointment of Dr. Cui at the EGM, apart from being an independent non-executive Director, a member of each of the Audit Committee,

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APPENDIX VIII

DETAILS OF DR. CUI XIAOZHONG

Remuneration Committee, Nomination Committee, Strategic Development Committee and Risk Management Committee and the chairman of each of the Audit Committee and the Remuneration Committee, Dr. Cui does not hold any other position in the Company or any other member of the group of companies of which the Company forms part.

Other information

Save as disclosed above, Dr. Cui has no other information to be disclosed pursuant to Rules 13.51(2)(h) to (w) of the Listing Rules or any matters concerning Dr. Cui that need to be brought to the attention of the shareholders of the Company.

VIII-2

NOTICE OF EXTRAORDINARY GENERAL MEETING

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

Flat Glass Group Co., Ltd.

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

(stock code: 6865)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “ EGM ”) of Flat Glass Group Co., Ltd. (the “ Company ”) will be held at 9:00 a.m. on Monday, 21 November 2016 at the Conference Room, 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the People’s Republic of China (the “ PRC ”) for the purpose of considering, and if thought fit, passing, with or without modifications, the following resolutions. Unless otherwise defined, capitalised terms used herein shall have the meanings as those defined in the circular of the Company dated 5 October 2016:

SPECIAL RESOLUTIONS

(1) Proposed A Share Offering:
(a) class of shares to be issued;
(b) nominal value per share;
(c) place of listing;
(d) offer size;
(e) pricing methodology;
(f) target subscribers;
(g) method of offering; and
(h) validity period of the resolutions;
(2) proposal on granting authorisation to the Board to handle matters in relation to the Proposed A Share Offering;
(3) use of proceeds from the Proposed A Share Offering;
(4) distribution plan of the accumulated undistributed profits before the Proposed A Share Offering;
(5) amendments to the Articles;

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NOTICE OF EXTRAORDINARY GENERAL MEETING

(6) price stabilising for the A Shares within three years after the Proposed A Share Offering;
(7) undertakings in connection with the Proposed A Share Offering and related restrictive measures;
(8) proposal on dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures;
(9) undertakings from the Directors and senior management of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures;
(10) undertakings from the actual controllers of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures;
(11) dividend distribution plan for the three years after the Proposed A Share Offering;

ORDINARY RESOLUTIONS

(12) the rules of procedures of general meetings;
(13) the rules of procedures of Board meetings;
(14) the rules of procedures of meetings of supervisors; (15) the implementation rules of the cumulative voting system;
(16) the investment management policy;
(17) the related parties transactions decision policy;
(18) the working instructions for independent directors;
(19) the provision of external guarantees policy;
(20) the use of proceeds management policy;
(21) the funds to and from related parties management policy;
(22) appointment of Dr. Cui Xiaozhong as an independent non-executive Director of the Company; and
(23) declaration of an interim dividend of RMB5.5 cents per ordinary share for the six months ended 30 June 2016 to the Shareholders.

By order of the Board of Flat Glass Group Co., Ltd. Ruan Hongliang Chairman

Jiaxing, Zhejiang, the PRC 5 October 2016

As at the date of this notice, the executive directors of the Company are Mr. Ruan Hongliang, Ms. Jiang Jinhua, Mr. Wei Yezhong, Mr. Shen Qifu and the independent non-executive directors of the Company are Ms. Pan Yushuang, Mr. Li Shilong and Mr. Ng Ki Hung.

EGM-2

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

In order to ascertain Shareholders’ entitlement to attend and vote at the EGM, the register of members of the Company will be closed from 21 October 2016 (Friday) to 21 November 2016 (Monday) (both days inclusive), during which period no transfer of shares will be registered. In order to qualify for attending and voting at the forthcoming EGM, all transfer documents must be lodged with the Company’s H share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong (for holders of H Shares), or to the Company’s registered office in the PRC at 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the PRC (for holders of Domestic Shares), for registration before 4:30 p.m. on 20 October 2016 (Thursday). Shareholders whose names appear on the register of members of the Company on 21 November 2016 (Monday) are entitled to attend and vote at the EGM.

The Board has recommended an interim dividend for the six months ended 30 June 2016 of RMB5.5 cents per ordinary share (before tax) (equivalent to approximately HK$6.4 cents per ordinary share (before tax)) (the “ 2016 Interim Dividend ”) and, if the resolution regarding the payment of the 2016 Interim Dividend is approved by the shareholders at the EGM, the 2016 Interim Dividend is expected to be distributed on or around 30 December 2016 (Friday) to shareholders whose names appear on the register of members of the Company on 29 November 2016 (Tuesday).

For the purpose of ascertaining shareholders’ entitlement to the 2016 Interim Dividend, the register of members of the Company will be closed from 25 November 2016 (Friday) to 29 November 2016 (Tuesday) (both days inclusive) for the purpose of determining shareholders’ entitlement to the 2016 Interim Dividend. In order to qualify for receiving the 2016 Interim Dividend, all transfer documents must be lodged with the Company’s H share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong (for holders of H Shares), or to the Company’s registered office in the PRC at 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the PRC (for holders of Domestic Shares), for registration before 4:30 p.m. on 24 November 2016 (Thursday). The record date for entitlement to the 2016 Interim Dividend is 29 November 2016 (Tuesday).

Shareholders who are entitled to attend and vote at the EGM may appoint one or more proxies to attend and vote on their behalf. A proxy need not be a shareholder of the Company.
The instrument appointing a proxy must be in writing under the hand of a Shareholder or his attorney duly authorized in writing. If the Shareholder is a legal person, that instrument must be executed either under its seal or under the hand of its director or other attorney duly authorized to sign the same.
In order to be valid, the proxy form for the EGM must be deposited by hand or by post, for holders of H shares of the Company, to the H share registrar of the Company, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong and, for holders of domestic shares of the Company, to the head office in the PRC of the Company not less than 24 hours before the time for holding the EGM (or any adjournment thereof) for taking the poll. If the proxy form is signed by a person under a power of attorney or other authority, a notarial copy of that power of attorney or authority shall be deposited at the same time as mentioned in the proxy form. Completion and return of the proxy form will not preclude

EGM-3

NOTICE OF EXTRAORDINARY GENERAL MEETING

Shareholders from attending and voting in person at the EGM or any adjourned meetings should they so wish.
Shareholders or their proxies shall provide their identification documents when attending the EGM. If corporate Shareholders appoint authorized representative to attend the EGM, the authorized representative shall produce his/her identity documents and a notarially certified copy of the relevant authorization instrument signed by the board of directors or other authorized parties of the corporate Shareholders or other notarially certified documents allowed by the Company. Proxies shall produce their identity documents and the proxy form signed by the Shareholders or their attorney when attending the EGM.
Shareholders who intend to attend the EGM should complete the reply slip and return it by hand or by post to the H share registrar of the Company (for holders of H shares of the Company) or to the head office in the PRC of the Company (for holders of domestic shares of the Company) on or before 1 November 2016 (Tuesday).
Shareholders attending the EGM shall be responsible for their own travel and accommodation expenses.
The address of the head office in the PRC of the Company is 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the PRC.

EGM-4

NOTICE OF DOMESTIC SHAREHOLDERS’ CLASS MEETING

Flat Glass Group Co., Ltd.

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

(stock code: 6865)

NOTICE OF DOMESTIC SHAREHOLDERS’ CLASS MEETING

NOTICE IS HEREBY GIVEN that the Domestic Shareholders’ Class Meeting of Flat Glass Group Co., Ltd. (the “ Company ”) will be held at the Conference Room, 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the People’s Republic of China (the “ PRC ”) on Monday, 21 November 2016 immediately after the conclusion of the EGM of the Company held at the same date or any adjournment thereof for the purpose of considering, and if thought fit, passing, with or without modifications, the following resolutions. Unless otherwise defined, capitalised terms used herein shall have the meanings as those defined in the circular of the Company dated 5 October 2016.

SPECIAL RESOLUTIONS

(1) Proposed A Share Offering:
(a) class of shares to be issued;
(b) nominal value per share;
(c) place of listing;
(d) offer size;
(e) pricing methodology;
(f) target subscribers;
(g) method of offering; and
(h) validity period of the resolutions;
(2) proposal on granting authorisation to the Board to handle matters in relation to the Proposed A Share Offering;
(3) use of proceeds from the Proposed A Share Offering;
(4) distribution plan of the accumulated undistributed profits before the Proposed A Share Offering;
(5)
amendments to the Articles;
(6) price stabilising for the A Shares within three years after the Proposed A Share Offering;

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NOTICE OF DOMESTIC SHAREHOLDERS’ CLASS MEETING

(7) undertakings in connection with the Proposed A Share Offering and related restrictive measures;
(8) proposal on dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures;
(9) undertakings from the Directors and senior management of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures;
(10) undertakings from the actual controllers of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures; and
(11) dividend distribution plan for the three years after the Proposed A Share Offering.

By order of the Board of Flat Glass Group Co., Ltd. Ruan Hongliang Chairman

Jiaxing, Zhejiang, the PRC 5 October 2016

Notes:

In order to ascertain Domestic Shareholders’ entitlement to attend and vote at the Domestic Shareholders’ Class Meeting, the register of members of the Company will be closed from 21 October 2016 (Friday) to 21 November 2016 (Monday) (both days inclusive), during which period no transfer of shares will be registered. In order to qualify for attending and voting at the forthcoming Domestic Shareholders’ Class Meeting, all transfer documents must be lodged with the Company’s registered office in the PRC at 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the PRC, for registration before 4:30 p.m. on 20 October 2016 (Thursday). Domestic Shareholders whose names appear on the register of members of the Company on 21 November 2016 (Monday) are entitled to attend and vote at the Domestic Shareholders’ Class Meeting.
Domestic Shareholders who are entitled to attend and vote at the Domestic Shareholders’ Class Meeting may appoint one or more proxies to attend and vote on their behalf. A proxy need not be a shareholder of the Company.
The instrument appointing a proxy must be in writing under the hand of a Domestic Shareholder or his attorney duly authorized in writing. If the Domestic Shareholder is a legal person, that instrument must be executed either under its seal or under the hand of its director or other attorney duly authorized to sign the same.
In order to be valid, the proxy form for the Domestic Shareholders’ Class Meeting must be deposited by hand or by post to the head office in the PRC of the Company not less than 24 hours before the time for holding the Domestic Shareholders’ Class Meeting (or any adjournment thereof) for taking the poll. If the proxy form is signed by a person under a power of attorney or other authority, a notarial copy of that power of attorney or authority shall be

ND-2

NOTICE OF DOMESTIC SHAREHOLDERS’ CLASS MEETING

deposited at the same time as mentioned in the proxy form. Completion and return of the proxy form will not preclude Domestic Shareholders from attending and voting in person at the Domestic Shareholders’ Class Meeting or any adjourned meetings should they so wish.
Domestic Shareholders or their proxies shall provide their identification documents when attending the Domestic Shareholders’ Class Meeting. If corporate Domestic Shareholders appoint authorized representative to attend the Domestic Shareholders’ Class Meeting, the authorized representative shall produce his/her identity documents and a notarially certified copy of the relevant authorization instrument signed by the board of directors or other authorized parties of the corporate Domestic Shareholders or other notarially certified documents allowed by the Company. Proxies shall produce their identity documents and the proxy form signed by the Domestic Shareholders or their attorney when attending the Domestic Shareholders’ Class Meeting.
Domestic Shareholders who intend to attend the Domestic Shareholders’ Class Meeting should complete the reply slip and return it by hand or by post to the head office in the PRC of the Company on or before 1 November 2016 (Tuesday).
Domestic Shareholders attending the Domestic Shareholders’ Class Meeting shall be responsible for their own travel and accommodation expenses.
The address of the head office in the PRC of the Company is 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the PRC.

ND-3

NOTICE OF H SHAREHOLDERS’ CLASS MEETING

Flat Glass Group Co., Ltd.

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

(stock code: 6865)

NOTICE OF H SHAREHOLDERS’ CLASS MEETING

NOTICE IS HEREBY GIVEN that the H Shareholders’ Class Meeting of Flat Glass Group Co., Ltd. (the “ Company ”) will be held at the Conference Room, 1999 Yunhe Road, Xiuzhou District, Jiaxing, Zhejiang Province, the People’s Republic of China (the “ PRC ”) on Monday, 21 November 2016 immediately after the conclusion of the Domestic Shareholders’ Class Meeting held at the same date or any adjournment thereof for the purpose of considering, and if thought fit, passing, with or without modifications, the following resolutions. Unless otherwise defined, capitalised terms used herein shall have the meanings as those defined in the circular of the Company dated 5 October 2016.

SPECIAL RESOLUTIONS

(1) Proposed A Share Offering:
(a) class of shares to be issued;
(b) nominal value per share;
(c) place of listing;
(d) offer size;
(e) pricing methodology;
(f) target subscribers;
(g) method of offering; and
(h) validity period of the resolutions;
(2) proposal on granting authorisation to the Board to handle matters in relation to the Proposed A Share Offering;
(3) use of proceeds from the Proposed A Share Offering;
(4) distribution plan of the accumulated undistributed profits before the Proposed A Share Offering;
(5) amendments to the Articles;

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NOTICE OF H SHAREHOLDERS’ CLASS MEETING

(6) price stabilising for the A Shares within three years after the Proposed A Share Offering;
(7) undertakings in connection with the Proposed A Share Offering and related restrictive measures;
(8) proposal on dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures;
(9) undertakings from the Directors and senior management of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures;
(10) undertakings from the actual controllers of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures; and
(11) dividend distribution plan for the three years after the Proposed A Share Offering.

By order of the Board of Flat Glass Group Co., Ltd. Ruan Hongliang Chairman

Jiaxing, Zhejiang, the PRC 5 October 2016

Notes:

In order to ascertain H Shareholders’ entitlement to attend and vote at the H Shareholders’ Class Meeting, the register of members of the Company will be closed from 21 October 2016 (Friday) to 21 November 2016 (Monday) (both days inclusive), during which period no transfer of shares will be registered. In order to qualify for attending and voting at the forthcoming H Shareholders’ Class Meeting, all transfer documents must be lodged with the Company’s H share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration before 4:30 p.m. on 20 October 2016 (Thursday). H Shareholders whose names appear on the register of members of the Company on 21 November 2016 (Monday) are entitled to attend and vote at the H Shareholders’ Class Meeting.
H Shareholders who are entitled to attend and vote at the H Shareholders’ Class Meeting may appoint one or more proxies to attend and vote on their behalf. A proxy need not be a shareholder of the Company.
The instrument appointing a proxy must be in writing under the hand of an H Shareholder or his attorney duly authorized in writing. If the H Shareholder is a legal person, that instrument must be executed either under its seal or under the hand of its director or other attorney duly authorized to sign the same.
In order to be valid, the proxy form for the H Shareholders’ Class Meeting must be deposited by hand or by post to the H share registrar of the Company, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 24 hours

NH-2

NOTICE OF H SHAREHOLDERS’ CLASS MEETING

before the time for holding the H Shareholders’ Class Meeting (or any adjournment thereof) for taking the poll. If the proxy form is signed by a person under a power of attorney or other authority, a notarial copy of that power of attorney or authority shall be deposited at the same time as mentioned in the proxy form. Completion and return of the proxy form will not preclude H Shareholders from attending and voting in person at the H Shareholders’ Class Meeting or any adjourned meetings should they so wish.

H Shareholders or their proxies shall provide their identification documents when attending the H Shareholders’ Class Meeting. If corporate H Shareholders appoint authorized representative to attend the H Shareholders’ Class Meeting, the authorized representative shall produce his/her identity documents and a notarially certified copy of the relevant authorization instrument signed by the board of directors or other authorized parties of the corporate H Shareholders or other notarially certified documents allowed by the Company. Proxies shall produce their identity documents and the proxy form signed by the H Shareholders or their attorney when attending the H Shareholders’ Class Meeting.
H Shareholders who intend to attend the H Shareholders’ Class Meeting should complete the reply slip and return it by hand or by post to the H share registrar of the Company on or before 1 November 2016 (Tuesday).
H Shareholders attending the H Shareholders’ Class Meeting shall be responsible for their own travel and accommodation expenses.

NH-3

AI assistant

Flat Glass Group Co., Ltd. — Proxy Solicitation & Information Statement 2016

51063_rns_2016-10-04_c7cb75a3-3f8c-4b79-bc08-ed5a571b5787.pdf

Flat Glass Group Co., Ltd.

(stock code: 6865)

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

LETTER FROM THE BOARD

Flat Glass Group Co., Ltd.

(stock code: 6865)

(1) PROPOSED A SHARE OFFERING

INTRODUCTION

LETTER FROM THE BOARD

SPECIAL RESOLUTIONS

ORDINARY RESOLUTIONS

LETTER FROM THE BOARD

PROPOSED A SHARE OFFERING

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

OTHER RESOLUTIONS RELATING TO THE PROPOSED A SHARE OFFERING

LETTER FROM THE BOARD

LETTER FROM THE BOARD

2. Use of proceeds from the Proposed A Share Offering

LETTER FROM THE BOARD

3. Distribution plan of the accumulated undistributed profits before the Proposed A Share Offering

4. Proposed amendments to the Articles

5. Proposed amendments to certain corporate governance rules

LETTER FROM THE BOARD

6. Price stabilising plan for the A Shares within three years after the Proposed A Share Offering

7. Undertakings in connection with the Proposed A Share Offering and related restrictive measures

LETTER FROM THE BOARD

8. Proposal on dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures

9. Undertakings from the Directors and senior management of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures

10. Undertakings from the actual controllers of the Company on the dilution of immediate returns as a result of the Proposed A Share Offering and related remedial measures

LETTER FROM THE BOARD

11. Dividend distribution plan for the three years after the Proposed A Share Offering

OTHER INFORMATION FOR THE PROPOSED A SHARE OFFERING

Reasons and benefits of the A Share Offering

Fund raising activities since the initial public offering of H Shares

Use of Proceeds from the initial public offering of H Shares

LETTER FROM THE BOARD

Effects of the A Share Offering on the shareholding structure of the Company

Public Float

PROPOSED CHANGE OF INDEPENDENT NON-EXECUTIVE DIRECTOR AND CHANGE OF COMPOSITION OF BOARD COMMITTEES

Resignation of independent non-executive Director

LETTER FROM THE BOARD

Proposed appointment of independent non-executive Director

INTERIM DIVIDEND

CLOSURE OF REGISTER OF MEMBERS

LETTER FROM THE BOARD

NOTICES OF THE EGM AND CLASS MEETINGS

REPLY SLIP AND PROXY FORM

VOTING BY POLL AT THE EGM AND THE CLASS MEETINGS

LETTER FROM THE BOARD

RECOMMENDATION

APPENDIX I USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND FEASIBILITY ANALYSIS

USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND FEASIBILITY ANALYSIS

I. THE PROCEEDS FROM THE PROPOSED A SHARE OFFERING:

II. BACKGROUND AND NECESSITY OF UNDERTAKING INVESTMENT PROJECTS WITH THE PROCEEDS FROM THE PROPOSED A SHARE OFFERING

1. Background of the Proposed A Share Offering

APPENDIX I USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND FEASIBILITY ANALYSIS

USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND FEASIBILITY ANALYSIS

(4) Integrate the Group’s industry chain

III. BASIC INFORMATION OF THE INVESTMENT PROJECTS USING THE PROCEEDS FROM THE A SHARE OFFERING

APPENDIX I

USE OF PROCEEDS FROM THE PROPOSED A SHARE OFFERING AND FEASIBILITY ANALYSIS

ARTICLES OF ASSOCIATION

of

FLAT GLASS GROUP CO., LTD.

Chapter 1 General Provisions

Chapter 2 Objective and Scope of Business

Chapter 3 Shares and Registered Capital

Chapter 4 Decrease and Buyback of Shares

Chapter 5 Financial Assistance to Acquire Shares of the Company

Chapter 6 Shares and Shareholders’ Register

Chapter 7 Rights and Obligations of Shareholders

Chapter 8 General Meetings

Flat Glass Group Co., Ltd. Proxy Solicitation & Information Statement 2016

(I ) Chapter 16 Appointment of Certified Public Accountants