GOLDWIND SCIENCE&TECHNOLOGY CO.,LTD. — Capital/Financing Update 2010

Jun 7, 2010

IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.

XINJIANG GOLDWIND SCIENCE & TECHNOLOGY CO., LTD.[*]

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

GLOBAL OFFERING

Number of Offer Shares under the Global Offering : 395,294,000 H Shares (subject to the Over-allotment Option) Number of Hong Kong Public Offer Shares : 39,529,600 H Shares (subject to adjustment) Number of International Offer Shares : 355,764,400 H Shares (subject to adjustment and the Over-allotment Option) Maximum Offer Price : HK$23.00 per H Share (payable in full on application in Hong Kong dollars and subject to refund, plus brokerage of 1%, SFC transaction levy of 0.004% and Hong Kong Stock Exchange trading fee of 0.005%) Nominal Value : RMB1.00 per H Share Stock Code : 2208

Joint Global Coordinators

Joint Bookrunners

Joint Sponsors

==> picture [76 x 45] intentionally omitted <==

Joint Lead Managers

Global Financial Advisors PRC Financial Advisor

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this prospectus, 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 prospectus.

A copy of this prospectus, having attached thereto the documents specified in “Appendix X — Documents delivered to the Registrar of Companies and Available for Inspection”, has been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies Ordinance of Hong Kong (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility for the contents of this prospectus or any other document referred to above.

The Offer Price is expected to be determined by agreement between us and the Joint Bookrunners (on behalf of the Underwriters) on the Price Determination Date. The Price Determination Date is expected to be on or around June 12, 2010 and, in any event, not later than June 20, 2010. The Offer Price will be not more than HK$23.00 and is currently expected to be not less than HK$19.80 per Offer Share unless otherwise announced. The Joint Bookrunners (on behalf of the Underwriters, and with our consent) may reduce the number of Offer Shares and/or the indicative Offer Price range stated in this prospectus at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offering in which case, notice of such reduction will be published in the South China Morning Post (in English) and the Hong Kong Economic Times (in Chinese), and will be posted on the website of the Hong Kong Stock Exchange (www.hkexnews.hk) and on the website of our Company (www.goldwind.cn). If applications for Hong Kong Public Offer Shares have been submitted prior to the day which is the last day for lodging applications under the Hong Kong Public Offering, then even if the number of Offer Shares and/or the indicative Offer Price range is so reduced, such applications cannot be subsequently withdrawn. Further details are set out in the sections entitled “Structure of the Global Offering” and “How to Apply for Hong Kong Public Offer Shares” in this prospectus. If, for whatever reason, the Offer Price is not agreed between us and the Joint Bookrunners (on behalf of the Underwriters) on or before June 20, 2010, the Global Offering (including the Hong Kong Public Offering) will not proceed and will lapse.

The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement to subscribe for, and to procure applicants for the subscription for, Hong Kong Public Offer Shares are subject to termination by the Joint Bookrunners, (for themselves, and on behalf of the Hong Kong Underwriters), if certain grounds arise at or prior to 8:00 a.m. (Hong Kong time) on the day dealings in the H Shares first commence on The Stock Exchange of Hong Kong Limited (such first dealing date is currently expected to be June 22, 2010). Such grounds are set out in the section entitled “Underwriting” in this prospectus. It is important that you refer to that section for further details. We are incorporated, and substantially all of our businesses are located, in the PRC. Potential investors should be aware of the differences in the legal, economic, and financial systems between the PRC and Hong Kong, and the fact that there are different risks relating to investment in PRC incorporated businesses. Potential investors should also be aware that the regulatory framework in the PRC is different from the regulatory framework in Hong Kong, and should take into consideration the different market nature of the H Shares. Such differences and risk factors are set forth in the sections entitled “Risk Factors”, “Appendix VII — Summary of Principal Legal and Regulatory Provisions” and “Appendix VIII — Summary of the Articles of Association” in this prospectus.

The Offer Shares have not been and will not be registered under the Securities Act and may not be offered, sold, pledged or transferred within the United States or to, or for the account or benefit of U.S. persons, except that Offer Shares may be offered, sold or delivered to QIBs in reliance on an exemption from registration under the Securities Act provided by, and in accordance with the restrictions of, Rule 144A or outside the United States in accordance with Rule 903 or Rule 904 of Regulation S.

* For identification purpose only.

June 7, 2010

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EXPECTED TIMETABLE[(1)]

Application lists of the Hong Kong Public Offering open(2) . . . . . . .	11:45 a.m. on Thursday, June 10, 2010
Latest time to complete electronic applications under White Form
eIPO service through the designated website www.eipo.com.hk(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11:30 a.m. on Thursday, June 10, 2010
Latest time to lodge WHITE and YELLOWApplication Forms . . .	12:00 noon on Thursday, June 10, 2010
Latest time to give electronic application instructions to HKSCC(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12:00 noon on Thursday, June 10, 2010
Latest time to complete payment of White Form eIPO applications
by effecting internet banking transfer(s) or PPS payment
transfer(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12:00 noon on Thursday, June 10, 2010
Application lists of the Hong Kong Public Offering close . . . . . . . . .	12:00 noon on Thursday, June 10, 2010
Expected Price Determination Date . . . . . . . . . . . . . . . . . . . . . . . . .	Saturday, June 12, 2010

Announcement of
k the Offer Price;
k the level of applications in the Hong Kong Public Offering;
k the level of indications of interest in the International
Offering; and
k the basis of allotment of the Hong Kong Public Offer Shares
expected to be published in the South China Morning Post (in
English), the Hong Kong Economic Times (in Chinese), on the
website of our Company at www.goldwind.cn and on the website
of the Hong Kong Stock Exchange at www.hkex.com.hk on or
before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Monday, June 21, 2010
Announcement of results of allocations in the Hong Kong Public
Offering (including successful applicants’ identification document
numbers, where applicable) to be available through a variety of
channels including the website of the Hong Kong Stock Exchange
at www.hkex.com.hk and the website of our Company at
www.goldwind.cn, as described in the paragraphs headed
“Publication of Results” and “Dispatch/Collection of H Share
Certificates and Refund Monies” in the section entitled “How to
Apply for Hong Kong Public Offer Shares” . . . . . . . . . . . . . . . . .	Monday, June 21, 2010
Results of allocations in the Hong Kong Public Offering will be
available at www.iporesults.com.hk with a “search by ID”
function. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Monday, June 21, 2010
H Share certificates in respect of wholly or partially successful
applications will be dispatched or deposited into CCASS on or before(5) to (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Monday, June 21, 2010
Refund cheques (if applicable) will be dispatched on or before(6) to (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Monday, June 21, 2010
White Form e-Refund payment instructions or refund cheques (if applicable) will be dispatched on or before(6) . . . . . . . . . . . . . . . .	Monday, June 21, 2010
Dealings in H Shares on the Hong Kong Stock Exchange expected
to commence on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Tuesday, June 22, 2010

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EXPECTED TIMETABLE

Notes:

• (1) All times refer to Hong Kong local time, except as otherwise stated. Details of the structure of the Global Offering, including its conditions, are set out in the section entitled “Structure of the Global Offering” in this prospectus.

• (2) If there is a “black” rainstorm warning or a tropical cyclone warning signal number eight or above in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, June 10, 2010, the application lists will not open on that day. Further information is set out in the paragraph headed “Effect of bad weather on the opening of the application lists” in the section entitled “How to Apply for Hong Kong Public Offer Shares” in this prospectus.

• (3) You will not be permitted to submit your application through the designated website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you have already submitted your application and obtained an application reference number from the designated website prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment of application monies) until 12:00 noon on the last day for submitting applications, when the application lists close.

• (4) Applicants who apply for H Shares by giving electronic application instructions to HKSCC should refer to the paragraph headed “Applying by giving electronic application instructions to HKSCC via CCASS” in the section entitled “How to Apply for Hong Kong Public Offer Shares” in this prospectus.

• (5) H Share certificates will only become valid certificates of title if the Global Offering has become unconditional in all aspects and neither of the Underwriting Agreements has been terminated in accordance with its terms. Investors shall have to bear all the risks of dealing in H Shares on the basis of publicly available allocation details prior to the receipt of H Share certificates or prior to the H Share certificates becoming valid certificates of title.

• (6) e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially unsuccessful applications and in respect of successful applications if the final Offer Price is less than the price payable on application. Part of your Hong Kong identity card number or passport number or, if you are joint applicants, part of the Hong Kong identity card or passport number of the first-named applicant, provided by you may be printed on your refund cheque, if any. This data may also be transferred to a third party for refund purposes. Your banker may require verification of your Hong Kong identity card number or passport number before encashment of your refund cheque. Inaccurate completion of your Hong Kong identity card number or passport number may lead to a delay in encashment of or may invalidate your refund cheque.

• (7) Applicants who apply on WHITE Application Forms for 1,000,000 H Shares or more under the Hong Kong Public Offering and have indicated in their Application Forms their wish to collect H Share certificates and refund cheques (as applicable) in person from our H Share Registrar may collect (where applicable) share certificates and (where applicable) refund cheques in person from our H Share Registrar, at Shops 1712 - 1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, from 9:00 a.m. to 1:00 p.m. on Monday, June 21, 2010. Applicants being individuals who opt for personal collection must not authorize any other person to make collection on their behalf. Applicants being corporations who opt for personal collection must attend by their authorized representatives each bearing a letter of authorization from his corporation stamped with the corporation’s chop. Both individuals and authorized representatives (if applicable) must produce, at the time of collection, evidence of identity acceptable to our H Share Registrar.

• (8) Applicants who apply on YELLOW Application Forms for 1,000,000 H Shares or more under the Hong Kong Public Offering and have indicated in their Application Forms their wish to collect refund cheques (where relevant) in person may do so but may not elect to collect their H Share certificates, which will be deposited into CCASS for credit to their designated CCASS Participants’ stock accounts or CCASS Investor Participant stock accounts, as appropriate. The procedure for collection of refund cheques for applicants who apply on YELLOW Application Forms for H Shares is the same as that for WHITE Application Form applicants.

• (9) Applicants who apply for 1,000,000 Hong Kong Public Offer Shares or more through the White Form eIPO service by submitting an electronic application to the designated White Form eIPO Service Provider through the designated website at www.eipo.com.hk and whose applications are wholly or partially successful, may collect H Share certificate(s) in person from our H Share Registrar, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, from 9:00 a.m. to 1:00 p.m. on Monday, June 21, 2010, or such other date as notified by our Company in the newspapers as the date of dispatch/collection of H Share certificates/ e-Refund payment instructions/refund cheques.

For applicants who apply for less than 1,000,000 Hong Kong Public Offer Shares, H Share certificate(s) will be sent to the address specified in the applicant’s application instructions to the designated White Form eIPO Service Provider through the designated website at www.eipo.com.hk on Monday, June 21, 2010 by ordinary post and at the applicant’s own risk.

Applicants who paid the application monies from a single bank account may have e-Refund payment instructions (if any) dispatched to the application payment bank account on Monday, June 21, 2010. Applicants who used multiple bank accounts to pay the application monies may have refund cheques (if any) dispatched to the applicants on Monday, June 21, 2010.

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EXPECTED TIMETABLE

• (10) Uncollected H Share certificates and refund cheques will be dispatched by ordinary post at the applicants’ own risk to the addresses specified in the relevant Application Forms. Further information is set out in the paragraph headed “Dispatch/Collection of H Share Certificates and Refund Monies” in the section entitled “How to Apply for Hong Kong Public Offer Shares” in this prospectus.

You should read carefully the sections entitled “Underwriting”, “Structure of the Global Offering” and “How to Apply For Hong Kong Public Offer Shares” in this prospectus for details relating to the structure and conditions of the Global Offering, how to apply for Hong Kong Public Offer Shares and the expected timetable, including, among other things, conditions, effect of bad weather and the dispatch of refund cheques and share certificates.

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CONTENTS

This prospectus is issued by Xinjiang Goldwind Science & Technology Co., Ltd. solely in connection with the Hong Kong Public Offering and the Hong Kong Public Offer Shares and does not constitute an offer to sell or a solicitation of an offer to buy any security other than the Hong Kong Public Offer Shares. This prospectus may not be used for the purpose of, and does not constitute, an offer to sell or a solicitation of an offer to buy in any other jurisdiction or in any other circumstances. No action has been taken to permit a public offering of the Offer Shares or the distribution of this prospectus in any jurisdiction other than Hong Kong. The distribution of this prospectus and the offering and sale of the Offer Shares in other jurisdictions are subject to restrictions and may not be made except as permitted under the applicable securities laws of such jurisdictions pursuant to registration with or authorization by the relevant securities regulatory authorities or an exemption therefrom. You should rely only on the information contained in this prospectus and the Application Forms to make your investment decision. We have not authorized anyone to provide you with information that is different from what is contained in this prospectus. Any information or representation not included in this prospectus must not be relied on by you as having been authorized by us, the Joint Global Coordinators, the Joint Sponsors, the Joint Bookrunners, any of the Underwriters, any of our or their respective directors or advisors, or any other person or party involved in the Global Offering. Information contained in our website, located at www.goldwind.cn, does not form part of this prospectus.

	Page
Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	i
Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	iv
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Glossary of Technical Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
Waivers from Strict Compliance with the Listing Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	45
Information About This Prospectus and the Global Offering. . . . . . . . . . . . . . . . . . . . . . . . . . . .	47
Directors, Supervisors and Parties Involved in the Global Offering. . . . . . . . . . . . . . . . . . . . . . .	51
Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	56
Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	58
Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	70
Our History and Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	82
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	91
Connected Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	127
Directors, Supervisors and Senior Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	131
Substantial Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	141
Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	143

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CONTENTS

			Page
Cornerstone Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			150
Financial Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			152
Future Plans and Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			190
Underwriting. .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		192
Structure of the Global Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			199
How to Apply for Hong Kong Public Offer Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			206
Appendix I	—	Accountants’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Appendix II	—	Profit Forecast. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
Appendix III	—	Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . . . .	III-1
Appendix IV	—	Unaudited Interim Financial Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
Appendix V	—	Property Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1
Appendix VI	—	Taxation and Foreign Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VI-1
Appendix VII	—	Summary of Principal Legal and Regulatory Provisions. . . . . . . . . . . . . . .	VII-1
Appendix VIII	—	Summary of the Articles of Association. . . . . . . . . . . . . . . . . . . . . . . . . . . .	VIII-1
Appendix IX	—	Statutory and General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IX-1
Appendix X	—	Documents Delivered to the Registrar of Companies and Available for
		Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	X-1

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SUMMARY

This summary aims to give you an overview of the information contained in this prospectus. As this is a summary, it does not contain all the information that may be important to you and is qualified in its entirety by, and should be read in conjunction with, the full text in this prospectus. You should read the whole document including the appendices hereto, which constitute an integral part of this prospectus, before you decide to invest in our Offer Shares.

There are risks associated with any investment. Some of the particular risks in investing in our Offer Shares are summarized in the section entitled “Risk Factors” in this prospectus. You should read that section carefully before you decide to invest in our Offer Shares.

OVERVIEW

We are a leading manufacturer of wind turbine generators and provider of complete wind power solutions in China. Our primary business is WTG R&D, manufacturing and sales. We also engage in the provision of comprehensive wind power services and the development of wind farms for sale to wind farm operators and investors. As an enterprise with one of the longest track records in the PRC wind power equipment manufacturing industry, we possess substantial technical expertise, strong independent R&D capabilities and have successfully introduced innovative leading edge wind turbine technologies to the PRC market. Most of our core management team have specialized in wind power for many years, and possess significant industry experience in wind energy development and operation, giving us a deep understanding of our client base and their operational needs. Our comprehensive quality assurance system and after-sales service operations have also contributed to achieving our dominant market position. According to the International Wind Energy Development — World Market Update published by BTM, the accumulated installed capacity of WTGs manufactured by us reached 5.3 GW as of December 31, 2009, representing a market share in the PRC of approximately 21%. In 2009, our market share in the PRC in terms of newly installed capacity increased approximately 2 percentage points as compared to the previous year to approximately 20%, ranking us the fifth largest WTG manufacturer globally and the second largest in the PRC. The World Wind Energy Association, or WWEA, awarded us the World Wind Energy Award 2006 for our contribution to the development of the international wind power industry.

• k For our WTG R&D, manufacturing and sales business, we focus on the research, design, manufacturing and sales of premium quality WTGs with high efficiency and availability. Our main product is currently the 1.5 MW direct-drive permanent magnet WTG, and we also produce the 750 kW stall-regulated WTG. Throughout our corporate history, our customers have primarily been China’s large power producers and other enterprises investing in renewable energy, and our products and services have been sold across the PRC, with over 5,800 of our WTGs installed in 19 of China’s provinces as of March 31, 2010. Apart from our business in the domestic market, we have also embarked on sales of our WTGs in international markets. For the three years ended December 31, 2007, 2008 and 2009, the revenue generated from our WTG R&D, manufacturing and sales business segment was RMB3,079.2 million, RMB6,299.3 million and RMB10,347.4 million, respectively, and accounted for 99.7%, 98.2% and 97.0% of our total revenue.

• k For our wind power services business, we offer customers a complete range of services covering the whole process of developing a wind farm project, from preliminary investment consultancy and preconstruction project services such as feasibility studies and wind measurement, to project construction services such as EPC contracting, to post-construction operation and maintenance services such as equipment servicing and wind farm operation and maintenance. As of March 31, 2010, we had provided preliminary investment consultancy and pre-construction services for 275 projects, project construction

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SUMMARY

services for 123 wind farms, and post-construction operation and maintenance services for 72 wind farms with total installed capacity of 4,129.1 MW. For the three years ended December 31, 2007, 2008 and 2009, the revenue generated from our wind power services business segment was RMB9.8 million, RMB29.5 million and RMB215.4 million, respectively, and accounted for 0.3%, 0.4% and 2.0% of our total revenue.

• k For our wind farm investment, development and sales business, we are able to provide wind farm operators and investors with completed wind farms that we have invested in and developed, and equipped with our WTGs. As of March 31, 2010, we developed 14 wind farms with total installed capacity of 628.5 MW and attributable installed capacity of 471.5 MW, of which four completed wind farms were sold. We generate income from sale of equity interests in the project companies we set up to develop the wind farms, and income from such sale is recorded under other income and gains. During the Track Record Period, income from sale of completed wind farms was nil, RMB263.1 million and RMB189.8 million, respectively. For our completed wind farms yet to be sold, we put them into operation and generate revenue from the tariffs received from the power generated. As of March 31, 2010, we had three completed wind farms yet to be sold. For the three years ended December 31, 2007, 2008 and 2009, our revenue for this business segment was nil, RMB88.5 million and RMB103.7 million, respectively, and accounted for 0.0%, 1.4% and 1.0% of our total revenue.

We have strategically leveraged the depth of our R&D and manufacturing, services and wind farm development capabilities to achieve synergies among our three business segments and formed an advanced model as a provider of complete solutions covering multiple aspects of the wind power industry value chain. No other PRC WTG manufacturer is engaged in the provision of complete wind power solutions on a scale similar to ours.

Our main product technology is the direct-drive permanent magnet full-power rectification technology, which holds four significant advantages over other wind turbine technologies, being high efficiency, high reliability, superior grid connectivity, and low spare parts and consumable materials requirements. We believe these advantages are greatly valued by our customers and the power grids for whom they generate electricity. We have successfully introduced our specialized wind turbine series, which adopt this technology and are efficiently adapted to the PRC’s diverse operating conditions, including low and high temperatures, high altitude, low wind velocity and coastal areas.

We possess a comprehensive technology development system and have established three R&D centers in Beijing and Urumqi, PRC and Neunkirchen, Germany, where the headquarters of our subsidiary, Vensys AG, is based, with specialized research teams that focus on developing next generation technology and product improvements. We are also engaged in the in-house design and manufacture of core parts and components. This reduces our production cost and also enables us to obtain independent rights for key wind turbine technologies. We have completed the design and production of our 2.5 MW direct-drive permanent magnet WTG and 3.0 MW hybrid-drive WTG prototypes, and achieved successful grid connection. Our 5.0 MW WTG is currently under development. We independently developed our MW-level WTGs through extensive R&D activities focused on our advanced direct-drive permanent magnet full-power rectification technology, whereas most Chinese WTG manufacturers generally acquire wind turbine technologies through licensing. The strength of our R&D capabilities is further evidenced by our ownership of six proprietary technologies, 25 patents, and 39 pending patents as of the Latest Practicable Date. In addition to achieving widespread customer acceptance, we have been called upon by the relevant PRC authorities to lead the drafting of eight national and local wind power industry technical standards, and are currently involved in the drafting of a further three such national standards.

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SUMMARY

We undertook an initial public offering and listing of our A Shares on the SZSE in 2007. During the Track Record Period, we have experienced significant growth in revenues and maintained good profitability. For the three years ended December 31, 2007, 2008 and 2009, our revenue was RMB3,089.0 million, RMB6,417.3 million and RMB10,666.5 million, respectively, and our profit attributable to owners of our Company was RMB624.6 million, RMB906.4 million and RMB1,745.6 million, respectively, growing at a CAGR of 85.8% and 67.2%, between 2007 and 2009, respectively. During the same period, our sales volume of WTGs was 754.5 MW, 1,372.5 MW and 2,035.5 MW, respectively, growing at a CAGR of 64.3% between 2007 and 2009.

OUR COMPETITIVE STRENGTHS

We believe our historical success and future prospects are underpinned by a combination of competitive strengths, including:

• k We are a leader in the PRC WTG manufacturing industry with extensive sector experience, and have played an active role in the rapid growth of China’s wind power market.

• k We possess superior technology and strong independent R&D, design and product development capabilities.

• k We have an advanced business model as a provider of complete wind power solutions and continue to discover new value along the entire wind power industry value chain.

• k We are able to provide customers with comprehensive, timely and efficient after-sales services.

• k We have strong capabilities to design and manufacture core components in-house and optimize our supply chain, enabling us to reduce cost of production while assuring quality.

• k We have an experienced management team, and are continuously recruiting new talent.

OUR STRATEGIES

We seek to maintain and further enhance our position in the business of WTG R&D, manufacturing and sales, continue to be a leading provider of complete wind power solutions, expand our business globally and create maximum customer value. To this end, we plan to carry out or are in the process of carrying out the following strategies:

• k Maintain and enhance market leading position in China.

• k Continue to focus on technology and product innovation to develop more advanced WTGs.

• k Continuously reduce costs and further optimize our supply chain.

• k Actively grow our wind power services and wind farm investment, development and sales businesses.

• k Expand into attractive international markets.

– 3 –

SUMMARY

SUMMARY FINANCIAL INFORMATION

The following tables set forth summary consolidated financial information of our Group. We have derived the consolidated financial information for the three years ended December 31, 2007, 2008 and 2009 and the three months ended March 31, 2010 from the Accountants’ Report in Appendix I and the unaudited interim financial report in Appendix IV to this prospectus. The summary consolidated financial information should be read together with, and is qualified in its entirety by reference to, the consolidated financial statements set forth in the Accountants’ Report in Appendix I to this prospectus, including the related notes.

Consolidated Statements of Comprehensive Income

				Three
				months
				ended
	**Year **	ended December 31,		March 31,
	2007	2008	2009	2010
				(unaudited)
		**RMB in **	million
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,089.0	6,417.3	10,666.5	1,838.7
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(2,177.2)	(4,895.9)	(7,908.9)	(1,326.5)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	911.8	1,521.4	2,757.6	512.2
Other income and gains, net. . . . . . . . . . . . . . . . . . . . . . . .	38.2	337.3	335.6	35.5
Selling and distribution costs . . . . . . . . . . . . . . . . . . . . . . .	(107.2)	(286.7)	(689.8)	(123.5)
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . .	(161.9)	(237.0)	(276.3)	(62.6)
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(36.3)	(145.9)	(77.4)	(29.4)
Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(22.9)	(43.0)	(62.8)	(13.1)
Share of profits and losses of:
Jointly-controlled entities . . . . . . . . . . . . . . . . . . . . . . . .	—	—	(0.3)	—
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	—	—	4.0	(1.0)
PROFIT BEFORE TAX. . . . . . . . . . . . . . . . . . . . . . . . . . .	621.7	1,146.1	1,990.6	318.1
Income tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8.1	(120.9)	(200.0)	(60.5)
PROFIT FOR THE YEAR/PERIOD . . . . . . . . . . . . . . . . . .	629.8	1,025.2	1,790.6	257.6
Other comprehensive income:
Exchange differences on translation of foreign operations . . .	1.8	(24.3)	7.9	(18.8)
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR/PERIOD, NET OF TAX . . . . . . . . . . . . . . . . . . .	631.6	1,000.9	1,798.5	238.8
Profit attributable to:
Owners of the Company. . . . . . . . . . . . . . . . . . . . . . . . .	624.6	906.4	1,745.6	248.4
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5.2	118.8	45.0	9.2
	629.8	1,025.2	1,790.6	257.6
Total comprehensive income attributable to:
Owners of the Company. . . . . . . . . . . . . . . . . . . . . . . . .	626.4	889.2	1,753.5	229.6
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5.2	111.7	45.0	9.2
	631.6	1,000.9	1,798.5	238.8
Earnings per share attributable to ordinary equity holders of
the Company:
Basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	RMB0.31	RMB0.40	RMB0.78	RMB0.11

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SUMMARY

Consolidated Statements of Financial Position

Non-current assets Property, plant and equipment . . . . . . . . . . . . . Investment properties . . . . . . . . . . . . . . . . . . . Prepaid land lease payments. . . . . . . . . . . . . . . Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . Other intangible assets . . . . . . . . . . . . . . . . . . Interests in jointly-controlled entities . . . . . . . . . Interests in associates . . . . . . . . . . . . . . . . . . . Available-for-sale investments . . . . . . . . . . . . . Deferred tax assets . . . . . . . . . . . . . . . . . . . . . Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . Other long-term assets. . . . . . . . . . . . . . . . . . . Total non-current assets. . . . . . . . . . . . . . . . . Current assets Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and bills receivables . . . . . . . . . . . . . . . . Prepayments, deposits and other receivables . . . . Derivative financial instruments . . . . . . . . . . . . Pledged deposits. . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents . . . . . . . . . . . . . . . . Total current assets. . . . . . . . . . . . . . . . . . . . Current liabilities Trade and bills payables . . . . . . . . . . . . . . . . . Other payables . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments . . . . . . . . . . . . Interest-bearing bank and other borrowings. . . . . Tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . Dividend payable . . . . . . . . . . . . . . . . . . . . . . Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . Total current liabilities . . . . . . . . . . . . . . . . . Net current assets. . . . . . . . . . . . . . . . . . . . . Total assets less current liabilities. . . . . . . . . . Non-current liabilities Interest-bearing bank and other borrowings. . . . . Deferred tax liabilities . . . . . . . . . . . . . . . . . . . Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . Government grants . . . . . . . . . . . . . . . . . . . . . Other long-term liabilities . . . . . . . . . . . . . . . . Total non-current liabilities . . . . . . . . . . . . . . . Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity attributable to owners of the Company Issued share capital. . . . . . . . . . . . . . . . . . . . . Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proposed dividend . . . . . . . . . . . . . . . . . . . . . Minority interests . . . . . . . . . . . . . . . . . . . . . Total equity . . . . . . . . . . . . . . . . . . . . . . . . .	As at December 31,	As at December 31,	2009 2010 As at March 31, (unaudited) million 2,440.6 2,651.7 81.0 80.4 160.6 170.7 249.9 234.0 346.6 333.8 69.7 49.5 47.4 46.3 9.0 9.0 190.5 181.7 1.9 2.3 — — 3,597.2 3,759.4 2,853.5 4,006.0 2,919.6 2,912.8 830.4 1,292.2 4.7 — 218.5 323.2 4,459.0 2,388.1 11,285.7 10,922.3 3,760.2 3,545.5 2,055.8 1,436.1 10.7 18.1 601.9 924.2 212.3 110.1 — 140.0 241.3 280.8 6,882.2 6,454.8 4,403.5 4,467.5 8,000.7 8,226.9 2,022.1 2,145.3 90.9 82.1 195.8 210.0 140.6 141.1 24.0 22.3 2,473.4 2,600.8 5,527.3 5,626.1 1,400.0 1,400.0 3,661.1 3,106.7 140.0(1) 784.0(2) 5,201.1 5,290.7 326.2 335.4 5,527.3 5,626.1
	2007 404.2 53.3 62.8 — 17.7 — — 4.2 11.7 — — 553.9 971.6 764.1 498.3 — — 2,679.7 4,913.7 934.5 862.2 — 470.0 — — 7.9 2,274.6 2,639.1 3,193.0 153.0 — 16.0 75.1 — 244.1 2,948.9 500.0 2,333.3 50.0 2,883.3 65.6 2,948.9	2008 RMB in 1,303.4 76.9 79.1 240.2 320.1 — — 26.2 101.9 0.3 2.1 2,150.2 2,119.2 2,619.0 1,036.1 — — 3,286.4 9,060.7 2,544.5 2,671.4 2.3 50.0 184.4 — 51.1 5,503.7 3,557.0 5,707.2 1,281.7 85.6 80.3 98.4 23.5 1,569.5 4,137.7 1,000.0 2,442.5 280.0 3,722.5 415.2 4,137.7

Notes:

(1) On March 25, 2010, our Company’s 2009 annual general meeting approved the distribution of our Company’s consolidated actual distributable profits of RMB1,767.8 million as of December 31, 2009. As partial settlement of this distribution, on April 6, 2010, our Company issued 840 million A Shares and paid cash of RMB140.0 million to holders of our A Shares funded with cash from profits generated by our business.

• (2) On May 26, 2010, our Board of Directors approved the distribution of RMB784.0 million in the form of a cash dividend paid out of our internal cash resources (and not out of our net proceeds from the Global Offering), subject to approval of our Shareholders in a general meeting to be held on June 12, 2010, the settlement date of which will be determined after the general meeting and is expected to be after the Listing. Our H Shareholders shall not be entitled to any portion of this cash dividend. Please see the section entitled “Financial Information — Dividend Policy” in this prospectus.

– 5 –

SUMMARY

FINANCIAL DISCLOSURES AFTER GLOBAL OFFERING

Following the listing of our A Shares on the SZSE, we have been subject to periodic reporting and other information disclosure requirements in the PRC and, as a result, may publicly release information in the PRC from time to time. However, such information and the prospectus for the A Share offering do not form part of this prospectus. Further, under the rules of the SZSE, we are required to publish quarterly results of operations in the PRC containing unaudited financial statements. Pursuant to Rule 13.09(2) of the Listing Rules, our Company will release price sensitive information simultaneously in Hong Kong and China after the listing of our H Shares in Hong Kong, including our Company’s quarterly, interim and annual reports released on the SZSE.

PROFIT FORECAST FOR THE YEAR ENDING DECEMBER 31, 2010

Barring unforeseen circumstances, and based on the bases and assumptions set out in Appendix II to this prospectus, the Directors forecast that the consolidated profit attributable to owners of our Company for the year ending December 31, 2010 will be not less than RMB2,235 million.

All statistics in the following table are based on the assumption that the Over-allotment Option is not exercised.

Forecast net profit attributable to owners of our Company[(1)] . . . . . . . . . . . . not less than RMB2,235 million Unaudited pro forma fully diluted forecast earnings per Share[(2)] . . . . . . . . . no less than RMB0.85 (HK$0.97)

Notes:

(1) The bases and assumptions on which the profit forecast has been prepared are set out in Appendix II to this prospectus. The forecast net profit attributable to owners of our Company for the year ending December 31, 2010 is extracted from the section entitled “Financial Information — Profit forecast for the year ending December 31, 2010” in this prospectus.

• (2) The calculation of the unaudited pro forma fully diluted forecast earnings per Share is based on the forecast net profit attributable to owners of our Company for the year ending December 31, 2010, assuming that the Global Offering had been completed on January 1, 2010 and a total of 2,635,294,000 Shares were in issue during the entire year ending December 31, 2010. The translation of Renminbi into Hong Kong dollars has been made at the rate of RMB0.8772 to HK$1.00, the PBOC Rate prevailing on the Latest Practicable Date.

OFFER STATISTICS

All statistics in this table are based on the assumption that the Over-allotment Option is not exercised.

Market capitalization of H Shares(1) . . . . . . . . . . . . . . . . . . . . . . . . Forecast fully diluted price/earnings multiple on a pro forma basis(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unaudited pro forma adjusted consolidated net tangible asset per Share(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Based on offer price of HK$19.80 HK$8,610 million 20.4 times HK$4.83	Based on offer price of HK$23.00
		HK$10,001 million 23.7 times HK$5.29

Notes:

• (1) The calculation of market capitalization is based on that 434,823,400 H Shares (including 395,294,000 H Shares and 39,529,400 H Shares converted from A Shares and transferred to the NSSF) are expected to be outstanding immediately following the Global Offering.

• (2) The calculation of the forecast fully diluted price/earnings multiple on a pro forma basis is based on the unaudited pro forma forecast earnings per Share for the year ending December 31, 2010 and the respective Offer Prices of HK$19.80 and HK$23.00 per H Share.

• (3) The unaudited pro forma adjusted consolidated net tangible asset per Share is calculated after making the adjustments referred to in Appendix III and on the basis that 2,635,294,000 Shares are expected to be in issue immediately following the Global Offering.

– 6 –

SUMMARY

DIVIDEND POLICY

After completion of the Global Offering, our Shareholders will be entitled to receive dividends declared by our Company. The proposal of payment and the amount of our dividends will be made at the discretion of the Board and will depend on our general business condition and strategies, cash flows, financial results and capital requirements, interests of the Shareholders, taxation conditions, statutory and regulatory restrictions and other factors that the Board deems relevant. Any dividend distribution shall also be subject to the approval of the Shareholders in the Shareholders’ meeting.

Under the PRC Company Law and the Articles of Association, we will pay dividends out of our after-tax profit only after we have made the following allocations:

• k recovery of accumulated losses, if any;

• k allocations to the statutory reserve fund equivalent to 10% of our Company’s after-tax profit; and

• k allocations, if any, to a discretionary reserve fund approved by the Shareholders in a Shareholders’ meeting.

When the statutory reserve fund reaches and is maintained at or above 50% of our registered capital, no further allocations to this statutory fund will be required. Our profit distributable for the above-mentioned allocations and our dividend distribution shall be our after-tax profit as determined by PRC GAAP or IFRS, whichever is lower. All of our Shareholders have equal rights to dividends and distributions in the form of stock or cash. For holders of our H Shares, cash dividend payments, if any, will be declared by the Board in Renminbi and paid in Hong Kong dollars. According to the Articles of Association, the cumulative profit distribution in cash by our Company for any last-three-most-recent-years period shall be not less than 30% of the average of the same three years’ annual distributable profits.

We distributed dividends in the form of shares and cash amounting to RMB500.0 million and RMB680.0 million during the two years ended December 31, 2007 and 2008, respectively. The Board of Directors on August 31, 2009 and the Shareholders in general meeting on September 25, 2009 approved a resolution that holders of our A Shares are entitled to our distributable profits accumulated prior to January 1, 2010, and holders of our H Shares and A Shares upon the completion of the Global Offering will be equally entitled to our distributable profits accumulated between January 1, 2010 and the Listing Date. On March 25, 2010, our Company’s 2009 annual general meeting approved the distribution of our Company’s consolidated actual distributable profits of RMB1,767.8 million[(1)] . As partial settlement of this distribution, on April 6, 2010, our Company issued 840 million A Shares and paid cash of RMB140.0 million to holders of our A Shares funded with cash from profits generated by our business. On May 26, 2010, our Board of Directors approved the distribution of RMB784.0 million in the form of a cash dividend paid out of our internal cash resources (and not out of our net proceeds from the Global Offering), subject to approval of our Shareholders in a general meeting to be held on June 12, 2010, the settlement date of which will be determined after the general meeting and is expected to be after the Listing. Our H Shareholders shall not be entitled to any portion of this cash dividend. Our PRC legal advisor has confirmed that the declaration and payment of the foregoing dividend distribution is legal and valid under applicable PRC laws and regulations and our Articles of Association. Our historical dividends may not be indicative of the amount of our future dividends.

(1) Equal to the retained profits of our Group in the amount of RMB1,871.0 million as of December 31, 2009 according to PRC GAAP minus the statutory surplus reserve appropriated by our subsidiaries not distributable to our Shareholders, in the amount of RMB103.2 million.

– 7 –

SUMMARY

USE OF PROCEEDS

Assuming an Offer Price of HK$21.40 per H share (which is the mid-point of the indicative Offer Price range set forth on the cover page of the prospectus), we estimate that we will receive net proceeds of approximately HK$8,078.6 million from the Global Offering after deducting the underwriting commissions and other estimated expenses, if the Over-allotment Option is not exercised. If the Over-allotment Option is exercised in full, we estimate that the additional net proceeds to us from the offering of these additional H Shares will be approximately HK$1,211.8 million, after deducting the underwriting commissions and other estimated expenses, assuming an Offer Price of HK$21.40 per H Share.

In line with our strategies, we intend to use our proceeds from the Global Offering for the purposes and in the amounts set out below:

• k approximately 40.2% will be used for the construction of production bases and optimization of our business operations;

• k approximately 14.6% will be used for the design and development of more advanced WTGs and certain related components;

• k approximately 24.1% will be used for expansion into the international market, primarily the United States, Australia and Europe, and promotional activities as described in the section entitled “Business — Our Strategies — Expand into attractive international markets” in this prospectus;

• k approximately 11.1% will be used for the repayment of bank loans, including, among others (i) two three-year floating term loans in the total amount of EUR16.4 million at an annual interest rate of 120 basis points (bps) above EURIBOR, and EUR20.0 million at an annual interest rate of 115 bps above EURIBOR for the initial 12 months, and subsequently at 115 bps above six-month EURIBOR, which will be due for repayment on March 15, 2011 and April 15, 2011, respectively; (ii) a one-year floating rate short-term bank facility of EUR19.0 million for our subsidiary Vensys AG’s working capital purposes at an annual interest rate of 120 bps above EURIBOR, which will be due on June 15, 2010; (iii) a 10-year term loan in the total amount of EUR3.5 million at an annual interest rate of 7% before June 30, 2013 and adjustable rate after July 1, 2013, which will be due for repayment on September 30, 2018; and

• k approximately 10.0% will be used as our general working capital.

The allocation of the proceeds used for the above will be adjusted in the event that the Offer Price is fixed at a higher or lower level compared to the mid-point of the estimated offer price range. Assuming the Over-allotment Option is not exercised, if the Offer Price is fixed at HK$23.00 per H Share, being the high end of the stated Offer Price range, the net proceeds will be increased by approximately HK$604.0 million. In such circumstances, we presently intend to use such additional proceeds to increase the net proceeds applied to the same purposes above (other than for the repayment of bank loans and as general working capital) on a pro rata basis. If the Offer Price is fixed at HK$19.80 per H Share, being the low end of the stated Offer Price range, the net proceeds will be decreased by approximately HK$604.0 million. In such circumstances we presently intend to reduce the net proceeds applied to our general working capital.

In the event that the Over-allotment Option is exercised in full, the additional net proceeds of approximately HK$1,211.8 million (assuming the Offer Price is determined at the mid-point of the stated range), approximately HK$1,302.4 million (assuming the Offer Price is determined at the high end of the stated Offer Price range) or approximately HK$1,121.2 million (assuming the Offer Price is determined at the low end of the stated Offer

– 8 –

SUMMARY

Price range) will be applied by our Company for the same purposes above (other than for the repayment of bank loans and as general working capital) on a pro rata basis.

To the extent that the net proceeds of the Global Offering are not immediately required for the above purposes, the Directors currently intend that such proceeds will be placed on short-term deposits with licensed banks or financial institutions in Hong Kong or the PRC.

RISK FACTORS

We believe that there are certain risks involved in our operations. Many of these risks are beyond our control and can be categorized into: (i) risks relating to our business; (ii) risks relating to the industry in which we operate; (iii) risks relating to the PRC; and (iv) risks relating to the Global Offering.

Risks relating to our business

• k We may be affected if the government reduces or ceases its support and encouragement of the wind power industry.

• k We may not be able to continue our rapid growth and implement our business expansion plans successfully.

• k We face intense competition in our major markets.

• k We may not be able to obtain timely and stable supply of the core parts and components required for our business.

• k A significant portion of our revenue is derived from our major customers and changes in their requirements may have a material and adverse effect on our business.

• k We may not be able to develop new products that meet changing market demands or successfully introduce new products in a timely manner.

• k We may not be able to adequately protect our intellectual property rights.

• k If we fail to maintain an effective quality control system, our product quality and thus our business may be materially and adversely affected.

• k If we fail to effectively control costs, in particular the cost of parts and components, our results of operations and financial condition may be materially and adversely affected.

• k Our revenue may fluctuate through the year due to seasonality of business.

• k We are subject to risks associated with changes in preferential tax treatment.

• k Failure to fulfill customer orders due to delays in our production process may have a material and adverse effect on our business prospects, results of operations and financial condition.

• k Clauses in our contracts with customers may be modified.

• k Availability of credit and fluctuations in the interest rates of our bank borrowings and other loans may affect our business expansion or financial performance.

• k We may not be able to obtain wind farm projects with suitable wind resources or realize the expected profit from our development of wind farm projects.

– 9 –

SUMMARY

• k Our results of operations may be materially and adversely affected if we fail to retain or hire qualified personnel at reasonable costs.

• k Our success depends on the stability of our senior management team and successful implementation of our management incentive system.

• k Our international marketing and sales plans and strategies may not yield the desired results.

• k If we are unable to obtain power generation business licenses for wind farms that we own and operate, there may be a material and adverse effect on our business.

• k We have not obtained valid title certificates for some of the properties and land that we own and occupy.

• k We are subject to the risk of product liability claims and in some cases may not have sufficient insurance coverage.

• k Substantial damage to persons or loss of property may occur in the course of our production and construction processes.

• k Our production and operations may be affected by factors beyond our control.

Risks relating to the industry in which we operate

• k If major breakthroughs in other renewable energy technologies result in these technologies being superior to wind power, or the utilization of wind power is affected by the unpredictability of local weather conditions, demand for wind power projects may be affected.

• k The lack of grid infrastructure may restrict or otherwise affect the development of wind farms and the timing of their development and therefore affect our ability to maintain or increase our historical level of operations, and the timing of revenue recognition from those operations.

• k Demand for wind power is dependent upon the overall demand for electric power, and if the overall demand for electric power declines because of an economic downturn in the major markets, our business will be affected.

Risks relating to the PRC

• k Changes in the economic, political and social conditions in the PRC may have a material and adverse effect on our results of operations and financial condition.

• k The slowdown of the Chinese economy may have a material and adverse effect on our results of operations and financial condition.

• k The PRC’s legal system is still evolving, there exist uncertainties as to the interpretation and enforcement of PRC laws, and PRC laws are different from those of common law countries.

• k The recurrence of Severe Acute Respiratory Syndrome or an outbreak of other epidemics, such as bird flu or Type A H1N1 influenza, may materially and adversely affect our results of operations and financial condition.

• k Government control over the conversion of foreign exchange may affect our results of operations and financial condition.

– 10 –

SUMMARY

• k We face foreign exchange and conversion risks, and fluctuation in the value of the RMB may have a material and adverse effect on our business and your investment.

• k It may be difficult to enforce judgments rendered by courts other than PRC courts against us or the Directors, Supervisors or senior management residing in China.

Risks relating to the Global Offering

• k Characteristics of the A Share and H Share markets may differ.

• k The conversion of A Shares to H Shares could have a material and adverse effect on the prevailing market price of the H Shares and our ability to raise capital in the future.

• k As the Offer Price of the H Shares is higher than the net tangible asset value per share, you will experience immediate dilution.

• k The sales or potential sales of substantial amounts of the H Shares in the public market (including any future offering) may affect the prevailing market price of the H Shares and our ability to raise capital in the future, and future additional issuance of securities may dilute your shareholdings.

• k There exist uncertainties about the Vensys Option and potential issuance of additional Shares pursuant to the exercise of the Vensys Option will cause dilution in your shareholdings.

• k There will be a five-Business-Day time gap between pricing and trading of the H Shares offered pursuant to the Global Offering.

• k There is no assurance that we will adopt the same dividend policy as we have adopted in the past.

• k There has been no prior public market for the H Shares, and the liquidity, market price and trading volume of the H Shares may be volatile.

• k Certain industry statistics contained in this prospectus are derived from various publicly available official sources and may not be reliable.

• k Holders of the H Shares may be subject to PRC taxation.

• k You should read the entire prospectus carefully and we strongly caution you not to place any reliance on any information contained in press articles or other media regarding us and the Global Offering.

– 11 –

DEFINITIONS

In this prospectus, unless the context otherwise requires, the following expressions shall have the following meanings. Certain other terms are explained in the section entitled “Glossary of Technical Terms”.

“863 program” The State High-Technology Development Plan, a program funded and administered by the PRC Government intended to stimulate the development of advanced technologies in a wide range of fields “948 program” The Introduction of International Advanced Agricultural Science and Technology Program, approved by the State Council and involving programs relating to the development of the PRC ecology, forestry and agriculture industries “A Shares” Domestic shares of our Company, with a nominal value of RMB1.00 each, which are listed on the SZSE and traded in RMB “Accountants’ Report” The report by Ernst & Young, certified public accountants, our reporting accountants, in the form set out in Appendix I to this prospectus “Application Form(s)” WHITE Application Form(s), YELLOW Application Form(s) and GREEN Application Form(s), or where the context so requires, any of them, relating to the Hong Kong Public Offering “Articles of Association” The Articles of Association, adopted by our Company on May 26, 2010, which shall become effective on the Listing Date and as amended from time to time, a summary of which is set forth in Appendix VIII to this prospectus “ASP” Average selling price(s) “associates” Has the meaning ascribed thereto under the Listing Rules “Bayannur Fuhui” Inner Mongolia Bayannur Fuhui Wind Energy Electricity Co., Ltd. ( ), a company incorporated under the laws of the PRC on April 26, 2004 and a non-wholly owned subsidiary of our Company “Beijing Goldwind” Beijing Goldwind Science & Creation Wind Power Equipment Co., Ltd. ( ), a company incorporated under the laws of the PRC on February 13, 2006 and a wholly owned subsidiary of our Company “Beijing Techwin” Beijing Techwin Electric Co., Ltd. ( ), a company incorporated under the laws of the PRC on December 16, 2008 and a non-wholly owned subsidiary of our Company “Beijing Tianrun” Beijing Tianrun New Energy Investment Co., Ltd. ( ), a company incorporated under the laws of the PRC on April 11, 2007 and a wholly owned subsidiary of our Company

– 12 –

DEFINITIONS

“Beijing Tianyuan” “BTM” “Business Day” “CAGR” “CB Fund” “CCASS” “CCASS Clearing Participant” “CCASS Custodian Participant” “CCASS Investor Participant” “CCASS Participant” “CDM” “CEIC” “CERs” “China” or “PRC”

Beijing Tianyuan Science & Creation Wind Power Technology Co., Ltd. ( ), a company incorporated under the laws of the PRC on September 29, 2005 and a non-wholly owned subsidiary of our Company BTM Consult ApS, an organization that specializes in information and statistics regarding renewable energy and independent of our Company, Directors, Substantial Shareholder(s) and their respective associates A day (other than a Saturday or a Sunday or a public holiday) on which banks in Hong Kong are open for banking business to the public Compounded annual growth rate China-Belgium Direct Equity Investment Fund ( ), a company incorporated under the laws of the PRC on November 18, 2004 and a Shareholder of our Company The Central Clearing and Settlement System established and operated by HKSCC A person admitted to participate in CCASS as a direct clearing participant or a general clearing participant A person admitted to participate in CCASS as a custodian participant A person admitted to participate in CCASS as an investor participant, who may be an individual or joint individuals or a corporation A CCASS Clearing Participant, a CCASS Custodian Participant or a CCASS Investor Participant Clean development mechanism, which allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol to implement an emission-reduction project in developing countries CEIC Data Company Ltd., an organization that specializes in economic databases of emerging and developed markets worldwide, and independent of our Company, Directors, Substantial Shareholder(s) and their respective associates Certified emission reductions, which are carbon credits issued by the CDM Executive Board for emission reductions achieved by CDM projects and verified by a designated operating entity accredited for monitoring CDM projects under the Kyoto Protocol The People’s Republic of China, excluding, only for purposes of this prospectus, Taiwan, the Macau Special Administrative Region of the PRC and Hong Kong

– 13 –

DEFINITIONS

“China Three Gorges” China Three Gorges Corporation ( ) (formerly known as China Three Gorges Project Corporation ( )), a company incorporated under the laws of the PRC and the parent company of China Water “China Water” China Water Resources Investment Group Company ( ) (formerly known as China Water Resources Investment Company ( )), a company incorporated under the laws of the PRC on December 22, 1997, the name of which was changed to China Water Resources Investment Group Company on October 31, 2006, and a Shareholder of our Company “China Water Baotou” China Water Resources Investment Group Baotou Wind Power Equipment Co., Ltd ( ), a company incorporated under the laws of the PRC and a subsidiary of China Water “China Water Xi’an” China Water Resources Investment Group Xi’an Wind Power Equipment Co., Ltd. ( ), a company incorporated under the laws of the PRC and a subsidiary of China Water “Chinese Academy of Meteorological A multi-disciplinary meteorological research institution in the PRC Sciences” directly attached to the China Meteorological Administration, the public service agency under the State Council responsible for organizational and operational management of China’s national meteorological services “Company” Xinjiang Goldwind Science & Technology Co., Ltd. ( ), a joint stock limited liability company incorporated in the PRC on March 26, 2001, and including its subsidiaries as the context requires “Companies Ordinance” The Companies Ordinance (Chapter 32 of the Laws of Hong Kong), as amended and supplemented or otherwise modified from time to time “Connected Person(s)” Has the meaning ascribed thereto under the Listing Rules “Controlling Shareholder(s)” Has the meaning ascribed thereto under the Listing Rules

“Company”

“Cornerstone Investor” The cornerstone investor as described in the section entitled “Cornerstone Investor” in this prospectus “CSRC” China Securities Regulatory Commission ( ), a regulatory body responsible for the supervision and regulation of the PRC securities markets

• “Director(s)” or “Board of Directors”

“EIA”

Director(s) or the board of directors of our Company, respectively

The Energy Information Administration under the Department of Energy of the United States

– 14 –

DEFINITIONS

“EPC” Engineering, Procurement and Construction, a construction arrangement where the company that is contracted to construct the project will be responsible for the design, procurement, and construction, and will deliver the project to the owner after completion of the project construction and passing of the final acceptance inspection “EUR” or “euro” The lawful currency of the member states of the European Union that have adopted the single currency in accordance with the treaty establishing the European Community, as amended “EURIBOR” The EUR interbank offered rate, which is the rate at which a prime bank is willing to lend funds in EUR to another prime bank “GDP” Gross domestic product (all references to GDP growth rates are real as opposed to nominal rates of GDP growth) “Global Financial Advisors” China International Capital Corporation Hong Kong Securities Limited and CCB International Capital Limited “Global Offering” The Hong Kong Public Offering and the International Offering “Goldwind Windenergy” Goldwind Windenergy GmbH, a company incorporated under the laws of Germany on May 18, 2006 and a wholly owned subsidiary of our Company “Green Application Form(s)” The Application Form(s) to be completed by the White Form eIPO Service Provider, Computershare Hong Kong Investor Services Limited “Group”, “us” or “we” Our Company and our subsidiaries “H Shares” Foreign shares in the share capital of our Company, with a Renminbi denominated par value of RMB1.00 each, which are to be subscribed for and traded in HK dollars and for which an application will be made for listing and permission to trade on the Hong Kong Stock Exchange “H Share Registrar” Computershare Hong Kong Investor Services Limited

• “HK$” or “HK dollars” or “Hong Kong dollars” and “cents”

• “HKSCC”

• “HKSCC Nominees”

• “Hong Kong” or “HK”

• “Hong Kong Public Offering”

Hong Kong dollars and cents respectively, the lawful currency of Hong Kong

Hong Kong Securities Clearing Company Limited

HKSCC Nominees Limited, a wholly owned subsidiary of HKSCC The Hong Kong Special Administrative Region of the PRC

The offer for subscription of the Hong Kong Public Offer Shares to the public in Hong Kong at the Offer Price (plus brokerage of 1%, SFC transaction levy of 0.004% and the Hong Kong Stock Exchange trading fee of 0.005%), subject to and in accordance with the terms

– 15 –

DEFINITIONS

and conditions set out in this prospectus and the related Application Forms “Hong Kong Public Offer Shares” The 39,529,600 H Shares being offered for subscription pursuant to the Hong Kong Public Offering (subject to adjustment as described in the section entitled “Structure of the Global Offering” in this prospectus) “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited “Hong Kong Underwriters” The underwriters of the Hong Kong Public Offering whose names are set out in the section entitled “Underwriting — Hong Kong Underwriters” in this prospectus “Hong Kong Underwriting Agreement” The underwriting agreement dated June 4, 2010 entered into by, among others, our Company, the Joint Bookrunners and the Hong Kong Underwriters relating to the Hong Kong Public Offering, the details of which are set out in the section entitled “Underwriting — Hong Kong Underwriters” in this prospectus “IEA” The International Energy Agency, an intergovernmental organization which acts as energy policy advisor to 28 countries, including the United States, Japan and member states of the European Union “IEC” International Electrical Commission, the organization that prepares and publishes international standards for electrical, electronic and related technologies “IFRS” International Financial Reporting Standards, which include standards, amendments and interpretations issued by the International Accounting Standards Board (IASB) “Independent Third Party(ies)” Person(s) who, as far as the Directors are aware after having made all reasonable enquiries, is/are not connected person(s) of our Company within the meaning of the Listing Rules “International Offering” The offer for sale of the International Offer Shares by the International Underwriters to professional and institutional investors at the Offer Price, the details of which are set out in the section entitled “Structure of the Global Offering” in this prospectus “International Offer Shares” The 355,764,400 H Shares being offered for subscription pursuant to the International Offering together, where relevant, with any additional H Shares issued pursuant to the exercise of the Overallotment Option, the number of which is further subject to adjustment as described in the section entitled “Structure of the Global Offering” in this prospectus “International Underwriters” The underwriters of the International Offering, who are expected to enter into the International Underwriting Agreement

– 16 –

DEFINITIONS

• “International Underwriting Agreement” The underwriting agreement relating to the International Offering which is expected to be entered into by, among others, our Company, the Joint Bookrunners and the International Underwriters on or before the Price Determination Date

• “ISO” International Organization for Standardization

• “Joint Bookrunners” China International Capital Corporation Hong Kong Securities Limited, Citigroup Global Markets Asia Limited and Credit Suisse (Hong Kong) Limited

• “Joint Global Coordinators” China International Capital Corporation Hong Kong Securities Limited and Citigroup Global Markets Asia Limited

• “Joint Lead Managers” China International Capital Corporation Hong Kong Securities Limited, Citigroup Global Markets Asia Limited, Taifook Securities Company Limited and Credit Suisse (Hong Kong) Limited

• “Joint Sponsors” China International Capital Corporation Hong Kong Securities Limited, Citigroup Global Markets Asia Limited and Hai Tong Capital (HK) Limited

• “Keshiketengqi Huifeng” Keshiketengqi Huifeng New Energy Co., Ltd. ( ), a company incorporated under the laws of the

• PRC on July 25, 2005 and a former indirectly-owned subsidiary of our Company

• “Kyoto Protocol” The Kyoto Protocol to the “United Nations Framework Convention on Climate Change” passed in 1997

• “Latest Practicable Date” May 27, 2010, being the latest practicable date for ascertaining certain information in this prospectus prior to its publication

“Listing”

Listing of the H Shares on the Main Board

“Listing Date” The date on which dealings in the H Shares commence on the Hong Kong Stock Exchange

• “Listing Rules” The Rules Governing the Listing of Securities on the Hong Kong Stock Exchange, as amended from time to time

• “Main Board” The stock exchange (excluding the option market) operated by the Hong Kong Stock Exchange which is independent from and operated in parallel with the Growth Enterprise Market of the Hong Kong Stock Exchange

“Mandatory Provisions” The Mandatory Provisions for the Articles of Association of Companies to be Listed Overseas ( ) promulgated on August 27, 1994 by the Securities Commission and the State Economic Restructuring Commission ( ), as amended, supplemented or otherwise modified from time to time

– 17 –

DEFINITIONS

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||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|“Ministry of Commerce” or “MOFCOM”|The|Ministry|of|Commerce|of|the|PRC|(|)|
|“MOST”|The|Ministry|of|Science|and|Technology|of|the|PRC|(|
|)|
|“NDRC”|National|Development|and|Reform|Commission|of|the|PRC|
|(|)|
|“NPC”|The|National|People’s|Congress|of|the|PRC|(|
|),|the|national|legislative|body|of|the|PRC|
|“NSSF”|The National Social Security Fund Council of the PRC (|
|), an organization|authorized|by the State|
|Council|which|is|responsible|for|the|administration|of|the|State’s|
|national|social|security|funds|
|“Offer|Price”|The final offer price per Offer Share (exclusive of a brokerage of 1%,|
|SFC|transaction|levy|of|0.004%|and|Hong|Kong|Stock|Exchange|
|trading fee of 0.005%) of not more than HK$23.00 and expected to be|
|not|less|than|HK$19.80,|such|price|to|be|determined|in|the|manner|
|described in the section entitled “Structure of the Global Offering —|
|Pricing|and|Allocation”|in|this|prospectus|
|“Offer|Shares”|The Hong Kong Public Offer Shares and the International Offer Shares|
|with|any|additional|H|Shares|to|be|issued|and|sold|pursuant|to|the|
|exercise|of|the|Over-allotment|Option|
|“Over-allotment|Option”|The|option|to|be|granted|by|our|Company|to|the|International|
|Underwriters|pursuant|to|the|International|Underwriting|
|Agreement,|exercisable|by|the|Joint|Bookrunners|on|behalf|of|the|
|International Underwriters, to require our Company to allot and issue|
|up to an aggregate of 59,294,000 additional new H Shares at the Offer|
|Price (representing 15% of the H Shares initially being offered under|
|the|Global|Offering),|details|of|which|are|described|in|the|section|
|entitled|“Underwriting”|in|this|prospectus|
|“PBOC”|People’s Bank of China (|), the central bank of the PRC|
|“PBOC|Rate”|The|exchange|rate|for foreign|exchange|transactions|set|daily|by the|
|PBOC based on the previous day’s interbank foreign exchange rate in|
|China|and|with|reference|to|prevailing|exchange|rates|on|the|world|
|financial|markets|
|“power|generation|business|license”|Electric power business license for power generation, which should be|
|obtained|by|companies|engaged|in|the|power|generation|business|in|
|the|PRC|pursuant|to|the|Electric|Power|Law|of|the|PRC|(|
|)|and|the|Provisions|for|the|Administration|of|
|Electric|Power|Business|Licenses|(Order|no.|9|issued|by|the|SERC)|
|(|)|

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– 18 –

DEFINITIONS

The Company Law of the PRC ( ), as adopted at the Fifth Session of the Standing Committee of the Eighth NPC on December 29, 1993, which became effective on July 1, 1994, as amended, supplemented or otherwise modified from time to time. The latest revision was approved on October 27, 2005 and came into effect on January 1, 2006

• “PRC Company Law”

• “PRC Financial Advisor”

Haitong Securities Co., Ltd.

Accounting Standards for Business Enterprises and its interpretations issued by the Ministry of Finance of the PRC

• “PRC GAAP”

• “PRC Government” or “Chinese Government”

The central government of the PRC and all governmental subdivisions (including provincial, municipal and other regional or local government entities) and organizations of such government or, as the context requires, all of them The agreement to be entered into among our Company and the Joint Bookrunners (on behalf of the Underwriters) on the Price Determination Date to record and fix the Offer Price The date on which the Offer Price will be determined for the purposes of the Global Offering, expected to be on or around June 12, 2010 (Hong Kong time), or such later time as the Joint Bookrunners (on behalf of the Underwriters) and us may agree, but in any event no later than June 20, 2010

• “Price Determination Agreement”

• “Price Determination Date”

“province” or “provinces” The provinces, autonomous regions and municipalities of the PRC “QIBs” Qualified institutional buyers as defined in Rule 144A “R&D” Research and development “Regulation S” Regulation S under the Securities Act “RMB” and “Renminbi” The lawful currency of the PRC “Rule 144A” Rule 144A under the Securities Act “Saarwind” Saarwind Beteiligungs-Kommanditgesellschaft, a company incorporated under the laws of Germany “SAFE” The State Administration of Foreign Exchange of the PRC ( ), the PRC governmental agency responsible for matters relating to foreign exchange administration “SAIC” or “State Administration for The State Administration for Industry and Commerce of the PRC Industry and Commerce” ( ) “SASAC” State-owned Assets Supervision and Administration Commission of the State Council, responsible for the administration of state-owned assets ( )

“SAFE”

• “Securities Act”

The U.S. Securities Act of 1933, as amended from time to time

– 19 –

DEFINITIONS

“Securities Commission” The Securities Commission of the State Council ( ), which was abolished in March 1998 when its functions were thereafter assumed by CSRC “Securities Law” The Securities Law of the PRC ( ), enacted by the Standing Committee of the NPC on December 29, 1998 and which became effective on July 1, 1999, as amended and supplemented or otherwise modified from time to time. The latest revision was approved on October 27, 2005 and came into effect on January 1, 2006 “SERC” The State Electricity Regulatory Commission of the PRC ( ) “SFC” The Securities and Futures Commission of Hong Kong “SFO” The Securities and Futures Ordinance, (Chapter 571 of the Laws of Hong Kong), as amended and, supplemented or otherwise modified from time to time “Shanghai Chengrui” Shanghai Chengrui Investment Co., Ltd. ( ), a company incorporated under the laws of the PRC on December 4, 2001 “Shanghai Wind Info” Shanghai Wind Information Co., Ltd. ( ), a financial data and financial software provider in China, and independent of our Company, Directors, Substantial Shareholder(s) and their respective associates “Share(s)” Ordinary share(s) of par value RMB1.00 each in the share capital of our Company, including both A Shares and H Shares “Shareholders” Holder(s) of the Shares “Solar Energy Co.” Xinjiang Solar Energy Technology Development Company ( ), a company incorporated under the laws of the PRC on January 1, 1994 and a Shareholder of our Company “Special Regulations” The Special Regulations of the State Council on the Overseas Offering and Listing of Shares by Joint Stock Limited Companies ( ) promulgated by the Securities Commission and the State Council on August 4, 1994, as amended and supplemented or otherwise modified from time to time

“State Council”

“subsidiaries”

“Substantial Shareholder(s)”

“Supervisor(s)” or “Supervisory Committee”

The State Council of the PRC ( ) Has the meaning ascribed thereto under section 2 of the Companies Ordinance Has the meaning ascribed thereto under the Listing Rules

Supervisor(s) or the supervisory committee of our Company

– 20 –

DEFINITIONS

“SZSE” The Shenzhen Stock Exchange ( ) “SZSE Listing Rules” The Rules Governing Listing of Stocks on the SZSE as amended from time to time “Tacheng Tianrun” Tacheng Tianrun Wind Power Co., Ltd. ( ), a company incorporated under the laws of the PRC on July 20, 2007 and former subsidiary of our Company “TianRun USA” TianRun USA, Inc., a company incorporated under the laws of the United States on June 10, 2009 and a wholly owned subsidiary of our Company “TQM” Total Quality Management, a management method used by an organization that is quality oriented, where all employees participate in the initiative, the purpose of which is to achieve long-term success by achieving customer satisfaction and by benefiting the organization itself, its members, and society “Track Record Period” The three years ended December 31, 2007, 2008 and 2009 “Underwriters” The Hong Kong Underwriters and the International Underwriters “Underwriting Agreements” The Hong Kong Underwriting Agreement and the International Underwriting Agreement “U.S.” or “United States” The United States of America, its territories, its possessions and all areas subject to its jurisdiction “US$” or “U.S. dollars” United States dollars, the lawful currency of the United States “Vensys/Innowind” Vensys/Innowind Beteiligungs — GmbH & Co. Kommanditgesellschaft, a limited company incorporated under the laws of Germany “Vensys AG” Vensys Energy AG, a company incorporated under the laws of Germany on February 14, 2000 and a non-wholly owned subsidiary of our Company “Vensys Elektrotechnik” Vensys Elektrotechnik GmbH, a company incorporated under the laws of Germany on November 13, 1998 and a non-wholly owned subsidiary of our Company

“Vensys Option” The option granted to Vensys/Innowind, Saarwind and Windpark as shareholders of the remaining 30.0% equity interest of Vensys AG in accordance with the Vensys Shares SPA and the Vensys Supplemental Agreements to exchange their remaining shares of Vensys AG into our Shares

“Vensys Shares SPA” The share purchase agreement regarding our acquisition of a 70.0% equity interest in Vensys AG dated January 24, 2008 entered into among our Company, Vensys/Innowind, Saarwind, Goldwind Windenergy and Vensys AG

– 21 –

DEFINITIONS

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|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
|“Vensys|Supplemental|Agreements”|The|two|supplemental|share|purchase|agreements|for|the|Vensys|
|Shares|SPA|dated|May|14,|2010|entered|into|among|our|Company,|
|Vensys/Innowind,|Saarwind,|Windpark,|Goldwind|Windenergy|and|
|Vensys|AG|
|“White|Form|eIPO”|The application for Hong Kong Public Offer Shares to be issued in the|
|applicant’s|own|name|by|submitting|applications|online|through|the|
|designated|website|of|White|Form|eIPO|www.eipo.com.hk|
|“White|Form|eIPO|Service|Provider”|Computershare|Hong|Kong|Investor|Services|Limited|
|“Windpark”|Vensys Windpark Beteiligungs-und Verwaltungsgesellschaft GmbH, a|
|company|incorporated|under|the|laws|of|Germany|
|“Wind|Power|Research|Centre”|Xinjiang|Wind|Power|Research|Centre|(|
|), a business unit established under the laws of the PRC on|
|July|1,|1986|and|a|Shareholder|of|our|Company|
|“WTG”|Wind|turbine|generator|
|“Xinjiang”|The|Xinjiang|Uyghur|Autonomous|Region|of|the|PRC|
|“Xinjiang|SASAC”|State-owned|Assets|Supervision|and|Administration|Commission|of|
|Xinjiang|(|)|
|“Xinjiang|Wind|Power”|Xinjiang Wind Power Co., Ltd. (|), (formerly|
|known as Xinjiang|Wind Power Company (|)), a state-|
|owned enterprise incorporated under the laws of the PRC on April 11,|
|1988,|which|was|converted|to|Xinjiang|Wind|Power|Co.,|Ltd.|on|
|October|13,|2005,|and|a|Shareholder|of|our|Company|
|“XJ|New|Wind”|Xinjiang New Wind Kegongmao Co., Ltd. (|
|),|a|company|incorporated|under|the|laws|of|the|PRC|on|
|February|17,|1998|and|the|predecessor|of|our|Company|
|“XJ|Tianyun”|Xinjiang|Tianyun|Wind|Power|Equipment|Distribution|Co.,|Ltd.|
|(|),|a|company|incorporated|under|
|the laws of the PRC on June 11, 2007 and a wholly owned subsidiary|
|of|our|Company|
|“Yuanfeng|Investment”|Shenzhen|Yuanfeng|Investment|Co.,|Ltd.|(|
|),|a|company|incorporated|under|the|laws|of|the|PRC|on|
|November|24,|2006|and|a|Shareholder|of|our|Company|
|“Yuanjing|Xinfeng”|Shenzhen|Yuanjing|Xinfeng|Investment|Consultation|Co.,|Ltd.|
|(|),|a|company|incorporated|
|under|the|laws|of|the|PRC|on|November|13,|2006|and|a|
|Shareholder|of|our|Company|

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– 22 –

DEFINITIONS

“Yuanjing Xinneng”

Shenzhen Yuanjing Xinneng Investment Consultation Co., Ltd. ( ), a company incorporated under the laws of the PRC on November 17, 2006 and a Shareholder of our Company

Certain amounts and percentage figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures preceding them.

In this prospectus, if there is any inconsistency between the Chinese names of the entities, authorities, organizations, institutions or enterprises established in China or the awards, certificates given in China and their English translations, the Chinese language version shall prevail.

– 23 –

GLOSSARY OF TECHNICAL TERMS

This glossary contains certain definitions of technical terms used in this prospectus as they relate to us and as they are used in this prospectus in connection with our business or us. Some of these definitions may not correspond to standard industry definitions.

“AC” Alternating current, being electricity that changes direction periodically “active power control” The method of reducing the power output generated by wind turbines at any point in time. For pitch regulated WTGs, it is achieved by adjusting the angle of the blades facing the wind thereby changing the wind energy absorbed by wind turbines

“attributable installed capacity” The aggregate installed capacity is calculated by multiplying an entity’s percentage ownership in the power project company by the total installed capacity of such power project company

“availability” A percentage calculated by dividing the amount of time a WTG is not experiencing technical defaults over a certain period by the amount of time in such period “blade” The WTG component that drives the turbine rotor using wind energy “concession project” Awind power concession project for which the NDRC solicits bids. It involves: (1) the PRC Government designating the construction site and the project capacity; (2) a grid corporation acquiring all the power generated; (3) a fixed tariff price during the concession term; (4) determining the tariff price by public bidding; (5) selection of the wind power investor and WTG manufacturer through bidding; and (6) a grid corporation being responsible for connecting the wind farm to the grid “constant frequency” The technology that converts the changing power frequency from the generator of a WTG into a constant grid frequency “constant speed” Operation of a WTG whereby the rotational speed of the turbine rotor remains constant

“DC”

Direct current, being electricity which flows in one direction through the conductor

“direct-drive”

A drive-train concept in which the need for a gearbox is eliminated and the turbine rotor directly drives the generator rotor

“excitation”

Using an electric current to create a magnetic field

“full power rectification” The converter technology wherein the WTG converter’s rated capacity is equal to the WTG’s rated capacity “gigawatt” or “GW” A unit of power. 1 GW equals 1,000 MW

• “gigawatt” or “GW”

“greenhouse gas”

The natural and man-made gaseous components of the atmosphere that absorb and release infrared radiation

– 24 –

GLOSSARY OF TECHNICAL TERMS

• “grid connection”

• “hub”

“hub height”

• “hybrid-drive”

• “IEC Type I, II, III and S models”

• “kilowatt” or “kW”

• “kilowatt hour” or “kWh”

• “low voltage ride through capability”

When a WTG is connected to the grid and is transmitting power

The component of the WTG to which the blades are fixed The height of the hub center above the ground A geared drive transmission using a low-speed gearbox

According to the IEC 61400-1 (2005) standard for WTG design, a type I model is defined as a WTG model able to operate in environments with a reference wind speed of less than 50m/s measured at the hub height of a WTG; a type II model is defined as a WTG model able to operate in environments with a reference wind speed of less than 42.5m/s measured at the hub height of a WTG; and a type III model is a WTG model able to operate in environments with a reference wind speed of less than 37.5m/s measured at the hub height of a WTG; and a type S model is a WTG model able to operate in the specific environment defined by both the WTG manufacturer and the customer

A unit of power. 1 kW equals 1,000 watts

The unit of measurement for calculating the quantity of power production output. One kilowatt hour is the work completed by a kilowatt generator running continuously for one hour at the rated output capacity

The ability of a WTG to continue to stay connected to the grid within a given period of time when the grid is experiencing abnormal voltage drops

• “megawatt” or “MW” A unit of power. 1 MW equals 1,000 kW

• “MW-level WTGs”

• “nacelle”

• “permanent magnet”

• “permanent magnet generator” or “permanent magnet synchronous generator”

• “pitch control” or “pitch regulated”

• “power curve”

• “rated output capacity”

WTGs with rated output capacity of equal to or greater than 1 MW

The structure at the top of the tower just behind the blades that houses the key components of the wind turbine, including the turbine rotor shaft and generator

A material that retains its magnetic properties without external magnetic field

A synchronous generator in which permanent magnet is used on the generator rotor

A method of controlling the power of a WTG by using the control system to adjust the angle of the blade (or inlet angle)

The curve showing the relation between the output power of a WTG and the wind speed

The output capacity as per a WTG nameplate

– 25 –

GLOSSARY OF TECHNICAL TERMS

“rated wind speed” The wind speed range at which a WTG can produce its rated output capacity “reactive power control” A method of transmitting or absorbing reactive power to stabilize the grid voltage “renewable energy” Energy sources that are sustainable, or for all practical purposes, cannot be depleted, such as geothermal, biomass, wind and sunlight. Unless otherwise specified, for purposes of this prospectus, renewable energy excludes conventional hydropower “SCADA” Supervisory Control and Data Acquisition “stall-regulated” A method to control and regulate the power generated by a WTG. When the wind speed exceeds the rated wind speed of the WTG, the blade stalls and no further increase in the energy is captured by the turbine rotor, thereby controlling the power output of the WTG “terawatt hour” or “TWh” The unit of measurement for calculating the quantity of power production output. 1 TWh equals 1 billion kWh

• “total installed capacity” (also referred to The sum of the rated output capacity for power generation equipment as “cumulative installed capacity” by such as WTGs, installed BTM or in other industry reports)

• “tower” The supporting structure which supports and elevates a turbine rotor and nacelle

• “turbine rotor” The component of a WTG that consists of a hub and blades and drives the generator rotor

• “unit capacity” The rated power of an individual WTG

“variable pitch system” The electrical system in a WTG that ensures high efficiency at different wind velocities. This system is capable of real-time regulation of the WTG’s rotational speed when wind velocity changes through control of the blade angle for optimal operation and energy capture

“wind farm” A power plant in which a group of WTGs are installed to generate electricity from wind power

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FORWARD-LOOKING STATEMENTS

We have included in this prospectus forward-looking statements that are not historical facts, but relate to our intentions, beliefs, expectations or predictions for future event. These forward-looking statements are contained principally in the sections entitled “Summary”, “Risk Factors”, “Industry Overview”, “Business”, and “Financial Information”, which are, by their nature, subject to risks and uncertainties.

In some cases, we use the words “aim”, “anticipate”, “believe”, “continue”, “could”, “expect”, “intend”, “may”, “plan”, “potential”, “predict”, “project”, “propose”, “seek”, “should”, “will”, “would” and similar expressions or statements to identify forward-looking statements. These forward-looking statements include, without limitation, statements relating to:

• k our business strategies and plan of operations;

• k our capital expenditure and funding plans;

• k projects under construction and planning;

• k general economic conditions;

• k capital market development;

• k the trends of industry and technology;

• k certain statements in “Financial Information” with respect to trends in prices, volumes, operations, margins, overall market trends, risk management and exchange rates;

• k the regulatory environment for the electrical power industry in general and the level of policy support for renewable energy; and

• k other statements in this prospectus that are not historical fact.

These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors set forth in “Risk Factors” and other risks.

These forward-looking statements are based on current plans and estimates, and speak only as of the date they are made. We undertake no obligation to update or revise any forward-looking statement in light of new information, future events or otherwise. Forward-looking statements involve inherent risks and uncertainties and are subject to assumptions, some of which are beyond our control. We caution you that a number of important factors could cause actual outcomes to differ, or to differ materially, from those expressed in any forward-looking statements.

Due to these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus might not occur in the way we expect, or at all. Accordingly, you should not place undue reliance on any forward-looking information. All forward-looking statements contained in this prospectus are qualified by reference to these cautionary statements.

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RISK FACTORS

You should consider carefully all of the information set out in this prospectus and, in particular, should evaluate the following risks in connection with an investment in the Offer Shares before making an investment. You should pay particular attention to the fact that we are a company incorporated in the PRC and most of our business is conducted in the PRC. There are risks associated with investing in the H Shares not typical of investment in the capital stock of companies incorporated and/or engaging in business in Hong Kong or the United States. Any of the risks and uncertainties described below could have a material adverse effect on our business expansion, results of operations, financial condition or the trading price of the H Shares, and could cause you to lose your investment.

We believe that there are certain risks involved in our operations and the Global Offering. Many of these risks are beyond our control and can be categorized into: (i) risks relating to our business; (ii) risks relating to the industry in which we operate; (iii) risks relating to the PRC; and (iv) risks relating to the Global Offering.

RISKS RELATING TO OUR BUSINESS

We may be affected if the government reduces or ceases its support and encouragement of the wind power industry.

In recent years, the PRC Government has promulgated a series of laws and regulations to support and encourage the development of wind power. These include The Renewable Energy Law of the PRC, Medium-to-Long Term Development Plan for Renewable Energy, Notice of the NDRC on Related Requirements for the Administration of Wind Power Construction, and Notice of the NDRC on Perfecting the Policy Governing the Price of Wind Power Sold to the Grid . These laws, regulations and policies directly affect the prospects of the domestic wind power industry and wind power equipment manufacturing industry and are major factors that affect the demand for our products.

The level of acceptance of wind power as a viable form of renewable energy by the government agencies that establish energy policies as well as the general public in markets in which we operate has a significant effect on us. The direct or indirect reduction or termination of such government support may have a negative impact on the PRC wind power market. In the event of changes in the support by the PRC Government of the industry in which we operate, or changes to the policies associated with our industry, our operations may be affected. Moreover, changes in government policies and support in those countries to which we plan to expand our business may also affect us. In the event of changes in these preferential policies by the PRC Government and/or the relevant authorities of other markets in which we intend to operate or changes in the level of public acceptance for wind power in such markets, wind power may become less attractive, and this could have a material and adverse effect on our business, results of operations and prospects.

We may not be able to continue our rapid growth and implement our business expansion plans successfully.

We have experienced significant growth in terms of production capacity, revenue and profits during the Track Record Period. We plan to secure further growth by increasing our sales, expanding the geographical coverage of our production bases, researching and introducing more advanced WTGs, improving the performance of our products, exploring business opportunities for our wind power services and wind farm investment, development and sales business, and expanding our international operations. The success of our plans for growth depends on certain factors, including, but not limited to, our ability to expand, construct or operate our production bases; implement and manage our business expansion plans; secure financing necessary for business expansion; operate in an efficient

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manner; maintain and expand our existing customer base; manage relationships with suppliers; ensure timely and sufficient supply of parts and components; hire, train and retain qualified personnel and deal with challenges that may arise in new and existing markets and business areas. Some of the above factors are beyond our control. Although we have commenced active efforts in all the abovementioned areas, if we fail to successfully implement our business expansion plans, maintain and further enhance our domestic and international market share, further increase sales and promote newly developed products, develop businesses with strategic significance, or, if we encounter difficulties in any of the foregoing, our growth, business prospects, results of operations and financial condition may be materially and adversely affected.

Moreover, substantial capital is necessary for the construction, maintenance and operation of new facilities, equipment purchases and R&D of new products and technologies. During the Track Record Period, our total capital expenditures were RMB395.8 million, RMB2,043.0 million and RMB2,078.3 million, respectively. If we fail to obtain adequate financing on acceptable terms, we may not be able to sufficiently fund our operations or implement our expansion strategy. As a result, we may be forced to adopt alternative strategies that may include delaying capital expenditures, refinancing of our indebtedness or seeking equity capital. These may subject us to loss of market competitiveness and future revenues, and thus materially and adversely affect our results of operations and financial condition.

We face intense competition in our major markets.

We face increasingly intense competition in the markets in which we operate. Now and in the near future, most of our business will continue to be concentrated in the PRC. The PRC wind power industry has seen rapid development since the introduction of a series of wind power incentives in 2005, and compared to 2004, when the PRC wind turbine market was dominated by eight or nine Chinese and international suppliers, there are now more than 80 wind turbine manufacturers that have entered the PRC market. Although the supply of WTGs in the PRC had in the past fallen short of demand, the production capacity for WTGs has exceeded demand recently as a result of the rapid increase in the number of wind turbine suppliers and the expansion of production facilities. Some of these manufacturers may have greater financial, sales and marketing, R&D, personnel, or other resources than us. Some of these new market entrants may achieve immediate market share through leveraging existing business relationships and acquisition of wind turbine technologies from third parties. Our competitors may also respond more quickly to changes in technology or customer requirements, or offer similar products at prices lower than ours. Furthermore, as defects in WTGs and wind power services may not appear in the early stages of using the product or service, new market entrants who may produce products or provide services of sub-standard quality may market their products and services for an extended period of time before potential customers can gain actual knowledge of the quality of their products and services. All of the foregoing factors have intensified market competition, and we may face pressure in product pricing and competition for orders. In particular, our historical WTG ASP are not necessarily representative of future trends for our product pricing, and we may adjust our selling prices downward due to pricing pressure. Any adverse or unforeseen change in our competitive environment may have a material and adverse effect on our business, results of operations, financial condition and prospects.

We may not be able to obtain timely and stable supply of the core parts and components required for our business.

Most of our parts and components are purchased domestically. Due to the relatively high technical threshold for the production of certain core parts and components, the number of qualified suppliers in the PRC is limited. To reduce the impact of this, we have in-house capability to develop, design and manufacture certain core parts and components. We also own shares of some promising parts and components suppliers, and we maintain close

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relationships with external suppliers that are able to manufacture and supply parts and components required by our WTGs in accordance with our technical parameters and quality standards.

Although we have long-term relationships with most of our suppliers and believe that we are able to purchase the requisite parts and components on reasonable commercial terms from other qualified suppliers when necessary, we cannot assure you that the suppliers can meet all of our specified quality standards and technical specifications for increasing quantities in a timely manner and at acceptable prices. If our existing suppliers materially reduce or cease supply of parts and components to us, and we fail to source the parts and components that satisfy our quality standards and requirements from other suppliers, our business operations and financial performance may be materially and adversely affected.

A significant portion of our revenue is derived from our major customers and changes in their requirements may have a material and adverse effect on our business.

As most of our customers are China’s large power producers and other enterprises investing in renewable energy, our customer base is relatively concentrated. For each of the three years ended December 31, 2007, 2008 and 2009, sales to our five largest customers in aggregate accounted for 39.8%, 37.7% and 38.7% of our total revenue, respectively. We anticipate that the revenue derived from these major customers will continue to represent a significant proportion of our total revenue in the future. If our customers, including our five largest customers, experience negative changes in their business, adjust their investment strategies or slow down the growth rate of their investment in wind power, it may result in a reduction or cessation of their purchase orders with us. If we fail to obtain a comparable level of purchase orders from new customers, our business, results of operations and financial condition may be adversely affected.

We may not be able to develop new products that meet changing market demands or successfully introduce new products in a timely manner.

WTG technology evolves rapidly. WTG unit capacity is progressively increasing with improved operational performance, and our customers are demanding more cost-effective WTGs. To maintain our market-leading position, we will be required, on a rapid and consistent basis, to design and develop new and improved WTGs that keep pace with technological developments in order to meet the higher demands of our customers. Therefore, we have devoted substantial resources to our R&D activities. However, we cannot assure you that our R&D activities will yield the anticipated results. If we encounter delays in technology development, fail to meet changing market demands or successfully introduce newly developed products to the market, and our competitors respond more rapidly than we do, our business, financial condition and results of operations may be materially and adversely affected.

We may not be able to adequately protect our intellectual property rights.

We rely primarily on patents and proprietary technologies to protect our technological know-how, which includes designs and technologies for our products and core components. Furthermore, certain know-how cannot be registered, and we rely on confidentiality and trade secrets protection obligations of our suppliers and employees to protect this know-how. We are also applying for the registration of certain trademarks and patents. Please see the section entitled “Business — Intellectual Property” in this prospectus for more details. We cannot assure you that these measures will be sufficient to prevent any infringement of our intellectual property rights or that our competitors will not independently develop alternative technologies that are equivalent or superior to our technologies. Furthermore, we cannot assure you that all our registration applications will be successful, or our

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registered intellectual property rights will not be subject to any objection. In the event that the steps we have taken and the protection afforded by law do not adequately safeguard our intellectual property rights, or we are not able to register or defend our intellectual property rights, our competitors may exploit our intellectual property in the manufacturing and sale of competing products, which could materially and adversely affect our business.

If we fail to maintain an effective quality control system, our product quality and thus our business may be materially and adversely affected.

The performance, quality and safety of our products are critical to our customers, our reputation and ultimately, our success. Accordingly, we have established and maintained stringent quality assurance standards and inspection procedures, including quality control of the parts and components purchased from external suppliers. Our quality control system has been accredited the ISO 9001:2008 certification. Please see the section entitled “Business — Quality Assurance” in this prospectus for further details. The effectiveness of our quality control system is determined by various factors, including the design of the system, implementation of quality standards, quality of training programs and the mechanism to ensure our employees’ adherence to our quality control policies and guidelines, especially our ability to monitor and manage our supplier quality system. If we fail to maintain an effective quality control system, we may produce defective products that expose us to product liabilities and warranty claims. As a result, our reputation and relationships with existing customers may be undermined, and our business may be materially and adversely affected.

If we fail to effectively control costs, in particular the costs of parts and components, our results of operations and financial condition may be materially and adversely affected.

In order to maintain our competitiveness and achieve profitability, we must effectively control our costs. A significant portion of our business with our customers is conducted pursuant to fixed price contracts, awarded on a competitive bidding basis. The profit margins realized on such fixed price contracts may vary from original estimates as a result of changes in costs and production volume over their term due to factors such as changes in the costs of components, materials or manpower, difficulties in obtaining adequate financing, unanticipated technical problems with parts and components being supplied, project or schedule modifications, delays caused by local weather conditions and suppliers’ failure to fulfill their obligations. All of our revenue during the Track Record Period was derived from fixed price contracts.

Among these, fluctuations in the purchase prices of parts and components are a key factor affecting our costs. The parts and components used for manufacturing WTGs require substantial amounts of steel, copper, various other metals and composite materials. The prices and availability of these materials may be affected by factors beyond our control, including global demand for and supply of such materials, inflation and local economic cycles, price control measures imposed by the government or private companies, international geopolitical issues and instability of the government of the exporting countries. We experienced fluctuations in the prices of raw materials during the Track Record Period, and any increase in their prices will cause our costs to increase. For instance, a significant fluctuation in the prices of raw materials in 2008 affected the prices of the parts and components required for our products. During the contractual term, it is difficult to predict price trends of raw materials, and price fluctuations in raw materials may have a material and adverse effect on our financial condition and results of operations. We do not hedge our exposure to movements in the prices of steel, copper, rare earth materials and other raw materials. We are thus exposed to the risk of increases in the prices of these raw materials and components and to the extent we cannot pass on the price increases in these raw materials and components to our customers fully or in part, our business and financial condition could be affected. Although we believe that our resources, experience and project management skills allow us in most cases to estimate costs accurately and to control costs effectively, there can be no assurance

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that we will realize expected profits from all of our fixed price contracts. In the event this occurs, our results of operations and financial condition may be materially and adversely affected.

Our revenue may fluctuate through the year due to seasonality of business.

During the Track Record Period, our customers were located primarily in the northern part of China, where, due to weather conditions, the construction of wind farm projects tends to commence at the beginning of the year, with construction carried out through the year, and installation at the end of the year. Consequently, the quantity of our WTGs delivered and sales revenue in the third and the fourth quarters are generally greater than in the first and second quarters. As our revenue fluctuates seasonally, our interim financial results may not reflect our financial results or performance for the entire year. Comparisons of sales and operating results between different periods in a single financial year for our business segments, or between the same periods in different financial years, are not necessarily meaningful and should not be relied on as indicators of our performance. We try to mitigate the influence of such seasonal factors by increasing sales to other regions in the PRC and managing delivery schedules. The seasonal nature of our revenue requires us to control our operating capital carefully so as to provide our business with adequate cash for operations. Failure to manage seasonality in our business may cause our revenue and financial condition to be materially and adversely affected.

We are subject to risks associated with changes in preferential tax treatment.

We are subject to various PRC taxes, including the current statutory PRC enterprise income tax of 25% as determined in accordance with the relevant PRC tax rules and regulations. Please see the appendix entitled “Appendix VI — Taxation and Foreign Exchange” to this prospectus for further details. However, PRC national and local tax laws provide certain preferential tax treatments applicable to different enterprises, industries and locations. Our Company and some of our subsidiaries are currently taxed at preferential rates due to the nature of our business activities and the location of our projects. For instance, our Company has been accredited as a high and new technology enterprise and is presently entitled to the preferential enterprise income tax rate of 15%. Please see the section entitled “Financial Information — Results of Operations for the Track Record Period — Income Tax” in this prospectus for further details. Termination or revision of any such preferential tax treatments may materially and adversely affect our results of operations and financial condition.

Failure to fulfill customer orders due to delays in our production process may have a material and adverse effect on our business prospects, results of operations and financial condition.

The manufacturing and sales of our WTGs involves purchases of parts and components, assembly of the units, and transportation of finished products. Any unexpected delay in the process may affect our ability to deliver products on time. We cannot assure you that we can always fulfill customer orders on time. In addition, we provide letters of guarantee to our customers for our fulfilment of sales contracts. Please see the section entitled “Financial Information — Contingent Liabilities” in this prospectus for more details. Any failure to fulfil customer orders due to delays in our production process may affect our current sales, and undermine our reputation and market position and thus the quantity of future orders. Further, we may be subject to substantial contractual penalties or obligations in connection with the letters of guarantee we have provided. Any of these may have a material and adverse effect on our business prospects, results of operations and financial condition.

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Clauses in our contracts with customers may be modified.

We sign contracts with our customers for the supply of our WTGs. However, we cannot assure you that we and our customers will not modify the clauses in our existing contracts due to delays in the execution of contracts and for other reasons, in particular with respect to the price, quantity and delivery time. This could occur due to factors beyond our control or the control of our customers, such as general changes in industry market prices, adverse economic conditions or difficulties in obtaining required government approvals and permits. Any material adverse change in contract clauses, such as price decreases, reduction of order quantity or change of delivery time, or difficulties encountered in performing the contracts may have a material and adverse effect on our results of operations, financial condition and cash flows.

Availability of credit and fluctuations in the interest rates of our bank borrowings and other loans may affect our business expansion or financial performance.

We have obtained bank loans to support our business expansion and provide financing for our development of wind farms. For the three years ended December 31, 2007, 2008 and 2009, we have had RMB470.0 million, RMB87.4 million and RMB332.2 million working capital-related bank borrowings and other loans and RMB153.0 million, RMB1,244.3 million and RMB2,291.8 million project-related bank loans outstanding, respectively. During the same periods, the effective interest rates associated with our working capital-related bank borrowings and other loans were 6.0%, 4.3% and 4.3%, respectively, and the effective interest rates associated with our project-related bank loans were 7.8%, 8.4% and 5.3%, respectively. Due to the economic stimulus plan implemented by the PRC Government and the global economic crisis, the one-year RMB benchmark loan rate was reduced several times in 2008. We believe that this interest rate may increase as the Chinese economy recovers from the global economic crisis. Our interest expenditure may increase significantly in the future, which may have a material and adverse effect on our financial performance.

In addition, the PRC Government has recently adopted a number of measures in monetary policy, including increasing the reserve ratio of commercial banks, which may have the effect of restricting money supply and the availability of credit. If these measures result in PRC banks reducing their volumes of commercial loans, our access to financing to fund our business expansion may be adversely affected.

We may not be able to obtain wind farm projects with suitable wind resources or realize the expected profit from our development of wind farm projects.

The sustainable development of our wind farm investment, development and sales business depends on many factors, in particular, our ability to continuously obtain wind farm projects with suitable wind resources. Although we are actively engaging in the overseas expansion of our wind farm investment, development and sales business, our activities remain concentrated in the PRC market. We believe that, as the development of wind farm projects in the PRC increases and competition for premium quality wind farm projects grows, such premium quality wind farm projects will be more difficult to obtain. Moreover, even if we succeed in obtaining suitable wind farm projects and in developing these projects, there can be no assurance that we will be able to successfully complete construction of our wind farm projects or sell our completed wind farm projects, or that the wind farm projects we develop and sell will generate the expected profits. If we fail to obtain suitable wind farm projects or realize the expected profit from our development of wind farm projects, our business, profitability and prospects may be materially and adversely affected.

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Our results of operations may be materially and adversely affected if we fail to retain or hire qualified personnel at reasonable costs.

The success of our products depends on our ability to retain qualified R&D, production, quality control and after-sales service and operations personnel. These departments require the continued service of our skilled personnel and our ability to recruit additional skilled personnel in the future. Due to the rapidly growing demand for qualified personnel in China, competition for such personnel is intensifying. If we fail to retain or hire qualified personnel, we may experience difficulties in developing new products, applying new technologies, expanding production capacities, maintaining product quality or providing our customers with quality after-sales services, which may in turn have a material and adverse effect on our business and reputation.

In addition, due to our relatively complex production process, it generally takes three to five months to train newly employed workers so that they may acquire the necessary skills, and some skilled workers are not easily or quickly replaceable. Hence, if a significant portion of our technically skilled workers terminate their employment relationships with us in a short period of time, we may encounter interruption of our production or services, which may substantially impact our operations.

Moreover, in the global context, labor costs in China are relatively low. This is one of our competitive advantages over foreign competitors. In the event of significant increases in the salaries of qualified personnel in the PRC market, our labor cost may significantly increase and our profit margins and market competitiveness may be materially and adversely affected.

Our success depends on the stability of our senior management team and successful implementation of our management incentive system.

The experience and leadership of our senior management team have been critical to our success, especially with regard to our development strategy and R&D. For more information about our senior management, please see the section entitled “Directors, Supervisors and Senior Management” in this prospectus. Moreover, our management incentive system is one of the key factors that contributes to retaining our senior management team and allowing us to gain the most from their talents. Our future growth will require us to maintain a stable and competent senior management team, in particular, ensuring the continued service of our chairman and chief executive officer, Mr. Wu Gang. The competition for qualified senior management is intense. If we lose the services of any of these key management personnel, or fail to recruit and retain new talent, or fail to maintain an attractive management incentive system in the future, our planned growth may not be realized and our business prospects, results of operations and financial condition may be materially and adversely affected.

Our international marketing and sales plans and strategies may not yield the desired results.

While most of our sales revenue is generated from the PRC, we are actively developing our overseas businesses. This involves setting up sales offices, marketing activities, establishment or acquisition of production facilities, construction or acquisition of wind farms, provision of wind farm services and other activities. Some of our recent efforts abroad include establishment of a production base at the headquarters of our subsidiary in Germany and commencing sales of our products in Europe, setting up branches in the United States and Australia as well as the successful completion of a demonstration wind farm project in the United States to build up our track record there. Please see the section entitled “Business — Sales and Marketing” in this prospectus for more details on our overseas marketing activities. There is no assurance that our overseas growth strategies will be implemented successfully. Our global business expansion, being pursued through our branches in the United States, Australia and Germany, may be hindered by risks such as: low demand for our products, lack of a track record in these markets,

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lack of availability of overseas financing on suitable terms to fund our international expansion, possible difficulties in the management of overseas personnel and business operations including a potential increase in labor costs due to our overseas expansion, lack of understanding of the local business environment, financial and management system or legal system, volatility in currency exchange rates, potentially more stringent product liability requirements, cultural differences, changes in political, regulatory or economic environments in the foreign countries or regions, as well as restrictions on foreign trade. Also, in certain markets, WTG manufacturers may be required to provide specific product warranties in order for the relevant wind farm developers to receive financing for their wind farm projects. We have provided warranties to our overseas customers, but in the event our warranties are deemed not to be in line with the requirements of financing providers in overseas markets, our customers may not be able to obtain the relevant financing, which would then affect their demand for our products and services. If we fail to manage the above risks effectively, our global expansion may be hindered, which may in turn result in a material and adverse effect on our business prospects, results of operations and financial condition.

Moreover, the fluctuation in the global economy in the second half of 2008 resulted in credit tightening, an increased unemployment rate and liquidity problems for many industries. This had a material and adverse effect on the U.S. and other major economies and led to a global economic downturn, which may affect our expansion plans in the global market.

If we are unable to obtain power generation business licenses for wind farms that we own and operate, there may be a material and adverse effect on our business.

The Renewable Energy Law of the PRC clearly stipulates that power grids shall acquire wind power electricity in full. In accordance with the Provisions for the Administration of Electric Power Business Licenses issued in 2005, unless otherwise provided by the SERC, a company may not engage in power generation, transmission, dispatch and sales without obtaining an electric power business license. In particular, our PRC legal advisor confirmed that power generating projects which became operational after August 1, 2006 shall obtain a power generation business license within three months from the commencement of operations. Since the processing time by the relevant PRC authorities of an application for a power generation business license tends to be relatively long, it is not unusual in the power industry for power generating projects to begin trial operation after completion of construction, apply for the license upon completing the trial operation period, and continue to operate after the application is submitted. The trial operation period is generally assumed to comprise 240 hours but is subject to various factors including weather conditions and the actual period of operation usually ends up being longer. Prior to obtaining this license, income generated from operation of wind farms may be confiscated and fines up to an amount five times of such income may be imposed. As of the Latest Practicable Date, we had obtained the power generation business licenses for all the wind farms which we currently own and operate. As we will continue to own and operate wind farms in the future, we will use our best endeavors to ensure compliance with the relevant laws and regulations as applied by the relevant regulatory authorities in the PRC and obtain the power generation business licenses for our wind farms in the future. However, procedures for granting licenses vary by local area, and certain provinces may deny requests for licenses for various reasons. If we are unable to obtain the requisite power generation business licenses, there may be a material and adverse effect on our business, including the forfeiture of revenue, imposition of fines or cessation of operations at the wind farms.

We have not obtained valid title certificates for some of the properties and land that we own and occupy.

Our applications for the title certificates in respect of some of our properties and land are currently being processed. Please see the section entitled “Business — Properties” in this prospectus for further details. There can be no assurance that we will be able to obtain valid title certificates for all the properties and land. Our rights as

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owner or occupant of these properties and buildings may be adversely affected due to the absence of such valid title certificates. Moreover, we cannot assure you that there will not be challenges in respect of our rights in relation to the relevant properties and land that we use or occupy which may result in interference with our business operations carried out on the affected properties or land, and cause a material and adverse impact on our business, results of operations and financial condition.

We are subject to the risk of product liability claims and in some cases may not have sufficient insurance coverage.

Although we have purchased insurance coverage, due to the complex technical specifications of our products, we may be subject to substantial product liability claims due to quality defects or shutdown resulting from malfunctions of our WTGs. Moreover, we provide customers with contractual warranties for the operating performance of our WTGs. After preliminary inspection, we will normally provide a letter of guarantee issued by a bank amounting to up to 5.0% of the total contract price to our customer against fulfilment of our warranty obligation, who may request payment from the bank in the event our obligation is not met. The warranty period of our products is generally 24 months from the day on which the preliminary inspection certificate is issued, and in a few instances, the warranty period may be 30 to 60 months. As of March 31, 2010, our total amount of warranty provision outstanding was RMB490.8 million. Our Directors are of the view that we have made adequate provisions for product quality warranties. If our products fail to meet these quality standards and technical requirements during the warranty period, or if, after expiration of the warranty period, significant product defects are discovered, or technical defaults which result in WTG downtime occurring, or the performance of our products falls below the requisite technical standard, we may be exposed to warranty expenses and costly product liability claims or litigation. As of the Latest Practicable Date, we have not been sued for any mechanical failure, accident, breach of warranty or product fault. Although we have purchased product insurance coverage for the warranty period, there may be difficulty in receiving compensation from the insurance companies, or the processing time may be lengthy or we may not be able to receive sufficient compensation to cover our liability or damages in full. If we fail to receive compensation from the insurance companies for our losses, our business, results of operations and financial condition may be materially and adversely affected.

Substantial damage to persons or loss of property may occur in the course of our production and construction processes.

Our production and construction processes involve dangerous activities, including aerial, engineering and routine construction works. We are required to comply with the necessary safety requirements and standards. Please see the section entitled “Business — Safety and Environmental Protection” in this prospectus. Risks associated with our production and construction activities include work injury accidents or geological hazards, which may result in personal injuries or fatalities and damage to property and equipment. Accidents related to any of these may result in personal injury claims, subcontractor claims, cessation of business, or civil and criminal penalties. We may also be liable for claims from third-party contractors. We do not maintain third party liability insurance in respect of our operations as it is neither industry practice nor a mandatory requirement under PRC law. If we incur substantial losses or liabilities due to the above reasons and our insurance coverage is unavailable or inadequate to cover such losses or liabilities, our results of operations and financial condition may be materially and adversely affected.

Our production and operations may be affected by factors beyond our control.

Our manufacturing business may be interrupted for reasons beyond our control, which may include such natural disasters as bad weather conditions, flooding, cyclones, typhoons, blizzards, snowstorms, landslides,

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earthquakes, and fire, as well as labor strikes, union strikes or social turmoil. Any major interruption of our business may have a material and adverse effect on our ability to manufacture and sell products or provide services. The transportation of WTGs and the construction, operation and maintenance of wind farms may be affected by bad weather conditions; in particular, in remote areas of China, the transportation of WTGs may be affected by poor infrastructure. If any of such events takes place, there may be a material and adverse effect on our production capacity, business, results of operations and financial condition.

RISKS RELATING TO THE INDUSTRY IN WHICH WE OPERATE

If major breakthroughs in other renewable energy technologies result in these technologies being superior to wind power, or the utilization of wind power is affected by the unpredictability of local weather conditions, demand for wind power projects may be affected.

The cost and social effects of wind power may affect the demand for wind power projects. Wind power is currently considered to be the most cost-competitive source of renewable energy, with improving technology and decreasing cost. However, in the event of improved cost competitiveness of other forms of renewable energy or major breakthroughs in other forms of renewable energy, such alternative forms of energy may become more attractive than wind power and, accordingly, demand for wind power may then drop significantly.

Moreover, the amount of wind power generated depends significantly on local weather conditions. As the status of wind resources may change, the effective utilization of wind power may be affected. This may result in a shift in demand toward other forms of renewable energy, such as solar, geothermal and tidal. If any of the above factors takes place, the wind power industry may be affected, and this may have a material and adverse effect on our business prospects, results of operations and financial condition.

The lack of grid infrastructure may restrict or otherwise affect the development of wind farms and the timing of their development and therefore affect our ability to maintain or increase our historical level of operations, and the timing of revenue recognition from those operations.

Wind farm sites are selected primarily with reference to wind resources. Many wind farms are far from major cities, making it difficult to transmit electric power to the major markets where demand for electric power is higher. To transmit electric power to areas of high demand in China, it will be necessary to build more grid infrastructure. As such infrastructure is expensive and has a large geographical span, the construction of wind farms requires adequate investment in and centralized planning of supporting grid facilities. The lack of grid infrastructure may restrict or otherwise affect the development of wind farms through preventing or delaying new construction or limiting the size of new wind farms. This may have a material and adverse effect on our ability to maintain or increase our historical level of operations, and the timing of revenue recognition from those operations.

Demand for wind power is dependent upon the overall demand for electric power, and if the overall demand for electric power declines because of an economic downturn in the major markets, our business will be affected.

Demand for wind power is closely related to overall demand for electric power. As the economy grows, economic activities such as industrial production and private consumption tend to grow, therefore increasing the demand for electric power. When the economy is in recession, however, activities such as industrial production and consumer demand may drop or come to a standstill, thereby decreasing the demand for electric power, including electric power generated from renewable energy. If the economy of the PRC, the United States and other major international markets no longer grows, or declines, there may be a drop in demand for electric power, including

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power generated from renewable energy such as wind power. This would have a material and adverse effect on our business, results of operations and financial condition.

RISKS RELATING TO THE PRC

The majority of our assets are located in the PRC and most of our revenue is derived from the PRC. Hence, our business operations and prospects are to a large extent affected by the economic, political and legal developments in the PRC.

Changes in the economic, political and social conditions in the PRC may have a material and adverse effect on our results of operations and financial condition.

The Chinese economy differs from that of most of the developed countries in many respects, including the degree of government involvement, control of capital investment, as well as the overall level of development. The PRC Government is committed to the continued reform of the economic system as well as the structure of the government. The PRC Government’s reform policies have emphasized the independence of enterprises and the use of market mechanisms. Since the introduction of these reforms, significant progress has been achieved in economic development, and enterprises have enjoyed an improved environment for their development. However, any changes in the PRC’s political, economic and social conditions may have a material and adverse effect on our present and future business operations, results of operations and financial condition.

The slowdown of the Chinese economy may have a material and adverse effect on our results of operations and financial condition.

Most of our revenue is derived from sales in the PRC. We rely on domestic demand for electric power, especially demand for wind power, to achieve growth in our revenue. Domestic demand for electric power is materially affected by industrial development, growth of private consumption and overall economic growth in China. The global crisis in financial services and credit markets in 2008 caused a slowdown in the growth of the global economy. Although there are signs of recovery in the global and Chinese economies, there is no assurance that any such recovery is sustainable. In addition, if the crisis in global financial services and credit markets was to persist, there is no certainty as to its impact on the global economy, especially the Chinese economy. As a result of global economic cycles, there is no assurance that the Chinese economy will grow in a sustained or steady manner. Any slowdown or recession of the Chinese economy may have a material and adverse effect on our results of operations and financial condition.

The PRC’s legal system is still evolving, there exist uncertainties as to the interpretation and enforcement of PRC laws, and PRC laws are different from those of common law countries.

Our Company is incorporated under the laws of the PRC and most of our activities are conducted in the PRC, hence our business operations are regulated primarily by PRC laws and regulations. PRC laws and regulations are based on written statutes, and past court judgments may be cited only for reference. Since 1979, the PRC Government has been committed to developing and refining its legal system and has achieved significant progress in the development of its laws and regulations governing economic matters, such as in foreign investment, company organization and management, business, tax and trade. However, as these laws and regulations are still evolving, and because of the limited number and non-binding nature of published cases, there exist uncertainties about their interpretation and enforcement.

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In addition, the PRC Company Law is different in certain important respects from company laws in common law countries or territories such as Hong Kong and the United States, particularly with regard to investor protection, including areas such as derivative actions by shareholders and other measures protecting minority shareholders, restrictions on directors, disclosure obligations, variations of class rights, procedures at general meetings and payments of dividends. Protection for investors under the PRC Company Law is increased, to a certain extent, by the introduction of the Mandatory Provisions and certain additional requirements that are imposed by the Listing Rules with a view to reducing the scope of differences between the company laws of Hong Kong and the PRC. The Mandatory Provisions and those additional requirements must be included in the articles of association of all PRC companies applying to be listed in Hong Kong. The Articles of Association have incorporated the provisions in the Mandatory Provisions and the Listing Rules. Despite the incorporation of those provisions, there is no assurance that you will enjoy an equal level of protection that you may be entitled to when investing in companies incorporated in common-law jurisdictions.

The recurrence of Severe Acute Respiratory Syndrome or an outbreak of other epidemics, such as bird flu or Type A H1N1 influenza, may materially and adversely affect our results of operations and financial condition.

Certain areas in the PRC, including the areas in which we operate, may be prone to infectious diseases such as Severe Acute Respiratory Syndrome, or SARS, H5N1 bird flu or Type A H1N1 influenza. The outbreak of infectious diseases in the past, depending on their scale, has damaged the regional and national economies in the PRC. In the case of a recurrence of SARS or other infectious diseases, especially in the areas in which we or our customers operate, the production and installation of WTGs, and the development, investment, operation and servicing of wind farms may be seriously affected, and there could be a material and adverse effect on our business prospects, results of operations and financial condition.

Government control over the conversion of foreign exchange may affect our results of operations and financial condition.

The Renminbi is not currently a freely convertible currency. As our operations are primarily conducted in the PRC and substantially all of our revenue is denominated in RMB, fluctuations in the RMB exchange rate against other currencies did not have a material impact on our results of operations during the Track Record Period. However, as we expand our business into international markets, our overseas income and expenditures may increase, so we anticipate our exposure to fluctuations in foreign exchange will increase.

Pursuant to existing foreign exchange regulations in the PRC, we are allowed to carry out current account foreign exchange transactions (including dividend payouts) without submitting the certifying documents of such transactions to SAFE for approval in advance as long as they are processed by banks designated for foreign exchange trading. However, foreign exchange transactions for capital account purposes, including direct overseas investment and various international loans, may require the prior approval or registration with SAFE. If we fail to obtain SAFE’s approval to convert RMB into foreign currencies for such purposes, our capital expenditure plans, business operations and subsequently our results of operations and financial condition could be materially and adversely affected.

We face foreign exchange and conversion risks, and fluctuation in the value of the RMB may have a material and adverse effect on our business and your investment.

The exchange rate between the RMB and the U.S. dollar and other currencies may fluctuate from time to time and be affected by, among other things, changes in China’s political and economic environment. Presently, the RMB

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is no longer only pegged to the U.S. dollar, but is subject to a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. We cannot predict how the RMB will fluctuate in the future. We face foreign exchange and conversion risks primarily through sales and procurement that are denominated in currencies other than the RMB. If the exchange rate of the RMB against other related foreign currencies were to appreciate, our export prices would increase, and the competitiveness of our products in comparison with products manufactured in other countries would decrease. On the other hand, if the exchange rate of the RMB against other related currencies were to depreciate, the price of our imported parts and components when converted into RMB would increase, which may have a material and adverse effect on us. Moreover, we will need to convert part of the proceeds denominated in foreign currencies from the Global Offering into RMB. The fluctuation in the exchange rate between the RMB and Hong Kong dollar and other currencies may have a material and adverse effect on our business, results of operations and financial condition, and thus your investment.

It may be difficult to enforce judgments rendered by courts other than PRC courts against us or the Directors, Supervisors or senior management residing in China.

Substantially all of our Directors, Supervisors and senior management reside within the PRC. Substantially all of our assets and the assets of our Directors, Supervisors and senior management are located within the PRC. The PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United States, the United Kingdom, Japan and many other countries. Therefore, it may not be possible for investors to serve summons upon us or those persons in the PRC or to enforce against us or them in the PRC any judgments obtained from non-PRC courts. In addition, recognition and enforcement in the PRC of judgments of a court of any other jurisdiction in relation to any matter not subject to a binding arbitration provision may not be possible.

The Articles of Association and the Listing Rules provide that disputes or claims for rights between holders of the H Shares and us, our Directors, Supervisors, senior management or holders of the A Shares, arising out of the rights and obligations provided in the Articles of Association, the PRC Company Law and the related laws and regulations and in relation to affairs of our Company, are to be resolved through arbitration in Hong Kong or the PRC, rather than by a court of law, except for disputes associated with the definition of shareholders or register of shareholders. Under the current arrangements for reciprocal enforcement of arbitral awards between the PRC and Hong Kong, awards made by PRC arbitral authorities, which are recognized under the Arbitration Ordinance of Hong Kong, can be enforced in Hong Kong. Hong Kong arbitration awards are also enforceable in the PRC.

RISKS RELATING TO THE GLOBAL OFFERING

Characteristics of the A Share and H Share markets may differ.

The A Shares have been listed and traded on the SZSE since December 2007. Following the Global Offering, the A Shares will continue to be traded on the SZSE, and the H Shares will be traded on the Hong Kong Stock Exchange. Without approval from the relevant regulatory authorities, the A Shares and H Shares are neither interchangeable nor fungible, and there is no trading or settlement between the A share and the H share markets. Please see the subsection below headed “The conversion of A Shares to H Shares could have a material and adverse effect on the prevailing market price of the H Shares and our ability to raise capital in the future”. The A share and H share markets have different trading characteristics, including trading volume and liquidity, and investor bases, including different levels of participation of retail and institutional investors. As a result of these differences, the trading prices of our A Shares and H Shares may not be the same. Moreover, fluctuations in our A Share price may affect our H Share price and vice versa. Because of the different characteristics of the A share and H share markets, the historical prices of the A Shares may not be indicative of the performance of the H Shares. You should therefore

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RISK FACTORS

not place undue reliance on the historical performance of the A Shares when evaluating an investment in the H Shares.

The conversion of A Shares to H Shares could have a material and adverse effect on the prevailing market price of the H Shares and our ability to raise capital in the future.

According to the stipulations by the State Council securities regulatory authority, A shares may be transferred to overseas investors, and such transferred shares may be listed or traded on an overseas stock exchange, provided that certain conditions are met and certain procedures are completed. Conversion of a substantial number of the A Shares to H Shares, or market anticipation that such conversion may occur, could materially and adversely affect the price of the H Shares. Further, assuming the Over-allotment Option is not exercised, 39,529,400 A Shares will be converted into H Shares and transferred to the NSSF in connection with the Global Offering. The NSSF has not entered into any lock up agreement with us or the Underwriters and would be free to sell the H Shares any time after the Global Offering. This may also materially and adversely affect the prevailing market price of the H Shares and our ability to raise capital in the future at a time and at a price favorable to us.

As the Offer Price of the H Shares is higher than the net tangible asset value per share, you will experience immediate dilution.

The Offer Price of the H Shares is higher than the net tangible asset value per share of the outstanding Shares issued to our existing Shareholders. Therefore, purchasers of the H Shares in the Global Offering will experience an immediate dilution in the net tangible asset value to HK$5.06 per Share (assuming an Offer Price of HK$21.40, being the mid-point of our indicative Offer Price range, and assuming the Over-allotment Option is not exercised), and the pro forma adjusted consolidated net tangible asset value per share of the Shares held by our existing Shareholders will increase. If, in order to expand our business in the future, we issue additional H Shares at a price below the net tangible asset value per share, the net tangible asset value per share of the H Shares held by the buyers of the H Shares may be diluted. As at the Latest Practicable Date, the share price of our A Shares was RMB23.15 per A Share.

The sales or potential sales of substantial amounts of the H Shares in the public market (including any future offering) may affect the prevailing market price of the H Shares and our ability to raise capital in the future, and future additional issuance of securities may dilute your shareholdings.

The sales of substantial amounts of the H Shares or other securities related to the H Shares in the public market, or the issuance of new H Shares or other securities, or the market anticipation that such sales or issuance may occur, may cause fluctuations in the market price of the H Shares, and may materially and adversely affect our ability to raise capital at a time and at a price as we see fit in the future. Further, if we issue additional securities in future offerings, the shareholdings of the Shareholders may be diluted.

There exist uncertainties about the Vensys Option and potential issuance of additional Shares pursuant to the exercise of the Vensys Option will cause dilution in your shareholdings.

Pursuant to the Vensys Share SPA and the Vensys Supplemental Agreements relating to our acquisition of a 70.0% equity interest in Vensys AG in 2008, we have granted the Vensys Option to each of the holders of the remaining 30.0% of the shares of Vensys AG (namely Vensys/Innowind, Saarwind and Windpark). Pursuant to the Vensys Option, Vensys/Innowind, Saarwind and Windpark may exchange the remaining 1.5 million shares of Vensys AG held by them in part or total into the Shares at a price of EUR11.78 per share of Vensys AG, and shall be

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subject to PRC laws, the relevant provisions of the PRC securities regulatory authority and the relevant rules of the stock exchange on which the Shares are listed at the respective date of the exercise of the Vensys Option. The number of our Shares to be exchanged upon the exercise of the Vensys Option will be calculated based on multiplying the number of shares of Vensys AG to be exchanged by the price of EUR11.78 divided by the market price of our Shares at the time the Vensys Option is exercised. Each of Vensys/Innowind, Saarwind and Windpark may request to exercise the Vensys Option from December 26, 2010 onwards. If Vensys/Innowind, Saarwind and Windpark fail to or are unable to exercise the Vensys Option before December 26, 2011, such option will automatically lapse. Please see the section entitled “Share Capital” in this prospectus for further details.

There exist uncertainties about the enforcement and interpretation of the Vensys Option as set forth in the Vensys Share SPA including determination of the actual exchange ratio, the class of the Shares subject to exchange and the procedural steps required to exercise the Vensys Option. If any of Vensys/Innowind, Saarwind and Windpark chooses to exercise the Vensys Option and we have to issue additional Shares in order to exchange their remaining shares of Vensys AG into the Shares, the Shareholders would experience dilution in their holdings. The Vensys Option does not stipulate the class of Shares that we may issue if it is exercised, and we may therefore need to issue additional H Shares pursuant to exercise of the Vensys Option. Further, in the event of future market anticipation that such issuance may occur, the market price of the H Shares may fluctuate.

There will be a five-Business-Day time gap between pricing and trading of the H Shares offered pursuant to the Global Offering.

The Offer Price of the H Shares sold in the Global Offering will be determined on the Price Determination Date. However, the trading of the H Shares on the Hong Kong Stock Exchange will not commence until they are delivered, which is expected to be the sixth Business Day after the Price Determination Date. As a result, investors may not be able to sell or otherwise deal in the H Shares during that period. Consequently, holders of the H Shares may bear risks as adverse market conditions or other unfavorable circumstances may arise during the period between the Price Determination Date and the time trading begins (for instance, decrease in the price of the A Shares) and the price of the H Shares may be lower than the Offer Price at the start of trading.

There is no assurance that we will adopt the same dividend policy as we have adopted in the past.

We distributed dividends in the form of Shares and cash amounting to RMB500.0 million and RMB680.0 million during the two years ended December 31, 2007 and 2008, respectively. The Board of Directors on August 31, 2009 and the Shareholders in general meeting on September 25, 2009 approved a resolution that holders of our A Shares are entitled to our distributable profits accumulated prior to January 1, 2010, and holders of our H Shares and A Shares upon the completion of the Global Offering will be equally entitled to our distributable profits accumulated between January 1, 2010 and the Listing Date. On March 25, 2010, our Company’s 2009 annual general meeting approved the distribution of our Company’s consolidated actual distributable profits of RMB1,767.8 million as of December 31, 2009. As partial settlement of this distribution, on April 6, 2010, our Company issued 840 million A Shares and paid cash of RMB140.0 million to holders of our A Shares funded with cash from profits generated by our business. On May 26, 2010, our Board of Directors approved the distribution of RMB784.0 million in the form of a cash dividend paid out of our internal cash resources (and not out of our net proceeds from the Global Offering), subject to approval of our Shareholders in a general meeting to be held on June 12, 2010, the settlement date of which will be determined after the general meeting and is expected to be after the Listing. Our H Shareholders shall not be entitled to any portion of this cash dividend. Any future declaration of dividends will be proposed by the Board of Directors and the amount of any dividends will depend on various factors, including our results of operations, financial condition, future business

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prospects and other factors that the board may determine to be important. For further details on our dividend policy, please see the section entitled “Financial Information — Dividend Policy” in this prospectus. There is no assurance that we will adopt the same dividend policy as we have adopted in the past.

There has been no prior public market for the H Shares, and the liquidity, market price and trading volume of the H Shares may be volatile.

Prior to the Global Offering, there has been no public market for the H Shares. We have applied to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the H Shares. However, there is no assurance that the Global Offering will result in the development of an active and liquid public trading market for the H Shares. The market price, liquidity and trading volume of the H Shares may be volatile.

We cannot assure you that Shareholders will be able to sell their H Shares or achieve their desired price. As a result, Shareholders may not be able to sell their H Shares at prices equal to or greater than the price paid for their H Shares under the Global Offering. Factors that may affect the volume and price at which the H Shares will be traded include, among other things, variations in our revenue, earnings, cash flows and costs, announcements of new investments and changes in PRC laws and regulations. We cannot assure you that these developments will not occur in the future. In addition, shares of other companies listed on the Hong Kong Stock Exchange with significant operations and assets in the PRC have experienced price volatility in the past, and it is possible that the H Shares may be subject to changes in price not directly related to our performance.

Certain industry statistics contained in this prospectus are derived from various publicly available official sources and may not be reliable.

Certain statistical data and other information relating to the PRC and the industries in which we operate contained in, for instance, the section entitled “Industry Overview” in this prospectus, has been derived from various publicly available official publications. However, we cannot guarantee the quality of such source materials. Moreover, statistics derived from multiple sources may not be prepared on a comparable basis. Neither the Joint Sponsors, Underwriters or any of their Connected Persons or advisors, nor we or any of our Connected Persons or advisors has verified the accuracy of the information contained in such sources. We make no representation as to the accuracy of the information contained in such sources, which may not be consistent with other information compiled within or outside the PRC. Accordingly, these industry information and statistics contained herein may not be accurate and should not be unduly relied upon for your investment in us.

Holders of the H Shares may be subject to PRC taxation.

Under current PRC tax laws, regulations and rules, foreign individuals and foreign enterprises that are not PRC residents are subject to different tax obligations with respect to the dividends paid by us or the gains realized upon the sale or other disposition of H Shares. Foreign individuals who are not PRC residents are currently exempted from PRC individual income tax on dividends received from H shares and gains realized by such individuals upon the sale or other disposition of H shares. If the PRC Government withdraws the exemption in the future, such foreign individuals may be required to pay PRC individual income tax unless there are applicable tax treaties between the PRC and the jurisdictions in which the foreign individuals reside that reduce or exempt the relevant tax.

For foreign enterprises that do not have establishments or premises in the PRC, or have establishments or premises in the PRC but their income is not related to such establishments or premises (“ Non-resident Enterprises ”), under the new PRC Enterprise Income Tax Law (the “ New EIT Law ”), they are subject to the

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RISK FACTORS

PRC enterprise income tax at a rate of 20% on their PRC-sourced income. The implementation rules to the New EIT Law provide that such tax rate will be reduced to 10%, subject to a further reduction according to applicable treaties on avoidance of double taxation. Further, pursuant to the Notice Concerning Withholding of Corporate Income Tax for Dividends Paid by Chinese Resident Enterprises to H Share Non-resident Enterprises Shareholders Outside the Mainland Territory (Guoshuihan (2008) No. 897) , from 2008 onwards, the enterprise income tax on dividends paid by PRC enterprises to H shareholders that are Non-resident Enterprises shall be withheld at a uniform rate of 10%, subject to reduction according to applicable treaties on avoidance of double taxation. As such, dividends paid by us to our H Shareholders that are Non-resident Enterprises and gains derived from the sale or disposal in other forms of the H Shares by Shareholders that are Non-resident Enterprises are usually subject to the PRC enterprise income tax at the rate of 10%. As the New EIT Law and the implementation rules thereto are new, there remains significant uncertainty as to their interpretation and application by the PRC tax authorities. The implementation of enterprise income tax on capital gain remains uncertain. The PRC tax laws, rules and regulations may also change from time to time. If the tax rates stipulated in the New EIT Law and the related implementation rules are amended, the value of your investment in the H Shares will be materially affected. Please see the appendix entitled “Appendix VI — Taxation and Foreign Exchange” to this prospectus for further details.

You should read the entire prospectus carefully and we strongly caution you not to place any reliance on any information contained in press articles or other media regarding us and the Global Offering.

We strongly caution you not to place any reliance on any information contained in press articles or other media regarding us and the Global Offering. Prior to the date of this prospectus, there has been press and media coverage regarding us and the Global Offering, which included certain financial information, financial projections, valuations, capital expenditure and other information about us that do not appear in this prospectus. We have not authorized the disclosure of any such information in the press or media. We do not accept any responsibility for any such information and such information is not sourced from or authorized by our directors or our management. We make no representation as to the appropriateness, accuracy, completeness or reliability of any such information included in or referred to by the press or other media, nor the fairness or appropriateness of any forecasts, views or opinions expressed by the press or other media regarding us or the Global Offering. To the extent that any such information is inconsistent or conflicts with the information contained in this prospectus, we would not accept any responsibility for it and you should not rely on any such information. Accordingly, you are cautioned that, in making your decisions as to whether to purchase our H Shares, you should rely only on the financial, operational and other information included in this prospectus and the Application Forms. By applying to purchase our Offer Shares in this Global Offering, you will be deemed to have agreed that you will not rely on any information other than the information contained in this prospectus and the Application Forms.

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WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES

CONNECTED TRANSACTIONS

Members of our Group have entered into, and are expected to continue after the Listing, certain transactions, which will constitute non-exempt continuing connected transactions under the Listing Rules upon Listing. Our Company has applied to the Hong Kong Stock Exchange for waivers from strict compliance with the requirements regarding the announcements and independent shareholders’ approval in respect of such non-exempt continuing connected transactions under Chapter 14A of the Listing Rules. The details of such waivers are set out in the section entitled “Connected Transactions” in this prospectus.

MANAGEMENT PRESENCE

According to Rule 8.12 and Rule 19A.15 of the Listing Rules, a new applicant applying for a listing on the Hong Kong Stock Exchange must have a sufficient management presence in Hong Kong, and this normally means that at least two of its executive directors must be ordinarily resident in Hong Kong. Our operations are principally in the PRC and substantially all of the Directors currently reside in the PRC. We do not, and for the foreseeable future will not, have sufficient management presence in Hong Kong for the purpose of satisfying the requirements under Rule 8.12 of the Listing Rules. As a result, we have applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted us, a waiver in connection with Rules 8.12 and 19A.15 of the Listing Rules, on the following conditions to ensure that regular and effective communication is maintained between the Hong Kong Stock Exchange and us:

1. We have appointed Wei Hongliang, our executive Director, and Ma Jinru, our company secretary, as our authorized representatives (the “ Authorized Representatives ”) for the purpose of Rule 3.05 of the Listing Rules. They will act as our principal channel of communication with the Hong Kong Stock Exchange. The Authorized Representatives will provide their usual contact details to the Hong Kong Stock Exchange to be readily contactable by the Hong Kong Stock Exchange, and will be available to meet with the Hong Kong Stock Exchange to discuss any matters on short notice;

2. As and when the Hong Kong Stock Exchange wishes to contact the Directors on any matters, each of the Authorized Representatives will have means to contact all the Directors (including our independent non-executive Directors) promptly at all times. We will implement such measures that (a) each Director must provide his mobile phone numbers, office phone numbers, email addresses and fax numbers to the Authorized Representatives; and (b) in the event that a Director expects to travel and or otherwise be out of office, he will provide the phone number of the place of his accommodation to the Authorized Representatives;

3. We will provide the mobile phone number, the telephone number of the business office, email address and fax number of every Director to the Hong Kong Stock Exchange; and

4. Each of the Directors who is not ordinarily resident in Hong Kong possesses or can apply for valid documents to visit Hong Kong and can meet with the Hong Kong Stock Exchange upon reasonable notice.

In compliance with Rule 3A.19 of the Listing Rules, we intend to appoint Taifook Capital Limited as the compliance advisor, which will act as our additional channel of communication with the Hong Kong Stock Exchange when our Authorized Representatives are not available. The compliance advisor will have access at all times to our Authorized Representatives, the Directors and other officers of our Company to ensure that it is in a position to provide prompt responses to any queries or requests from the Hong Kong Stock Exchange in respect of our Company.

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WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES

SUBSCRIPTION FOR SHARES BY EXISTING SHAREHOLDERS

Rule 10.04 of the Listing Rules requires that existing shareholders may only subscribe for securities provided no securities will be offered to them on a preferential basis and no preferential treatment will be given to them in the allocation of the securities.

Our Company has applied for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with Listing Rule 10.04 and the consent under paragraph 5(2) of Appendix 6 to the Listing Rules in relation to the placing of our H Shares with our existing A Shareholders or their associates under the International Offering.

The waiver is conditional on each of our A Shareholders placed with our H Shares (i) holding less than 2% of our issued A share capital immediately prior to the Global Offering and exerting no influence over our Company; (ii) not being and not intending to be a Connected Person of our Company; and (iii) being subject to the same book building and allocation process as other investors in the International Offering, and no preferential treatment is given to them in the allocation.

Any placing of our H Shares with our existing A Shareholders will be conducted in accordance with all applicable PRC and Hong Kong laws and regulations.

CLAWBACK MECHANISM

Paragraph 4.2 of the Practice Note 18 of the Listing Rules requires a clawback mechanism to be put in place, which would have the effect of increasing the number of Hong Kong Public Offer Shares to certain percentages of the total number of Offer Shares offered in the Global Offering if certain prescribed total demand levels are reached. An application has been made for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with Paragraph 4.2 of Practice Note 18 of the Listing Rules such that the allocation of the Offer Shares between the Hong Kong Public Offering and the International Offering is subject to the following adjustments:

• k If the number of the Offer Shares validly applied for under the Hong Kong Public Offering represents ten times or more but less than 40 times the number of the Offer Shares initially available for subscription under the Hong Kong Public Offering, then Offer Shares will be reallocated to the Hong Kong Public Offering from the International Offering, so that the total number of the Offer Shares available under the Hong Kong Public Offering will be 59,294,400 Offer Shares, representing 15% of the Offer Shares initially available under the Global Offering;

• k If the number of the Offer Shares validly applied for under the Hong Kong Public Offering represents 40 times or more but less than 50 times the number of the Offer Shares initially available for subscription under the Hong Kong Public Offering, then the number of Offer Shares to be reallocated to the Hong Kong Public Offering from the International Offering will be increased so that the total number of the Offer Shares available under the Hong Kong Public Offering will be 79,058,800 Offer Shares, representing 20% of the Offer Shares initially available under the Global Offering; and

• k If the number of the Offer Shares validly applied for under the Hong Kong Public Offering represents 50 times or more the number of the Offer Shares initially available for subscription under the Hong Kong Public Offering, then the number of Offer Shares to be reallocated to the Hong Kong Public Offering from the International Offering will be increased, so that the total number of the Offer Shares available under the Hong Kong Public Offering will be 118,588,400 Offer Shares, representing 30% of the Offer Shares initially available under the Global Offering.

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INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING

DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS IN THIS PROSPECTUS

This prospectus, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the PRC Company Law, the Companies Ordinance, the Securities and Futures (Stock Market Listing) Rules and the Listing Rules for the purposes of giving information to the public with regard to us. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this prospectus is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement in this prospectus or this prospectus misleading.

CSRC APPROVAL

CSRC has given its approval for the Global Offering and the making of an application by us to list the H Shares on the Hong Kong Stock Exchange on May 11, 2010. In granting such approval, CSRC accepts no responsibility for our financial soundness nor the accuracy of any of the statements made or opinions expressed in this prospectus or the Application Forms. No other approvals are required to be obtained for the listing of the H Shares on the Hong Kong Stock Exchange.

THE HONG KONG PUBLIC OFFERING AND THIS PROSPECTUS

This prospectus is published solely in connection with the Hong Kong Public Offering. For applicants under the Hong Kong Public Offering, this prospectus and the Application Forms set out the terms and conditions of the Hong Kong Public Offering.

Neither the delivery of this prospectus nor any subscription or acquisition made under it shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this prospectus or that the information in it is correct as at any subsequent time.

UNDERWRITING

For applicants under the Hong Kong Public Offering, this prospectus and the related Application Forms contain the terms and conditions of the Hong Kong Public Offering. The Global Offering comprises the Hong Kong Public Offering of initially 39,529,600 H Shares and the International Offering of initially 355,764,400 H Shares (subject, in each case, to reallocation on the basis described in the section entitled “Structure of the Global Offering” in this prospectus).

The Listing is sponsored by China International Capital Corporation Hong Kong Securities Limited, Citigroup Global Markets Asia Limited and Hai Tong Capital (HK) Limited. The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters under the terms of the Hong Kong Underwriting Agreement, subject to the agreement on the Offer Price between the Joint Bookrunners (on behalf of the Underwriters) and us on the Price Determination Date. The Global Offering is managed by the Joint Lead Managers. For further details of the Underwriters and the underwriting arrangements, please see the section entitled “Underwriting — Underwriting arrangements and expenses” in this prospectus.

DETERMINATION OF THE OFFER PRICE

The Offer Shares are being offered at the Offer Price which is expected to be determined by the Joint Bookrunners (on behalf of the Underwriters) and us on or around June 12, 2010, or such later date as may be agreed between the Joint Bookrunners (on behalf of the Underwriters) and us.

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INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING

If the Joint Bookrunners (on behalf of the Underwriters) and us are unable to reach an agreement on the Offer Price on or before June 20, 2010, the Global Offering will not become unconditional and will lapse.

SELLING RESTRICTIONS

No action has been taken to permit a Hong Kong Public Offering of the Offer Shares or the general distribution of this prospectus and/or the related Application Forms in any jurisdiction other than Hong Kong. Accordingly, this prospectus may not be used for the purposes of, and does not constitute, an offer or invitation in any jurisdiction or in any circumstances in which such an offer or invitation is not authorized or to any person to whom it is unlawful to make such an offer or invitation. The distribution of this prospectus and the offering and sales of the Offer Shares in other jurisdictions are subject to restrictions and may not be made except as permitted under the applicable securities laws of such jurisdictions pursuant to registration with or authorization by the relevant securities regulatory authorities or an exemption therefrom. Each person acquiring the Hong Kong Public Offer Shares under the Hong Kong Public Offering will be required to confirm, or be deemed by his acquisition of Hong Kong Public Offer Shares to confirm, that he is aware of the restrictions on offers and sales of the Offer Shares described in this prospectus. In particular, the Offer Shares have not been offered or sold, and will not be offered or sold, directly or indirectly, in the PRC.

The Offer Shares are offered for subscription solely on the basis of the information contained and representations made in this prospectus and related Application Forms, and on the terms and subject to the conditions set out herein and therein. No person is authorized in connection with the Global Offering to give any information, or to make any representation, not contained in this prospectus, and any information or representation not contained in this prospectus must not be relied upon as having been authorized by our Company, the Joint Global Coordinators, the Underwriters, any of their respective directors or any other persons or parties involved in the Global Offering. For further details of the structure of the Global Offering, including its conditions, and the procedures for applying for Hong Kong Public Offer Shares, please see the sections entitled “Structure of the Global Offering” and “How to Apply for the Hong Kong Public Offer Shares” in this prospectus and the relevant Application Forms.

APPLICATION FOR LISTING ON THE HONG KONG STOCK EXCHANGE

We have applied to the Listing Committee of the Hong Kong Stock Exchange for the listing of, and permission to deal in, the H Shares including any H Shares which may be issued by us pursuant to the Global Offering and upon the exercise of the Over-allotment Option. Except for the A Shares of our Company that have been listed on the SZSE and our pending application to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the H Shares, no other part of our share or loan capital is listed on or dealt in on any other stock exchange and no such listing or permission to list is being or proposed to be sought in the near future.

HONG KONG H SHARE REGISTER AND STAMP DUTY

All H Shares issued pursuant to applications made in the Hong Kong Public Offering and the International Offering will be registered on our H Share register of members to be maintained in Hong Kong. Our register of members will also be maintained by us at our legal address in the PRC.

Dealings in H Shares registered in our H Share register in Hong Kong will be subject to Hong Kong stamp duty.

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INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING

Unless determined otherwise by us, dividends payable in Hong Kong dollars in respect of H Shares will be paid to the Shareholders listed on our H Share register in Hong Kong, by ordinary post, at the Shareholders’ risk, to the registered address of each Shareholder.

H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

Subject to the granting of listing of, and permission to deal in, the H Shares on the Hong Kong Stock Exchange and our compliance with the stock admission requirements of HKSCC, the H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in the H Shares on the Hong Kong Stock Exchange or any other date as HKSCC may choose. Settlement of transactions between participants of the Hong Kong Stock Exchange is required to take place in CCASS on the second business day after any trading day. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. All necessary arrangements have been made for the H Shares to be admitted into CCASS.

REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES

We have instructed our H Share Registrar, and our H Share Registrar has agreed, not to register the subscription, purchase or transfer of any H Shares in the name of any particular holder unless and until such holder delivers to such H Share Registrar a signed form in respect of such H Shares bearing statements to the effect that the holder of the H Shares:

• (i) agrees with us and each of the Shareholders, and we agree with each of the Shareholders, to observe and comply with the PRC Company Law, the Special Regulations and the Articles of Association;

• (ii) agrees with us, each of our Shareholders, Directors, Supervisors, managers and officers, and we acting for ourselves and for each of our Directors, Supervisors, managers and officers agree with each of the H Shareholders, to refer all differences and claims arising from the Articles of Association or any rights or obligations conferred or imposed by the PRC Company Law or other relevant laws and administrative regulations concerning our affairs to arbitration in accordance with the Articles of Association, and any reference to arbitration shall be deemed to authorize the arbitration tribunal to conduct hearings in open session and to publish its award. Such arbitration shall be final and conclusive. Please see the appendices entitled “Appendix VII — Summary of Principal Legal and Regulatory Provisions” and “Appendix VIII — Summary of the Articles of Association” to this prospectus;

• (iii) agrees with us and each of the Shareholders that the H Shares are freely transferable by the holders thereof; and

• (iv) authorizes us to enter into a contract on his behalf with each of the Directors and officers whereby each such Director and officer undertakes to observe and comply with his obligation to the Shareholders as stipulated in the Articles of Association.

PROFESSIONAL TAX ADVICE RECOMMENDED

Applicants for the Offer Shares are recommended to consult their professional advisors if they are in any doubt as to the taxation implications of holding and dealing in the H Shares. It is emphasized that none of our Company, the Joint Bookrunners, the Underwriters, the Joint Sponsors, or the Joint Lead Managers, any of our or their respective directors, supervisors, officers, affiliates, agents or advisors or any other person involved in the

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INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING

Global Offering accepts responsibility for any tax effects or liabilities of holders of H Shares resulting from the subscription, purchase, holding or disposal of H Shares or the exercise of any rights attaching to H Shares.

PROCEDURES FOR APPLICATION FOR HONG KONG PUBLIC OFFER SHARES

The procedure for applying for Hong Kong Public Offer Shares is set out in the section entitled “How to Apply for Hong Kong Public Offer Shares” in this prospectus and in the Application Forms.

OVER-ALLOTMENT AND STABILIZATION

In connection with the Global Offering, Citigroup Global Markets Asia Limited, as stabilizing manager (“ Stabilizing Manager ”) or any person acting for it may over-allot or effect transactions with a view to prevent a decline in the market price of the H Shares for a limited period after the Listing Date. However, there is no obligation on the Stabilizing Manager or any person acting for it to do this. Such stabilization action, if taken, may be discontinued at any time and is required to be brought to an end after a limited period. In Hong Kong and certain other jurisdictions, activity aimed at reducing the market price is prohibited, and the price at which stabilization is effected is not permitted to exceed the Offer Price. Further details with respect to stabilization and the Overallotment Option are set out in the section entitled “Underwriting” in this prospectus.

STRUCTURE OF THE GLOBAL OFFERING

Details of the structure of the Global Offering, including its conditions, are set out in the section entitled “Structure of the Global Offering” in this prospectus.

EXCHANGE RATE CONVERSION

Solely for your convenience and information only, this prospectus contains translations of certain RMB amounts into Hong Kong dollars as well as RMB amounts and Hong Kong dollar amounts into U.S. dollars at specified rates. Unless otherwise stated or for transactions that have occurred at historical exchange rates, RMB amounts have been translated into Hong Kong dollars at the rate of RMB0.8772 to HK$1.00 and RMB amounts have been translated into U.S. dollars at the rate of RMB6.8281 to US$1.00, each of which was the PBOC Rate prevailing on the Latest Practicable Date. Any discrepancy in any table between totals and sums of amounts listed therein are due to rounding. No representation is made that any amounts in RMB, U.S. dollars or Hong Kong dollars can be or could have been at the relevant dates converted at the above rates or any other rates or at all on the date or dates in question or any other date.

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DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING

DIRECTORS

Name										Residential Address	Nationality
Executive Directors
Wu Gang (				)						No. 16	Chinese
										Karamy West Road
										Saybag District
										Urumqi, Xinjiang
										PRC
Guo Jian (				)						No. 1	Chinese
										East Second Street Alley
										Saybag District
										Urumqi, Xinjiang
										PRC
Wei Hongliang				(					)	Room 308, No. 12	Chinese
										Second Lane, Baiguang Road
										Xuanwu District
										Beijing
										PRC
Non-executive				Directors
Li Ying (		)								Jia No. 1	Chinese
										Fu Xing Road
										Haidian District
										Beijing
										PRC
Gao Zhong (						)				Building 145	Chinese
										Hot Spring West Road
										Shui Mogou District
										Urumqi, Xinjiang
Lv Houjun (							)			PRC No. 60138 Qing Xi Road	Chinese
										Changning District
										Shanghai
										PRC
Independent	non-executive Directors
Wang Yousan		(						)		No. 6	Chinese
										Zhong Shan Road
										Urumqi, Xinjiang
										PRC
Shi Pengfei (							)			No. 118	Chinese
										Hui Zhong Bei Li
										Chaoyang District
										Beijing
										PRC

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DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING

Name Li Man Bun, Brian David ( )

SUPERVISORS

Name

Wang Mengqiu ( )

Wang Shiwei ( )

Luo Jun ( )

Xiao Zhiping ( )

Zheng Chengjiang ( )

Residential Address Nationality Grenville House Chinese No. 1-3 (Hong Kong) Magazine Gap Road Hong Kong Residential Address Nationality No. 155 Chinese Dong Si Wu Tiao Dongcheng District Beijing PRC No. 82 Chinese Yangtze Road Saybag District Urumqi, Xinjiang PRC Hui Huang Subdistrict Chinese Huang He Market Alley Urumqi, Xinjiang PRC Yangtze Road Chinese Saybag District Urumqi, Xinjiang PRC No. 320 Chinese Jian Kang North Road Miquan, Xinjiang PRC

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DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING

PARTIES INVOLVED
Joint Global Coordinators	China International Capital Corporation Hong Kong
	Securities Limited
	29/F, One International Finance Centre
	1 Harbour View Street
	Central, Hong Kong
	Citigroup Global Markets Asia Limited
	50/F, Citibank Tower
	3 Garden Road
	Central, Hong Kong
Joint Bookrunners	China International Capital Corporation Hong Kong
	Securities Limited
	29/F, One International Finance Centre
	1 Harbour View Street
	Central, Hong Kong
	Citigroup Global Markets Asia Limited
	50/F, Citibank Tower
	3 Garden Road
	Central, Hong Kong
	Credit Suisse (Hong Kong) Limited
	45th Floor, Two Exchange Square
	8 Connaught Place
	Central, Hong Kong
Joint Sponsors	China International Capital Corporation Hong Kong
	Securities Limited
	29/F, One International Finance Centre
	1 Harbour View Street
	Central, Hong Kong
	Citigroup Global Markets Asia Limited
	50/F, Citibank Tower
	3 Garden Road
	Central, Hong Kong
	Hai Tong Capital (HK) Limited
	21/F, Li Po Chun Chambers
	189 Des Voeux Road Central
	Central, Hong Kong
Joint Lead Managers	China International Capital Corporation Hong Kong
	Securities Limited
	29/F, One International Finance Centre
	1 Harbour View Street
	Central, Hong Kong
	Citigroup Global Markets Asia Limited
	50/F, Citibank Tower
	3 Garden Road
	Central, Hong Kong

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DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING

Global Financial Advisors

PRC Financial Advisor

Legal Advisors to our Company

Legal Advisors to the Joint Sponsors and the Underwriters

Taifook Securities Company Limited 25/F, New World Tower 16-18 Queen’s Road Central Hong Kong Credit Suisse (Hong Kong) Limited 45th Floor, Two Exchange Square 8 Connaught Place Central, Hong Kong China International Capital Corporation Hong Kong Securities Limited 29/F, One International Finance Centre 1 Harbour View Street Central, Hong Kong CCB International Capital Limited 34/F, Two Pacific Place 88 Queensway Admiralty, Hong Kong Haitong Securities Co., Ltd. Haitong Securities Building No. 689, Guangdong Rd. Shanghai PRC as to Hong Kong law and United States law:

DLA Piper Hong Kong 17/F, Edinburgh Tower The Landmark 15 Queen’s Road Hong Kong as to PRC law: Xinjiang Tianyang Law Firm 24th, 25th Floor Century Prosperous Hotel 36 South Xinhua Road Urumqi, Xinjiang PRC as to Hong Kong law and United States law:

Freshfields Bruckhaus Deringer 11/F, Two Exchange Square Central, Hong Kong

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DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING

	as to PRC law:
	Jingtian & Gongcheng Attorneys At Law
	34/F, Tower 3, China Central Place
	77 Jianguo Road
	Chaoyang District
	Beijing
	PRC
Reporting Accountants	Ernst & Young
	Certified Public Accountants
	18/F, Two International Finance Centre
	8 Finance Street
	Central, Hong Kong
Property Valuer	Jones Lang LaSalle Sallmanns Limited
	17/F Dorset House, Taikoo Place
	979 King’s Road
	Quarry Bay
	Hong Kong
Receiving Bankers	Bank of China (Hong Kong) Limited
	1 Garden Road
	Central, Hong Kong
	Standard Chartered Bank (Hong Kong) Limited
	15/F, Standard Chartered Tower
	388 Kwun Tong Road
	Kowloon, Hong Kong
	China Construction Bank (Asia) Corporation Limited
	16/F, York House
	The Landmark
	15 Queen’s Road Central
	Central, Hong Kong

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CORPORATE INFORMATION

Legal address and head office in the PRC Principal place of business in Hong Kong Company secretary Authorized representatives Compliance advisor Nomination Committee Audit Committee Remuneration and Appraisal Committee Strategy Committee H Share Registrar Website address

No.107 Shanghai Road Economic & Technology Development District Urumqi, Xinjiang PRC 17/F, Edinburgh Tower The Landmark 15 Queen’s Road Hong Kong Ma Jinru (Affiliated Person, HKICS) Wei Hongliang (Executive Director) Room 308, No. 12 Second Lane, Baiguang Road Xuanwu District Beijing PRC Ma Jinru (Company Secretary) No. 19 Kangding Street Yizhuang Economic & Technology Development Zone Beijing PRC Taifook Capital Limited 25/F, New World Tower 16-18 Queen’s Road Central Hong Kong Wang Yousan (Chairman) Wu Gang Shi Pengfei Li Man Bun, Brian David (Chairman) Wang Yousan Gao Zhong Shi Pengfei (Chairman) Wang Yousan Li Ying Wu Gang (Chairman) Guo Jian Wei Hongliang Gao Zhong Shi Pengfei Computershare Hong Kong Investor Services Limited Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East Wanchai, Hong Kong www.goldwind.cn (contents of this website do not form part of this prospectus)

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CORPORATE INFORMATION

Principal bankers

China Construction Bank Corporation No. 25 Finance Street Xicheng District Beijing PRC China Development Bank No. 29 Fuchengmenwai Street Xicheng District Beijing PRC Bank of China Limited, Xinjiang Branch Bank of China Building No. 2 Dongfeng Road Urumqi, Xinjiang PRC Citibank (China) Co. Ltd., Beijing Branch 16-18F, Excel Center No. 6 Wudinghou Street Xicheng District Beijing PRC Deutsche Bank (China) Co., Ltd., Beijing Branch 27/F, Deutsche Bank Tower China Central Place No. 81, Jianguo Avenue Chaoyang District Beijing PRC Bank of Communications Co., Ltd., Xinjiang Branch No. 16 Dongfeng Road Urumqi, Xinjiang PRC

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INDUSTRY OVERVIEW

The information presented in this section is derived from various publications. None of these publications was commissioned by us or the Joint Sponsors or their respective affiliates or advisors. While reasonable care has been taken in the extraction, compilation and reproduction of such information and statistics, neither we, the Joint Bookrunners, the Joint Sponsors, or the Underwriters, nor any of their respective affiliates or advisors, nor any party involved in the Global Offering have independently verified such information and statistics, and such parties do not make any representation as to their correctness, accuracy, completeness or fairness. The information in this section may not be consistent with, or may not have been compiled with the same degree of accuracy or completeness as, statistical or other information compiled elsewhere. You should not place undue reliance on statements herein.

Power Generation

The global demand for electricity has increased substantially with the rapid growth of the global economy, in particular the economic growth of developing countries and corresponding increases in energy consumption levels. According to statistics from the EIA, global power generation volume has increased from 14,848.7 TWh in 2001 to 18,778.7 TWh in 2007 at a CAGR of 4.0%. Correspondingly, to meet the global demand for power generation, the world’s accumulated installed capacity has also increased, from 3,551.4 GW in 2001 to 4,428.4 GW in 2007 at a CAGR of 3.7%.

Similarly, there has been a considerable rise in China’s power generation volume from 1,480.8 TWh in 2001 to 3,663.9 TWh in 2009 at a CAGR of 12.0% as the development and industrialization of its economy progresses at an accelerated pace. To meet the demand for power generation in China, China’s accumulated installed power capacity has increased significantly, from 338.6 GW in 2001 to 874.1 GW in 2009 at a CAGR of 12.6%. Although the growth rate of China’s power generation volume and installed capacity has been much higher than the world average in recent years, as indicated in the following chart, China’s per capita power generation volume is still significantly lower than those of developed countries, suggesting its demand for power generation will continue to increase.

Per capita power generation volume of various countries in 2008 (MWh)

==> picture [453 x 96] intentionally omitted <==

----- Start of picture text -----

14.0 13.0
7.7 7.0
2.6
United States Australia Germany Spain China
----- End of picture text -----

Source: BP Statistical Review of World Energy 2009, United Nations Population Fund State of World Population 2008

Renewable Power Generation

With rising concern over energy shortages, the environmental threat posed by global warming and the emission of greenhouse gases, there has been growing pressure in the power generation industry for improved energy savings and emission reductions. This has translated into vast growth potential for the renewable power generation industry. According to the EIA, global accumulated installed capacity of renewable energy grew from

– 58 –

INDUSTRY OVERVIEW

63.9 GW in 2001 to 160.4 GW in 2007, at a CAGR of 16.6%, and accounted for 3.6% of global installed capacity of all energy sources in 2007 as compared to 1.8% in 2001.

Renewable energy is a viable alternative capable of meeting the energy needs of the growing Chinese economy and its sustained development, especially in view of the rapid depletion of finite conventional energy sources such as oil, coal and natural gas. Moreover, the emission of greenhouse gases in the PRC has increased in tandem with the rapid growth of its economy. According to the IEA’s World Energy Outlook 2008, China has surpassed the United States as the world’s largest source of carbon dioxide emissions from power generation through the use of coal, petroleum and natural gases, with 2,829 million tonnes of carbon dioxide emissions in 2006. In 2002, China formally ratified the Kyoto Protocol, promulgated a series of laws and regulations since 2005 to encourage the development and use of renewable energy, and also pledged on November 26, 2009 to cut its greenhouse gas emissions per unit of GDP by 40% to 45% by 2020 compared with 2005 levels. Please see the section entitled “Regulations” in this prospectus for further details. According to statistical data from CEIC, China’s installed capacity of renewable energy has grown rapidly in recent years at a CAGR of 60.4% between 2001 and 2009.

Global Wind Power Generation

With more mature and reliable technology, and as one of the most price-competitive forms of renewable energy, wind power is generally perceived as having the greatest commercial value among renewable energy sources and is being vigorously promoted by various governments. For instance, in the United States, under its American Recovery and Reinvestment Act of 2009, up to US$93.0 million in incentives for wind energy has been set aside in the form of grants, loan guarantees and tax incentives.

Accumulated installed wind power capacity registered rapid growth from 24.9 GW in 2001 to 160.1 GW in 2009 at a CAGR of 26.2% according to statistics from BTM[(1)] , whereas newly installed wind power capacity increased to 38.1 GW in 2009, a growth of 35.2% over the previous year. It is further estimated that installed wind power capacity will continue to grow rapidly in the future and the CAGR of the accumulated installed wind power capacity and newly installed wind power capacity will be 22.8% and 13.5% respectively, from 2009 to 2014.

(1) Founded in 1986, BTM is a private independent consultancy company based in Denmark and specializing in renewable energy, including wind energy. BTM states on its website that its staff has been working with wind energy utilization since 1979. Services provided by BTM include market assessment and business development, appraisal and due diligence investigations. It has published, among other things, International Wind Energy Development - World Market Update, a non-governmental publication, on an annual basis since 1995, which contains statistics and market updates regarding the global wind energy industry. Neither the Directors nor the Joint Sponsors commissioned BTM to prepare any research report and BTM is an Independent Third Party of our Group.

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INDUSTRY OVERVIEW

The following charts show the growth of the accumulated global installed wind power capacity and newly installed wind power capacity from 2001 to 2009 as well as the estimated accumulated installed wind power capacity and newly installed wind power capacity in 2014.

==> picture [437 x 128] intentionally omitted <==

----- Start of picture text -----

Accumulated global installed wind power capacity Newly installed global wind power capacity
(MW) (MW)
MW 447,689 MW 71,650
38,103
160,084 28,190
122,158 19,791
94,005 15,016
24,927 [32,037] [40,301] [47,912] [59,399] [74,306] 6,824 7,227 8,344 8,154 11,542
2001 2002 2003 2004 2005 2006 2007 2008 2009 2014E 2001 2002 2003 2004 2005 2006 2007 2008 2009 2014E
----- End of picture text -----

Note: The difference between the accumulated global installed wind power capacity for any two consecutive years is not equal to the newly installed global wind power capacity for the more recent of the same two years because some of the already installed WTGs were decommissioned.

Source: BTM

According to the World Meteorological Organization and the Chinese Academy of Meteorological Sciences, there is approximately 20,000 GW of wind energy resources globally available for use. Much of these wind energy resources are distributed across the northern and western coastal areas of Europe and parts of the Mediterranean Sea, East Asia and certain parts of the interior, northern and western coastal areas in Africa, the western and southern coastal areas in Australia, the coastal and certain interior areas in North America, especially the mountain areas, as well as the southern portion of South America. According to BTM, the top five wind power markets in 2009 based on accumulated installed capacity were the United States, China, Germany, Spain and India, and growth in the global accumulated installed wind power capacity is expected to come primarily from China and the United States. It is estimated that the CAGR of the accumulated installed wind power capacity of these two countries will reach 32.3% and 23.3%, respectively, from 2009 to 2014, while installed wind power capacity in Europe will continue to grow, but at a slower rate. The following chart shows the accumulated installed wind power capacity of these top five wind power markets and their estimated accumulated installed wind power capacity by 2014 and the CAGR for 2009 to 2014.

Accumulated installed wind power capacity in 2009 and 2014 (MW)

==> picture [458 x 141] intentionally omitted <==

----- Start of picture text -----

32.3%
23.3%
20.3%
104,853 100,159 9.7% 8.7%
25,853 35,159 10,827 27,327 18,784 29,784 25,813 39,213
China U.S. India Spain Germany
2009 2014E 2009-2014E CAGR
----- End of picture text -----

Source: BTM

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INDUSTRY OVERVIEW

Wind Power Generation in China

The wind power industry in the PRC has grown more rapidly than most other forms of renewable energy in recent years. According to the CEIC, as of December 31, 2009, wind power accounted for more than 99% of the accumulated installed capacity of renewable energy in the PRC. China also became the world’s largest wind power market in 2009 in terms of newly installed wind power capacity with 13.8 GW, and electricity generated from wind power accounted for 0.7% of total electricity generated in China.

Despite such high growth rates, according to the EIA and BTM, China’s installed wind power capacity accounted for only 0.8% of China’s accumulated installed capacity in 2007, significantly less than the 16.8%, 16.6% and 1.7% of Germany, Spain and the United States, respectively. Historically, China has exceeded installed wind power capacity targets set by its government on numerous occasions. For example, the PRC Government established a wind power development plan in accordance with the 11th Five-Year Plan for Renewable Energy issued by the NDRC with a target accumulated installed wind power capacity of 10 GW by the end of 2010, but in fact, China’s accumulated installed wind power capacity exceeded 12.1 GW by the end of 2008. According to BTM, China’s accumulated installed wind power capacity is expected to grow more than four-fold from 2009 to 2014, representing a CAGR of 32.3%. Moreover, the Chinese Wind Energy Association[(1)] forecasted that China’s accumulated installed wind power capacity will grow almost ten-fold from 2009 to 2020, reaching 247.8 GW in 2020, representing a CAGR of 22.8%. Even though industry reports have made positive forecasts on the Chinese wind power market, the Chinese wind power market has repeatedly out-performed forecasts. For example, in March 2008, BTM forecasted China’s newly installed wind power capacity in 2008 would be 5.5 GW, but the actual newly installed wind power capacity was 6.2 GW; in March 2009, BTM forecasted China’s newly installed wind power capacity in 2009 would be 7.3 GW, but the actual newly installed wind power capacity was 13.8 GW.

The following charts show China’s accumulated installed wind power capacity and newly installed wind power capacity from 2001 to 2009 and estimated accumulated installed wind power capacity and newly installed wind power capacity by 2014.

==> picture [442 x 201] intentionally omitted <==

----- Start of picture text -----

China’s accumulated installed wind power capacity China’s newly installed wind power capacity
(MW) (MW)
104,853
18,000
13,750
MW MW
6,246
25,853
12,121 3,287
406 473 571 769 [1,264] [2,588] 5,875 54 67 98 198 498 1,334
2001 2002 2003 2004 2005 2006 2007 2008 2009 2014E
2001 2002 2003 2004 2005 2006 2007 2008 2009 2014E
----- End of picture text -----

Source: BTM

(1) Our independent non-executive Director, Mr. Shi Pengfei is the vice chairman of the Chinese Wind Energy Association. Neither our Group nor the Joint Sponsors commissioned the Chinese Wind Energy Association nor Mr. Shi Pengfei to prepare any research report and the Chinese Wind Energy Association is an Independent Third Party of our Group.

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INDUSTRY OVERVIEW

China possesses abundant wind energy resources. According to the assessment results of the United Nations Environment Program, China has technically feasible wind power resources of 3,000 GW and BTM estimated that wind energy will be the third largest energy source for power generation by 2030, after coal and hydropower. China’s wind energy resources are distributed extensively throughout the north of China as well as the coastal and island areas of China. According to statistics published by the Chinese Wind Energy Association, the top five wind power markets in 2009 based on accumulated installed wind power capacity were Inner Mongolia, Hebei, Liaoning, Jilin and Heilongjiang, with 9,196.2 MW, 2,788.1 MW, 2,425.3 MW, 2,063.9 MW and 1,659.8 MW, respectively.

The following map shows the distribution of wind energy resources in the PRC.

Distribution of wind energy resources in China

==> picture [426 x 294] intentionally omitted <==

Note: Wind Power Density refers to the amount energy available at the site for conversion by a wind turbine and is measured in watts per square meter.

Source: Chinese Academy of Meteorological Sciences

In 2009, the NDRC classified the country into four categories of wind energy resource areas in the National Wind Power Generation Benchmark On-Grid Tariffs Schedule. Different benchmark power tariffs apply to each category to ensure adequate investment return for wind power investors, therefore it is estimated that this policy will effectively promote the rapid growth of newly installed wind power capacity in areas with poorer wind energy resources and construction conditions.

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INDUSTRY OVERVIEW

Growth Drivers of the Global Wind Power Industry

We believe that the following growth drivers will facilitate the development of the global wind power industry, thereby increasing the demand for our products and services:

Energy independence and security considerations Increased concern about energy security and energy independence are pushing countries, particularly those with insufficient conventional energy resources, towards renewable energy sources which provide a local and secure supply and reduce risk of volatility in prices of conventional energy sources.

Environmental concerns There is growing awareness of environmental protection issues and greenhouse gas emissions from the use of fossil energy. As one of the lowest greenhouse gas emission producing alternative energy sources and being relatively easy to develop on a large-scale basis, wind power has garnered widespread support.

Rising global energy demand and increasing costs of fossil fuels Statistics published by the EIA have shown that future economic growth and an increase in energy consumption will lead to greater global demand for energy. This is expected to reduce the supplies of and eventually exhaust finite fossil fuel sources such as coal, petroleum and natural gas, resulting in price hikes. Countries are turning to renewable energy to mitigate these pressures and limit their impact.

Governmental support for renewable energy and wind power Countries have enacted financial policies such as preferential tax rates and feed-in tariffs to encourage the development of renewable energy, in particular wind power. In addition, wind energy provides support to the pursuit of sustained economic development and creates employment opportunities for the local population.

Cost advantages of wind power The cost of wind power is, to a substantial extent, lower than that of other forms of renewable energy, and under certain circumstances, gradually becoming cost competitive with conventional energy sources. Moreover, factors such as expansion in the scale of wind farm projects, technological advancements which improve the efficiency and availability of wind power equipment, greater economies of scale in the production of wind power equipment as well as more low cost financing opportunities for wind farm projects are expected to further reduce the cost of wind power.

Technological advancements in wind power Investments in the R&D of wind power have resulted in major technological breakthroughs. Future wind power technological advancements will continue to improve the performance of wind power equipment while reducing the cost of wind power, thereby allowing greater development of global wind energy resources.

Growth Drivers of the PRC Wind Power Industry

In addition to the above main growth drivers of the global wind power industry, primary factors driving the growth of wind power generation in China include:

Policy requirements China has implemented a series of wind power policies which have sped up the development of the wind power industry, including a target of having 3% and 8% of attributable installed capacity of renewable power generation by power producers with attributable installed capacity of over 5 GW by 2010 and 2020, respectively. Please see the section entitled “Regulations — Overall Industry Regulation Planning and Guidance” in this prospectus for more details. Investment in wind power has consequently increased to better meet these new requirements.

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Preferential support The PRC Government has launched a series of favorable policies for wind power including preferential tax rates, on-grid benchmark tariffs, facilitating bank loans, investment in R&D and stipulating that Chinese power grids must purchase all the power generated from renewable energy and construct infrastructure for transmission and distribution of such power. Please see the section entitled “Regulations” in this prospectus. Those favorable policies encourage strategic and financial investors to invest in wind farms, which could generate attractive returns.

Improvements in grid infrastructure The PRC Government and state-owned grids have implemented several measures and indicated plans to significantly invest in the construction of ultra high voltage transmission infrastructure, and a smart grid featuring distributed power supply and storage. Such measures will help address the grid connectivity bottleneck currently faced by the wind power industry.

Better ability to exploit wind resources Potential wind farm projects have recently been identified in China’s inland provinces such as Jiangxi, Henan, Shanxi and Shaanxi, and these areas have consequently become emerging markets for the wind power industry. With a better ability to exploit wind resources, more areas for development are expected to be identified in China.

Wind Power Value Chain

The wind power value chain consists of parts and components suppliers, WTG design houses, WTG suppliers, operation and management service providers, wind farm project consultants, construction contractors as well as wind farm investors and developers. The following diagram illustrates the value chain of the wind power industry.

Value chain of the wind power industry

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Parts & Components
WTG Design House
Supplier
Operation
Wind Farm Project
WTG Supplier Management Service Construction Contractor
Consultant
Provider
Wind Farm Investor / Developer
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INDUSTRY OVERVIEW

Global WTG Manufacturing Industry

Competitive Landscape

Presently, the global WTG manufacturing industry features a high degree of concentration. According to BTM, in 2009, the top ten WTG manufacturers accounted for the vast majority of the global newly installed wind power capacity. In addition, with the rapid development of the wind power market in China, three Chinese WTG manufacturers, namely our Group, Sinovel Wind Group Co., Ltd.[(1)] and Dongfang Electric Co., Ltd.[(2)] , are among the list of the world’s top ten WTG manufacturers, as shown in the chart below:

The top ten WTG manufacturers in 2009

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Vestas, 12.5%
Others, 18.5%
GE Wind, 12.4%
REpower, 3.4%
Siemens, 5.9%
Sinovel, 9.2%
Suzlon, 6.4%
Enercon, 8.5%
Dongfang, 6.5%
Gamesa, 6.7% Goldwind, 7.2%
----- End of picture text -----

Note: Each of the above percentages is calculated by dividing the new capacity sold by the respective manufacturer in 2009 by the newly installed capacity in the industry in 2009, and the sum of the above percentages is less than 100%.

Source: BTM

WTG Product Mix

WTGs can be categorized by their unit capacity or by their ultimate installation location (onshore and offshore). Recent WTG technology trends have included increasing unit capacity of WTGs and more installations of offshore WTGs.

(1) Sinovel Wind Group Co., Ltd. is a PRC manufacturer of wind power generation equipment and principally engaged in the production and sales of WTGs.

(2) Dongfang Electric Co., Ltd. is a PRC company whose business includes production and sales of hydropower, thermo power, nuclear power and wind power generation equipment.

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According to BTM, the average unit capacity of newly installed WTGs globally exceeded 1.6 MW in 2009 and WTGs with unit capacity of over 1.5 MW accounted for 86.9% of the newly installed capacity in 2009, an increase of 17.9 percentage points from 2007. The following chart provides a breakdown of the newly installed capacity of WTGs globally by unit capacity for 2007, 2008 and 2009.

Newly Installed Capacity of WTGs Globally by Unit Capacity

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5.3% 6.0% 5.1%
63.7%
80.4% 81.8%
29.8%
13.1% 12.0%
1.3% 0.5% 1.1%
2007 2008 2009
Unit capacity below 750 kW Unit capacity between 750 kW and 1499 kW
Unit capacity btween 1.5 MW and 2.5 MW Unit capacity above 2.5 MW
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Source: BTM

BTM has also indicated that new installations of offshore WTGs are expected to increase significantly between 2010 and 2014, with annual newly installed capacity reaching 1,374 MW, 1,418 MW, 3,525 MW, 3,216 MWand 3,955 MW, accounting for 3.3%, 2.9%, 5.9%, 4.9% and 5.5% of the annual newly installed capacity globally, respectively.

WTG Technology Evolution

With the continued increase in unit capacity, WTG technology has evolved substantially as indicated in the chart below, from stall regulated to pitch regulated from constant speed to variable speed, and from gearbox drive to gearless direct-drive technology, with a resulting increase in efficiency and reliability and lower maintenance costs. According to BTM, gearless direct-drive WTGs account for 13.9% of the global newly installed capacity in 2009, an increase of 2 percentage points from 2008.

Global WTG Technology Trends

Gearless direct-drive Variable Speed Pitch Regulated Gearbox Limited Variable Speed Constant Speed Active Stall Stall Regulated Time

Source: European Wind Energy Association Wind Energy — The Facts (March 2009)

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Supply Chain of Key Components

A typical WTG consists of approximately 8,000 parts and components. WTG manufacturers generally choose to purchase such parts and components from external suppliers or manufacture components in-house. Core parts and components of WTGs include:

Blade Blades may be purchased or manufactured in-house by WTG manufacturers.

Control system The control system usually consists of a converter system, a variable pitch system and a master control system and is generally manufactured in-house by WTG manufacturers.

Generator The wind power generator is mostly manufactured by large generator manufacturers.

Drive train system The drive train system mainly consists of the gearbox, bearings, a wheel hub and a spindle and is generally outsourced.

Tower The tower is usually manufactured locally in close proximity to the project site.

China’s WTG Manufacturing Industry

Competitive Landscape

Compared to Europe and North America, the PRC wind power industry is relatively new and Chinese WTG manufacturers generally chose to acquire foreign WTG technologies through licensing or the establishment of joint ventures. In 2005, the PRC Government introduced the requirement that at least 70% of the wind turbine components (by purchase value) are to be domestically manufactured (repealed in 2009) and this played a large role in promoting the initial development of the PRC wind power equipment manufacturing industry. With the gradual growth of the domestic manufacturers, they have managed to be more cost-competitive and are now able to supply auxiliary parts and components in a timely manner and offer localized after-sales services, resulting in a steady growth in their market share compared to foreign competitors. According to BTM, WTGs manufactured by domestic and Sino-foreign joint venture suppliers had already accounted for 87.7% of China’s newly installed wind power capacity in 2009. The following chart shows the market share of Chinese WTG manufacturers from 2004 to 2009.

Market Share of WTG Manufacturers in the PRC

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21.1% 27.7%
45.0%
57.5%
75.0% 87.7%
78.9% 72.3%
55.0% 42.5%
25.0%
12.3%
2004 2005 2006 2007 2008 2009
Foreign Suppliers Domestic and Sino-foreign Joint Venture Suppliers
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Source: BTM

Currently, there is a relatively high concentration of PRC WTG manufacturers. According to statistics published by the Chinese Wind Energy Association, the five largest WTG manufacturers in the PRC in terms of

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accumulated installed capacity as of December 31, 2009 were Sinovel Wind Group Co., Ltd., our Group, Dongfang Electric Co., Ltd, Vestas Wind Systems A/S[(1)] and Gamesa Corporación Tecnológica, S.A.[(2)] with a market share of 21.9%, 20.7%, 12.9%, 7.8% and 7.1%, respectively.

The investment cost for a wind farm project is not only determined by the price of WTGs but also that of ancillary equipment as well as construction, operation and maintenance costs. As WTGs have a 20-year lifespan and operate outdoors year-round, PRC wind farm investors and developers often consider the efficiency, reliability and maintenance costs of WTGs and the quality of after-sales services in addition to price before making a purchase. Therefore, those WTG manufacturers that are able to offer highly reliable WTG products with effective designs at lower production costs have a competitive advantage in the PRC market.

WTG Product Mix and Technological Trends

According to statistics published by BTM, the average unit capacity of newly installed WTGs in China has grown from 726 kW in 2003 to 1,360 kW in 2009, representing an increase of over 80%. In terms of accumulated installed capacity, the average unit capacity of WTGs in China has grown from 539 kW in 2003 to 1,170 kW in 2009, representing an increase of over 100%, showing a clear trend towards larger-sized units. Among WTG models, 1.5 MW WTGs constitute the largest segment in China and the following chart shows the market share of the 1.5 MW WTGs from 2005 to 2009.

Market Share of WTGs with 1.5 MW Unit Capacity in the PRC

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73.8%
58.8%
39.5%
20.4% 23.3%
2005 2006 2007 2008 2009
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Source: Chinese Wind Energy Association

In November 2007, Asia’s first offshore 1.5 MW direct-drive permanent magnet WTG, which was manufactured by us, was installed in Bohai Bay, PRC. With growing attention paid to offshore wind resources, an increasing number of Chinese WTG manufacturers are expected to manufacture offshore WTG products. According to the Chinese Wind Energy Association, China’s newly installed capacity of offshore WTGs, will be 114 MW, 215 MW, 260 MW, 380 MW, 700 MW and 1000 MW from 2010 to 2015, respectively, representing a CAGR of 54.4%.

Prior to 2008, WTGs installed in China mainly adopted the gearbox-driven technology. However, as the advantages of gearless direct-drive WTGs have been gradually recognized by Chinese wind power investors, the proportion of installed capacity of WTGs adopting the direct-drive technology has been increasing. According to the Chinese Wind Energy Association, the market share of direct-drive WTGs in China grew from 0.2% in 2005 to 17.5% in 2009, and it was forecasted that the increase will continue.

(1) Vestas Wind Systems A/S is a Danish manufacturer of wind power generation equipment.

(2) Gamesa Corporación Tecnológica, S.A. is a Spanish manufacturer of power generation equipment, mainly wind power generation equipment.

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Entry Barriers

We believe the entry barriers to the PRC WTG manufacturing industry are as follows:

Track record Buyers exercise great care in selecting WTG manufacturers and historical performance is perceived as a reliable indicator of product quality and capabilities of a WTG manufacturer. WTG manufacturers with a longer operating history generally have a competitive advantage as it takes three to five years to bring a WTG from the design stage to actual production.

Technological expertise The design and manufacture of WTGs with large capacities are highly complex, involving a wide variety of technologies, including aerodynamics, multi-body dynamics, simulation technology and testing technologies. In order to develop a WTG series suitable for the PRC’s diverse geographical climates and able to meet the needs of Chinese customers, WTG manufacturers must possess both practical experience and technological expertise.

Supply chain WTG manufacturers must possess strong supply chain management capability and maintain long-term relationships with parts and components suppliers for the design and manufacture of WTGs. As the technical barriers for the manufacture of various core components are high, WTG manufacturers will require a substantial amount of time to collaborate with domestic suppliers so as to ensure a stable and high quality supply. In particular, foreign WTG manufacturers may encounter greater difficulties in establishing a supply chain in China.

Financial strength The WTG manufacturing industry requires significant initial investment. Such initial investment may not be recovered in the near term and profitability is realized only after a certain level of production scale has been attained, so WTG manufacturers must have a strong capital position and ready access to financing.

Qualified personnel The wind power industry being an emerging industry, there is a general lack of personnel with extensive industry experience who are well-versed in the technologies involved. For small-scale manufacturers or new entrants, their technical personnel may lack the practical experience and technical expertise possessed by the technical personnel of large manufacturers or those with a longer operating history.

Remediation capability Risks of design and product defects arise as the unit capacity and volume of WTGs produced increase. With the mass deployment of WTGs in the PRC and the related contractual warranties and obligations involved, any significant PRC WTG manufacturer must have the financial and technical capability to remediate technical defaults on a large scale, facing a possible sudden decline in customer orders or being exposed to product liability claims.

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OVERVIEW

Our business, which includes our three business segments, (i) WTG R&D, manufacturing and sales, (ii) wind power services, and (iii) wind farm investment, development and sale, is extensively regulated by PRC policies, relevant laws and regulations and other competent government authorities. These laws and regulations mainly relate to the supervision of the wind power industry, the administration of special funds for wind power equipment, the management of wind power concession projects and policies governing the grid tariff of wind power generation. In addition, all our operations in the PRC are subject to fees and taxes, as well as safety and environmental laws and regulations.

Major Regulatory Authorities

The State Council. As the highest administrative body, the State Council is responsible for examining and approving certain specific industrial and development projects classified as “encouraged” in the Guidance Directory of Industrial Restructuring .

The NDRC. The NDRC has several functions, which include: (i) formulating and implementing major policies related to economic and social development in the PRC; (ii) examining and approving investment projects that exceed a certain level of investment or fall under special industrial categories, including foreign invested projects; (iii) supervising reforms conducted by state-owned enterprises; (iv) formulating and coordinating the implementation of industrial and investment policies for the renewable resources industries, such as the solar power, hydropower and wind power generation industries; and (v) among other things, setting power tariffs, accepting and approving CDM projects.

The National Energy Administration (“NEA”). The NEA is a national administration managed by the NDRC. Its duties include (i) formulating energy development strategies, plans and policies along with the submission of recommendations on energy system reforms; (ii) implementing the management of oil, natural gas, coal and electric power; (iii) proposing policy measures for the development of renewable energy and energy conservation by the energy industries; (iv) reviewing international cooperation projects in the energy industries; and (v) managing the nationwide development and construction of offshore wind power projects.

The Ministry of Finance. The Ministry of Finance determines policies for wind power project construction and manages the special funds for wind power equipment.

The SERC (together with the local power bureaus). The SERC and the local power bureaus are responsible for (i) regulating the operations of the power market, power transmission and supply as well as businesses for noncompetitive power services; (ii) participating in the formulation of power technologies, safety, quotas, and quality standards, and the supervision and examination thereof; (iii) issuing and managing electric power business licenses; and (iv) coordinating with environmental protection authorities on the supervision and examination of the implementation by the power industry of environmental protection policies, regulations and standards.

The State Administration of Work Safety. The State Administration of Work Safety Supervision and the local work safety supervision and management authorities are responsible for (i) supervising and managing the safe production of large wind power equipment; and (ii) implementating and supervising laws and regulations governing energy equipment operations and project construction safety.

The State Administration of Quality Supervision. The State Administration of Quality Supervision and the local authorities for quality supervision, inspection and quarantine are responsible for (i) supervising and managing product quality and safety matters (including mandatory inspections and risk monitoring); (ii) monitoring and spotchecking by the state; and (iii) managing the production licenses of industrial products.

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The State Environmental Protection Ministry. The State Environmental Protection Ministry supervises and controls environmental protection works and monitors the environmental systems of the entire country.

State Oceanic Administration. The State Oceanic Administration is responsible for the management and supervision of the usage of sea areas and environmental protection in relation to the development and construction of offshore wind power projects.

Major Regulations

Major industrial policies, laws and regulations governing the production and sale of wind power equipment include The Energy Conservation Law of the PRC, The Renewable Energy Law of the PRC, The Electric Power Law of the PRC, The Medium and Long-Term Development Plan for Renewable Energy, Notice from the NDRC Regarding the Issuance of the 11[th] Five-Year Plan for the Development of Renewable Energy, A Development Guide Directory for the Renewable Energy Industry, Relevant Management Regulations on Power Generation by Renewable Energy, Management Measures for Preliminary Work on Wind Power Concession Projects, Interim Measures for Management of Special Funds for the Development of Renewable Energy, Interim Measures for Management of Special Funds for the Industrialization of Wind Power Generation Equipment, Measures on Supervision and Administration of Grid Enterprises in the Purchase of Renewable Energy Power, Notice from the NDRC Regarding Perfection of Policies Regarding the Grid Tariffs of Wind Power Generation, and Interim Measures for the Adjustment and Assignment of Additional Revenue from Electricity Tariff from Renewable Energy .

Overall Industry Regulation Planning and Guidance

The Energy Conservation Law of the PRC promulgated by the Standing Committee of the 8th NPC on November 1, 1997, as amended on October 28, 2007, has been implemented since April 1, 2008. Under this legislation, the conservation of resources is recognized as a basic national policy of China. The PRC Government implements an energy development strategy that concurrently promotes conservation and development, and recognizes energy conservation as a priority.

The Renewable Energy Law of the PRC was promulgated on February 28, 2005, and has been implemented since January 1, 2006. The amendment of The Renewable Energy Law of the PRC was passed by the 12th meeting of the Standing Committee of the 11th NPC on December 26, 2009. It outlines a regulatory framework for the development and use of renewable energy. The main purpose of this legislation is to promote the development and use of renewable energy, increase energy supply, improve the energy structure, safeguard the safety of energy, protect the environment and eventually achieve sustainable economic and social development in China.

The law stipulates that power grids shall sign grid connection agreements with renewable power generation enterprises, acquire the full amount of their grid-connected power and provide power grid connection services in relation to power generated by renewable energy sources. Meanwhile, the law has also preliminarily formulated measures for the management of on-grid tariffs for renewable energy. Under this law, the higher costs incurred for purchasing electricity generated by renewable energy as compared to costs calculated on the basis of the average on-grid tariff for electricity generated by conventional energy sources shall be compensated by amounts collected from a renewable energy tariff imposed on the sale of electricity nationwide. Grid connection costs and relevant expenses reasonably incurred by a power grid in purchasing electricity generated by renewable energy may be included in its power transmission costs and recovered through the retail electricity price.

In addition, the law provides for the establishment of a renewable energy development fund, which shall be used for compensation payments of additional costs and the support of five production and construction activities in

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relation to renewable energy. It also provides that financial institutions may offer preferential loans with financial discounts for renewable energy development and utilization projects, which are listed in the renewable energy industry development guidance catalogue and which fulfill credit requirements. In addition, the state shall adopt a tax incentive policy for projects that are listed in the renewable energy industry development guidance catalogue.

On August 31, 2007, the NDRC issued the Medium and Long-Term Development Plan for Renewable Energy, which indicates that China should strive to achieve the goal of having at least 10% and 15% of the total energy consumption in the PRC being made up of consumption of renewable energy (including hydropower) by 2010 and 2020, respectively. In regions covered by a major power grid, the percentage of power generated by renewable energy sources shall reach at least 1% and 3% of the total power generated by the power grid by 2010 and 2020, respectively. Meanwhile, for investors with attributable installed capacity of over 5 GW for power generation, the percentage of the attributable installed capacity of renewable power generation must reach over 3% and 8% of the attributable installed power capacity owned by them by 2010 and 2020, respectively. Moreover, with respect to wind power generation, the plan also requires full leverage of the economic strength of the more developed coastal regions and the natural resources of China’s “the three northern regions”, being the northwestern, northern and northeastern regions, to construct large and mega wind power stations. The plan also calls for other regions in China to construct medium and small wind power stations as appropriate.

The Notice from the NDRC Regarding the Issuance of the 11th Five-Year Plan for the Development of Renewable Energy was promulgated by the NDRC and took effect on March 3, 2008. According to this notice, during the 11th Five-Year Plan period, newly installed wind power capacity in China was approximately 9 GWand the total install capacity of wind power in China is expected to reach 10 GW by 2010. In addition, annual production capacity for wind power equipment and whole units manufactured domestically will reach 5 GW, and the production capacity of parts and components is expected to reach 8 GW by 2010, laying a solid foundation for the rapid development of wind power after 2010. Together with the construction of power supply facilities in regions with no electricity supply, a small wind power equipment industry and market should be actively developed. This notice anticipates that by 2010, the number of small WTGs in use will reach 300,000 units, with a total capacity of 75 MW, and the annual equipment production capacity will reach 8,000 sets. It further anticipates that approximately 30 key large wind farms that exceed 100 MW and five wind power bases at the 1,000 MW level will be constructed. This notice is aimed at fully leveraging the advantage of “the three northern regions” in wind power resources and constructing large and mega wind farms in those regions.

A Development Guide Directory for the Renewable Energy Industry was promulgated by the NDRC on November 29, 2005. The document sets out 88 types of renewable energy projects (including hydropower) which, if other requirements are met, will be entitled to favorable tax rates, preferential loans with discounts and special funds. The directory provides an itemized description of the technologies of the renewable energy (including hydropower) projects, so as to facilitate the provision of information by competent government authorities and the development of policies and measures to support such projects.

The Relevant Management Regulations on Power Generation by Renewable Energy was promulgated by the NDRC on January 5, 2006, and provides that: (i) management of projects for power generation from renewable energy (including hydropower), including electricity generated from wind power, will be implemented in a hierarchical fashion by the central and local governments, while the NRDC is responsible for the planning and policy development of projects for power generation from renewable energy (including hydropower) at the state level, in addition to the management of projects that require state examination or approval. The competent authorities of provincial governments in charge of energy are responsible for the management of projects for power generation from renewable energy (including hydropower) within their own jurisdictions; (ii) wind power

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generation projects at 50 MW and above will require examination and approval by the NDRC while other projects will require the examination and approval by competent authorities of provincial governments in charge of investments and filing with the NDRC. Projects involving power generation from biomass, geothermal, ocean and solar energy that require state policy and funding support should be filed with the NDRC; (iii) grid tariffs of projects for power generation from renewable energy (including hydropower) shall be set by competent authorities of the State Council in charge of pricing, taking into account the characteristics of different types of renewable energy (including hydropower) for power generation and different regions, on the principle of promoting the development and utilization of renewable energy (including hydropower) on a reasonable and economical basis, and shall be adjusted and disclosed to the public at appropriate times based on the progress of the technologies that develop and utilize renewable energy (including hydropower); and (iv) power generation enterprises shall actively invest in and construct projects for power generation from renewable energy (including hydropower) and comply with obligations imposed by the state in relation to the power generation quotas for renewable energy sources (including hydropower), while the quota targets and management measures for power generation shall be separately provided for, and large power generation enterprises shall invest in renewable power generation projects as a priority.

The Management Measures for Preliminary Work on Wind Power Concession Projects , which was promulgated in 2003 by the NDRC, expressly provides that a wind power concession project refers to a wind power generation project, the construction of which requires a public bid for investor selection. Preliminary work of wind power concession projects includes wind energy resource evaluation, wind farm site selection and wind farm pre-feasibility study.

Production of Wind Power Equipment

Management of special funds

On February 13, 2006, the State Council submitted its Several Opinions on Accelerating Revival of the Equipment Manufacturing Industry . These opinions are designed to enhance the competitiveness of the PRC’s equipment manufacturing industry and are aimed at domestic equipment manufacturing enterprises that have a competitive edge, independent intellectual property rights and key technologies, in order to meet the demands of key sectors such as energy, transportation, raw materials and national defense. These include the production of large-scale renewable energy equipment, such as WTGs, in order to meet the domestic demand for electric power construction.

The Interim Measures for Management of Special Funds for the Development of Renewable Energy has been implemented since May 30, 2006. These measures state that the PRC Government will set up “special funds for the development of renewable energy” whereby five categories of renewable energy construction or relevant projects, such as scientific and technical research on the development and utilization of renewable energy and localized production of equipment, will be supported by subsidies and discount loans.

The Interim Measures for Management of Special Funds for the Industrialization of Wind Power Generation Equipment was promulgated by the Ministry of Finance on August 11, 2008, and provides funding support for the industrialization of enterprises in the PRC that manufacture wind power generation equipment (including whole machines and impellers, gearboxes, power generators as well as parts and components such as inverters and bearings) with PRC investments and controlled by PRC investors. Funds for such industrialization come mainly in the form of subsidies to enterprises for the production of the first 50 units of MW-level WTGs which are newlydeveloped and produced after industrialization. The subsidies also cover ancillary parts and components. The amount of subsidies is based on installed capacity and other standards provided.

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Domestically manufactured wind power equipment components

On July 4, 2005, the NDRC promulgated the Notice of the NDRC in Relation to the Relevant Requirements of the Management of Wind Power Construction , which stipulates that at least 70% of wind turbine components (by purchase value) shall be manufactured domestically. This requirement had a relatively large effect on promoting the initial development of the PRC wind power equipment manufacturing industry. As a result of significant improvements in the production standards and after-sales service capabilities of domestic manufacturers, the pricing and after-sale services of domestically manufactured WTGs are now more competitive. In 2009, the PRC Government removed the restriction on the proportion of wind turbine components that must be domestically manufactured, which resulted in the PRC WTG market becoming completely market-oriented.

Prevention of overcapacity in wind power equipment industry

On September 26, 2009, the State Council promulgated the Notice of the NDRC and other Departments of Certain Opinions in Relation to Curbing Overcapacity and Repeated Construction in Some Industries and Guiding the Healthy Development of Industries , in which the PRC Government stated that in its implementation of regulations on prevention of overcapacity in the wind power equipment industry, it will “exercise strict control over the blind expansion of the production of wind power equipment, encourage leading enterprises to become larger and stronger” and limit price competition. As such, we are of the view that this policy will not have any material adverse effect on leading wind power equipment manufacturers in the PRC, including our Group.

Wind Power Project Development

Power Generation Business License

On September 28, 2005, the chairman’s Office Meeting of the SERC promulgated the Provisions on the Administration of Electric Power Business Licenses (the “ Licensing Provisions ”), which stipulates that the PRC electric power industry must adopt a market access license system. According to the Licensing Provisions, the electric power business licenses are divided into three categories, namely power generation, power transmission and power supply, each corresponding to enterprises engaging in the businesses of power generation, power transmission and power supply. No PRC company or individual is allowed to participate in any electric power activities without having obtained an electric power business license issued by the SERC unless otherwise stipulated by the SERC. Electric power activities include but are not limited to power generation, power transmission, power distribution and power supply. According to the Notice Regarding Expediting the Issuance of Electric Power Business Licenses promulgated by the SERC, power plants that were constructed and commenced operations between December 1, 2005 and July 31, 2006 must obtain a power generation business license by the end of 2006. For power plants that commenced operations after August 1, 2006 which have newly constructed power generation projects, their operators must obtain power generation business licenses within three months after both the new and existing projects commence operations. Pursuant to the Licensing Provisions, an application for a power generation business license can only be filed after the relevant administrative approvals in respect of inspection of the power generation project upon completion, inspection of the power generation equipment upon commencement of operations, as well as environmental compliance matters have been obtained.

Offshore Wind Power Projects

On January 22, 2010, the NEA and the State Oceanic Administration jointly promulgated the Interim Measures for Management of the Development and Construction of Offshore Wind Power Projects , which stipulate that offshore wind power projects are the projects located at sea areas where the coastal line is below the average

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level of spring tide and high tide over a multiple year period and on deserted islands in the corresponding sea area. According to the measures, the enterprises engaged in the development and investment of the offshore wind power projects will be selected through a tender process on a priority basis. Such enterprises shall be Chinese funded enterprises or Sino-foreign joint venture enterprises controlled by Chinese investors (with equity interest of above 50.0%). In addition, offshore wind power projects shall not commence construction until approvals of such projects and the right to use such sea area has been obtained.

Supervision of Power Supply

On November 26, 2009, the chairman’s Office Meeting of the SERC promulgated the Measures for Supervision of Power Supply, which stipulates that enterprises with electric power business licenses and engaging in power supply business should be subject to the supervision of the SERC and its agencies. The scope of supervision includes the enterprise’s power supply capacity, quality of the power supply, safety conditions of the power supply, circumstances of fulfilling obligations relating to universal service of electric power as well as situations relating to the handling of power consumption business.

Dispatch

In the PRC, except for power generated by facilities not connected to the power grids, all power is distributed through power grids. In such cases, a distribution center manages and is responsible for distributing power to various power grids. The operations of such distribution centers are subject to supervision under the Power Grid Dispatch Management Regulations promulgated and implemented on November 1, 1993 by the State Council (the “ Dispatch Regulations ”) and their implementing measures.

The Dispatch Regulations and their implementing measures provide that distribution centers shall be divided into five levels, namely national power grid, multi-provincial power grid, provincial power grid, municipal power grid and county power grid levels. Based on comprehensive consideration of relevant factors such as daily power load demand, internal water level, fuel supplies, capacity of power grid equipment and equipment servicing requirements, the distribution centers will prepare a daily power generation curve for implementation by the various power plants, including active power, reactive power and voltage.

Distribution centers prepare power generation and power supply distribution plans in accordance with plans issued by the state, relevant power supply and power grid synchronization agreements, and the equipment capacities of power grids.

Power Generation Prices and Quotas

The determination of the price of electric power is represented as a matter of principle in the relevant provisions of The Electric Power Law of the PRC (the “ Electric Power Law ”). In short, the price of electric power should represent a rational compensation for the cost of power generation and provide a reasonable return on investment. The price should take into account a fair allocation of expenditure, encourage the construction of power generation projects and go through an annual examination and approval process by the NDRC and provincial pricing authorities.

In addition to the relevant provisions of the Electric Power Law, on July 3, 2003, the State Council approved the Reform Plan for the Price of Electric Power (the “ Reform Plan ”), which notes that the long term goal is to establish a standardized and transparent pricing mechanism for electric power on the power grid.

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On March 28, 2005, the NDRC promulgated the Interim Measures for the Administration of the Power Grid Electric Power Price . These measures took effect on May 1, 2005, and provide regulatory guidance with respect to the above reform plan. For power plants located within power grids in areas where a pricing mechanism for power based on competitive bidding has not been implemented, competent authorities in charge of price shall determine and disclose the power tariff of the power grids to the public. This price is based on the production cost and a reasonable return on investment. For power plants located in areas where a pricing mechanism for power based on competitive bidding has been implemented, the power tariff comprises two components: (a) the WTG capacity tariff as determined by the NDRC, which is based on the average cost of investment in various power generation units within the power grids in the same area; and (b) the power tariff determined through a competitive bidding process. In addition, the NDRC plans to gradually achieve the transition from WTG capacity tariff to power tariff.

The Interim Trial Measures for the Administration of the Price of Renewable Energy Power Generation and Expense Allocation was issued by the NDRC and has been implemented since January 1, 2006. These measures correspond to the Notice Regarding the Relevant Requirements for the Construction and Management of Wind Power . These measures also provide that the power price of wind farms shall be measured and determined by competent authorities of the State Council in charge of prices based on actual circumstances of various regions on the principle of cost plus profit, and shall be made public. The notice provides that the power price of wind power concession construction projects shall be determined through a tendering process, but cannot be higher than the power price level set by competent authorities of the State Council in charge of prices. Meanwhile, such measures determine the price allocation mechanism for wind power projects.

The Measures on Supervision and Administration of Grid Enterprises in the Purchase of Renewable Energy Power was implemented on September 1, 2007, which further enforces The Renewable Energy Law of the PRC (the “ Renewable Energy Law ”) and the relevant regulations. The measures effectively promote power grid synchronization for power generation from renewable energy in China and regulate the actions carried out by power grids in relation to their acquisition of the full amount of electricity generated from renewable energy. The electric power regulatory authorities implement the regulation of eight aspects of the design of renewable energy projects, covering the construction of projects for power generation from renewable energy by power grids, dispatch of power generated from renewable energy on a priority basis by power distribution authorities, and acquisition of the full amount of the electricity generated from renewable energy by power grids. The power regulation authorities may disclose to the public any acts by electric power enterprises or power distribution authorities in violation of state rules on the acquisition of the full amount of the electricity generated from renewable energy, and how such acts are being dealt with.

The Interim Measures for the Adjustment and Assignment of Additional Revenue from Electricity Tariff from Renewable Energy provides that power grid access fees for wind farms shall be incorporated into a surcharge on the electric power price of renewable energy in order to compensate wind farms. The Notice from the NDRC Regarding Perfection of Policies Regarding the Grid Tariffs of Wind Power Generation, which has been implemented since August 1, 2009, provides that the benchmark power prices for wind power, based on the degree of wind energy resources and the project construction conditions, will be from RMB0.51 per kWh to RMB0.61 per kWh.

The Notice for Regulating Relevant Issues of Electric Energy Trading Price Management , which was promulgated by the NDRC, the SERC and the NEA on October 11, 2009, clarified the trading prices between power generation enterprises and power grids, and prices for cross-provincial and cross-regional electric energy trading. According to the notice, once the power generation unit is put into commercial operation, other than crossprovincial and cross-regional trading of electric energy and as otherwise provided by the state, on-grid tariffs formulated by the competent governmental department in charge of pricing should apply to its on-grid power

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output. Prior to commercial operation of the power generation unit, on-grid tariffs approved by the competent department in charge of pricing is applicable from the date on which power generation units for renewable energy sources establish connection to the grid. When power generation enterprises commence the ramp-up process or voluntarily stop operations, and have to purchase electricity from power grids as a result, the applicable price should be in accordance with the large-scale industrial class power tariff standards in the local catalog price list. Prices of cross-provincial and cross-regional trading of electric energy shall consist of power delivery prices, power transmission prices (costs) and transmission losses.

In addition to the above, the relevant departments promulgate notices from time to time regarding matters relating to additional allocation and subsidies of renewable energy tariffs for a certain period pursuant to the abovementioned laws and regulations. An example is the Notice from the NDRC and the SERC Regarding the Trading Scheme for Subsidies and Quota of Power Tariffs for Renewable Energy from January to June, 2009 promulgated by the NDRC and the SERC on December 17, 2009, which regulates relevant matters such as projects with subsidies for renewable energy tariffs, the amount of such subsidies, and trading of power tariffs with quotas from January to June, 2009.

Mandatory Purchase and Priority Right of Distribution

According to the Relevant Management Regulations on Power Generation by Renewable Energy , the SERC and its authorized agencies should supervise the power grids in respect of their mandatory purchase and gridconnection obligations. Power grids that are unable to, or fail to, perform the above responsibilities will be penalized. The SERC may also require power grids to compensate losses suffered by the relevant renewable energy enterprises and remedy their non-performance within a designated period of time. If the power grids refuse, they may be subject to a fine in an amount not exceeding two times the amount of the renewable power generation enterprises’ losses. These measures took effect on September 1, 2007.

On August 2, 2007, the State Council approved its Measures for Energy Conservation in the Dispatch of Power Generation (Trial) , with the aims of improving the utilization of natural resources, encouraging conservation of energy and achieving sustainable development. According to these measures, power generation companies that use non-adjustable renewable energy sources (including hydropower) such as wind, solar energy and hydropower enjoy the highest priority with respect to distribution of renewable energy resources.

The right to priority in the dispatch of power generation units is determined by laws and regulations, and power is dispatched according to the following order: (i) non-adjustable power generation units that use renewable energy (including hydropower); (ii) adjustable power generation units that use renewable energy (including hydropower); (iii) nuclear energy power generation units; (iv) thermal power units and power generation units with integrated utilization of resources; (v) gas power generation units; (vi) other coal fuelled power generation units with no thermal load, which include thermal power units with no thermal loads; and (vii) fuel oil power generation units.

CDM

The arrangements of the CDM was established by the Kyoto Protocol under the United Nations Framework Convention on Climate Change, which principally states that industrialized countries contributing to a reduction of greenhouse gas emissions can invest in projects in developing countries that reduce greenhouse gas emissions, and obtain emission credits, known as CERs, therefrom. Investors from industrialized countries can use such CERs to offset their domestic emission reduction goals or sell them to others, which provide an alternative to the high costs of emissions reduction in their own countries.

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In 1993 and 2002, China ratified and signed the United Nations Framework Convention on Climate Change and the Kyoto Protocol, respectively, but these did not give rise to responsibilities of a binding nature to achieve emission reduction goals. Among the relevant government authorities in the PRC, the State Climate Change Countermeasure Coordination Group Office is responsible for the formulation of policies and overall coordination, while the State CDM Commission is responsible for the examination and approval of CDM projects implemented in China.

The NDRC and the MOST, the Ministry of Foreign Affairs and the Ministry of Finance of the PRC jointly promulgated the Measures for Operation and Management of CDM Projects on October 12, 2005. The measures set out the rules and requirements for the examination and approval of CDM projects. The contents include but are not limited to:

• (a) entities which are permitted to conduct CDM projects in the PRC are restricted to companies that are wholly owned or controlled by a PRC partner. Therefore, a company controlled by foreign investors is prohibited from conducting CDM projects in the PRC;

• (b) the examination and approval of a CDM project is conducted according to the following procedures: (i) the NDRC appoints experts from a relevant organization to make an evaluation; (ii) the State CDM Project Review Council reviews and approves the CDM project; and (iii) the NDRC, MOST and the Ministry of Foreign Affairs jointly issues a certificate of approval; and

• (c) with respect to any CDM project approved after October 12, 2005, (i) the PRC Government has the right of recourse for reduction of emissions; (ii) ownership of the credits generated by a CDM project is vested in the owners of the CDM project; and, (iii) the fees imposed by the PRC Government is based on the proceeds generated from the sale of CERs under a CDM project, as against the different rates under the category of the CDM project. With respect to renewable energy, the development and utilization of which are encouraged by government policies (such as wind power projects), the PRC Government will only charge 2.0% of the transfer amount of greenhouse gas emission reductions.

Safe Production and Labor Protection

In accordance with laws and regulations such as The Law of Safe Production of the PRC , which has been implemented since November 1, 2002 and amended on August 27, 2009, and Regulations on Safe Production Licenses , which has been implemented since January 13, 2004, the State Administration of Work Safety performs comprehensive supervision and management of safe production work in the PRC. Organizations engaging in production and operation activities in the PRC must comply with the laws and regulations governing safe production, strengthen safe production management, establish and refine their safe production responsibility system, improve safe production conditions and ensure safe production. According to the Interim Regulations on Investigations into Accidents in Power Production , electric power enterprises must make a report to the SERC upon the occurrence of any major personal accident, power grid accident, equipment accident or fire accident, or power plant dam collapse as well as any power outage accident that has a serious effect on the society.

Environmental Protection

The PRC environmental protection laws and regulations that apply to our wind power equipment production and wind power project construction business include The Environmental Protection Law of the PRC , The Law of the PRC on Prevention and Control of Water Pollution , The Law of the PRC on the Prevention and Control of

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Atmospheric Pollution , The Law of the PRC on Prevention of Environmental Pollution Caused by Solid Waste and The Law of the PRC on Appraising Environment Impacts .

The Environmental Protection Law of the PRC (the “ Environmental Protection Law ”) was promulgated on December 26, 1989 by the Standing Committee of the NPC and is the most important environmental protection law in the PRC. This law formulated the basic principles of coordinating the development of economic growth, social advancement and environmental protection, and outlines the powers and duties of the various levels of government in the PRC.

Under the Environmental Protection Law, in order to prevent environmental pollution and to protect the ecological environment, the State Ministry of Environmental Protection is authorized to develop nationwide standards for environmental quality and emissions, and is responsible for monitoring the environmental protection system of the PRC. The environmental protection authorities at various levels of the PRC Government (at and above the county level) are responsible for environmental protection work within their own jurisdictions. Local environmental protection authorities have the power to formulate local standards that are more rigorous than national standards, and enterprises must comply with the more rigorous standard as between the state and local environmental protection standards. The Environmental Protection Law provides that any enterprise that may cause pollution or generate other harmful substances in its operations must adopt environmental protection measures in its operations by creating an environmental protection responsibility mechanism and adopting effective measures to control and properly dispose of exhaust gas, wastewater, waste residue, waste dust and other wastes.

In addition, any newly-constructed project, expansion project or renovation project and other equipment installation project that directly or indirectly discharges pollutants into the environment must comply with applicable state environmental protection regulations governing such project. The entity undertaking such project must submit a pollutant discharge declaration to the competent authorities, setting out in details the relevant matters such as the volume and type of discharge, the locations of the discharge and handling methods for examination purposes. The competent authorities may permit an operator which constructs a project to discharge a certain amount of pollutants, but if the pollutant discharge standards provided by the state or local governments are exceeded, a pollutant discharge fee must be paid and a pollutant discharge permit for discharge in the volume set out above must be obtained. In addition, even if the discharge standards have not been exceeded, an operator which discharges any pollutant into a body of water must pay a pollutant discharge fee. Discharge of pollutants is subject to supervision of the competent environmental protection authorities. If an operator fails to pay a pollutant discharge fee in accordance with the relevant provisions, the local environmental protection administrations are authorised to impose a penalty in an amount equivalent to of several times of the pollutant discharge fee, order the operator to cease operations, or adopt other measures for remedy.

To facilitate the thorough implementation and performance of the Renewable Energy Law of the PRC , and to support the development of wind power, standardize and accelerate the development and construction of wind farms and promote sustainable social and economic development in accordance with applicable state laws and regulations, and taking into account the characteristics of the construction of wind farms, the NDRC, the Ministry of Land and Resources and the State Ministry of Environmental Protection have jointly developed the Interim Measures for Management Of Land Used for Wind Power Farm Project Construction and Environmental Protection . These interim measures took effect on August 9, 2005 and provide that the construction of wind energy projects must comply with the PRC environmental impact assessment system. Under this system, the local competent authorities at the provincial level where such construction is located are in charge of environmental protection and are responsible for the review, examination and approval of the environmental impact assessment of wind energy projects. If the wind energy project is constructed on land which involves the natural reserves of the

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state, local competent authorities in charge of environmental protection must seek the opinion of the Ministry of Environmental Protection before issuing an approval.

Those who violate the Environmental Protection Law and various other environmental protection regulations may be given warnings and ordered to pay damages and fines. Any entity that carries out construction work or production activities prior to examination and approval by the environmental protection authorities of pollution and waste control and treatment facilities may be ordered to cease production or operations, and may be subject to fines. If any major property loss or personal injury or death arises as a result of any violation of such laws, the persons violating environmental protection laws and regulations may be held criminally responsible.

Taxes

Enterprises Income Tax

According to the New EIT Law which took effect on January 1, 2008, PRC enterprises typically pay an enterprise income tax at the rate of 25% and enterprises identified as high-and-new-technology enterprises requiring key state support enjoy a preferential enterprise income tax rate of 15%. Our Company has been identified as a high-and-new-technology enterprise and has obtained the relevant certificate, as such, we are subject to an enterprise income tax rate of 15%. In addition, according to the New EIT Law and the Notice Regarding Implementation of Transitional Favorable Policies for Enterprise Income Tax promulgated by the State Council on December 26, 2007, the preferential tax treatments for enterprises located in western China still apply. Our subsidiaries located in western China shall pay enterprise income tax at the preferential tax rate of 15%.

According to the Notice for Issues Regarding the Withholding of Enterprise Income Tax for Dividends Distributed by Resident Enterprises in China to Non-resident Enterprises Holding H-shares of the Enterprises promulgated by the State Administration of Taxation on November 6, 2008, enterprise income tax shall be withheld at a uniform tax rate of 10% on dividends for 2008 and the subsequent years which are distributed by PRC resident enterprises to foreign H shareholders that are non-resident enterprises, except where the jurisdiction in which the foreign investor is established has a different withholding arrangement under a tax treaty with the PRC.

According to the Notice on Issues on Implementation of the Directory of Favorable Enterprise Income Tax for Public Infrastructure Projects from the Ministry of Finance and the State Administration of Taxation, enterprises that were set up after January 1, 2008, which carry out public infrastructure works are entitled to a three-year enterprise income tax exemption period beginning from the first year in which they generate revenue. Furthermore, they are entitled to a 50% enterprise income tax relief in the next three subsequent years. Thus, a wind power project that receives an approval document from the governmental authorities on January 1, 2008 or thereafter is entitled to foregoing preferential tax policies starting from the first year it generates revenue from the sale of wind power.

Value-Added Tax

In accordance with the Notice Regarding Policy Issues on the Comprehensive Use of Resources and ValueAdded Taxes of Other Products , we enjoy a preferential treatment of a 50% instant rebate on value-added tax levied on our sale of electricity generated by wind energy.

The value-added tax reform was implemented on January 1, 2009. The amended value-added tax regulations and their implementing regulations allow an ordinary payer of value-added tax to offset input value-added tax against output value-added tax for the fixed assets purchased or made by it in accordance with the calculations based on the relevant value-added tax credit receipts.

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On December 25, 2008, the Ministry of Commerce and the State Administration of Taxation jointly promulgated the Notice on Cessation of Tax Refund Policies for Enterprises with Foreign Investment that Purchase Chinese-Made Equipment . This notice provides that, starting from January 1, 2009, the tax refund policies on value-added tax for foreign-invested enterprises which purchase equipment made in the PRC would be revoked unless such enterprises had purchased such equipment prior to June 30, 2009, or had received special valueadded tax invoices and declared a tax refund with the relevant tax authorities during the previous transaction period, in which case they would still be entitled to a refund of the value-added tax.

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OUR HISTORY AND CORPORATE STRUCTURE

Background

The history of our Company traces back to February 1998 when XJ New Wind, our Company’s predecessor, was established in the PRC as a limited liability company. At that time, it was held as to 90.0% by Xinjiang Wind Power and 10.0% by four individuals.

On December 31, 2000, the then shareholders of XJ New Wind passed a resolution to convert XJ New Wind from a limited liability company into a joint stock limited liability company. With the approval of the government of Xinjiang, XJ New Wind was converted into a joint stock limited liability company on March 26, 2001 and XJ New Wind was renamed as Xinjiang Goldwind Science & Technology Co., Ltd. ( ) which had a registered share capital of RMB32.3 million.

Major Increase in Share Capital

On December 21, 2004, with the approval of the general meeting of our Company and the government of Xinjiang, the share capital of our Company was increased from RMB32.3 million to RMB70.0 million. On December 16, 2005, upon approval by the general meeting of our Company and the government of Xinjiang, the share capital of our Company was further increased from RMB70.0 million to RMB100.0 million. In March 2007, our 2006 annual general meeting approved an increase of the share capital of our Company from RMB100.0 million to RMB450.0 million by way of capitalization of our 2006 undistributed profits, legal accumulation fund and surplus accumulation fund.

Pre-A Share Offering Investments by 26 Non State-Owned Corporate Entities

Prior to our A Share offering, 26 non state-owned corporate entities who are Independent Third Parties became Shareholders of our Company. In particular, CB Fund[(1)] , Yuanjing Xinfeng[(2)] , Yuanjing Xinneng[(3)] and Yuanfeng Investment[(4)] became the Shareholders of our Company as detailed below.

On September 16, 2005, we entered into an agreement with the original Shareholders and four new investors, including CB Fund and China Everbright Investment Management Company (“ China Everbright ”) and two other Independent Third Parties[(5)] for the subscription of 30 million Shares by the new investors. CB Fund and China Everbright subscribed for 8 million Shares and 7 million Shares, respectively, at a consideration of RMB40.0 million and RMB35.0 million, which were negotiated and determined at arm’s length. Our Company’s 2005 extraordinary general meeting approved the increase of our share capital and the subscription by the four new investors.

In accordance with the equity transfer agreement dated May 25, 2006, China Everbright transferred 7 million Shares to China Everbright Growth Investment (Shenzhen) Company Limited (“ China Everbright Growth Investment ”), an Independent Third Party for total consideration of RMB35.0 million.

(1) CB Fund was established on November 18, 2004. Its business scope is investment in the equity of unlisted enterprises; subscription for bonds issued by the PRC Government and other fixed return bonds on the primary market; providing management consultancy services to invested enterprises; and other business activities approved by the competent authorities.

(2) Yuanjing Xinfeng was established on November 13, 2006. Its business scope is project investment consultancy.

(3) Yuanjing Xinneng was established on November 17, 2006. Its business scope is project investment consultancy.

(4) Yuanfeng Investment was established on November 24, 2006. Its business scope is investment in industrial projects or companies and investment consultancy.

(5) These two Independent Third Parties disposed of their interests in our Company prior to our A share offering.

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OUR HISTORY AND CORPORATE STRUCTURE

In accordance with the equity transfer agreements dated November 30, 2006 entered into amongst China Everbright Growth Investment, Yuanjing Xinneng, Yuanjing Xinfeng and Yuanfeng Investment, China Everbright Growth Investment transferred 2 million Shares, 4.85 million Shares and 150,000 Shares, being 7 million Shares in aggregate, to each of Yuanjing Xinneng, Yuanjing Xinfeng and Yuanfeng Investment, respectively.

CB Fund, Yuanjing Xinfeng, Yuanjing Xinneng and Yuanfeng Investment are all third parties independent of our Company and independent of our state-owned Shareholders. Save for Yuanjing Xinfeng being the wholly owned subsidiary of SeaBright China Special Opportunities (I) Limited (“ SeaBright ”), and shareholders of Yuanfeng Investment being investment managers of SeaBright, their beneficial owners are independent of one another and they are not parties acting in concert. CB Fund, Yuanjing Xinfeng, Yuanjing Xinneng and Yuanfeng Investment are not controlled or owned by any governmental entities.

After various increases in our Company’s share capital and the numerous share transfers by or amongst the Shareholders of our Company, the shareholding structure of our Company immediately prior to our A Share offering was as follows:

No. 1. 2. 3. 4. 5. 6.	Shareholders Xinjiang Wind Power . . . . . . . . . China Water . . . . . . . . . . . . . . . . Wind Power Research Centre(1) . . Solar Energy Co.(1) . . . . . . . . . . Subtotal: . . . . . . . . . . . . . . . . . . 26 domestic corporate entities . . . 30 PRC individuals . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . .	Type of Shares State-owned shares State-owned shares State-owned shares State-owned shares Non state-owned legal person shares Natural person shares	Number of Shares 91,350,000 78,750,000 10,710,000 5,188,950 185,998,950 134,710,763 129,290,287 450,000,000	Approximate percentage of shareholding (%)	Approximate percentage of shareholding (%)
					20.3 17.5 2.4 1.2 41.4 29.9 28.7 100.0

(1) Wind Power Research Centre and Solar Energy Co. are controlled by the Finance Department of Xinjiang

Listing on the SZSE and Further Increase in Share Capital

On December 5, 2007, our Company’s application for our initial public offering and listing of our A Shares on the SZSE was approved by the CSRC. On December 13 and 14, 2007, our Company issued 50,000,000 A Shares to the public in the PRC, including 40,000,000 A Shares by way of on-line offering that were listed on the SZSE on December 26, 2007, and the remaining 10,000,000 A Shares by way of off-line placing that were listed on the SZSE on March 26, 2008 after a three-month lock up period. After the issuance of the A Shares, the share capital of our Company increased to RMB500.0 million. 450,000,000 Shares held by the Shareholders before the initial public offering on the SZSE were subject to trading restrictions and were not freely tradable. Xinjiang Wind Power, China Water, Wind Power Research Centre, CB Fund, Yuanjing Xinfeng, Yuanjing Xinneng and Yuanfeng Investment were subject to trading restrictions for three years (which will expire on December 25, 2010), and the remaining corporate Shareholders (including Solar Energy Co.) and 30 individual Shareholders were subject to trading restrictions for one year, which expired on December 25, 2008. Our PRC legal advisor has confirmed that all of our Shares were tradable upon our listing on the SZSE, and our Company is not required to carry out any share reform.

Our Company’s 2007 annual general meeting approved the increase of the share capital of our Company by capitalizing our capital reserve fund and undistributed profits. Accordingly the share capital of our Company was

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OUR HISTORY AND CORPORATE STRUCTURE

further increased from RMB500.0 million to RMB1,000.0 million. The increase of share capital was registered with the Administration for Industry and Commerce of Xinjiang on March 3, 2008.

Our Company’s 2008 annual general meeting approved the increase of the share capital of our Company by capitalizing our undistributed profits. Accordingly, the share capital of our Company was further increased from RMB1,000.0 million to RMB1,400.0 million. The increase of share capital was registered with the Administration for Industry and Commerce of Xinjiang on May 11, 2009.

Our Company’s 2009 annual general meeting further approved the increase of our Company’s share capital by capitalizing our undistributed profits. Accordingly, our Company’s share capital was further increased from RMB1,400.0 million to RMB2,240.0 million. The increase of share capital was registered with the Administration for Industry and Commerce of Xinjiang on April 13, 2010.

Acquisition of Vensys AG

On January 25, 2008, a resolution approving the acquisition of Vensys AG was passed at our Company’s annual general meeting for the year 2007, it was also approved that our Company’s wholly owned subsidiary, Goldwind Windenergy, would acquire from Vensys/Innowind and Saarwind their 70.0% shareholding interest in Vensys AG, totaling 3,500,000 shares. The purchase price would be EUR11.78 per share and the total purchase price would be EUR41,240,000. On January 24 and 25, 2008, Vensys/Innowind, Saarwind (both Vensys/Innowind and Saarwind as the sellers), Goldwind Windenergy (as purchaser), our Company (as related party of purchaser) and Vensys AG entered into the Vensys Shares SPA. Vensys/Innowind, Saarwind, Windpark, Goldwind Windenergy, Vensys AG and our Company entered into the Vensys Supplemental Agreements on May 14, 2010. The acquisition of Vensys AG was completed in April 2008.

At the same time, according to the Vensys Shares SPA and the Vensys Supplemental Agreements mentioned above, our Company granted each of the shareholders of the remaining 30.0% shareholding interest of Vensys AG (i.e. Vensys/Innowind, Saarwind and Windpark) the Vensys Option. Please see the section entitled “Share Capital — Option to Exchange Vensys AG’s Shares” in this prospectus for more details.

Apart from the acquisition of Vensys AG mentioned above, given the nature of our Company’s business, we have also acquired numerous subsidiaries solely for the purpose of carrying out certain projects. Particulars of these acquisitions are set out in the appendix entitled “Appendix I — Accountants’ Report” to this prospectus.

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OUR HISTORY AND CORPORATE STRUCTURE

The Shareholding Structure of our Company

The following table sets out the shareholding structure of our Company as at the Latest Practicable Date and immediately before the Global Offering on the assumption that the A Shares have not been transferred to NSSF (Please see the section entitled “Share Capital — Transfer of the State-owned Shares to the NSSF” in this prospectus for more details):

No. 1 2 3 4 5 6 7 8 9	Shareholder Xinjiang Wind Power China Water CB Fund Yuanjing Xinfeng Wind Power Research Centre Yuanjing Xinneng Yuanfeng Investment Directors and senior management Other public Shareholders Total	Type of Shares A Shares A Shares A Shares A Shares A Shares A Shares A Shares A Shares A Shares	Number of Shares 409,248,000 352,800,000 161,280,000 97,776,000 47,980,800 40,320,000 3,024,000 97,505,208 1,030,065,992 2,240,000,000	Approximate shareholding (%)	Approximate shareholding (%)
					18.3 15.8 7.2 4.4 2.1 1.8 0.1 4.4 45.9 100.0

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OUR HISTORY AND CORPORATE STRUCTURE

Our Group Structure Chart

The following chart sets out our shareholding structure and our principal subsidiaries immediately before completion of the Global Offering and on the assumption that A Shares have not been transferred to NSSF according to the Transfer Measures (Please see the section entitled “Share Capital — Transfer of the State-owned Shares to the NSSF” in this prospectus for more details):

X 38.9%	X 38.9%	Xinjiang Changyuan Water Group Ltd. China Water Investment Co., Ltd(9) injiang SASAC 60.0% 40.0% 17.7% 9.4% China Th Changjiang New Energy Development Co., Ltd. 100.0% SAS	Xinjiang Changyuan Water Group Ltd. China Water Investment Co., Ltd(9) injiang SASAC 60.0% 40.0% 17.7% 9.4% China Th Changjiang New Energy Development Co., Ltd. 100.0% SAS	Xinjiang Changyuan Water Group Ltd. China Water Investment Co., Ltd(9) injiang SASAC 60.0% 40.0% 17.7% 9.4% China Th Changjiang New Energy Development Co., Ltd. 100.0% SAS	Xinjiang Changyuan Water Group Ltd. China Water Investment Co., Ltd(9) injiang SASAC 60.0% 40.0% 17.7% 9.4% China Th Changjiang New Energy Development Co., Ltd. 100.0% SAS	Xinjiang Changyuan Water Group Ltd. China Water Investment Co., Ltd(9) injiang SASAC 60.0% 40.0% 17.7% 9.4% China Th Changjiang New Energy Development Co., Ltd. 100.0% SAS	Xinjiang Changyuan Water Group Ltd. China Water Investment Co., Ltd(9) injiang SASAC 60.0% 40.0% 17.7% 9.4% China Th Changjiang New Energy Development Co., Ltd. 100.0% SAS	SAS	SAS	SAS	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC	100.0% ree Gorges 100.0% AC
	X	injiang SASAC			China Water Investment Co., Ltd(9)
			40.0%
		Xinj Chan Water L			iang gyuan Group td.
X P		injiangWind ower Co., Ltd.				33.9%		China Water Resources Investment Group Company			China-Belgium Direct Equity Investment Fund				Shenzhen Yuanjing Xinfeng Investment Consultation Co., Ltd.						Xinjiang Wind Power Research Centre						Shenzhen Yuanjing Xinneng Investment Consultation Co., Ltd.					Shenzhen Yuanfeng Investment Co., Ltd.				Directors and senior management							Other public A Shareholders
		18.3% 15.8%										7.2%						4.4%					2.1%						1.8%					0.1%					4.4%
											Xinjiang Goldwind Science &
		100.0%				100.0%			100.0%			100.0%						75.0%					83.3%					100.0%					100.0%
Bei Gold Scien Crea Wind Equip Co.,		jing wind ce & tion Power ment Ltd. (1)			Inner Mongolia Goldwind Science & Technology Co., Ltd. (2)			Gansu Goldwind Wind Power Equipment Manufacture Co., Ltd. (3)			Goldwind Windenergy GmbH (4)				Beijing Techwin Electric Co., Ltd.(5)						Beijing Tianyuan Science & Creation Wind Power Technology Co., Ltd.(6)					Xinjiang Tianyun Wind Power Equipment Distribution Co., Ltd. (7)					Beijing Tianrun New Energy Investment Co., Ltd. (8)
		100.0% 100.0% 90 ~~Chi~~feng Tianrun Xinneng New Energy Co., Ltd. Gol US Goldwind Australia Pty Ltd. Tianrun Wind Power (Beijing) Logistics Co., Ltd.			00.0% 1			00.0%			100.0%				100.0%						100.0%				100.0%					100.0%
						Goldwind Australia Pty Ltd.				Gol US	dwind A, Inc	Nanjing Goldwind Science & Technology Co., Ltd.						Xi'an Goldwind Science & Technology Co., Ltd.					Beijing Goldwind Tiantong Import and Export Trading Co., Ltd.					Urumchi Goldwind Tianyi Wind Power Co., Ltd.					Jiangsu Goldwind Wind Power Equipment Manufacture Co., Ltd.
											Vensys Energy AG (4)
											Vensys Elektrotechnik GmbH
											51.0% .0% ., ~~Chi~~feng Huifeng New Energy Co., Ltd.	100.0% 6			6.0%	51.0%			56.0%		51.0%		51.0% 1		1 00.0%		00.0	100.0 %		100.0 %		100.0% %		51.0% 1		00.0%		100.0%		100.0%			51.0%
										~~Chi~~feng Tianrun Xinneng New Energy Co., Ltd.		~~Uru~~mqi Tianrun Wind Power CoLtd		Yichun Taiyangfeng New Energy Co., Ltd.	~~Sun~~ite Youqi Tianrunlong Wind Power Co., Ltd.			~~Bei~~jing Xingqiyuan Energy Conservation Technology Co., Ltd.			~~Qia~~nguo Fuhui Wind Energy Co., Ltd.	~~Ton~~gyu Fuhui Wind Energy Co., Ltd.		~~Bol~~i Double Star Wind Power Development Co., Ltd.		~~Tacheng Tianrun New Energy Co., Ltd.~~		TianRun Uilk, TianRun USA, Inc. 75.0% 97.0%		~~Gua~~zhou Tianrun Wind Power Co., Ltd	., .	~~Ham~~iTianrun New Energy Co Ltd	~~Sha~~ngdu Tianrun Wind Power Co., Ltd.		~~Bue~~rjin Tianrun Wind Power Co., Ltd.		~~Tac~~heng Tianrun Wind Power Co., Ltd.		~~Dam~~ao Qi Tianrun Wind Power Co., Ltd.			~~Inn~~er Mongolia Bayannur Fuhui Wind Energy Electricity Co., Ltd.			Xianghuang Qi Tianrun Wind Power Co., Ltd.
																											LLC
																											Uilk Wind Farm LLC (10)

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OUR HISTORY AND CORPORATE STRUCTURE

Note:

• (1) Beijing Goldwind Science & Creation Wind Power Equipment Co., Ltd. is a wholly owned and principal operating subsidiary of our Company and its principal business is the manufacture and sale of wind power equipment and components.

• (2) Inner Mongolia Goldwind Science & Technology Co., Ltd. is a wholly owned and principal operating subsidiary of our Company and its principal business is the manufacture and sale of wind power equipment and components.

• (3) Gansu Goldwind Wind Power Equipment Manufacture Co., Ltd. is a wholly owned and principal operating subsidiary of our Company and its principal business is the manufacture and sale of wind power equipment and components.

• (4) Goldwind Windenergy GmbH is a wholly owned and principal operating subsidiary of our Company and its principal business is investment holding; Vensys Energy AG is a subsidiary of Goldwind Windenergy GmbH and its principal business is the provision of technical services and manufacture and sale of wind power equipment and components.

• (5) Beijing Techwin Electric Co., Ltd. is a non-wholly owned and principal operating subsidiary of our Company and its principal business is the manufacture and sale of wind power components.

• (6) Beijing Tianyuan Science & Creation Wind Power Technology Co., Ltd. is a non-wholly owned and principal operating subsidiary of our Company and its principal business is the provision of wind farm construction and technical services and sale of wind power components. The shareholding structure of Beijing Tianyuan is as follows:

Name of Shareholder Wang Hai ( ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yang Jian ( ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cao Lian Shan ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wu Yu Zhu ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cai Rui Gang ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wang Jing ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wu Jun ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Zou Jian Ming ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liu Xiang ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Song Jian Jun ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Zhang Zhen ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lu Xiao Yong ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wang Xin Ju ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Approx. % of shareholding
	2.44 2.22 1.78 1.33 1.27 1.00 1.11 1.11 0.89 1.11 0.67 0.78 0.96 83.33
	100.0

• (7) Xinjiang Tianyun Wind Power Equipment Distribution Co., Ltd. is a wholly owned and principal operating subsidiary of our Company and its principal business is transportation.

• (8) Beijing Tianrun New Energy Investment Co., Ltd. is a wholly owned and principal operating subsidiary of our Company and its principal business is wind farm investment, development and sales.

• (9) The shareholders of China Water Investment Co., Ltd are

Name of Shareholder Bureau of Comprehensive Development of Ministry of Water Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sinohydro Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Water Affairs Group Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shanxi Wanjiazhai Yin Huang Project Parent Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inner Mongolia Energy Power Investment Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Zhejiang DY-Link Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Institute of Water Resources and Hydropower Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Beijing Neng Da Power Investment Co., Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Approx. % of shareholding

36.875 33.125 19.375 6.25 2.5 0.625 0.625 0.625

• (10) The shareholding structure of Uilk Wind Farm LLC is:

Name of Shareholder Tianrun Uilk, LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Uilk Wind I, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Uilk Wind II, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Uilk Wind III, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Approx. % of shareholding

97 1 1 1

Please see the appendix entitled “Appendix IX — Statutory and General Information” to this prospectus for details of our other non-wholly owned subsidiaries with shareholders holding more than 10% equity interests.

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OUR HISTORY AND CORPORATE STRUCTURE

The following chart sets out our shareholding structure and our principal subsidiaries immediately after completion of the Global Offering on the assumption that the Over-allotment Option has not been exercised, the A Shares have not been transferred to NSSF according to the Transfer Measures and there is no change in the shareholding of our A Shares other than the conversion and transfer of state-owned Shares to the NSSF:

38.9%							9.4% China Th SA Changjiang New Energy Development Co., Ltd. 100.0% Water stment , Ltd 60%	SA	SA	SA	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC	100.0% 100% ree Gorges SAC
	Xinjiang SASAC					China Inve Co.	Water stment , Ltd
	Xinjiang Changyuan Water Group Ltd. 17.7% 40%		40%
		Xinjiang Changyuan Water Group Ltd.
						17.7%
X P	injiang~~Wind~~ ower Co., Ltd.						33.9%	China Water Resources Investment Group Company			China-Belgium Direct Equity Investment Fund					Shenzhen Yuanjing Xinfeng Investment Consultation Co., Ltd.						Xinjiang Wind Power Research Centre						Shenzhen Yuanjing Xinneng Investment Consultation Co., Ltd.					Shenzhen Yuanfeng Investment Co., Ltd.				Directors and senior management							Other A Shares Shareholders					Other H Shares Shareholders
	14.8%						12.8%						6.1%						3.7%					1.7%						1.5%					0.1%					3.7%							39.1%
											Xinjiang Goldwind Science &
	100.0%			1			00.0%		100.0%				100.0%						75.0%					83.3%					100.0%					100.0%
Bei Gold Scien Crea Wind Equip Co.,	jing wind ce & tion Power ment Ltd.				Inne Mong Goldw Scienc Techno Co., L		r olia ind e & logy td.	Gansu Goldwind Wind Power Equipment Manufacture Co., Ltd.			Goldwind Windenergy GmbH					Beijing Techwin Electric Co., Ltd.						Beijing Tianyuan Science & Creation Wind Power Technology Co., Ltd.					Xinjiang Tianyun Wind Power Equipment Distribution Co., Ltd.					Beijing Tianrun New Energy Investment Co., Ltd.
	100.0% Tianrun Wind Power (Beijing) Logistics Co., Ltd.							100.0%			100.0%					100.0%						100.0%				100.0%					100.0%
							Goldwind Australia Pty Ltd.			Gol US	dwind A, Inc		Nanjing Goldwind Science & Technology Co., Ltd.						Xi'an Goldwind Science & Technology Co., Ltd.					Beijing Goldwind Tiantong Import and Export Trading Co., Ltd.					Urumchi Goldwind Tianyi Wind Power Co., Ltd.					Jiangsu Goldwind Wind Power Equipment Manufacture Co., Ltd.
							90. ~~Chi~~feng Tianrun Xinneng New Energy Co., Ltd.
											Vensys Energy AG
											Vensys Elektrotechnik GmbH
											51.0% 0% , ~~Chi~~feng Huifeng New Energy Co., Ltd.		100.0% 6			6.0%	51.0%			56.0%		51.0%		51.0% 1		10 00.0%		0.0%	100.0		100.0% %		100.0%		51.0% 1		00.0%		100.0%		100.0%			51.0%
										~~Chi~~feng Tianrun Xinneng New Energy Co., Ltd.		,	~~Uru~~mqi Tianrun Wind Power Co.Ltd		Yichun Taiyangfeng New Energy Co., Ltd.	~~Sun~~ite Youqi Tianrunlong Wind Power Co., Ltd.			~~Bei~~jing Xingqiyuan Energy Conservation Technology Co., Ltd.		,	~~Qia~~nguo Fuhui Wind Energy Co. Ltd.	~~Ton~~gyu Fuhui Wind Energy Co., Ltd.		~~Bol~~i Double Star Wind Power Development Co., Ltd.		~~Tacheng Tianrun New Energy Co., Ltd.~~	~~,~~	TianRun Uilk, ~~TianRun USA Inc.~~ 75.0% 97.0%		~~Gua~~zhou Tianrun Wind Power Co., Ltd		~~Ham~~i Tianrun New Energy Co., Ltd.	~~Sha~~ngdu Tianrun Wind Power Co., Ltd.		~~Bue~~rjin Tianrun Wind Power Co., Ltd.		~~Tac~~heng Tianrun Wind Power Co., Ltd.		~~Dam~~ao Qi Tianrun Wind Power Co., Ltd.			~~Inn~~er Mongolia Bayannur Fuhui Wind Energy Electricity Co., Ltd.			~~Xia~~nghuang Qi Tianrun Wind Power Co., Ltd.
																												LLC
																												Uilk WindFarm LLC

(1) Includes an approximate 1.5% shareholding interest held by NSSF

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OUR HISTORY AND CORPORATE STRUCTURE

Milestones in our History

We have achieved the following important milestones in our development into a leading WTG manufacturer:

1998	XJ New Wind was established.
	We commenced the development of our 600 kW WTGs on the basis of technologies originally licensed
	from suppliers in Germany and then through adaptation, further development, integration and
	innovation of such technologies. Please see the subsection entitled “Business — R&D — Product
	Technology R&D” in this prospectus for more details.
	Our first domestically-made 600 kW WTGs successfully commenced operation in Dabancheng,
	Xinjiang.
1999	The 600 kW WTGs localization project passed the joint examination and inspection conducted by the
	MOST and Xinjiang Science Bureau. The assessment opinion concluded that such R&D work was the
	first of its kind in China and considered technologically advanced. The project was respectively given
	the Xinjiang Science and Technology Advancement First Prize Award and the PRC Science and
	Technology Advancement Second Prize Award.
2000	Our products began to be sold in the PRC market.
2001	Our Company was established as a joint stock limited liability company upon completion of the
	restructuring.
	We began to develop our 750 kW WTGs.
2002	Our production base in Urumqi, Xinjiang was completed and commenced operation with an annual
	production capacity of 200 units of 600 kW and 750 kW WTGs, which were launched on the market in
	batches.
2004	We won the bid for the first wind power concession project of the PRC.
	We obtained approval from the MOST for the establishment of our “National Wind Power Engineering
	Technology Research Centre”.
2005	Our 1.2 MW WTG models commenced operation in the wind farm at Dabancheng, Xinjiang.
2006	The World Wind Energy Association awarded the “2006 World Wind Energy Award” to our Company
	and our Chairman, Mr. Wu Gang in recognition of our contribution to the development of the
	international wind power industry.
	Based on our accumulated installed capacity of WTGs in 2006, we were ranked tenth amongst global
	WTG manufacturers.
	We won the bid for the wind power project in Guanting, Beijing, becoming the green power supplier for
	the Beijing Olympics.
	We were ranked seventh amongst “100 Chinese Companies to Watch in 2007” by Forbes Magazine and
	rated as one of the companies with the greatest growth potential in China.
2007	The A Shares were listed on the SZSE.
	We shifted to independent development of our products and key technologies, and began sales of our
	1.5 MW WTG product.
	We manufactured Asia’s first offshore 1.5 MW direct-drive permanent magnet WTG, which was
	installed in Bohai Bay, PRC.

We completed the establishment of our nationwide production and service network in China.

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OUR HISTORY AND CORPORATE STRUCTURE

2008	Our market share based on accumulated installed capacity was ranked first among WTG manufacturers
	in the PRC for three consecutive years.
	We successfully acquired German-based Vensys AG, which owned the advanced direct-drive
	technology and launched its 1.5 MW WTGs in the European market.
	We commenced international sales of our products, primarily targeting markets in the United States,
	Australia and Europe. Please see the subsection entitled “Business — Sales and Marketing — Overseas
	Business” in this prospectus for more details.
2009	Our newly-developed 2.5 MW and 3.0 MW WTG prototypes were produced and achieved successful
	grid connection.

– 90 –

BUSINESS

OVERVIEW

We are a leading manufacturer of wind turbine generators and provider of complete wind power solutions in China. Our primary business is WTG R&D, manufacturing and sales. We also engage in the provision of comprehensive wind power services and the development of wind farms for sale to wind farm operators and investors. As an enterprise with one of the longest track records in the PRC wind power equipment manufacturing industry, we possess substantial technical expertise, strong independent R&D capabilities, and have successfully introduced innovative leading edge wind turbine technologies to the PRC market. Most of our core management team have specialized in wind power for many years, and possess significant industry experience in wind energy development and operation, giving us a deep understanding of our client base and their operational needs. Our comprehensive quality assurance system and after-sales service operations have also contributed to achieving our dominant market position. According to the International Wind Energy Development — World Market Update published by BTM, the accumulated installed capacity of WTGs manufactured by us reached 5.3 GW as of December 31, 2009, representing a market share in the PRC of approximately 21%. In 2009, our market share in the PRC in terms of newly installed capacity increased approximately 2 percentage points as compared to the previous year to approximately 20%, ranking us the fifth largest WTG manufacturer globally and the second largest in the PRC. The WWEA awarded us the World Wind Energy Award 2006 for our contribution to the development of the international wind power industry.

• k For our WTG R&D, manufacturing and sales business, we focus on the research, design, manufacturing and sales of premium quality WTGs with high efficiency and availability. Our main product is currently the 1.5 MW direct-drive permanent magnet WTG, and we also produce the 750 kW stall-regulated WTG. Throughout our corporate history, our customers have primarily been China’s large power producers and other enterprises investing in renewable energy, and our products and services have been sold across the PRC, with over 5,800 of our WTGs installed in 19 of China’s provinces as of March 31, 2010. Apart from our business in the domestic market, we have also embarked on sales of our WTGs in international markets. For the three years ended December 31, 2007, 2008 and 2009, the revenue generated from our WTG R&D, manufacturing and sales business segment was RMB3,079.2 million, RMB6,299.3 million and RMB10,347.4 million, respectively, and accounted for 99.7%, 98.2% and 97.0% of our total revenue.

• k For our wind power services business, we offer customers a complete range of services covering the whole process of developing a wind farm project, from preliminary investment consultancy and preconstruction project services such as feasibility studies and wind measurement, to project construction services such as EPC contracting, to post-construction operation and maintenance services such as equipment servicing and wind farm operation and maintenance. As of March 31, 2010, we had provided preliminary investment consultancy and pre-construction services for 275 projects, project construction services for 123 wind farms, and post-construction operation and maintenance services for 72 wind farms with total installed capacity of 4,129.1 MW. For the three years ended December 31, 2007, 2008 and 2009, the revenue generated from our wind power services business segment was RMB9.8 million, RMB29.5 million and RMB215.4 million, respectively, and accounted for 0.3%, 0.4% and 2.0% of our total revenue.

• k For our wind farm investment, development and sales business, we are able to provide wind farm operators and investors completed wind farms that we have invested in and developed, and equipped with our WTGs. As of March 31, 2010, we developed 14 wind farms with total installed capacity of 628.5 MW and attributable installed capacity of 471.5 MW, of which four completed wind farms were

– 91 –

BUSINESS

sold. We generate income from sale of equity interests in the project companies we set up to develop the wind farms, and income from such sale is recorded under other income and gains. During the Track Record Period, income from sale of completed wind farms was nil, RMB263.1 million and RMB189.8 million, respectively. For our completed wind farms yet to be sold, we put them into operation and generate revenue from the tariffs received from the power generated. As of March 31, 2010, we have two completed wind farms yet to be sold. For the three years ended December 31, 2007, 2008 and 2009, our revenue for this business segment was nil, RMB88.5 million and RMB103.7 million, respectively, and accounted for 0.0%, 1.4% and 1.0% of our total revenue.

We have strategically leveraged the depth of our R&D and manufacturing, services and wind farm development capabilities to achieve synergies among our three business segments and formed an advanced model as a provider of complete solutions covering multiple aspects of the wind power industry value chain. No other PRC WTG manufacturer is engaged in the provision of complete wind power solutions on a scale similar to ours.

Our main product technology is the direct-drive permanent magnet full-power rectification technology, which holds four significant advantages over other wind turbine technologies, namely high efficiency, high reliability, superior grid connectivity and low spare parts and consumable materials requirements. We believe these advantages are greatly valued by our customers and the power grids for whom they generate electricity. We have successfully introduced our specialized wind turbine series, which adopt this technology and are efficiently adapted to the PRC’s diverse operating conditions, including low and high temperatures, high altitude, low wind velocity and coastal areas.

We possess a comprehensive technology development system and have established three R&D centers in Beijing and Urumqi, PRC and Neunkirchen, Germany, where the headquarters of our subsidiary, Vensys AG, is based, with specialized research teams that focus on developing next generation technology and product improvements. We are also engaged in the in-house design and manufacture of core parts and components. This reduces our production cost and also enables us to obtain independent rights for key wind turbine technologies. We have completed the design and production of our 2.5 MW direct-drive permanent magnet WTG and 3.0 MW hybrid-drive WTG prototypes and achieved successful grid connection. Our 5.0 MW WTG is currently under development. We independently developed our MW-level WTGs through extensive R&D activities focused on our advanced direct-drive permanent magnet full-power rectification technology, whereas most Chinese WTG manufacturers generally acquire wind turbine technologies through licensing. The strength of our R&D capabilities is further evidenced by our ownership of six proprietary technologies, 25 patents, and 39 pending patents as of the Latest Practicable Date. In addition to achieving widespread customer acceptance, we have been called upon by the relevant PRC authorities to lead the drafting of eight national and local wind power industry technical standards, and are currently involved in the drafting of a further three such national standards.

We undertook an initial public offering and listing of our A shares on the SZSE in 2007. During the Track Record Period, we have experienced significant growth in revenues and maintained good profitability. For the three years ended December 31, 2007, 2008 and 2009, our revenue was RMB3,089.0 million, RMB6,417.3 million and RMB10,666.5 million, respectively, and our profit attributable to owners of our Company was RMB624.6 million, RMB906.4 million and RMB1,745.6 million, respectively, growing at a CAGR of 85.8% and 67.2%, between 2007 and 2009, respectively. During the same period, our sales volume of WTGs was 754.5 MW, 1,372.5 MW and 2,035.5 MW, respectively, growing at a CAGR of 64.3% between 2007 and 2009.

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BUSINESS

OUR COMPETITIVE STRENGTHS

We are a leader in the PRC WTG manufacturing industry with extensive sector experience, and have played an active role in the rapid growth of China’s wind power market.

We are a leading WTG manufacturer in the PRC, one of the largest and most rapidly growing wind power markets globally. The accumulated installed capacity of WTGs manufactured by us reached 5.3 GW as of December 31, 2009, representing a market share in the PRC of approximately 21%. In 2009, our market share in the PRC in terms of newly installed capacity increased approximately 2 percentage points as compared to the previous year to approximately 20%, ranking us the fifth largest WTG manufacturer globally and the second largest in the PRC. Over 5,800 WTGs manufactured by us have been deployed in 19 of China’s provinces under diverse operating conditions as of March 31, 2010.

As one of the PRC’s pioneers in the wind power industry, our R&D, operations and service teams have accrued significant experience in designing, manufacturing and operating WTGs as well as developing and constructing wind farms across the PRC. This enables us to provide our customers with timely, integrated solutions covering multiple aspects of the wind power industry chain. We believe we are an important partner to our customers, which include the PRC’s largest power producers, due to the high quality and performance of our WTGs, and our ability to assist customers with many aspects of the wind power industry value chain.

We possess superior technology and strong independent R&D, design and product development capabilities.

Our state-of-the-art technology and strong R&D capabilities are key to our market leading position in the PRC. Our main product is the 1.5 MW direct-drive permanent magnet WTG, which adopts the direct-drive permanent magnet full-power rectification technology. This technology holds significant advantages over other wind turbine technologies such as higher efficiency, higher reliability, superior grid connectivity and lower spare parts and consumable materials requirements. Most Chinese WTG manufacturers generally acquire WTG technologies through licensing, however, we independently developed our MW-level WTGs. We have also launched the widest product range among all PRC WTG manufacturers. These series are adapted to the diverse operating conditions in the PRC, including low and high temperatures, high altitude, low wind velocity and coastal areas. We believe our WTGs built on these technologies will continue to experience wide market acceptance and will continue to grow in market share.

Our professional R&D team has extensive wind power industry experience and a comprehensive combination of knowledge and expertise, and combined with our establishment of a superior technology development platform, makes us well-equipped to carry out development work. Our R&D centers in Beijing and Urumqi, PRC and at our Vensys AG headquarters in Neunkirchen, Germany, with specialized research teams, focus on continuously improving our technologies and products for adaptation to different operating environments and timely meeting of customer needs using the latest technologies. Our R&D work includes research on key specialized wind turbine technologies such as high-power permanent magnet generator technology, transmission technology, control strategy, electric control technology and grid connectivity technology. Further development of these technologies will improve the performance and reliability of our WTGs. In addition, we also possess in-house design capabilities for core parts and components. Mass production of our independently-designed converter, variable pitch and master control systems will commence in 2010. We have complete testing measures in place for parts and components and assembled WTG units to ensure the high quality of our WTGs.

We believe the combination of our established technology and production capabilities, enhanced through our acquisition of German-based Vensys AG in 2008, results in continuous improvements in our direct-drive permanent

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magnet full-power rectification technology, and enables our products to maintain a leading position in the PRC wind power industry and enter global markets.

We have an advanced business model as a provider of complete wind power solutions and continue to discover new value along the entire wind power industry value chain.

We have in place an advanced business model as a complete wind power solutions provider with our marketleading WTG R&D, manufacturing and sales business segment at the core, fully complemented by our two other businesses: wind power services and wind farm investment, development and sales. This enables us to benefit from multiple aspects of the wind power industry value chain. Leveraging our extensive experience in designing and manufacturing WTGs, as well as constructing wind farms in the PRC, we not only are able to provide customers with high quality WTGs, but also have developed a complete suite of wind power services and wind farm development solutions, allowing us to meet our customers’ needs in multiple aspects of the wind power industry value chain.

Our comprehensive portfolio of wind power services includes preliminary investment consultancy and project services, project construction services and post-construction operation and maintenance services. Our service teams ensure fast, timely and tailored servicing of our WTGs to provide superior WTG availability for our customers and also provide services needed at every stage of a wind farm project to assist customers with developing more efficient wind farms. Our integrated business model also allows us to apply our industry experience and technical expertise to all aspects of wind farm design and construction — from wind measurement, filing of the relevant governmental applications, project planning and construction and installation of WTGs to operation of the wind farm — enabling us to develop cost-efficient wind farms. This allows us not only to provide wind farm operators and investors with completed wind farms but also obtain income from electricity generated.

The synergies achieved between our three business segments are significant. The provision of wind power services allows us to cultivate existing and potential customer relationships which benefits our WTG R&D, manufacturing and sales business. Our manufacturing industry background and experience in operation and maintenance services have assisted our wind farm investment, development and sales business. Our wind farm investment, development and sales business has also contributed to an increase in our WTG sales, and according to these customers’ needs, our operational and maintenance teams will also provide wind power services. This creates new attractive sources of profit growth for us and contributes to enhancing our market position.

We are able to provide customers with comprehensive, timely and efficient after-sales services.

We offer our customers comprehensive service through the integration of our service, logistics and technical support units to ensure the high availability of our WTGs. We believe the quality of after-sales services we provide have made our WTGs among the best performers in the PRC market, resulting in our wide customer acceptance and leading market position. Our 12 service centers form a nationwide service and spare parts supply network to ensure prompt customer response time, with engineers generally arriving at customer sites within 12 hours of customer requests and maintenance or replacement of conventional spare parts occurring generally within 24 hours. To ensure that first-rate services are provided to customers, and to ensure the service level and technical competency of the field service personnel, we carry out personnel training, assessment and certification. Field service personnel with appropriate technical certification are allocated to each project site based on the actual technical requirements of the project. In addition, we have also developed and implemented the SCADA system for our customers to centrally monitor and compile statistics on the operation of our WTGs. We use all of the foregoing to develop the best

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operational solutions and the most suitable maintenance measures, allowing us to provide superior service to our customers.

We have strong capabilities to design and manufacture core components in-house and optimize our supply chain, enabling us to reduce cost of production while assuring quality.

We have developed independent in-house design and manufacturing capabilities for certain core parts and components, which, combined with the optimization of our supply chain, enables us to reduce our cost of sales and ensure timely delivery of our products to customers. We believe we have realized significant cost savings through our research, design and manufacture of core parts and components, such as the converters, variable pitch and master control systems for our WTGs. As we fully oversee the entire design and production process of such customized parts and components, we are also able to more effectively implement quality control systems and ensure product quality while controlling costs.

Traditionally our industry has faced several supply chain-related challenges, with frequent difficulties related to timely supply of high-quality parts and components. We have attempted to address these issues by committing significant R&D, operations and quality control personnel to develop reliable suppliers and strengthen our relationships with key suppliers. Our teams work together with these suppliers to effectively leverage their respective expertise and advantages, ensure their quality and technical specifications meet our standards, and better control our parts and components’ costs. Further, we have established a quality control system encompassing our entire design and production process through supervising the design and manufacturing process of our suppliers, allowing us to realize efficient control of our parts and components costs. The resulting close relationship from such mutual cooperation provides a secure supply chain for our business, which enables us to effectively control our production costs and achieve higher cost efficiency for our customers.

We have an experienced management team, and are continuously recruiting new talent.

Our senior management, core operations, strategic planning and investment management personnel were some of China’s first professionals to enter the wind power field, most of whom have specialized in wind power for many years and have been with us since our incorporation. Their deep familiarity with the development of the PRC wind power industry, the evolution of WTG technologies, design and manufacturing of core parts and components, wind power services as well as their extensive experience in developing and operating wind farms, including the then largest wind farm in Asia at Dabancheng, Xinjiang in 1989, are essential to our long term success. Our operations teams in all of our business segments are led by professionals with significant experience in their fields. In addition, many members of our senior management team have technical backgrounds and extensive experience in enterprise management.

Mr. Wu Gang, our chairman and chief executive officer, has more than 22 years of experience in the wind power industry and currently is the deputy director of the Chinese Renewable Energy Industries Association. He was awarded the World Wind Energy Award in 2006 for his leadership of our Group in contributing to the development of the international wind power industry. His vision have been critical to our growth, making us a leading enterprise in China’s WTG manufacturing industry.

Our active, open corporate culture and accelerated pace of growth have attracted international and domestic talent to join us and enrich our management and operation teams. We believe this advantage will continue to attract new talent for us and be significant for maintaining our technological superiority, expanding our market share and increasing our profitability in the future.

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OUR STRATEGIES

We seek to maintain and further enhance our position in the business of WTG R&D, manufacturing and sales, continue to be a leading provider of complete wind power solutions, expand our business globally and create maximum customer value. Our specific strategies are as follows:

Maintain and enhance market leading position in China.

We are a leading WTG manufacturer in the PRC. We seek to grow our customer base while servicing our existing major clients, which include the PRC’s large power producers and other enterprises investing in renewable energy. Their participation in the PRC wind power market has grown rapidly in recent years and this is expected to continue given the gradual depletion of traditional fossil fuel energy sources, progressive maturity of the renewable energy industry and policy support of the PRC Government. We believe that our customers most value the high efficiency and availability of our WTGs, and we are committed to continually improving the performance of our WTGs and providing new and advanced WTG models, which are cost efficient and tailored to their specific needs. We also seek to maintain and increase sales to our existing customer base through providing after-sales and valueadded services suited to their specific needs and fully demonstrating their value to our customers.

We will also continue to fully leverage our extensive experience, ability to provide integrated solutions covering multiple aspects of the wind power industry value chain to our existing and new customers, and a management team with strong strategic vision and execution abilities to further enhance our leading market share in China. We are also in the process of establishing more production facilities and strategically expanding our production capacity in regions with abundant wind resources to support our customers as they develop these markets, or concentration of component suppliers, such as our construction of new production bases in Dafeng and Nanjing, Jiangsu province, and Xi’an, Shaanxi province, PRC. Through providing our customers with more advanced WTG products, high-quality comprehensive services and integrated solutions, and a reasonable distribution of production capacity to meet our customers’ needs, we believe we will be able to increase our sales in the PRC and maintain our leading market position.

Continue to focus on technology and product innovation to develop more advanced WTGs.

We believe that our superior R&D abilities and focus on technology and product innovation will continue to drive our success. We intend to research and develop our next generation products, while delivering our currently dominant products, to provide an innovative product line based on our detailed analysis of market needs. We are committed to developing WTGs with higher efficiency and reliability, better climate adaptability and greater cost efficiency. To that end, we will continue to introduce more advanced WTG series customized for optimum performance under diverse operating conditions. We have also developed larger WTGs. Specifically, the prototypes of our 2.5 MW direct-drive permanent magnet WTG and 3.0 MW hybrid-drive WTG have achieved successful grid connection and will begin commercial production in 2010. Further, we are also developing our 5.0 MW WTG model. Offshore wind farm deployment of our WTGs is also a driving focus of our innovation, with our 1.5 MW, 2.5 MW, 3.0 MWand 5.0 MW WTGs all being able to be used at sea. We have also committed significant resources to refining the development, operation and maintenance of offshore WTGs in anticipation of servicing this growing market segment.

We will continue to increase our R&D efforts, with our technological innovation mainly focusing on key specialized WTG technologies, including permanent magnet generator technology, transmission technology, control strategy, electric control technology and grid connectivity technology. We will further refine our R&D operation mechanism to better stimulate our technical personnel’s potential and facilitate their development. In

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addition to expanding our R&D centers in Beijing and Urumqi, PRC and Neunkirchen, Germany, where the headquarters of our subsidiary, Vensys AG, is based, we will continue to engage in technology exchanges and partnerships with leading domestic and international academic institutions and industry groups. Through leveraging our R&D base in Germany, we seek to better understand the adoption of cutting edge European wind technology to the PRC WTG market, and continue to keep our R&D team at the forefront of global WTG technology.

Continuously reduce costs and further optimize our supply chain.

We will continue to strive to reduce costs through investment in cost control measures and optimization of our supply chain. We intend to (i) expand the scale of our sales, sourcing and operations so as to achieve greater economies of scale, (ii) lower transportation costs through maintaining better geographic distribution of our production bases, (iii) further strengthen our in-house design and manufacturing capabilities for certain core parts and components, such as our construction of a new production base in Beijing, PRC to manufacture electric control systems, (iv) continue to implement stringent quality control measures and effectively reduce costs incurred due to product defects and technical malfunctions, and (v) strengthen management capabilities to increase operational efficiency, including management of our supply chain.

Further, we will continue to maintain close relationships with our suppliers and cooperate with high-quality suppliers in the PRC and globally to ensure the stability, quality and cost-effectiveness of our parts and components supply chain. As with our production bases, our new manufacturing facilities and facilities under construction are located in close proximity to major parts and components suppliers or marketing regions under development, thus lowering our logistics costs. Capital investments in, and joint ventures with, some of our suppliers are also used to bring us closer to our suppliers and their management. We believe the continuous fostering of mutually beneficial relationships with our suppliers is a competitive advantage, and can contribute to enterprise innovation and mutual growth. We will continue to increase the cost efficiency achieved by optimization of our supply chain through effective cost control measures and good supplier relationship management.

Actively grow our wind power services and wind farm investment, development and sales businesses.

We believe our wind power services and wind farm investment, development and sales businesses represent new sources of profit growth with great potential for us, and the synergies between them and our WTG R&D, manufacturing and sales business make our products and services more attractive to our customers. As such, we intend to expand these businesses to maximize customer value. In light of market demand and public support for renewable energy, PRC power producers and other investors are rapidly entering the renewable energy markets, and in particular the wind power market. BTM predicts that the accumulated installed capacity of WTGs in the PRC will realize a CAGR of 32.3% from 25.9 GW in 2009 to 104.9 GW in 2014. As a result, we believe that there is significant growth potential for our wind power services business, which will in the long term provide us a competitive advantage both in the PRC and overseas markets. We intend to improve our existing services and develop new value-added services such as maintenance services for parts and components and advisory services. We will also continue with the localization of our services to provide our customers with reliable support, ensuring that their needs are attended to in the shortest time possible.

We have accumulated expertise in all aspects of the development, construction, operation and maintenance of wind farms in the PRC. As investment and development of wind farms require a certain level of professional expertise, the construction cycle of wind farm projects is lengthy and the risk of unsuccessful development exists, some wind power investors prefer to obtain completed wind farms ready for operation. Recognizing the corresponding potential for our wind farm investment, development and sales business, our senior management

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has fully leveraged our internal resources, our WTG R&D, design and product development capabilities, our ability to provide professional operation and maintenance services and external strategic partnerships to further expand and explore more opportunities in wind farm investment and cooperation with investors. We intend to continue actively promoting these services to our existing and new customers. As a result, we expect these new attractive revenue streams to contribute to our growth in the future.

Expand into attractive international markets.

Besides maintaining our domestic market share, we seek to expand our operations globally into attractive international markets. Our target markets are the United States, Australia and Europe: the United States is currently the largest wind power market in the world, Australia possesses high growth potential, and Europe is a developed and growing market that allows us to fully leverage our subsidiary, Vensys AG’s existing advantages for market penetration. We believe the growth opportunities in the United States, Australia and Europe are significant, given the public and policy support for renewable energy in those regions. BTM estimates that CAGR of installed capacity of WTGs in the United States, Australia and Europe from 2009 to 2014 will be 23.3%, 22.4% and 16.7%, respectively.

Our initial efforts abroad have included establishment of production facilities, sales offices and service networks in Germany, the United States and Australia for manufacturing and sales of our WTGs and development of wind farm projects. We have successfully completed a wind farm project in the United States, and are actively pursuing other potential projects. We have established a production base at the headquarters of our subsidiary, Vensys AG in Neunkirchen, Germany and began sales of our products in Europe. We have also dispatched management teams to these regions to understand market conditions, and have set up a dedicated team responsible for the long-term development of our international business. We are also actively participating in foreign aid projects organized by the PRC Government. Our international expansion presents opportunities to increase the market for our existing WTG models, and we expect this expansion may involve the establishment or acquisition of further production facilities overseas. With our product, technology and cost advantages, we believe that our overseas expansion can be successfully achieved.

OUR BUSINESS SEGMENTS

Our business segments consist of (i) WTG R&D, manufacturing and sales, (ii) wind power services, and (iii) wind farm investment, development and sales. As of March 31, 2010, there are over 5,800 of our WTGs installed in China, we had provided preliminary investment consultancy and pre-construction services for 275 projects, project construction services for 123 wind farms, and post-construction operation and maintenance services for 72 wind farms with total installed capacity of 4,129.1 MW, and the total installed capacity and attributable installed capacity of wind farm projects developed by us was 628.5 MW and 471.5 MW, respectively.

WTG R&D, MANUFACTURING AND SALES

Our focus is on the research, design and manufacturing of premium quality WTGs with high efficiency and availability. We have accumulated substantial experience in developing the PRC wind power market, and we believe that we have derived significant competitive strengths in terms of R&D, production process technology and quality of our wind turbine products and services. Our products and services coverage extends over 19 provinces in the PRC, and according to BTM, the accumulated installed capacity of WTGs manufactured by us as of December 31, 2009 was approximately 5.3 GW with a market share of approximately 21%.

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We recognize revenue for this business segment from the sale of individual WTGs as well as spare parts sales, when the significant risks and rewards of ownership have been transferred to the buyer. Our costs of sales in respect of this business segment consist mainly of raw materials and components for our WTGs, including blades, generators, structural parts and electric control systems. During the Track Record Period, our revenue from this business segment was RMB3,079.2 million, RMB6,299.3 million and RMB10,347.4 million, respectively, representing a CAGR of 83.3% for the same period. Please see the section entitled “Financial Information” in this prospectus for more details.

Our Product Portfolio

Our primary product range during the Track Record Period consisted of the 1.5 MW direct-drive permanent magnet WTG and the 750 kW stall-regulated WTG. Our products are fully adaptable and suitable for different geographical regions and climates, including high and low temperature, high altitude, low wind velocity and coastal areas.

Since inception, we have developed seven distinct WTG product series, from 600 kW to 3.0 MW, using increasingly advanced technologies. Through our experience in product development, we have established a full team of R&D and operations personnel with a deep understanding of WTG technologies. The 1.5 MW WTG series has become our main product although we still continue to sell our 750 kW WTG series. In November 2007, Asia’s first offshore 1.5 MW direct-drive permanent magnet WTG, which was manufactured by us, was installed in Bohai Bay, PRC.

The following table sets out the technical specifications of our 1.5 MW WTGs and 750 kW WTGs.

Product Category 1.5 MW WTG 750 kW WTG	WTG Model GW70/1500 GW77/1500 GW82/1500 GW48/750 GW50/750 GW52/750 GW50/750 (60hz)	Turbine Rotor Diameter (meter) 70 77 82 48 50 52 50	Hub Height (meter) 65 65 85 70 85 50 60 65 50 60 65 50 50	IEC Models (Type)
				I / II II / III III I / II / S I/ II II I / II I / III II II II

The table below sets out the sales details of our primary products during the Track Record Period.

WTG 1.5 MW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750 kW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended December 31,	Year ended December 31,
	Installed capacity sold (MW) 2007 2008 2009 85.5 519.0 1,591.5 669.0 853.5 444.0 754.5 1,372.5 2,035.5	2009
		2,035.5

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We have also completed the design and production of our 2.5 MWand 3.0 MW WTG prototypes, which have achieved successful grid connection. We are developing our 5.0 MW WTG. We expect to begin commercial production of our 2.5 MWand 3.0 MW WTGs during 2010. Please see the subsection below entitled “— R&D” for details on our 2.5 MW, 3.0 MW and 5.0 MW WTGs.

WTG Design and Development

We have comprehensive wind turbine design and development capabilities and own numerous proprietary technologies and patents, which we have leveraged through our history to develop seven distinct series of WTGs. We believe we are a leading large-scale PRC WTG manufacturer capable of independently developing new and advanced models of WTGs. Our main product technology is the direct-drive permanent magnet full-power rectification technology. Through our extensive research and design experience, we have developed our current series of high-performance wind turbines, and further enhanced their ability to operate in diverse geographic regions of the PRC.

Direct-Drive Permanent Magnet Full-Power Rectification Technology

Direct-drive permanent magnet full-power rectification technology consists of a wind-driven turbine rotor turning a permanent magnet synchronous generator, which does not require a gearbox to operate. The generator produces alternating current which is delivered to the grid via AC-DC-AC conversion by a full-power converter. The key advantages of the direct-drive permanent magnet full-power rectification technology are:

High efficiency	—	Unlike double-fed turbines, direct-drive wind turbines eliminate the gearbox
		component, which reduces transmission loss and allows higher generation
		levels, especially at low wind velocities. Permanent magnet technology
		further improves efficiency.
High reliability	—	Gearboxes have a relatively higher operational failure rate. The direct-drive
		technology eliminates the gearbox component and its ancillary parts, and
		simplifies the transmission structure, thereby ensuring higher reliability. The
		WTG also has considerably fewer moving parts when in operation at low speed,
		which increases its reliability.
Superior grid	—	Wind turbines may trip off-line in the event of major grid disturbances, but with
connectivity		the low-voltage ride through (LVRT) capability, WTGs adopting the direct-
		drive permanent magnet full-power rectification technology are able to stay
		connected to the grid during such grid disturbances, and can also easily perform
		the functions of active power control and reactive power control, thus better
		fulfilling grid requirements.
Low spare parts and	—	Gearless direct-drive technology reduces the number of WTG parts and
consumable materials		components and eliminates costs associated with gearbox oil replacement,
requirements		which lowers operation and maintenance costs considerably.

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Series Design

To keep pace with the rapid growth of the wind power market and to meet the requirements of the relevant market segments, we focus on developing WTGs suited to diverse geographical and climate conditions. Since our inception, we have created and introduced a wide range of WTG models under our customised series, which are adapted for diverse operating conditions including low and high temperatures, high altitude, low wind velocity and coastal areas:

High temperature	—	Designed with improvements to the cooling and radiation capabilities of the
		wind turbine’s components and sub-systems. Use of a self-regulating system
		enables the cooling system to continue functioning in the event of a wind turbine
		system failure without the need for a cooling fan or pump.
Low temperature	—	Designed for sub-zero environments of -20 to -40 degrees Celsius through the
		selection of suitable mechanical parts and materials, blade structure, lubrication
		system, electric control system, and materials for protecting components.
High altitude	—	Designed for areas with altitudes of over 2,000 meters through improvements in
		blade length, cooling and insulation of the electric control system and the motor,
		prevention of turbine corrosion and moisture resistance.
Low wind velocity	—	Designed with a larger wind wheel diameter for higher energy capture ability as
		well as optimized control strategy and other complementary solutions to ensure
		operation at low wind velocity.
Coastal	—	Designed for use in humid, high-salt areas with focus on prevention of salt
		corrosion, electrical protection and insulation. Improvements were made to the
		structural designs of the wind turbine and relevant parts and components and
		special anti-corrosion solutions were applied to the easily-corrodible
		components.

We own several proprietary technologies relating to WTG control strategy and systems. In addition, we have developed a self-adaptive turbine activation and cut-off control strategy which is able to identify the environmental conditions and technical factors in different operating terrains and self-tune the model parameters intelligently to optimize energy capture.

Design and Manufacture of Core Parts and Components

In order to optimize our WTGs, reduce reliance on upstream suppliers, and control costs effectively, we also concentrate on continuous enhancement of our R&D, design and manufacturing capabilities for certain core parts and components of WTGs, including electric control systems and generators, to ensure the quality and stability of the supply of our core parts and components.

Electric Control System

Along with advances in wind power technology and the gradual increase in wind turbine capacity, control technology is becoming a pivotal element for large wind turbines. In view of the complex operating conditions of WTGs, the design performance, reliability and stability of the electric control system are major factors affecting the wind turbine’s efficiency.

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The electric control system in our MW-level WTGs generally comprises a master control system, converter system and variable pitch system, as illustrated in the diagram below. Our 750 kW WTG model operates with a master control system only.

==> picture [317 x 190] intentionally omitted <==

----- Start of picture text -----

Converter system
Variable
pitch
system
Master control
system
----- End of picture text -----

Generator

The generator plays the important role in a WTG of converting mechanical energy into electrical energy. In comparison to a conventional generator, the permanent magnet generator used in our direct-drive WTGs does not require an exciter and the elimination of excitation loss results in a higher efficiency. Further, the high magnetic energy of the rare-earth permanent magnet materials enables a reduction in the weight of the generator.

We own or have applied for multiple patents in magnetic poles arrangements and the cooling and shaft designs of the external generator rotor for the 1.5 MW WTGs. The unique seal design of our generator for the first 1.5 MW offshore WTG in Asia, which was manufactured by us in 2007, has ensured its stable operation since installation. Our next product, the 2.5 MW generator, possesses all the advantages of the existing 1.5 MW directdrive permanent magnet synchronous generator with enhanced features such as higher power density, outstanding sealing performance, high reliability and lower weight to unit capacity ratio, and is able to operate in severe weather conditions.

Production

Production Facilities

In addition to our headquarters and production base in Urumqi, Xinjiang, we operate several other production bases located in Beijing, Inner Mongolia and Gansu provinces in the PRC and an overseas base in Germany through our subsidiaries. As of December 31, 2009, the total gross floor area of our production bases was 101,596.4 square meters. In addition, we have set up integrated assembly plants in Chengde, Hebei province and Yinchuan, Ningxia province through an associate company and consignment manufacturing by a third party to supplement our production capacity.

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The geographic distribution of our production bases is primarily driven by the surrounding target markets, and they are generally located in close proximity to areas with abundant wind resources and concentration of parts and components suppliers. Our production bases currently cover most of the significant PRC wind power markets. We have also established strategic supply-chain relationships so as to directly source critical parts and components from suppliers near our production bases. We believe this further reduces our costs, enhances our production control ability and increases our market competitiveness. The following table sets forth certain basic information relating to each production facility as of December 31, 2009:

Production base Phase I, Urumqi, Xinjiang Phase II Urumqi, Xinjiang Beijing, China Baotou, Inner Mongolia Jiuquan, Gansu Chengde, Hebei(2) Yinchuan, Ningxia(3) Neunkirchen, Germany	Products 750 kW WTG, turbine rotor and nacelle for 1.5 MW WTG 1.5 MW WTG 1.5 MW WTG 1.5 MW WTG Turbine rotor and nacelle for 1.5 MW WTG 750 kW WTG, turbine rotor and nacelle for 1.5 MW WTG 750 kW WTG, turbine rotor and nacelle for 1.5 MW WTG 1.5 MW WTG	Production commencement 2002 2008 2007 2008 2009 2004 2006 2009	Annual capacity as of December 31, 2009(1) 500 units of 750 kW WTGs, 300 units of turbine rotor and nacelle 600 units 900 units 900 units 800 units of turbine rotor and nacelle 500 units of 750 kW WTGs, 600 units of turbine rotor and nacelle 500 units of 750 kW WTGs, 500 units of turbine rotor and nacelle 100 units	Available gross floor area as of December 31, 2009 (sq.m)
				19,410.1 12,646.5 42,041.4 12,370.5 6,058.9 — — 9,069.0

Notes:

(1) Our production capacity may differ in accordance with changes in product mix.

(2) Assembly plant established through our associate company.

(3) Assembly plant established through our consignment manufacturing arrangements with a third party local enterprise, Ningxia Tianjing Power Equipment Co., Ltd., for exclusive production and assembling of certain components for our 1.5 MW WTGs. Under the consignment manufacturing contract, which is for a term of one year to be renewed annually, they exclusively produce these components underour direct supervision in accordance with our technical specifications and quality standards.

Our production capacity for our main product, the 1.5 MW WTG was 1,500 units as at the beginning of 2009 and for most of the year ended December 31, 2009. Subsequently in the last quarter of 2009, we realized an annual production capacity of 2,500 units of 1.5 MW WTGs, as part of our strategy to meet the estimated demand for our 1.5 MW WTGs in 2010. In 2009, we produced 1,391 units of 1.5 MW WTGs.

We also had an annual production capacity of 1,500 units of 750 kW WTGs, which was achieved before the 1.5 MW WTG became our main product in 2009. Due to our switch in our product focus and also a decrease in demand for the 750 kW WTG given new models such as our 1.5 MW WTG, we intend to gradually use the spare production capacity of 750kW WTGs for manufacturing certain components for our 1.5 MW WTGs and future WTG products. In 2009, we produced 782 units of 750 kW WTGs.

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We are currently constructing new production bases in Xi’an, Shaanxi province, Nanjing and Dafeng, Jiangsu province, and Beijing, PRC. The following table sets forth certain basic information relating to each of these four production bases as of December 31, 2009.

Production base under construction Xi’an, Shaanxi Nanjing, Jiangsu Dafeng, Jiangsu Beijing, PRC	Products 1.5 MW WTG and its generator 3.0 MW WTG Turbine rotor and nacelle for MW-level WTG Electric control system for MW-level WTG	Target annual capacity 200 units of 1.5 MW WTGs and 1000 units of generators 100 units 300 units 3,000 units	Current Status Trial production Construction design and planning Commenced construction Commenced construction	Estimated production commencement 2010 2011 2010 2010	Cost incurred (RMB in million) 33.1 25.1 0.2 43.0	Cost to completion (RMB in million) 85.9 490.9 104.8 597.0	Source of Funding
							Internal funds Internal funds and proceeds from the Global Offering Internal funds Internal funds and proceeds from the Global Offering

We expect our annual production capacity to increase to over 3,000 units of MW-level WTGs with sufficient supply capacity of core components for our WTGs by the end of 2010. Of the approximate 40.2% of our net proceeds from the Global Offering to be used for construction of production bases and optimization of our business operations, 20.4% will be allocated to construction of our new production facilities. Among the new construction bases, the Xi’an and Nanjing production bases are designed to manufacture WTGs while the remaining are all designed to manufacture core components of WTGs. The Nanjing production base is intended to manufacture 3.0 MW WTGs mainly for offshore deployment, which is an important strategic step for our Group to enlarge our offshore WTG production capacity since market demand for offshore WTGs is expected to increase significantly. The Joint Sponsors are of the view that the above business plan is in line with our development strategies.

As of December 31, 2009, the total number of our manufacturing employees was 796. These employees undergo regular training and job rotations to ensure a complete understanding of our products and manufacturing processes.

Production Planning

We formulate an overall annual production plan for each year based on factors such as the expected demand for wind turbines, projected delivery of parts and components, the response time of the supply chain, and the projected progress of each wind farm project to ensure the timely performance of supply contracts and contractual delivery schedule of our wind turbine products. This production plan is subject to rolling adjustments in accordance with the actual conditions of supply and demand of wind turbines and parts and components, and construction progress of our customers’ wind farm projects.

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Production Process

Our production process is described below:

Generator	Generator		Base structure	Base structure		Hub	Hub
Cleaning of generator rotors			Installation of base			Installation of hub
Pasting of magnet steel			Installation of yaw bearing			Installation of pitch bearing
Installation of main axis			Installation of yaw brake			Installation of pitch drive
Connecting stator and fixed axis			Installation of	inner platform		Installation of pitch control system
Installation of large and small bearings			Installation of hydraulic lubrication system			Installation of dome
Installation of moving axis			Installation of upper platform			Testing of pitch system
Installation of generator rotors			Installation of electric control system			Ex-factory	inspection
Testing of generator mode			Installation of lower platform
Ex-factory	inspection		Installation of yaw drive
			Installation of nacelle
			Ex-factory testing
			Ex-factory	inspection
			WTG delivery

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Our WTGs are transported from our production facilities to customers’ sites for product delivery, following which installation of the WTGs will be arranged by our customers while we provide technical guidance.

Sales and Marketing

Overview

Our WTGs are sold through direct sales to a relatively specific and concentrated customer base. Our PRC customers are primarily large- and medium-sized power producers and renewable energy investors. We have established a marketing department and a sales department with a sales force of 77 employees, many of whom have technical backgrounds and extensive industry experience.

The sales department is directly responsible for sales and customer management and maintenance. Based on the nature of our customers’ business and their operating markets, we carry out large customer management and geographical customer management. Our major customers include the five major power producers in the PRC and other enterprises investing in renewable energy. Each major customer has a specially-appointed service team who manages sales orders and provides long-term direct-sales services across all geographical regions.

Our marketing department consists of three units, namely, business development, market analysis and research and technical support. These units are mainly responsible for researching PRC domestic and overseas industry policies, market development and competition. They also formulate our sales and marketing strategies, coordinate bidding work, provide technical sales support and plan marketing activities, which include promotional events in relation to our products and services, publicity efforts, initiating contact with potential customers and strengthening relationships with existing customers and clients.

Our Sales Model

We obtain orders through tender bids, which comprise concession projects and non-concession projects. Concession projects are those for which the PRC Government organizes the bidding to select the wind farm developer and the WTG manufacturer, whereas bidding for non-concession projects are organized by wind farm developers. Otherwise, non-concession projects and concession projects generally do not differ in terms of pricing, credit policy, product warranty, payment schedule and other relevant contractual obligations. Our basic selection criteria for projects to bid on includes (1) the suitability of our WTGs to the environmental and climatic characteristics of the project area; (2) our ability to meet the requirements specified in the clauses of the bidding documents such as the construction period, terms of payment, warranty and penalties; (3) the financial condition and credit worthiness of the tenderer; and (4) the extent to which the tenderer recognizes and accepts us and our products. As our business has grown, we have encouraged our marketing department to focus their efforts on bids for larger orders. For each year of the Track Record Period, our sales revenue from concession projects and non-concession projects accounted for 17.0%, 20.2% and 27.5%, and 83.0%, 79.8% and 72.5% of our WTG sales revenue, respectively. We estimate that as of March 31, 2010, we had orders on hand for our WTGs totalling 3,349.5 MW.

Pricing Policy

Our pricing policy for each bid or sales contract is primarily competition driven, with primary consideration given to production costs and project return.

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Credit Policy

Our credit policy towards customers varies for each of our business segments, but for our core business of sales of WTGs, we generally grant contractual credit terms of around three months.

Our WTG contractual payment schedule is generally as follows:

k Prepayment: 10% to 15% of contract price

k Progress payment: 20% to 40% of contract price

k Delivery of products: 35% to 60% of contract price

k Preliminary inspection: 10% of contract price

Product Warranty

We provide comprehensive product warranties for our WTGs, and all sales contracts contain appropriate warranty clauses. After preliminary inspection, we will normally provide a letter of guarantee issued by a bank amounting to up to 5% of the total contract price to our customer against fulfilment of our warranty obligation, who may request payment from the bank in the event our obligation is not met. Historically, retention monies were retained by our customers to secure our performance of obligations during the warranty period, however, we have gradually changed our policy to provide our customers letters of guarantee. The warranty period of our products is generally 24 months from the day on which the preliminary inspection certificate is issued, and in a few instances, the warranty period may be 30 to 60 months. Generally, main product warranty clauses in our contracts include: guarantee of the WTG’s stable operation in line with the contractual technical specifications and warranty guidelines stated therein, the actual measured power curve should be equal to or exceed 95% of the specified power curve, and the average availability of the WTGs shall not be less than 95%. During the warranty period, we are accountable for any problems associated with wind turbine defects, operation problems or below-standard performance. If our WTGs do not satisfy the specific performance standards as set out in the contract during the warranty period, customers may also claim against us for a penalty sum in accordance with the relevant contractual provisions.

During the Track Record Period, there was an increase in the amount of our product quality warranty provisions, mainly due to the significant increase in our product sales and the change in our product mix sold. Our main product sold was the 750kW WTG in 2007 and the 1.5MW WTG in 2009, respectively. Due to complicated structure and more expensive raw materials and components of the 1.5MW WTG, the estimated expenses related to the maintenance and repair of the 1.5MW WTG are higher than those of the 750kW WTG. In addition, we made a more sufficient provision in 2009 for the total expenses related to the warranty maintenance and repairs of the 1.5MW WTGs sold, based on the actual maintenance and repair expenses incurred for the 1.5MW WTGs sold in the previous two years, and made further product quality warranty provisions for 1.5MW WTGs sold in previous years.

As of March 31, 2010, our total amount of warranty provision outstanding was RMB490.8 million. For the three years ended December 31, 2007, 2008 and 2009, our amount of provision utilized was RMB7.9 million, RMB34.0 million and RMB153.4 million, respectively. Our Directors are of the view that we have made adequate provisions for product quality warranties.

Geographical Distribution

We divide our sales network into four main regions: (i) Inner Mongolia, (ii) Northeast China, (iii) North China, and (iv) Northwest and South China. The PRC’s development of wind resources is currently concentrated in the northern and coastal regions, and the grid infrastructure and connection issues experienced in the northern

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region have impacted the market to some extent. Although the northern region continues to be a focus area for us, we are also keen to explore markets in the southern region as its existing grid system is relatively sound and has greater wind power development potential. Our wind turbine products are highly competitive in quality and performance, and our advanced capabilities in leading proprietary technologies serve as strong support for our market expansion. We also plan to increase efforts to develop our sales network in inland areas, including Shandong, Jiangsu and Shanxi provinces.

Overseas Business

Although our overseas operations are newly established and at a relatively early development stage, based on our current strategy, our international target markets are primarily the United States, Australia and Europe. Our German subsidiary, Vensys AG has launched its 1.5 MW WTGs in the European market and is our primary sales channel for Europe. We have set up branches in the United States and Australia to recruit international talent for our overseas business development, and have organized experienced sales teams to travel to the United States and Australia to conduct marketing activities and meet with wind power developers for discussion on collaboration opportunities. We have carefully studied the obstacles likely to be faced when entering a foreign wind power market, in particular, the lack of a track record in the market, and we have decided to invest in demonstration wind farm projects in our target markets as part of our sales strategy to display our capabilities, introduce our products and start building a track record in those markets. Also, in certain markets, WTG manufacturers may be required to provide specific product warranties in order for the relevant wind farm developers to receive financing for their wind farm development projects. After careful consideration and where we believe necessary, we plan to offer warranties in line with the requirements of financing providers in overseas markets, in order to develop our business successfully in these markets. Our international sales, which mainly comprised WTG and related component sales, commenced in 2008 and our grid-connected demonstration wind farm project in Minnesota, USA has commenced power generation and is managed by our U.S. subsidiary, TianRun USA. We are also actively participating in the PRC Government’s foreign aid projects and have won a bid for a project in Ethiopia. Through such participation, we have been able to accumulate valuable overseas market experience beneficial to our international expansion plans.

After-sales services

We firmly believe that providing customers with the most comprehensive and timely after-sales services is the key to remaining competitive. We have in place a stringent after-sales service system with high standards to ensure the quality of our services. Our customers generally enjoy warranty service periods of 24 months from the date on which the preliminary inspection certificate is issued, and in a few instances, the warranty periods may be 30 to 60 months. We have also set up 12 service centers, forming a nationwide service and spare-part supply network, to assure our customers of minimum wind turbine downtime due to inadequate supply of spare parts and better serve their needs. Our service personnel are able to reach the customer’s wind farm within 12 hours and perform any required spare part replacement within 24 hours.

During the warranty service period, we will appoint professional after-sales technical support personnel as stipulated in our contracts to provide after-sales services for our customers. Our aim is to offer our customers comprehensive service through the integration of our service, logistics and technical support units to ensure the availability of our WTGs.

In addition, we also recommend the implementation of the SCADA system for our customers to enable remote monitoring and control of the operation of their WTGs. The management of our spare parts supply is separate from our wind turbine maintenance, and our maintenance staff is required to provide a detailed description

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of the technical default and the relevant solution when requesting a particular spare part. We believe that through the SCADA system and audit, management and analysis of our spare parts utilization, we are better able to ascertain the maintenance and operational status of our WTGs, which enables us to provide our customers with better-tailored services and continuously improve our products.

We intend to develop our after-sales services in line with the growth of our WTG R&D, manufacturing and sales business segment, and fund any development with working capital used for developing this business segment.

WIND POWER SERVICES

We provide a comprehensive portfolio of wind power services for customers through our subsidiary, Beijing Tianyuan, a professional wind power services company in the PRC. Our background in R&D and manufacturing as well as our experience in wind farm operation provides a distinct advantage to our service offerings. We localize our services, which enables us to increase technical content and better ensure fast response to customers’ needs. We offer a complete range of services from preliminary investment consultancy and pre-construction project services, project construction services to post-construction operation and maintenance services.

We generate revenue primarily from services such as EPC contracting, logistics and maintenance. Revenue is recognized from the rendering of wind power services, when the agreed services are performed, provided over the term of the agreement. For EPC contracting services, we record revenue from the construction contracts, on the percentage of completion basis. Our costs of sales in respect of this business segment consist mainly of labor, including wages and salaries for our workers directly involved in the wind power services provided. During the Track Record Period, our revenues from this business segment were RMB9.8 million, RMB29.5 million and RMB215.4 million, respectively, representing a CAGR of 368.0% for the same period. Please see the section entitled “Financial Information” in this prospectus for more details.

Our Services Portfolio

We strive to create value for our customers by providing services covering the whole process of developing a wind farm project. Our wind power services can be divided into three categories as shown in the following diagram:

Preliminary Investment Consultancy and Pre-Construction Project Services • Policy research, industry analysis • Investment, CDM consultancy • Project financing • Wind farm design • Feasibility study • Macro/micro site selection • Wind measurement • Assessment of wind resources • Turbine model selection	Preliminary Investment Consultancy and Pre-Construction Project Services • Policy research, industry analysis • Investment, CDM consultancy • Project financing • Wind farm design • Feasibility study • Macro/micro site selection • Wind measurement • Assessment of wind resources • Turbine model selection	Wind Power Services
Preliminary Investment Consultancy and Pre-Construction Project Services		Project Construction Services • Basic structure design • Tower construction supervision • Engineering supervision • Installation guidance • Ramp-up and operation • EPC contracting • Logistics
• Policy research, industry analysis • Investment, CDM consultancy • Project financing • Wind farm design • Feasibility study • Macro/micro site selection • Wind measurement • Assessment of wind resources • Turbine model selection

As of December 31, 2009, we have a professional team of 889 service personnel. As of March 31, 2010, we had provided preliminary investment consultancy and pre-construction services for 275 projects, project construction services for 123 wind farms, and post-construction operation and maintenance services for 72 wind farms with total installed capacity of 4,129.1 MW.

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Preliminary Investment Consultancy and Pre-Construction Project Services

Preliminary wind power investment consultancy services include policy research, industry analysis, investment consulting, project financing and CDM consulting. The majority of such work involves preparing relevant reports and communicating with our customers on our report results. Preliminary project services include feasibility studies, wind farm design, macro/micro site selection, wind measurement, wind resources assessment, and turbine model selection. Besides such paid consultancy work, we also provide customers complimentary general project investment advice, as it serves as an effective method to educate customers on wind power and develop the wind power market. Although preliminary services do not constitute a major source of profits from this business segment, they are able to create a large prospective market for sales of our WTGs and need for after-sales services which will form a continuous source of income for us. Moreover, the provision of such comprehensive preliminary services supports our efforts to expand overseas operations.

Project Construction Services

Although historically we have not provided installation services for our customers, we do provide project construction services such as basic structure design, tower construction supervision, engineering supervision, installation guidance, ramp-up and operation, and logistics. Furthermore, we have obtained the EPC contract qualification and are able to set up dedicated teams to undertake the construction of entire turnkey projects from equipment purchase, construction, installation and ramp-up to grid connection and power generation, thus providing customers with contracting services throughout the project construction period.

To better serve our customers and lower our logistics costs, we established our wholly owned subsidiary, XJ Tianyun, in 2008 to provide transportation services for our WTGs. As our projects are spread across China, we contract with regional and local third-party logistics contractors for transportation vehicle fleets, an arrangement which allows us to fully utilize their expertise in certain routes and effectively lower our costs. We primarily use road transport, with railway and air transport as alternatives. During the transportation process, we take comprehensive protection measures including reinforcing the security of the transporting vehicle, assigning escort vehicles, and providing extensive staff training on safety measures.

Post-Construction Operation and Maintenance Services

Post-construction services mainly include operation and maintenance of wind farms, equipment servicing, spare parts support, training consultancy, project assessment and service software applications. We provide wind farm owners with operation and maintenance services and assign dedicated teams to customers’ sites to assist with the operation and maintenance work. We have established a wide service network that can offer customers fast and timely support, and provide maintenance and replacement of parts and components services for our products after the expiry of the warranty period. In addition, we conduct assessment of completed projects, provide staff training for wind farm owners, and provide technical consultancy services.

In addition, we recommend customized SCADA remote monitoring systems to our customers so that they are able to remotely monitor and control their wind farm operations. The SCADA system we implement assists customers with unified monitoring and control over their WTGs and wind farms. The continuous data collection of all product failure issues through the SCADA system provides timely technical support analysis and guidance to onsite maintenance crews. Through analyzing the historical operational data collected through the SCADA system, technicians are able to issue early warnings on malfunctions and prevent problems before they occur. We believe this greatly reduces maintenance costs and the workload of on-site staff, and further minimizes the costs for our customers. As of March 31, 2010 our SCADA system covered 35 wind farms, with an accumulated installed capacity of 2,145.5 MW.

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Sales and Marketing

Our services are provided via direct sales to our customers, including wind farm developers and operators as well as companies investing in wind power. We have a sales and marketing team comprising personnel with industry experience who are knowledgeable about wind farm projects. Our sales team also actively develops relationships with new customers through gradual introduction of our wind power services. We will typically provide general project investment advice to understand a client’s requirements and concerns, and then tailor our services offering to their needs.

WIND FARM INVESTMENT, DEVELOPMENT AND SALES

We are able to provide wind farm operators and investors with completed wind farms that we have invested in and developed, and equipped with our WTGs. Leveraging our competitive strengths in R&D, WTG manufacturing and provision of comprehensive wind power services, we believe that we offer our customers maximum value for their wind farm investment. This business segment effectively creates for us a new source of profit with strong growth potential and also contributes to the sales of our WTGs and wind power services, thereby enhancing our overall market position.

We develop and selectively sell our completed wind farms when appropriate in view of the then prevailing market conditions, and we put them into operation prior to sale, which generates revenue from power generation. We do not intend to hold our completed wind farms as long-term investment. Our wind farms in operation are managed by the specialized and experienced service personnel of our subsidiary, Beijing Tianyuan.

We generate income from sale of equity interests in the project companies we set up to develop the wind farms, and income from such sale is recorded under other income and gains. During the Track Record Period, income from sale of completed wind farms was nil, RMB263.1 million and RMB189.8 million, respectively. We generate revenue from the tariffs received from the power generated by these wind farms prior to sale, which is determined based on the volume of electric power transmitted and the applicable fixed tariff rates. Our costs of sales in respect of this business segment consist mainly of depreciation costs and operational costs. During the Track Record Period, our revenue for this business segment was nil, RMB88.5 million and RMB103.7 million, respectively. Please see the section entitled “Financial Information” in this prospectus for more details.

Wind Farm Project Investment and Development

We adopt a flexible model for our investment in and development of wind farms, which is divided into independent development and joint development. For independent development, we will set up project companies in which we hold the entire equity interest and are responsible for the full development process from wind measurement, filing of project application to authorities, project construction, operation of the wind farm and sale to interested investors. For joint development, we cooperate with selected partners through jointly-owned project companies on the development process. As of March 31, 2010, the wind farms completed and sold by us had an approximate total installed capacity of 198.0 MW and attributable installed capacity of 125.2 MW, wind farms completed and put into operation had an approximate total installed capacity of 103.5 MWand attributable installed capacity of 102.3 MW, and wind farms under construction had an approximate total installed capacity of 327.0 MW and attributable installed capacity of 244.0 MW.

The estimated investment costs for a typical wind farm project with an installed capacity of 49.5 MWamount to approximately RMB450.0 million comprising, among others, approximately 70% for WTG-related costs, approximately 15% for grid connection-related infrastructure, approximately 12% for construction and

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approximately 3% for other expenses. Generally speaking, approximately 80% of our capital expenditures in respect of our wind farm projects is financed by the relevant project companies through bank borrowings and the remaining approximate 20% through equity investments from us and other shareholders, if any, of the relevant project companies. Further, the financial impact of the capital expenditures related to our wind farm projects are the same as capital expenditures related to our other business segments, which is dependent on our ability to maintain adequate cash inflows to meet our committed capital expenditures and the related debt obligations. We also incur interest expenses for the capital expenditures funded by bank borrowings with interest rates usually at a 10% discount to the benchmark interest rates in China. Please see the section entitled “Financial Information” in this prospectus for more details.

Our wind farm development procedure is as follows:

==> picture [435 x 356] intentionally omitted <==

----- Start of picture text -----

Conduct in-depth analysis of the Organize target development areas in
Visit the local energy and climate
proposed development area’s accordance with the public information
topographical map and preliminary authorities and finalize the proposed on wind resources as well as activities
evaluation of wind resources development area of other wind-power developers
Conduct on-site survey of the
Sign project development
geographical features and mineral Establish project company,
agreements with local
resources of the proposed development authorities and formulate wind apply to the PDRC [(1)] for and obtain
area to confirm the proposed preliminary work approvals
measurement plan
development project
Install anemometer tower,
Complete financing plan and
Prepare feasibility study and commence wind measurement
obtain a certificate of capital
contribution relevant supporting documents and surrounding wind
resources data collection
Upon obtaining project approval
File application report on
project with the PDRC [(1)] and relevant permits, invite Award bids and commence
and obtain approval bids for equipment, civil project construction
construction, and installation
Officially commence Complete trial operation and
Equipment installation and
operation and power apply for power generation
generation business license ramp-up
----- End of picture text -----

Note:

• (1) “PDRC” means the Provincial Development and Reform Commission of the PRC.

To control the quality of our wind farm projects, we have implemented internal control standards for project development to carefully check data used in designing wind farms, and adopted internationally-recognized software applications to analyze project costs and returns. We have also strengthened internal management of quotas and budgets to control project construction costs, and monitor the project process and implement project risk

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management. Moreover, we use SCADA remote management system for wind farms to ensure our assets’ operation and management meet international standards.

Our Wind Farm Projects Portfolio

As of March 31, 2010, we had 14 wind farms in our project portfolio, of which seven were completed and seven were under construction. Four of the seven completed projects have been sold.

Completed Projects

The following table shows projects we had completed as of March 31, 2010:

Project Wulate Zhongqi Tugurige Wind Farm Phase I(2) Wulate Houqi Narenbaolige Wind Farm Phase I(3) Keshiketengqi Wutao Hainan Wind Farm Phase I(4) Tacheng Mayitasi Wind Farm Phase I(5) Xinjiang Buerjin 49.5 MW Trial Demonstration Wind Farm Damao Qi Xinbaolige Wind Farm US Minnesota UILK project	Location Inner Mongolia Inner Mongolia Inner Mongolia Xinjiang Xinjiang Inner Mongolia Minnesota, U.S.	Installed Capacity (MW) 49.5 49.5 49.5 49.5 49.5 49.5 4.5	Effective Equity Interest (%) 51.0 51.0 51.0 100.0 100.0 100.0 72.8	On-grid Tariff rate RMB0.51/kWh RMB0.51/kWh RMB0.54/kWh RMB0.58/kWh RMB0.58/kWh RMB0.51/kWh US$0.064/kWh(6)	Status
					Sold(1) Sold(1) Sold(1) Sold(1) Operation Operation Operation

Notes:

• (1) The buyers of our four completed projects were Independent Third Parties of our Company.

• (2) This completed project was 100% owned by Bayannur Fuhui, which was held as to 51% by our wholly owned subsidiary, Beijing Tianrun. 100% of the equity interest of this completed project was sold by Bayannur Fuhui in November 2008 for cash consideration of RMB233.0 million.

• (3) This completed project was 100% owned by Bayannur Fuhui, which was held as to 51% by our wholly owned subsidiary, Beijing Tianrun. 100% of the equity interest of this completed project was sold by Bayannur Fuhui in November 2008 for cash consideration of RMB209.5 million.

• (4) This completed project was 51% owned by our wholly owned subsidiary, Beijing Tianrun. 49% of the equity interest of this completed project was sold in March 2009 for cash consideration of RMB90.4 million and the remaining 3% equity interest was sold in October 2009 for cash consideration of RMB3.3 million.

• (5) This completed project was 100% owned by our former subsidiary, Tacheng Tianrun. 49% of the equity interest of this project was sold in October 2008 for cash consideration of RMB49.0 million and the remaining 51% equity interest was sold in November 2009 for cash consideration of RMB86.3 million.

• (6) This is based on the tariff rate for the first commercial operation year and will progressively increase for each subsequent commercial operation year in accordance with the agreed schedule as specified in the relevant contractual agreement.

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Projects under Construction

The following table shows our projects under construction as of March 31, 2010[(1)] :

Project Shangdu County Jiqingliang Wind Farm Phase I Jiuquan Guazhou Liuyuan Trial Wind Farm Keshiketengqi Wutao Hainan Wind Farm Phase II Damao Guochan Demonstration Wind Farm Phase II Yichun Xinqing Laobai Mountain Wind Farm Phase I Jilin Qianguo Wangfu Zhanfeng Wind Farm Tacheng Mayitasi Wind Farm Phase II	Location Inner Mongolia Gansu Inner Mongolia Inner Mongolia Heilongjiang Jilin Xinjiang	Installed Capacity (MW) 49.5 49.5 49.5 49.5 30.0 49.5 49.5	Equity Interest (%) 51.0 100.0 51.0 100.0 66.0 51.0 100.0	Construction commencement 2008 2009 2009 2009 2009 2009 2010	Expected completion
					July 2010 July 2010 August 2010 August 2010 October 2010 August 2011 November 2010

Note:

(1) As of April 30, 2010, we have added one more wind farm “Xingqiyuan Zhurihe Wind Farm Phase I” to our projects under construction. The wind farm is located in Inner Mongolia, and has an installed capacity of 49.5 MW. We hold a 56% equity interest in this wind farm, for which we commenced construction in April 2010 and expect to complete in October 2010.

We estimated our total capital expenditure for our seven projects under construction in the above table amounted to approximately RMB2,605 million, including capital expenditure to be incurred for completion of these projects of approximately RMB839 million as of March 31, 2010. We expect to finance such capital expenditure partially with internal funding and the remaining balance through bank borrowings.

Wind Farm Sales

Due to the professional expertise required for the development of a wind farm, long development cycle and the risk of unsuccessful development, many large PRC power producers and wind farm investors prefer to directly acquire completed wind farms from vendors such as us. We generally do not engage in sales and marketing activities for our completed wind farms projects as well as projects under construction. In view of the general scarcity of completed wind farms and due to our market reputation, potential buyers usually approach us for negotiations and we evaluate the terms of their offers carefully. For our remaining completed projects and our projects under construction, we have already engaged in negotiations with potential buyers. Moreover, in light of the overall high demand for wind farms, we have entered into various legally binding agreements with different power companies or investors who have committed to acquiring most of our wind farm projects. Given the foregoing, we believe there is no risk that these projects cannot be sold.

When considering the sale of our completed wind farms, in addition to evaluation of the potential buyers and the terms of their offers, we will take into consideration various factors including the operational condition and performance of the completed projects, our development strategies, and whether it is in our commercial interest to sell the relevant completed project. Our wind farms can be sold by way of either full or partial share transfers of the

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equity interest of the project companies. Large domestic power producers are our major target customers for full equity transfers as they generally do not accept non-controlling shareholdings of wind farms. For partial equity transfers, only a portion of the shares of the wind farm project company is transferred, and we retain the remaining equity interest.

CUSTOMERS

The majority of our sales are derived from the PRC domestic market and our customers are primarily large power producers and other enterprises investing in renewable energy. With an excellent product line-up and competitive advantage in services, we have established and maintained stable long-term relationships with our customers. Further, we have also provided certain customers with training, preliminary technical support and other services.

The table below contains data regarding our five largest customers for the year ended December 31, 2009:

Customer Inner Mongolia Jingneng Wulanyiligeng Wind Power Co., Ltd. . . . . . . . . . . . . . . . . China Power Investment Northeast New Energy Development Co., Ltd. . . . . . . . . . . China Power Dafeng Wind Power Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Huadian International Shandong Supplies Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . Hebei Weichang Longyuan Jiantou Wind Power Co., Ltd. . . . . . . . . . . . . . . . . . . . .

Main business

Wind power generation Energy and chemicals Wind power generation Wind power generation Wind power generation

For each year of the Track Record Period, sales to our five largest customers accounted for 39.9%, 37.7% and 38.7%, respectively, of our total sales revenue, while sales to our largest customer accounted for 12.1%, 16.0% and 14.4%, respectively, of our total sales revenue. As of December 31, 2009, none of the Directors, Supervisors, or their respective associates, or any Shareholders of our Company who, to the best of the Directors’ knowledge, owns 5% or more of our Company’s issued shares, has any interest in any of our five largest customers.

Our relationships with our customers continue to be strong in 2010, and we have received and expect to continue to receive significant orders from our large customers, including affiliated companies of our five largest customers.

SUPPLIERS

We enjoy long-term relationships with our suppliers, including those in which we have invested. Due to the lack of suppliers in the PRC that can meet our technical specifications, we have dedicated significant resources to develop reliable suppliers such as providing training and labor resources to some of our suppliers. Our teams work closely with these suppliers to ensure that the quality and technical specifications of their parts and components meet our standards. We may also invest in some suppliers experiencing a sudden shortage of resources, or those that are in need of capital funding for long term growth, so as to ensure the stability and quality of our supply chain as well as better control our costs. As of December 31, 2009, we provided financial resources to several companies, including:

• k constructing a production facility, which is leased to LM Glasfiber (Xinjiang) Co., Ltd. to exclusively produce blades for our WTGs that we purchase at market price. The relevant construction costs were recorded under investment properties; and

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• k making equity investments of RMB7.0 million, RMB34.0 million, RMB17.5 million, RMB1.0 million and RMB1.0 million in China Water Xi’an[(1)] , Jiangxi Jinli Mag Rare-Earth Co., Ltd.[(2)] , Jiangsu Chenfeng New Material Technology Co., Ltd.[(2)] , China Water Baotou[(1)] and Jiuquan Xinmao Technology Wind Power Equipment Co., Ltd.[(3)] , respectively. We currently hold a 4.67%, 34%, 35%, 5% and 5% equity interest in each of these five companies, respectively. All of these five companies are principally engaged in the production and sale of components and raw materials for wind power equipment.

During the Track Record Period, the aggregate amount of purchases by us from the abovementioned suppliers was RMB37.4 million, RMB485.2 million and RMB873.0 million, respectively. We did not enjoy any preferential terms from these suppliers and do not have a formal investment policy in respect of such investments.

We collaborate with external suppliers to manufacture most of our parts and components. These parts and components are manufactured based on our designs, drawings, technical parameters and quality standards. Our parts and components supply contracts generally include exclusivity clauses prohibiting sales of the same parts and components to our competitors. Please see the section entitled “Risk Factors — Risks Relating to Our Business — We may not be able to obtain timely and stable supply of the core parts and components required for our business” in this prospectus. The pool of suppliers for our requisite main parts and components is relatively concentrated. To further ensure a stable supply, we are actively enhancing our abilities to develop and manufacture certain core parts and components for our WTGs.

We have signed short-term supply contracts of one to two years with our five largest suppliers. The main contractual clauses cover products supplied, contract price, payment terms, intellectual property rights, dispute settlement and termination. Payment is made in phases. For each year of the Track Record Period, purchases from our five largest suppliers accounted for 47.6%, 39.4% and 25.8%, respectively, of our total purchases, while purchases from our largest supplier accounted for 23.7%, 13.1% and 6.6%, respectively, of our total purchases.

As of December 31, 2009, none of the Directors, Supervisors, or their respective associates, or any Shareholders of our Company, who, to the best of the Directors’ knowledge, owns 5% or more of our issued shares, has any interest in any of our five largest suppliers.

PARTS AND COMPONENTS

The core parts and components we source include blades, generators, electric control systems and structural parts. Externally purchased parts and components account for the majority of our operating costs. We also manufacture in-house certain of these core parts and components, of which some of the processing materials used to manufacture them are produced by external suppliers through consignment manufacturing arrangements. These consigned processing materials consist mainly of parts for generators and converters.

Most of our parts and components are purchased from PRC domestic suppliers, and each part or component is sourced from at least three to five designated suppliers. As the purchase of parts and components represents a key element in our quality and cost control, we have established an internal management system for overall management of the sourcing procedures, including requests for purchasing materials, quotation, delivery

(1) China Water Xi’an and China Water Baotou are subsidiaries of China Water.

(2) Jiangxi Jinli Mag Rare-Earth Co., Ltd. and Jiangsu Chenfeng New Material Technology Co., Ltd. are private companies.

(3) Jiuquan Xinmao Technology Wind Power Equipment Co., Ltd. is a subsidiary of a company listed in the PRC.

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receipt, inspection, payment, supplier assessment and order maintenance. The primary purpose of this system is to control costs while ensuring high product quality.

Inventory

We have developed an inventory management policy and set inventory targets according to market conditions. We have also specified the control processes and supervisory procedures for all the stages in transportation and storage of parts and components. Our inventory mainly comprises bearings, cast structure parts, generator stators and generator rotor structure parts, and our inventory policy is based on our production plans and spare parts demand arising from project maintenance. It is not necessary for us to hold completed WTGs in inventory, as large wind power equipment is characteristically made-to-order. We do maintain an inventory of certain spare parts in anticipation of our customers’ needs during the warranty period and also to accommodate the 20-year lifespan of our WTGs. Inventory of other parts and components including those used in the production process will be maintained in accordance with monthly production plans.

QUALITY ASSURANCE

We have always focused on quality as a core competitive strength, and been committed to producing technologically-advanced and operationally stable WTGs of high quality.

We have established and refined six main quality assurance systems as shown in the diagram below. These systems cover every aspect of our business from signing of the sales contract, product development and design, setting of product quality standards, supplier management and review, assembly, transportation and packaging of WTGs, installation and ramp-up during the wind farm project construction process, and after-sales operation and maintenance services:

==> picture [411 x 117] intentionally omitted <==

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Quality Assurance
Systems
Engineering
Product Supplier Assembled
TQM quality Product personnel
quality management WTG quality
review of testing & professional
control and supervision &
suppliers control qualification
standards certification control
system
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Our quality control team presently consists of 131 employees, who are responsible for setting of quality standards, product testing and measurement, and quality promotion, process control and quality information management throughout the product lifespan. We have set up a supplier quality control team to carry out TQM quality review and control of the suppliers’ entire production process. We also have in place a team of quality control personnel to supervise the general assembly and production of complete WTGs and project sites. Further, we have set up an after-sales quality management unit to supervise the quality of our after-sales service team and build our service brand.

In 2007, we established our testing and measurement center in Xi’an, which is equipped with a geometric laboratory and physiochemical testing laboratory, an experienced team of testing and measurement personnel, and advanced, precision equipment. Further, we conduct training and review of our engineers’ knowledge and skills through implementation of our professional qualification system. We have set up an expert consultancy system to

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help solve various technical and quality problems that arise during the design of parts and components, production processes, as well as during testing and inspection.

We obtained the ISO 9001:2000 certification in October 2003 and the ISO 9001:2008 certification in December 2009.

R&D

Overview

Our R&D activities have a history of more than ten years, and we have strong independent R&D capabilities. We have developed numerous series of WTG models which are adapted to the diverse operating conditions in the PRC. Our highly-regarded R&D team possesses considerable wind power industry experience and we have established a superior technology development platform. Most Chinese WTG manufacturers generally acquire wind turbine technologies through licensing, however, we independently developed our MW-level WTGs. Since our establishment, we have been committed to the development of new products, the upgrading of existing technologies, the meeting of changing market requirements, and the introduction of advanced international technologies into China. With our wealth of wind power industry experience, a deep understanding of the environmental and wind resource conditions in China, and through our continuous innovation and improvement of advanced technologies, we have accomplished significant achievements in WTG R&D. As a result, we believe our products and technologies have been able to maintain a leading position in the PRC wind power industry.

Our main innovations are in the areas of the design of our WTGs, electric control systems, core mechanical parts and components as well as the design and manufacture of permanent magnet generators, converters and our performance testing and inspection capabilities.

Please see the section entitled “Financial Information — Critical Accounting Policies — R&D costs” in this prospectus for our R&D expenditures during the Track Record Period.

Structure of Our R&D Organization

We have established R&D centers in Beijing and Urumqi, PRC and in Neunkirchen, Germany, each staffed with specialized teams to carry out studies on specific technical topics. In 2004, we were approved by MOST to set up China’s first national wind power engineering technology R&D center, which was subsequently officially recognized in 2008.

As of December 31, 2009, our R&D team consists of more than 200 personnel, including 90 with more than five years of wind power experience, more than 190 with at least three years of wind power experience, eleven employees with PhDs and more than 90 with master’s degrees. Our R&D system consists of nine departments, being Technology R&D, General Technology, Mechanical Design, Process Technology, Motor Technology, Testing Technology, Product Development, Pilot Development and Technical Support.

We have set up a full-power performance testing laboratory at our Beijing production base as well as a complete WTG testing laboratory in Urumqi to facilitate product R&D, inspect and test our WTGs and their parts and components. Ground simulation of our WTGs and various tests on the control safety, electromagnetic compatibility, load control, permanent magnet generators and electric control systems as well as overall performance of our WTGs are carried out by these two testing laboratories.

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Through our R&D centers, we have developed a complete system from design, research, development and testing to the commencement of production and succeeded in building an integrated international/domestic R&D network.

Our R&D Mechanism

We have set up effective R&D operations so that we can mobilize our various resources in connection with any R&D project. Our R&D work is subject to project-based management, which consists of three stages: project establishment, mid-term review and final acceptance. To ensure successful implementation of the project and motivate team members from different departments, our project management policy provides for performancebased evaluations of team members.

Moreover, we have established reward measures for on-the-job inventions and other technological advancements. Our R&D efforts are guided by a technical decision-making committee, which has established working rules for project selection and management. We believe these effectively create and promote a culture of innovation within our Group.

Product Technology R&D

Our development of product technologies has undergone three stages — from technology importation to joint development to independent development. We have continually emphasized enhancing independent R&D capabilities. We have also built a R&D system based on close collaboration with domestic and overseas scientific research institutions, design companies and parts and components suppliers.

Our 600 kWand 750 kW stall-regulated WTG models were developed on the basis of technologies originally licensed from several suppliers in Germany and industrialized through adaptation of such technologies, further development, integration and innovation. There was no infringement of others’ intellectual property rights arising from or related to such licenses. Since 2002, we have built a long-term strategic partnership with the German design and engineering company, Vensys AG, to collaborate in the development of the 1.2 MWand 1.5 MW WTG models.

Since 2007, we have shifted to independent development of our products. This shift resulted primarily in the development of key technologies comprising of our 1.5 MW direct-drive permanent magnet WTGs, development and design of the 2.5 MW direct-drive permanent magnet WTG model, and the 3.0 MWand 5.0 MW WTG models. In addition, we conducted an extensive study of key components such as the electric control system. In order to fully exploit the wind power technology research talent in Germany, in 2008 we acquired our German cooperative partner, Vensys AG, which enhanced our R&D capabilities and enabled our direct-drive technology products to enter the international market. As of the Latest Practicable Date, we have completed trial production of the 2.5 MW and 3.0 MW wind turbine prototypes and the overall design of the 5.0 MW WTG model. We expect to commence commercial production of our 2.5MW and 3.0MW WTGs in 2010 while production of our 5.0MW WTG will depend on market conditions. We have also set up a project team focusing on the study of key technologies of offshore WTGs.

Over the years, we have engaged in extensive cooperation with renowned international entities such as the UK design firm, Garrad Hassan, and the Netherlands-based design company, Mecal. Through continuous importation, assimilation and innovation of wind turbine technologies over the years, we have achieved significant R&D milestones. Apart from the primary innovations mentioned above, we have upgraded our main product from the initial 600 kW stall-regulated WTG model to the current 1.5 MW direct-drive permanent magnet WTG model.

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Moreover, we own multiple proprietary technologies. Please see the subsection below entitled “Business — Intellectual Property” for more details.

Participation in Developing National and Local Standards and Undertaking of Scientific Research Programs of the State

During the Track Record Period, we have been inducted as a member of the National Wind Power Standardization Work Committee and played a leading role in drafting three national wind power standards and five local standards and are currently involved in the drafting of a further three such national standards. We have long been involved in many science and technology programs, including:

• k five national 863 programs;

• k two programs in the “11th Five-Year Science and Technology Support Projects”;

• k three 10th Five-Year Key Science and Technology Programs;

• k one 9th Five-Year Key Science and Technology Program;

• k three NDRC Scientific Research Programs;

• k five MOST programs;

• k two Ministry of Water Resources 948 programs; and

• k 23 Xinjiang scientific research programs, focusing on the R&D of direct-drive permanent magnet WTGs and their core parts and components as well as electric control systems of WTGs.

Of the abovementioned programs, 30 have been completed while 14 programs were ongoing as of the Latest Practicable Date.

INTELLECTUAL PROPERTY

Intellectual property rights are essential for our business. In the PRC, we own two registered trademarks, 22 patents and six proprietary technologies. We continue to apply for new patent rights in the PRC for the products and technologies we develop, and are currently applying for 34 patents, including 18 pending invention patents, and 41 pending trademarks. We also own four registered trademarks in Hong Kong. In Germany, we registered four trademarks and three patents and are applying for five pending patents as well. Further, we own other intellectual property such as non-registered trade secrets, proprietary technologies, procedures and processes.

We have taken the following measures to protect our intellectual property rights:

• k Signing of confidentiality agreements with suppliers to protect our trade secrets;

• k Signing of trade secret protection agreements with employees; and

• k Implementing the international registration and expanded-scope registration of our registered trademarks.

More information about our intellectual property rights (including pending patents and trademarks) is set out in the appendix entitled “Appendix IX — Statutory and General Information — 3. Further information about the Business” to this prospectus. As of the Latest Practicable Date, no lawsuit has been brought against us, nor have we initiated any lawsuits for intellectual property rights infringement.

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EMPLOYEES

As of December 31, 2009, we employed a total of 2,527 employees (including contract labor staff) which are classified as follows:

Competency R&D and technical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sales and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management and other administration . . . . . . . . . . . . . . . . . . . . . . . Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Number of Employees 396 796 77 889 291 78 2,527	Percentage of the total number of employees (%)
		15.7 31.5 3.0 35.2 11.5 3.1
		100.0

We have 2,408 employees (including contract labor staff) in the PRC and 119 overseas employees. For each year during the Track Record Period, our labor costs were approximately RMB121.8 million, RMB182.9 million and RMB254.4 million, respectively.

We provide management personnel and employees with on-the-job education, training and other opportunities to improve their skills and knowledge. We sign individual employment agreements with our employees, covering, among other things, salaries, benefits, training, workplace safety and hygiene, confidentiality obligations relating to trade secrets and grounds for termination. The remuneration package of our employees includes salary, bonuses and allowances. Our employees also receive welfare benefits including medical care, housing subsidies, retirement and other miscellaneous benefits. To increase our competitiveness, attract and retain top talent, and better maximize value to our Shareholders, we intend to introduce and implement share incentive schemes as appropriate after the Listing, subject to approval by the relevant regulatory authorities and compliance with the Articles of Association and the Listing Rules.

Our employees (excluding contract labor staff) are members of a trade union affiliated with the All China Federation of Trade Unions. As of the Latest Practicable Date, we have not experienced any major labor dispute or other labor disturbances that have interfered with our operations, and our employee relations are favorable.

WELFARE CONTRIBUTIONS

We must comply with PRC laws and regulations relating to social welfare, including the Interim Regulations Governing the Receiving and Payment of Social Security issued by the State Council, which establishes the basic measures for receiving pension payments, medical insurance payments and unemployment insurance payments. Also to be complied with are the Regulations Governing the Public Housing Reserves issued by the State Council, which sets out the regulations related to the public housing reserves contributed by employers and employees, and other laws and regulations related to social insurance such as work injury insurance and maternity insurance.

In accordance with applicable Chinese regulations, we currently participate in social insurance contribution plans organized by the relevant local governments, under which we are required to pay in respect of each of our relevant employees a monthly contribution. The amount of contribution may vary depending on a number of factors, including the requirements of the relevant local government and the income of the employee. We currently provide employees with a pension insurance program, medical insurance program, unemployment insurance program, individual work injury program, maternity insurance contributions and employee public housing reserve

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contributions. During the Track Record Period, the total amount of our contribution was approximately RMB11.8 million, RMB27.0 million, and RMB40.7 million, respectively.

We believe we have complied with all applicable national, local and foreign laws and regulations relating to social welfare and have paid in full the social security premiums and contributions payable as required by relevant laws and regulations and we have never been penalized for a violation of these laws.

SAFETY AND ENVIRONMENTAL PROTECTION

Safety and Labor Protection

We have taken measures to ensure compliance with applicable national, local and foreign laws and regulations concerning workspace safety. We have full-time safety management personnel responsible for supervising workplace safety and occupational health, hygiene and safety, as well as performing internal safety checks during the production process to minimize accidents, injuries and occupational diseases. We obtained the GBT 28001-2001 certification in December 2009. Our PRC legal advisor has confirmed that we have satisfied all requirements established by relevant laws and regulations and have obtained all licenses necessary to perform work in our production bases during the Track Record Period.

In order to further strengthen workplace safety compliance policies, we plan to develop operational rules for employees, and dedicate more training resources to prevent implementation of policies and practices in violation of relevant laws and regulations, and to prevent employees from committing violations of our workplace safety policies and procedures. As of the Latest Practicable Date, we have not experienced any major workplace or industrial accidents.

Environmental Protection

Our operations are currently subject to environmental laws and regulations relating to construction and operation of renewable energy generation facilities, noise control, air and water emissions, water and ground protection, hazardous substances and waste management. Please see the subsection entitled “Regulations — Environmental Protection” in this prospectus for more details. During the Track Record Period, our annual cost of compliance with the applicable environmental rules and regulations was approximately RMB0.4 million, RMB1.5 million and RMB1.0 million, respectively. Our expected cost of compliance for 2010 is approximately RMB5.3 million.

As the industry in which we operate is not a major source of environmental pollution, we believe that the impact of our operations on the environment is minor and we have taken all necessary internal environmental protection measures. Our PRC legal advisor has confirmed that we were in full compliance with relevant environmental protection rules and regulations, not subject to any fines or administrative actions involving non-compliance with any relevant regulations, and did not experience any environmental pollution accident during the Track Record Period. We have adopted advanced technologies and equipment to prevent and minimize pollution and we have not experienced any major accident causing environmental pollution.

We will also maintain strict compliance with applicable local laws and regulations concerning health, safety and the environment in respect of our overseas operations. Before deciding to carry out business in foreign jurisdictions, we will take into account our ability to comply with local laws. Our health, safety and environment — related departments will conduct regular inspection and monitor compliance by our subsidiaries with related local health, safety and environmental laws and regulations of those foreign jurisdictions in which our overseas

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operations are located. Where necessary, we will appoint local legal advisors to provide advice concerning relevant regulations. We obtained the ISO14001:2004 certification in December 2009.

INSURANCE

We have purchased insurance coverage for our products, certain properties, machinery and equipment, automobiles and other assets owned, operated or deemed important by us. For instance, we have purchased product quality insurance and equipment insurance coverage for our WTGs. The scope of product quality insurance covers equipment damage due to defects, and the scope of equipment damage insurance covers damage caused by centrifugal force, short-circuits, over-voltage and other physical reasons.

In accordance with industry practices in China, our own experience in operating our business, and the recommendations of insurance companies, the Directors believe that we have purchased sufficient insurance coverage. We have not purchased any third party liability insurance coverage for claims relating to personal injury, assets or environmental damage arising from our operations, nor have we purchased any insurance for interruptions of our business or environmental liability, which, in our opinion, is consistent with customary practices. During the Track Record Period, we have not experienced any major operational problems, such as equipment failure, or failure to meet standards, improper equipment operation and industrial accidents, nor any business interruptions as a result of fire, power shortages, software or hardware malfunctions, flood, computer virus or other events beyond our control. Please see the sections entitled “Risk Factors — Risks relating to our business — We are subject to the risk of product liability claims and in some cases may not have sufficient insurance coverage” and “Risk Factors — Risks relating to our business — Substantial damage to persons or loss of property may occur in the course of our production and construction processes”, respectively.

PROPERTIES

Owned Properties in the PRC

As at March 31, 2010, we owned, held or occupied 98 parcels of land with an aggregate site area of approximately 1,292,523.0 square meters, 119 buildings or units with an aggregate gross floor area of approximately 108,114.3 square meters in the PRC, as well as six buildings or units under construction with an aggregate gross floor area of approximately 33,124.3 square meters. The independent valuer had valued the abovementioned properties as at March 31, 2010. The text of the letter and the valuation report issued by the independent valuer are set out in the appendix entitled “Appendix V — Property Valuation” to this prospectus.

Land use rights (excluding land for property under construction)

As at March 31, 2010, we obtained land use right certificates for 88 parcels of land with an aggregate site area of approximately 756,259.8 square meters. We also signed the state-owned land use right grant contracts for one parcel of land with a site area of 53,033.9 square meters. We have applied for and are in the process of obtaining the land use right certificate for this parcel of land. However, the timing for obtaining the certificate is beyond our control. This parcel of land would be used for construction of staff dormitories and not crucial to our business operations. Our PRC legal advisor has confirmed that there is no material legal impediment to our obtaining the relevant land use right certificate, and that we are not in breach of any relevant laws and regulations for the absence of the land use right certificate. However, prior to our obtaining the land use right certificate, our rights in respect of this parcel of land are not fully protected under PRC laws.

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Land for property under construction

As at March 31, 2010, we had nine parcels of land with an aggregate site area of approximately 483,229.3 square meters used as project construction sites. Among these nine parcels of land, we had obtained land use right certificates for five parcels of land with an aggregate site area of approximately 318,833.3 square meters, and we signed the state-owned land use right grant contracts for two parcels of land with an aggregate site area of 45,874.0 square meters. These two parcels of land constitute:

• k one parcel of land with a site area of 22,871.0 square meters to be used for development of our future wind farm project, Damao Guochan Demonstration Wind Farm Phase II, located in Inner Mongolia under our wind farm investment, development and sales business segment.

• k one parcel of land with a site area of 23,003.0 square meters to be used for development of our future wind farm project, Tacheng Mayitasi Wind Farm Phase II, located in Xinjiang under our wind farm investment, development and sales business segment.

Our PRC legal advisor has confirmed that there is no material legal impediment to our obtaining the relevant land use right certificates for the abovementioned two parcels of land, and that we are not in breach of any relevant laws and regulations for the absence of the land use right certificates. However, prior to our obtaining the land use right certificates, our rights in respect of these parcels of land are not fully protected under PRC laws.

We have not signed the state-owned land use rights grant contracts pending consummation of the relevant land acquisition procedures for two parcels of land with an aggregate site area of approximately 118,522.0 square meters. These two parcels of land constitute:

• k one parcel of land with a site area of 30,000.0 square meters to be used for construction of our future WTG and components production facility located in Shaanxi province under our WTG R&D, manufacturing and sales business segment.

• k one parcel of land with a site area of 88,522.0 square meters to be used for development of our future wind farm project, Jilin Qianguo Wangfu Zhanfeng Wind Farm, located in Jilin province under our wind farm investment, development and sales business segment.

We estimate that the land premium in respect of these two parcels of land is approximately RMB13.4 million and expect to fund this payment with our working capital. Our PRC legal advisor has confirmed that after we have signed the state-owned land use rights grant contracts and fully paid the land premium, there is no material legal impediment to our obtaining the relevant land use right certificates, however, prior to our obtaining the land use right certificates, our rights in respect of these two parcels of land are not fully protected under PRC laws.

Buildings (excluding buildings under construction)

As at March 31, 2010, among the 119 buildings or units that we owned, held or occupied, we obtained the building ownership certificates for 98 buildings or units, with an aggregate gross floor area of approximately 106,086.6 square meters. We have applied for and are in the process of obtaining the building ownership certificates for 20 units, with an aggregate gross floor area of approximately 1,867.7 square meters. The timing for obtaining these building ownership certificates is beyond our control. The abovementioned buildings are located in Beijing and are used as staff dormitories and are not crucial to our current business operations. Our PRC legal advisor has confirmed that there is no legal impediment to our obtaining the building ownership certificates of the foregoing units after the required procedures are completed. We are not in breach of the relevant laws and regulations and not subject to any risk of penalties or sanctions. Prior to our obtaining the building ownership certificates, we are

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entitled to occupy and use these 20 units, and after we have obtained the certificates, we are entitled to occupy, use, assign, lease, pledge or otherwise dispose of the ownership rights of these 20 units in accordance with applicable laws.

As at March 31, 2010, we obtained the building ownership certificate but had not applied for the land use right certificate for one building in Xinjiang which is primarily used as a staff dormitory, with a gross floor area of approximately 160.0 square meters. We are in the process of signing the land use right transfer contract with the land use right owner of this building, and our PRC legal advisor has confirmed that after the relevant land use right certificate has been obtained, we are entitled to occupy, use, assign, lease, pledge or otherwise dispose of the ownership rights of this building in accordance with applicable laws.

Buildings under construction

As at March 31, 2010, we had six buildings under construction, with an aggregate gross floor area of approximately 33,124.3 square meters. Our PRC legal advisor has confirmed that except for four buildings with an aggregate gross floor area of approximately 14,330.9 square meters for which we did not have or were in the process of applying for and obtaining proper construction licenses, we had obtained all proper construction licenses for the buildings under construction. The four buildings under construction constitute:

• k two buildings under construction with an aggregate gross floor area of approximately 11,603.0 square meters to be used as our WTG and components production facility located in Jiangsu province under our WTG R&D, manufacturing and sales business segment.

• k one building under construction with a gross floor area of approximately 1,362.2 square meters to be used for our future wind farm project, Jilin Qianguo Wangfu Zhanfeng Wind Farm, located in Jilin province under our wind farm investment, development and sales business segment.

• k one building under construction with a gross floor area of approximately 1,365.7 square meters to be used for our future wind farm project, Jiuquan Guazhou Liuyuan Trial Wind Farm, located in Gansu province under our wind farm investment development and sales business segment.

Of the foregoing four buildings under construction, we obtained the construction licenses for the two buildings located in Jiangsu province on May 13, 2010 and are still in the process of applying for and obtaining the construction licenses for the remaining two buildings. Our PRC legal advisor has confirmed that there is no legal impediment to our obtaining the relevant construction licenses for the two buildings, and the current lack of these licenses will not have a material adverse effect on our operations. However, the timing for obtaining these licenses is beyond our control. Our PRC legal advisor has advised us that we face the risk of penalty, fines, or sanction, including an order to cease construction from the relevant PRC authorities due to our lack of the proper construction licenses.

Given the remaining buildings under construction for which we have not obtained the relevant construction licenses relate to only two of our wind farm projects under construction, we are of the view that the lack of the relevant proper construction licenses is not crucial to our current business operations.

Leased Properties in the PRC

As at March 31, 2010, we leased two buildings and a unit, with an aggregate gross floor area of approximately 17,616.4 square meters, which are primarily used for production, corporate purposes or as an office. Our PRC legal advisor has confirmed that the building ownership certificates of the aforementioned leased properties have been

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obtained, our lease agreements with the lessors have been duly signed and properly registered, and our leasing of the aforementioned properties complies with the requirement of the relevant laws and regulations and is legal and valid.

Overseas Properties

Germany

As at March 31, 2010, we owned and occupied six parcels of land, with an aggregate site area of approximately 37,298.0 square meters, and six buildings, with an aggregate gross floor area of approximately 10,874.1 square meters, in Germany. These are primarily used as the production facilities of Vensys AG and Vensys Elektrotechnik. We also leased five properties in Germany, with an aggregate gross floor area of approximately 1,372.0 square meters, which are primarily used as the production facilities and staff quarters of Vensys AG and Vensys Elektrotechnik.

United States

As at March 31, 2010, we leased two parcels of land, with an aggregate site area of approximately 647,497.0 square meters in Minnesota, U.S. These are primarily used for industrial purposes.

LEGAL PROCEEDINGS AND REGULATIONS

We may be involved in certain legal proceedings during the course of our business operations. As of the Latest Practicable Date, our Directors confirm, to the best of their knowledge, there exists no pending or threatened litigation, arbitration matters or other legal proceedings that may have a material adverse effect on our financial condition, results of operation, reputation, business activities, or future prospects.

We have not obtained certain permits and certificates in respect of our properties. Please see the subsection entitled “— Properties” above for more details on our properties with defective titles.

Save as disclosed above, our PRC legal advisor has confirmed that we are in full compliance with all related laws and regulations, and have obtained all licenses, approval documents and permits necessary for the operation of our business in the PRC. Following the Listing, we will continue to use our best efforts to comply with the laws and regulations as applied by the relevant regulatory authorities in the PRC.

We are also engaged in operations in Germany, the United States and Australia. Apart from PRC laws, we are also bound by the laws and regulations of these countries and regions as well as international treaties such as the Convention on International Sales of Goods. Our Directors confirm, to the best of their knowledge, we have obtained all requisite licenses, permits and approvals, and complied with all applicable laws and regulations in these overseas jurisdictions.

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CONNECTED TRANSACTIONS

Upon completion of the Global Offering, transactions between us and our Connected Persons will constitute connected transactions for us under Chapter 14A of the Listing Rules.

Further, as the A Shares are listed on the SZSE, some of the transactions described below will, in addition to being subject to and regulated by the Listing Rules, continue to be subject to and regulated by the SZSE Listing Rules and other applicable laws and regulations in the PRC as long as the A Shares remain listed. However, the requirements of the Listing Rules in relation to connected transactions differ from those of the SZSE. In particular, the definition of connected persons pursuant to the Listing Rules is different from the definition of related parties pursuant to the SZSE Listing Rules. Therefore, a connected transaction pursuant to the Listing Rules may not constitute a related party transaction pursuant to the SZSE Listing Rules, and vice versa.

We set out below details of our connected transactions.

CONNECTED PERSONS

China Water holds more than 10.0% of the equity interests of our Company and is a Substantial Shareholder of our Company. China Water is a wholly owned subsidiary of China Three Gorges. Therefore, each of China Three Gorges and its subsidiaries and associates constitutes a Connected Person of our Company under Chapter 14A of the Listing Rules.

CONTINUING CONNECTED TRANSACTIONS

The following transactions have been carried out by our Group and the above mentioned Connected Persons during the Track Record Period and are expected to be continued following the Listing. These transactions will constitute continuing connected transactions which are not exempt from the reporting, announcement and independent shareholders’ approval requirements set out in Chapter 14A of the Listing Rules upon the Listing:

Continuing connected transactions with China Three Gorges

Purchase of components

Description of present and future transactions and the main terms

We have purchased and will purchase from the subsidiaries and associates of China Three Gorges components for the manufacture of WTGs in the ordinary and usual course of business.

The purchase of products from the subsidiaries and associates of China Three Gorges for the manufacture of WTGs has been and will continue to be made in accordance with our internal purchase procedures. We have put in place a purchase monitoring process in the purchase department and have also formed a dedicated team to adopt the purchase procedures.

As we are not in a position to ascertain in advance which subsidiaries or associates of China Three Gorges that we may purchase components from, our Group will enter into written agreements with the subsidiaries and associates of China Three Gorges in respect of each individual connected transaction of the purchase of components for the manufacture of WTGs described above.

We believe that it is in our interest to purchase components from the subsidiaries and associates of China Three Gorges on terms acceptable to us for the manufacture of WTGs, and confirm that the transactions contemplated under the written agreements to be entered into will be conducted on normal commercial terms after arm’s length negotiation.

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Pricing

The fees payable in connection with the products of the subsidiaries and associates of China Three Gorges have always been and will be determined based on the market price. Such market price is defined by reference to the price at which we are able to be provided with identical or similar products by an Independent Third Party in the ordinary and usual course of business.

Historical figures

For each of the three years ended December 31, 2007, 2008 and 2009, our purchases from the subsidiaries and associates of China Three Gorges amounted to RMB2.2 million, RMB367.0 million and RMB734.6 million, respectively. From January 1, 2010 to March 31, 2010, our purchases from the subsidiaries and associates of China Three Gorges were RMB276.6 million.

Annual caps

For each of the three years ending December 31, 2010, 2011 and 2012, the annual amount to be payable by us to the subsidiaries and associates of China Three Gorges in connection with the purchase of components from the subsidiaries and associates of China Three Gorges will be no more than RMB1,866.4 million, RMB2,245.0 million and RMB1,001.0 million, respectively. The above annual caps have been determined by our Company after consideration of the following factors:

• (i) The historical transaction value;

• (ii) Our current and anticipated business needs and production volume;

• (iii) Prevailing market conditions;

• (iv) A component purchase contract of RMB1,271.4 million we have entered into with an associate of China Three Gorges on April 22, 2010, pursuant to which most of the delivery of the components is expected to take place in 2010; and

• (v) Certain Connected Persons are expected to cease to be our Connected Persons in 2011, which results in a decrease in the annual cap for 2012.

Product sale

Description of present and future transactions and the main terms

Our Group has sold and will sell to the subsidiaries of China Three Gorges WTGs in the ordinary and usual course of business.

Such sale of WTGs by our Group to the subsidiaries of China Three Gorges is usually awarded through public tenders in accordance with the applicable laws and regulations of the PRC, i.e. the relevant subsidiary of China Three Gorges will invite bids for the WTGs they propose to purchase in accordance with the laws and regulations of the PRC, and our Group, as the tenderer, shall submit tender documents in response to the invitation to tender. For further details on our sales, please see the section entitled “Business — Sales and Marketing” in this prospectus.

As most of the sale of WTGs is usually awarded through the tendering process described above which is subject to the relevant PRC laws and regulations, our Group will enter into written agreements with the subsidiaries of China Three Gorges in respect of each individual connected transaction of sale of WTGs after winning a tender, or on normal commercial terms after arm’s length negotiation where no tendering process is required to be adopted.

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CONNECTED TRANSACTIONS

We believe that the sale of WTGs to the subsidiaries of China Three Gorges constitutes a vital part of our business and is in our interests and confirm that the transactions contemplated under the written agreements to be entered into will be conducted on normal commercial terms.

Pricing

The selling price in respect of the sale of WTGs has been and will be determined through the tender bidding process if the sale is awarded through a public tender. Where the sale of WTGs is not awarded through a public tender, the selling price has been and will be determined based on the market price.

Historical figures

For each of the three years ended December 31, 2007, 2008 and 2009, our revenue in connection with the sale of WTGs to the subsidiaries of China Three Gorges amounted to RMB79.0 million, RMB190.6 million and RMB310.0 million, respectively.

Annual caps

For each of the three years ending December 31, 2010, 2011 and 2012, the annual amount receivable by our Group from the subsidiaries of China Three Gorges in connection with the sale of WTGs to the subsidiaries of China Three Gorges will be no more than RMB1,400 million, RMB1,900 million and RMB2,300 million, respectively. The annual caps have been determined by our Company based on the following factors:

• (i) According to publicly available information, China Three Gorges has just launched an aggressive wind power development plan with both near term targets such as 2010 and 2012, and long term targets such as 2020.

• (ii) We enjoy a favorable business relationship with China Three Gorges, and have historically maintained a dominant market share of its purchases of WTGs.

• (iii) We aim to maintain our position as a leading WTG supplier for China Three Gorges by providing premium quality WTGs at competitive prices with a high performance to price ratio.

• (iv) From January 1, 2010 to the Latest Practicable Date, we had concluded WTG contracts with subsidiaries of China Three Gorges amounting to approximately RMB283 million, and are about to conclude several WTG contracts in the near term.

WAIVER APPLICATION

Upon completion of the Global Offering, the continuing connected transactions described above will constitute non-exempt continuing connected transactions under the Listing Rules, and will be subject to the requirements of reporting, announcement and independent shareholders’ approval set out in Rules 14A.45 to 14A.48 of the Listing Rules.

The Directors (including independent non-executive Directors) are of the view that the continuing connected transactions described above have been carried out in our ordinary and usual course of business on normal commercial terms in the past and will be so in the future, and the proposed annual caps set out above are fair and reasonable and in the interests of the Shareholders as a whole. Pursuant to Rule 14A.42(3) of the Listing Rules, we have applied to be exempt from strict compliance with the requirements of announcement and independent shareholders’ approval as set out in Rules 14A.47 and 14A.48 of the Listing Rules for the period of three years

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ending on December 31, 2010, 2011 and 2012 and the Hong Kong Stock Exchange has granted a waiver in relation thereto. Except for the waiver granted to exempt from compliance with the requirements of announcement and independent shareholders’ approval, our Company will comply with the relevant requirements under Chapter 14A of the Listing Rules, including Rules 14A.35(1), 14A.35(2), 14A.36, 14A.37, 14A.38, 14A.39 and 14A.40. Our Company confirms that for the purpose of Rules 14A.35(1), 14A.37(3) and 14A.38(3) of the Listing Rules, all the relevant contracts in relation to the continuing connected transactions in the relevant years as disclosed above are available for review by the independent non-executive Directors and auditors of our Company. Our independent non-executive Directors and auditors will check whether the relevant continuing connected transactions are entered into in accordance with the terms and pricing disclosed in this prospectus and will disclose their confirmation annually in accordance with the requirements of the Listing Rules.

THE JOINT SPONSORS CONFIRMATION

The Joint Sponsors are of the view that the non-exempt continuing connected transactions described above have been entered into in our ordinary and usual course of business, on normal commercial terms, are fair and reasonable and in the interests of the Shareholders as a whole. The Joint Sponsors are also of the view that the annual caps for such transactions are fair and reasonable.

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GENERAL

Board of Directors

The Board of Directors consists of nine Directors, three of whom are independent non-executive Directors. The Directors are elected at meetings of the Shareholders for a term of three years, renewable upon re-election. The independent non-executive Directors shall not serve on the Board of Directors for more than two consecutive terms. The duties and powers conferred on the Board of Directors include: convening the Shareholders’ meeting and reporting its work to the Shareholders, implementing shareholders’ resolutions, determining our Company’s business plans and investment plans, formulating our Company’s annual budget and final accounts, formulating our Company’s proposals for profit distributions and recovery of losses, formulating our Company’s proposals for the increase or reduction of registered capital, as well as exercising other powers as conferred by the Articles of Association. Written contracts between our Company and the Directors were entered into on May 26, 2010.

Supervisory Committee

The PRC Company Law requires a joint stock limited liability company to establish a supervisory committee and this requirement is also contained in the Articles of Association. Our Supervisory Committee is responsible for monitoring our Company’s financial matters and overseeing the actions of the Board of Directors and our management personnel. Our Supervisory Committee consists of five Supervisors, two of whom are elected by the employees of our Company.

The term of office of the Supervisors is three years renewable upon re-election. An elected Supervisor cannot concurrently hold the position of a Director, president, vice president, chief financial officer or other senior management. The duties and powers conferred on the Supervisors include: examining the periodic reports of our Company prepared by the Board of Directors and providing written comments, proposing resolutions to the Shareholders’ meeting, proposing to convene a meeting of the Board of Directors, as well as overseeing the actions of the Board of Directors and other senior management of our Company in carrying out their duties. In the case of any conflict of interest between our Company and any of the Directors, the Supervisors shall negotiate or initiate legal proceedings against such Directors on behalf of our Company. A resolution of our Supervisory Committee may be adopted only if it is approved by voting by two-thirds or more of the members of our Supervisory Committee.

DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

The table below sets forth information regarding the Directors:

Name Age WU Gang ( ) . . . . . . . . . . . . . . 52 GUO Jian ( ) . . . . . . . . . . . . . . 46 WEI Hongliang ( ) . . . . . . . . 38 LI Ying ( ) . . . . . . . . . . . . . . . . 75 GAO Zhong ( ) . . . . . . . . . . . . 51 LV Houjun ( ) . . . . . . . . . . . . 47 WANG Yousan ( ) . . . . . . . . 74 SHI Pengfei ( ) . . . . . . . . . . . 69 LI Man Bun, Brian David ( ) . . 35	Position Chairman, Chief Executive Officer and Executive Director President and Executive Director Vice President and Executive Director Vice Chairman and Non-Executive Director Non-Executive Director Non-Executive Director Independent Non-executive Director Independent Non-executive Director Independent Non-executive Director	Date of Appointment
		March 25, 2010 March 25, 2010 March 25, 2010 March 25, 2010 March 25, 2010 March 25, 2010 March 25, 2010 March 25, 2010 March 25, 2010

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EXECUTIVE DIRECTORS

Wu Gang ( ), aged 52, is the chairman, chief executive officer and an executive Director of our Company. He is a senior engineer (advanced grade) as conferred by the Xinjiang Human Resources Department, an expert entitled to special allowance[(1)] granted by the State Council and a member of the expert consultants’ group for the government of Xinjiang. Mr. Wu was the chairman and general manager of our Company from 2002 to 2006 and became our chief executive officer in 2006. Further, he chaired the supervisory committee of Vensys AG. Mr. Wu led various scientific and technological research projects under significant national programs, including the 9th Five-Year Key Technologies R&D Program and the 10th Five-Year Key Technologies R&D Program, as well as major projects under the 863 programs organized by the PRC Government. He has been granted numerous awards and accolades by the State and the government of Xinjiang, including the 600 kW Domestic WTGs R&D First Class Award in 2000, the National Science & Technology Second Class Progress Award in 2003, the Xinjiang Science & Technology New Contribution Award in 2007 and the Xinjiang Science & Technology Outstanding Contribution Progress Award in 2008. Moreover, the WWEA awarded him the World Wind Energy Award for his leadership of our Group in our contribution to the development of the international wind power industry. Currently, Mr. Wu is the deputy director of the Chinese Renewable Energy Industries Association. He graduated from Xinjiang Engineering Institute in 1983 with a bachelor’s degree in power station and electric systems and obtained a master’s degree in engineering from Dalian University of Technology in 2003. Mr. Wu possesses more than 20 years of experience in, and has a deep understanding of the wind power industry.

Guo Jian ( ), aged 46, is the president and an executive Director of our Company. He is a senior engineer (advanced grade) as conferred by the Xinjiang Human Resources Department. Mr. Guo was the deputy general manager from 2001 and subsequently, the general manager of our Company. He was appointed as a Director of our Company in 2004, and became our general manager in 2006 and president in 2007. Mr. Guo led and participated in various major scientific and technological research projects under the 863 programs organized by the PRC Government. He has been granted numerous awards and accolades by the State and the government of Xinjiang, including the the National Science & Technology Second Class Progress Award in 2003, the Xinjiang Science & Technology New Contribution Award, the First Class Award for Excellent New Product and the Technology Innovation Outstanding Contribution Award between 2003 to 2008, as well as the title of “Xinjiang Elite Entrepreneur” in 2009. He is recognized as an expert with outstanding contribution in Xinjiang and entitled to the special allowance[(1)] granted by the government of Xinjiang. He graduated from Xinjiang Engineering Institute in 1984 with a bachelor’s degree in mechanical manufacturing technology and equipment and graduated from Dalian University of Technology with a master’s degree in engineering in 2003. Mr. Guo has been in the wind power industry since 1986 with more than 20 years of in-depth experience. Besides possessing the relevant industry skills, in particular, he has extensive expertise in the management of the wind power equipment manufacturing business.

Wei Hongliang ( ), aged 38, is the vice president and an executive Director of our Company. From 1998 to 2009, he acted as, among other things, the manager of the Legal Department, the manager of the Planning and Development Department, as well as the general manager of the Capital Operation and Equity Management department of China Water, a large investment corporation in the PRC. In addition, Mr. Wei is currently a general assistant manager with China Water and the vice chairman of Xinjiang Wind Power. He has been a vice president of our Company from 2009 and was appointed a Director of our Company in 2010. Mr. Wei graduated from Northwest Institute of Politics and Law in 1996 with a bachelor’s degree in laws and obtained a master’s degree in administrative studies from Wuhan University in 2007. Due to his substantial experience in capital

(1) a special subsidy granted by the PRC Government to experts or scholars with special contributions

(1) a special subsidy granted by the government of Xinjiang to experts or scholars with special contributions

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management and familiarity with investments by large corporations, his main responsibilities include our Group’s capital management and investment.

NON-EXECUTIVE DIRECTORS

Li Ying ( ), aged 75, is the vice chairman and a non-executive Director of our Company. He is a senior engineer (advanced grade) and entitled to the special allowance[(2)] granted by the State Council. Mr. Li was the deputy director of the Rural Hydropower Department of the Ministry of Water Resources of the PRC from 1993 to 1996, the chairman of Ningde City Dagang Hydropower Station Development Co., Ltd. from 2006 to present, the chairman of Beijing Qunrui Energy Investment Co., Ltd. from 2007 to present and the chairman of Jianghe Rural Electricity Development Co., Ltd. from 2008 to present. Mr. Li has been the vice chairman of our Company from 2001. He graduated from Wuhan College of Hydraulics in 1955.

Gao Zhong ( ), aged 51, is a non-executive Director of our Company. Mr. Gao is a senior political officer as conferred by the Senior Professionals Evaluation Committee of Xinjiang Enterprises’ Ideological and Political Personnel. Mr. Gao was the director, deputy general manager and the Party Committee secretary of Xinjiang Jinfang Textile Co., Ltd. from 2003 to 2005, the vice chairman and supervisor of the trade union of Xinjiang Bagang (Group) Co., Ltd. from 2005 to 2006, and the chairman and the Party Committee secretary of Xinjiang Beizheng Industrial Co., Ltd. from 2006 to 2008. In addition, he was the chairman and the Party Committee secretary of Xinjiang Wind Power from 2008. Mr. Gao graduated from Northwest Institute of Textile Science and Technology in 1987.

Lv Houjun ( ), aged 47, is a non-executive Director of our Company. He is a qualified senior economist as conferred by the China Construction Bank. Mr. Lv was the deputy general manager of the International Department of Hai Tong Securities Co., Ltd. from May 2001 to October 2004 and a general manager and director of Hai Tong-Fortis Private Equity Fund Management Co. Ltd. from October 2004. Mr. Lv joined our Group in March 2006 and was appointed a Director of our Company. Mr. Lv graduated from Nanjing University in 2008 with a doctorate degree in economics.

INDEPENDENT NON-EXECUTIVE DIRECTORS

Wang Yousan ( ), aged 74, is an independent non-executive Director of our Company. Mr. Wang is a qualified senior economist. He held numerous important positions, including the deputy section manager, section manager, deputy governor and governor of China Construction Bank, Xinjiang branch from 1958 to 1988, the governor of the PBOC, Xinjiang branch from 1988 to 1991, the vice chairman of the government of Xinjiang from 1991 to 1996, and the vice chairman of the Xinjiang Chinese People’s Political Consultative Conference from 1996 to 2001. Mr. Wang was appointed as a Director of our Company from 2007. In addition, Mr. Wang is currently an independent non-executive director of Xinjiang Joinworld Co., Ltd., Xinjiang Tianfu Thermoelectric Co., Ltd. and Xinjiang Hops Co., Ltd., all of which are listed companies in the PRC.

Shi Pengfei ( ), aged 69, is an independent non-executive Director of our Company. He is a senior engineer (advanced grade) as conferred by the Hydropower and Water Resources Planning and Design General Institute under the Ministry of Water Resources (formerly part of the now defunct Ministry of Power Industry). Mr. Shi possesses extensive experience in the energy sector and held several important energy-related positions, including director of the International Liaison Department of the Chinese Wind Energy Association from 1987 to 1995, head of the New Energy Department and deputy chief engineer of China Water Conservancy and

(2) a special subsidy granted by the PRC Government to experts or scholars with special contributions

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Hydropower Engineering Consulting Company from 1995 to 2001. Mr. Shi was appointed as a Director of our Company from 2007. Currently, he is a member of the expert committee of China Hydropower Engineering Consulting Group Co. and the vice chairman of the Chinese Wind Energy Association. Mr. Shi graduated from Beijing Institute of Machinery in 1965.

Li Man Bun, Brian David ( ), aged 35, is an independent non-executive Director of our Company. Mr. Li was the general manager and head of Wealth Management Division of The Bank of East Asia, Limited (BEA) (stock code: 23) from July 2004 to March 2009. Subsequently, he became BEA’s deputy chief executive in April 2009, primarily responsible for BEA’s China and international business operations and management of BEA Union Investment Management Limited. In addition, he holds directorships in various member companies of BEA and has been appointed a member of several committees by the board of BEA. Currently, Mr. Li is also an independent non-executive director of Towngas China Company Limited (stock code: 1083) and an alternate director of AFFIN Bank Berhad. He was appointed as a Director of our Company in March 2010. Mr. Li is an associate of the Institute of Chartered Accountants in England & Wales, a member of the Hong Kong Institute of Certified Public Accountants and a member of the Treasury Markets Association. Mr. Li holds a number of public and honorary positions, including, among others, being a member of the Eleventh National Committee of the Chinese People’s Political Consultative Conference, a member of the Eleventh Beijing Municipal Committee of the Chinese People’s Political Consultative Conference, a member of the Hong Kong-Taiwan Business Cooperation Committee, a member of the Hong Kong Energy Advisory Committee, a member of the Hong Kong Standing Committee on Judicial Salaries and Conditions of Service, a member of the Hong Kong Financial Reporting Review Panel and a member of the Hong Kong Traffic Accident Victims Assistance Advisory Committee. Mr. Li graduated from the University of Cambridge in 1995 with a bachelor’s degree in arts, and obtained a master’s degree in business administration from Stanford University in 2002.

SUPERVISORS

The table below sets forth information regarding the Supervisors:

Name Age WANG Mengqiu ( ) . . . . . . . . . 45 WANG Shiwei ( ) . . . . . . . . . . . 52 LUO Jun ( ) . . . . . . . . . . . . . . . . . 43 XIAO Zhiping ( ) . . . . . . . . . . . 33 ZHENG Chengjiang ( ) . . . . . . . 36	Position Supervisor, Chairman of the Supervisory Committee Supervisor Supervisor Supervisor (representative of employees) Supervisor (representative of employees)	Date of Appointment
		March 25, 2010 March 25, 2010 March 25, 2010 March 25, 2010 March 25, 2010

Wang Mengqiu ( ), aged 45, is the Chairman of the Supervisory Committee of our Company. Mr. Wang graduated from Shenzhen University in 1989. From 2002 to 2006, Mr. Wang served as the director of the Finance Center of China Water, and is now a director of its Risk Control Department. Mr. Wang was appointed as a Supervisor of our Company from 2008.

Wang Shiwei ( ), aged 52, is a Supervisor of our Company. Mr. Wang is an engineer and has been a deputy manager in Xinjiang Wind Power since 2005. Mr. Wang was appointed as a Supervisor of our Company from 2009.

Luo Jun ( ), aged 43, is a Supervisor of our Company. Mr. Luo graduated from Southwest University of Science and Technology in 2005 and is an accountant. From 2002 to 2008, Mr. Luo held positions in the Finance

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DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

Department, Reform Office and Equity Management Office of Xinjiang Wind Power and served as a director of its Equity Management Office since 2006. Mr. Luo was appointed as a Supervisor of our Company from 2004.

Xiao Zhiping ( ), aged 33, is an employee representative Supervisor of our Company. Mr. Xiao graduated from Xinjiang University in 1999 and obtained a bachelor’s degree in economics. Between 1999 and 2000, he worked for Bank of China, Xinjiang Branch; between 2000 and 2002, he worked for Suntime International Economic-Trading Co., Ltd; between 2002 and 2006, he held positions as the manager of the Leasing Department II and the deputy general manager of the Leasing Department of Xinjiang Financial Leasing Co., Ltd. Mr. Xiao joined our Company in 2006 and is now the director of our Investment and Equity Management Department. He was appointed as an employee representative Supervisor of our Company in 2010.

Zheng Chengjiang ( ), aged 36, is an employee representative Supervisor of our Company. Mr. Zheng graduated from Xinjiang Finance and Economics Institute in 1995, majoring in industrial enterprises management. Mr. Zheng was the assistant to the general manager, director of our Planning and Management Department, assistant to the president, and director of our Systems Management Department. Currently, he serves as our director of Information Systems. Mr. Zheng was appointed as an employee representative Supervisor of our Company from 2007.

SENIOR MANAGEMENT

The table below sets forth information regarding our senior management:

Name Age WU Gang ( ) . . . . . . . . . . . . . . . . 52 GUO Jian ( ) . . . . . . . . . . . . . . . . 46 LI Yuzhuo ( ) . . . . . . . . . . . . . . 61 CAO Zhigang ( ). . . . . . . . . . . . 34 WEI Hongliang ( ) . . . . . . . . . . 38 SUN Liang ( ) . . . . . . . . . . . . . . . 39 Ju¨rgen Rinck . . . . . . . . . . . . . . . . . . . 47 WANG Haibo ( ) . . . . . . . . . . . 35 WANG Xiangming ( ) . . . . . . . . 40 CUI Xinwei ( ) . . . . . . . . . . . . . 48 MA Jinru ( ) . . . . . . . . . . . . . . . 44

Position

Chairman, Chief Executive Officer and Executive Director President and Executive Director Executive Vice President Executive Vice President Vice President and Executive Director Chief Financial Officer Vice President and Chief Technology Officer Vice President Vice President Chief Engineer Vice President, Secretary of the Board and Company Secretary

Wu Gang ( ) — Please see the subsection above under the heading of “Executive Directors”. Guo Jian ( ) — Please see the subsection above under the heading of “Executive Directors”.

Li Yuzhuo ( ), aged 61, is an executive vice president of our Company. Mr. Li was the vice president of Shenzhen Huawei Technologies Co., Ltd, the general manager of Beijing Leader & Harvest Electric Technologies Co., Ltd. and the general manager of Beijing Zhongyi Hekang Electric Technologies Co., Ltd. Mr. Li has been a vice president of our Company from 2007. He graduated from Tsinghua University in 1977. Mr. Li has substantial experience in the management of large corporations in the PRC and assists our president with the overall operation and management of our Group.

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DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

Cao Zhigang ( ), aged 34, is an executive vice president of our Company. Mr. Cao is a qualified engineer as conferred by the Xinjiang Water Resources Department. He joined our Company in 1999 and was the director of our Electric Control Affairs department, director of our Chief Engineer Office and our deputy chief engineer. He was a vice president of our Company from 2007. Mr. Cao led various scientific and technological R&D programs, including the 10th Five-Year Key Technologies R&D Program and 10th Five-Year Key Technologies R&D Program, as well as major projects under the 863 program organized by the PRC Government. Mr. Cao graduated from Xinjiang Engineering Institute in 1998 with a bachelor’s degree in power systems and automation. Mr. Cao possesses more than ten years of experience in the wind power industry, with particular expertise in supply chain management and machinery manufacture.

Wei Hongliang ( ) — Please see the subsection above under the heading of “Executive Directors”.

Sun Liang ( ), CFTP , aged 39, is the chief financial officer of our Company. Mr. Sun was the financial director of ALSTOM (China) Investment Co., Ltd. from 2004 to 2007 and the chief financial supervisor of Changsha Zoomlion Heavy Industry Science and Technology Department Co., Ltd. from 2007 to 2009. He joined our Company in October 2009. Mr. Sun is a certified financial and treasury professional and has been a member of The Finance and Treasury Association Limited from January 2005. He obtained a master’s degree in financial management in 2003 from Australian National University. Mr. Sun has accumulated considerable financial experience from his previous work with large PRC subsidiaries of leading global companies.

Ju¨rgen Rinck, aged 47, is a vice president and the chief technology officer of our Company. He was a development engineer of the wind power R&D team of the Wind Power R&D Center at Saarbru¨cken, Germany from 1990 to 1999, and was responsible for the R&D of the GenesYs 600 WTG project from 1995 to 1998 as the chief engineer of the Wind Power R&D Center. Mr. Rinck was the general manager of VENSYS Energiesysteme GmbH & Co. KG from 1999 to 2007, and the chief executive officer of Vensys AG from May 2007 to present. He is mainly responsible for the financial, R&D, sales, patents and licencing aspects of Vensys AG’s business. Mr. Rinck graduated from Saarland University of Applied Sciences ( Hochschule fu¨r Technik und Wirtschaft des Saarlandes ) in 1990 with a master’s degree in constructive mechanical engineering.

Wang Haibo ( ), aged 35, is a vice president of our Company. He was director of our Marketing Center and Investment Development Department from 2002 to 2007 and managing deputy general manager of Beijing Tianrun from 2007. In addition, Mr. Wang was appointed as an employee representative Supervisor of our Company from 2005 to March 2010. Mr. Wang graduated from Xinjiang Finance and Economics Institute in 1996 with a bachelor’s degree in economic information management. Mr. Wang has substantial experience and expertise in the development and operation of wind farm projects as he has specialized in our wind farm development business since joining our Company in 2001.

Wang Xiangming ( ), aged 40, is a vice president of our Company. Mr. Wang is a qualified senior engineer as conferred by the Xinjiang Professional Technical Titles Office. He was the vice general engineer and general engineer of our Company, and served as a vice president of our Company from March 2007. As a main member of the project team, he has participated in various major scientific and technological research projects under significant national programs, including the 9th Five-Year Key Technologies R&D Program and the 10th Five-Year Key Technologies R&D Program, major and subsequent projects under the 863 programs and science and technology support programs organized by the PRC Government. Mr. Wang graduated from Northwestern Polytechnical University in 1991 with a bachelor’s degree in mechanics design and manufacturing. Mr. Wang has been in the wind power industry since 1992, with considerable experience in product development, client management and technology services.

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Cui Xinwei ( ), aged 48, is the chief engineer of our Company. Mr. Cui is an associate professor and was dean of the Engineering and Communication Institute of Xinjiang Agricultural University, a director of our general design office and our vice chief engineer. He has been our chief engineer from 2009. He led the “ R&D of a Large-scale Wind Power Generation Simulation and Testing System ” national project under the 863 program organized by the PRC Government. As a main member of the project team, he participated in numerous significant wind turbine technologies-related research projects under the National Key Technology R&D Program, including “ Key Technologies for the Industrialization of 750 kW Wind Power Generation ” under the 10th Five-Year Key Technologies R&D Programme, the “ Key Technologies Study of 1.5 MW Variable-Speed Constant-Frequency Direct-Driven Wind Turbine ” and “ Research and Development of 1.5 MW Variable-Speed Constant-Frequency Semi-Direct-Driven Wind Turbine ”. Mr. Cui obtained a master’s degree in mechanical engineering in 1989 from Zhejiang University. Mr. Cui possesses more than ten years of specific experience in the R&D of wind power generation, advanced technology application, industrialization of products and on-site technological services.

Ma Jinru ( ), aged 44, is a vice president, the secretary of the Board and the Company Secretary of our Company. Ms. Ma is a senior economist. She was an economist with the Dalian Port Design Institute from 1990 to 1991, head of the Foreign Trade and Economic Cooperation Department of the Dalian Port Authority from 1991 to 1999, a manager of the Financial Management Department of the Dalian Port Container Integrated Development Company from 2000 to 2002, secretary of the board of directors of Dalian Port Container Co., Ltd. from 2002 to 2005, and secretary of the board of directors/company secretary of Dalian Port (PDA) Co., Ltd. (stock code: 2880) from 2005 to 2010. Ms. Ma has been an affiliated person of The Hong Kong Institute of Chartered Secretaries since 2006 and she has acquired the relevant experience required under Rule 8.17(3) of the Listing Rules. Ms. Ma joined our Company in March 2010. Ms. Ma graduated from Jilin University of Technology in 1990 with a master’s degree in transportation management engineering.

COMPANY SECRETARY

Ma Jinru ( ) — Please see the subsection above under the heading of “Senior Management”.

COMPENSATION OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

Our executive Directors, non-executive Directors and Supervisors, if they are also members of our senior management or employees, receive compensation in the form of salaries, bonuses, benefits in cash as well as through our contribution to their social insurance plans and housing funds. If they are not members of our senior management or employees, they do not receive any compensation from us. Save for Mr. Wang Yousan, our independent non-executive Directors receive directors’ subsidies from us. The aggregate remuneration paid and benefits in kind granted to the Directors and Supervisors during the Track Record Period were approximately RMB15.1 million, RMB12.4 million and RMB10.2 million, respectively. As required by PRC regulations, we participate in various pension plans, insurance plans and housing funds organized by the PRC Government for our employees, including those who are the Directors, Supervisors and senior management, to which we contributed approximately RMB11.8 million, RMB27.0 million and RMB40.7 million, respectively during the Track Record Period.

The aggregate amount of compensation we paid to our five highest paid individuals during the Track Record Period were approximately RMB21.6 million, RMB16.8 million and RMB17.0 million, respectively.

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BOARD COMMITTEES

Audit Committee

We have established an audit committee in compliance with the Code on Corporate Governance Practices as set out in Appendix 14 of the Listing Rules and specified its terms of reference. The primary duties of our audit committee are to review and supervise our financial reporting process and internal control system. Our audit committee shall comprise three Directors not involved in our day-to-day management, who shall be appointed by the Board. Our audit committee currently comprises Mr. Li Man Bun, Brian David, Mr. Wang Yousan and Mr. Gao Zhong and is chaired by Mr. Li Man Bun, Brian David.

Remuneration Committee

We have established a remuneration committee according to the requirements of the Code of Corporate Governance Practices as set out in Appendix 14 of the Listing Rules, and have specified its terms of reference. The primary functions of our remuneration committee include determining the policies in relation to human resources management, reviewing our remuneration policies and determining remuneration packages for the Directors. Our remuneration committee consists of Mr. Shi Pengfei, Mr. Wang Yousan and Mr. Li Ying and is chaired by Mr. Shi Pengfei.

Nomination Committee

We have has also set up a nomination committee, the primary duties of which are to make recommendations to the Board regarding candidates to fill vacancies on the Board and in senior management. Our nomination committee comprises Mr. Wang Yousan, Mr. Shi Pengfei and Mr. Wu Gang and is chaired by Mr. Wang Yousan.

Strategy Committee

Our strategy committee consists of five Directors, including Mr. Wu Gang, Mr. Guo Jian, Mr. Wei Hongliang, Mr. Gao Zhong and Mr. Shi Pengfei, with Mr. Wu Gang serving as the chairman. The primary responsibilities of our strategy committee include: conducting research and submitting proposals regarding our mid-to-long term development strategies and major investment decisions; reviewing our annual operation and investment plans; conducting research and submitting proposals regarding major investments and financing plans, capital operations and assets operation projects.

MANAGEMENT PRESENCE

According to Rule 8.12 and Rule 19A.15 of the Listing Rules, a new applicant applying for a listing on the Hong Kong Stock Exchange must have a sufficient management presence in Hong Kong, and this normally means that at least two of its executive directors must be ordinarily resident in Hong Kong. Our operations are principally in the PRC and substantially all of the Directors currently reside in the PRC. We do not, and for the foreseeable future will not, have sufficient management presence in Hong Kong for the purpose of satisfying the requirements under Rule 8.12 of the Listing Rules. As a result, we have applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted us, a waiver in connection with Rules 8.12 and 19A.15 of the Listing Rules, on the following conditions to ensure that regular and effective communication is maintained between the Hong Kong Stock Exchange and us:

1. We have appointed Wei Hongliang, our executive Director, and Ma Jinru, our company secretary, as our authorized representatives (the “ Authorized Representatives ”) for the purpose of Rule 3.05 of the

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Listing Rules. They will act as our principal channel of communication with the Hong Kong Stock Exchange. The Authorized Representatives will provide their usual contact details to the Hong Kong Stock Exchange to be readily contactable by the Hong Kong Stock Exchange, and will be available to meet with the Hong Kong Stock Exchange to discuss any matters on short notice;

1. As and when the Hong Kong Stock Exchange wishes to contact the Directors on any matters, each of the Authorized Representatives will have means to contact all the Directors (including our independent non-executive Directors) promptly at all times. We will implement such measures that (a) each Director must provide his mobile phone numbers, office phone numbers, email addresses and fax numbers to the Authorized Representatives; and (b) in the event that a Director expects to travel and or otherwise be out of office, he will provide the phone number of the place of his accommodation to the Authorized Representatives;

2. We will provide the mobile phone number, the telephone number of the business office, email address and fax number of every Director to the Hong Kong Stock Exchange; and

3. Each of the Directors who is not ordinarily resident in Hong Kong possesses or can apply for valid documents to visit Hong Kong and can meet with the Hong Kong Stock Exchange upon reasonable notice.

In compliance with Rule 3A.19 of the Listing Rules, we intend to appoint Taifook Capital Limited as the compliance advisor, which will act as our additional principal channel of communication with the Hong Kong Stock Exchange when our Authorized Representatives are not available. The compliance advisor will have access at all times to our Authorized Representatives, the Directors and other officers of our Company to ensure that it is in a position to provide prompt responses to any queries or requests from the Hong Kong Stock Exchange in respect of our Company.

COMPLIANCE ADVISOR

We will appoint Taifook Capital Limited as our compliance advisor upon the Listing in compliance with Rule 3A.19 and Rule 19.05 of the Listing Rules.

We expect to enter into a compliance advisor agreement with Taifook Capital Limited prior to the Listing. Pursuant to Rule 3A.23 of the Listing Rules, the compliance advisor will advise us on the following matters:

• the publication of any regulatory announcement (whether required by the Listing Rules or requested by the Hong Kong Stock Exchange or otherwise), circular or financial report;

• whether a transaction, which might be a notifiable or connected transaction under Chapters 14 or 14A of the Listing Rules, is contemplated, including share issues and share repurchases;

• where we propose to use the net proceeds to us from the Global Offering in a manner different from that detailed in this prospectus or where our business activities, developments or results deviate from any forecast, estimate, or other information in this prospectus; and

• where the Hong Kong Stock Exchange makes an inquiry of us in accordance with Rule 13.10 of the Listing Rules regarding unusual movements in the price or trading volume of the Shares.

The material terms of the expected compliance advisor agreement are as follows:

• (a) the term of appointment of the compliance advisor shall commence on the Listing Date and end on the date on which we comply with Rule 13.46 of the Listing Rules in respect of our financial results for the

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DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

first full financial year commencing after the Listing Date (the “ Fixed Period ”), or until the agreement is terminated, whichever is earlier;

• (b) the compliance advisor shall provide us with services, including guidance and advice as to compliance with the requirements under the Listing Rules and other applicable laws, rules, codes and guidelines, and to act as one of our principal channels of communications with the Hong Kong Stock Exchange;

• (c) we may terminate the appointment of any compliance advisor if the compliance advisor’s work is of an unacceptable standard or if there is a material dispute (which cannot be resolved in 30 days) over fees payable by us to the compliance advisor but will not terminate the role of the compliance advisor until we have appointed a replacement compliance advisor, as permitted by Rules 3A.26 and 19A.05(1)(3)(a) of the Listing Rules; and

• (d) The compliance advisor may terminate its appointment by serving a written notice on us one month in advance if:

• we commit any breach of any of our obligations thereunder;

• we fail to take into account the reasonable advice or recommendation of the compliance advisor or in relation to any matter which the compliance advisor considers in its reasonable opinion to be material; or

• there arise any circumstances, including regulatory requirements or compliance with the Listing Rules and other applicable laws, rules codes and guidelines, which in the sole and absolute opinion of the compliance advisor, makes it impracticable, inadvisable or inexpedient for the compliance advisor to duly discharge its responsibility under the agreement or as required under the Listing Rules.

Pursuant to Rules 3A.26 and 3A.27 (as modified by Rule 19A.05(3)) of the Listing Rules, during the Fixed Period, we and the compliance advisor will immediately notify the Hong Kong Stock Exchange of termination or resignation of the compliance advisor, in each case, stating the reason for termination or resignation, as applicable; and we will notify the Hong Kong Stock Exchange of the new compliance advisor’s appointment.

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SUBSTANTIAL SHAREHOLDERS

SUBSTANTIAL SHAREHOLDERS

As of the Latest Practicable Date, the following persons directly or indirectly controlled, or were entitled to exercise, or control the exercise of, 5% or more of the A Shares:

Name of Shareholder Xinjiang Wind Power(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Water (1)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Three Gorges (2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . CB Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Number of A Shares directly or indirectly held 409,248,000(L) 762,048,000(L) 762,048,000(L) 161,280,000(L)	Approximate percentage of share capital (%)
		18.3 34.0 34.0 7.2

The letter “L” denotes long position in the Shares. Notes:

• (1) China Water (being a wholly owned subsidiary of China Three Gorges) directly holds 352,800,000 A Shares. China Water holds 33.9% of the issued share capital of Xinjiang Wind Power. Under the SFO, besides directly holding interests in our Company, China Water is deemed to be interested in the 409,248,000 A Shares held by Xinjiang Wind Power (38.9% of the interest in the share capital owned by the Xinjiang SASAC).

• (2) China Three Gorges (wholly owned by SASAC) is the holding company of China Water. Under the SFO, the 409,248,000 A Shares in Xinjiang Wind Power in which China Water is deemed to be interested and the 352,800,000 A Shares directly held by China Water are deemed to be China Three Gorges’s interest in our Company.

• (3) Pursuant to the Implementing Measures for the Transfer of Part of the State-owned Shares to the NSSF in Domestic Securities Market , jointly issued by the Ministry of Finance and four other ministries (Caiqi [2009] No. 94), subsequent to A Share offering, our state-owned Shareholder Xinjiang Wind Power shall transfer 11,001,352 A Shares held by it and China Water shall transfer 9,483,925 A Shares directly held by it to the NSSF. As of April 30, 2010, the above mentioned transfer processes had not been undertaken.

To the best knowledge of the Directors, immediately following the completion of the Global Offering (not including any Shares which will be placed and issued according to the Over-allotment Option), our Company’s share capital will include 2,200,470,600 A Shares, 395,294,000 H Shares and 39,529,400 H Shares converted from A Shares and transferred to the NSSF, representing 83.5%, 15.0% and 1.5% of our Company’s total share capital, respectively.

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SUBSTANTIAL SHAREHOLDERS

Immediately following the completion of the Global Offering, Xinjiang Wind Power shall transfer 19,414,146 A Shares (assuming the Over-allotment Option is not exercised) or 22,326,262 A Shares (assuming the Over-allotment Option is exercised) held by it in our Company, and China Water shall transfer 16,736,333 A Shares (assuming the Over-allotment Option is not exercised) or 19,246,779 A Shares (assuming the Overallotment Option is exercised in full) held by it in our Company, to the NSSF (which Shares shall be converted into H Shares upon such transfers). Upon the completion of the abovementioned transfer, the shareholding of our substantial Shareholders is as follows:

substantial Shareholders is as follows:
Name of Shareholder Xinjiang Wind Power(3) . . . . . . . . . . . China Water (1)(3) . . . . . . . . . . . . . . . . China Three Gorges (2)(3) . . . . . . . . . . CB Fund . . . . . . . . . . . . . . . . . . . . . .	Number of A Shares directly or indirectly held Approximate percentage of issued share capital (%) Immediately after the completion of the Global Offering (assuming the Over-allotment Option is not exercised) 389,833,854(L) 14.8 725,897,521(L) 27.5 725,897,521(L) 27.5 161,280,000(L) 6.1	Immediately after the completion of the Global Offering (assuming the Over-allotment Option is exercised in full)
	Number of A Shares directly or indirectly held 389,833,854(L) 725,897,521(L) 725,897,521(L) 161,280,000(L)	Number of A Shares directly or indirectly held 386,921,738(L) 720,474,959(L) 720,474,959(L) 161,280,000(L)	Approximate percentage of issued share capital (%)
			14.4 26.7 26.7 6.0

The letter “L” denotes long position in the Shares. Notes:

• (1) China Water (being a wholly owned subsidiary of China Three Gorges) directly holds 336,063,667 A Shares (assuming the Over-allotment Option is not exercised) or 333,553,221 A Shares (assuming the Over-allotment Option is exercised in full). Since China Water holds 33.9% of the issued share capital of Xinjiang Wind Power, under the SFO, besides directly holding interests in our Company, China Water is deemed to be interested in the 389,833,854 A Shares (assuming the Over-allotment Option is not exercised) or 386,921,738 A Shares (assuming the Over-allotment Option is exercised in full) held by Xinjiang Wind Power (38.9% of the interest in the share capital owned by the Xinjiang SASAC).

• (2) China Three Gorges (wholly owned by SASAC) is the holding company of China Water. Under the SFO, China Three Gorges is deemed to be interested in the 389,833,854 A Shares and 336,063,667 A Shares (assuming the Over-allotment Option is not exercised) or 386,921,738 A Shares and 333,553,221 A Shares (assuming the Over-allotment Option is exercised in full) held by Xinjiang Wind Power in which China Water is deemed to be interested and the A Shares directly held by China Water.

• (3) Pursuant to the Implementing Measures for the Transfer of Part of the State-owned Shares to the NSSF in Domestic Securities Market , jointly issued by the Ministry of Finance and four other ministries (Caiqi [2009] No. 94), state-owned Shareholder Xinjiang Wind Power after the A Shares offering shall transfer 11,001,352 A Shares held by it in our Company and China Water shall transfer 9,483,925 A Shares directly held by it in our Company to the NSSF. As of April 30, 2010, the above mentioned transfer processes had not been undertaken.

According to the Listing Rules, as of the Latest Practicable Date, our Company had no Controlling Shareholder.

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SHARE CAPITAL

SHARE CAPITAL

This section presents certain information regarding our share capital prior to the completion of the Global Offering and after the completion of the Global Offering.

Before Global Offering

As of the Latest Practicable Date, the share capital of our Company was RMB2,240.0 million comprising 2,240,000,000 Shares.

Number of shares A Shares in issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,240,000,000	Approximate percentage of issued share capital (%)
	100.0

Upon Completion of Global Offering

Immediately following completion of the Global Offering, assuming that the Over-allotment Option is not exercised, the share capital of our Company would be as follows:

A Shares in issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H Shares issued under the Global Offering. . . . . . . . . . . . . . . H Shares converted from A Shares and transferred to the NSSF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Number of shares 2,200,470,600 395,294,000 39,529,400	Approximate percentage of issued share capital (%)
		83.5(1) 15.0 1.5

Note:

(1) The figures shown in the table include the share dividends distributed on April 6, 2010.

Immediately following the completion of the Global Offering, assuming the Over-allotment Option is exercised in full, the share capital of our Company would be as follows:

A Shares in issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H Shares issued under the Global Offering. . . . . . . . . . . . . . . H Shares converted from A Shares and transferred to the NSSF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Number of shares 2,194,541,200 454,588,000 45,458,800	Approximate percentage of issued share capital (%)
		81.4(1) 16.9 1.7

Note:

(1) The figures shown in the table include the share dividends distributed on April 6, 2010.

The Shares

According to the Articles of Association, we have two classes of Shares, (i) domestic listed Shares, namely A Shares (Shares issued and subscribed for in RMB to investors within the PRC and listed in the PRC); and (ii) overseas listed Shares, namely H Shares (Shares listed in Hong Kong). A Shares and H Shares are all ordinary Shares in the share capital of our Company. However, apart from certain qualified domestic institutional investors in

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SHARE CAPITAL

the PRC, H Shares generally cannot be subscribed for by or traded between legal or natural persons of the PRC. On the other hand, A Shares can only be subscribed for by and traded between legal or natural persons of the PRC, qualified foreign institutional investors or qualified foreign strategic investors and must be traded in Renminbi. The A Shares held by Xinjiang Wind Power, China Water, Wind Power Research Centre, CB Fund, Yuanjing Xinfeng, Yuanjing Xinneng and Yuanfeng Investment are subject to three years’ lock up period from December 26, 2007 when our Company was listed on the SZSE on December 26, 2007 to December 25, 2010. As required by the PRC Company Law, the A Shares held by the Directors, Supervisors and senior management are subject to transfer restrictions.

Shareholders holding different classes of the Shares are considered as different classes of Shareholders. Our Company has two classes of Shareholders, namely holders of A Shares and holders of H Shares. The rights conferred on any class of Shareholders may not be varied or abrogated unless approved by a special resolution of Shareholders’ general meeting and by holders of Shares of that class at a separate meeting conducted in accordance with the Articles of Association. The circumstances which shall be deemed to be a variation or abrogation of the rights of a class are listed in Appendix VIII to this prospectus. However, the procedures for approval by separate classes of Shareholders shall not apply (i) where we issue, upon approval by a special resolution of the Shareholders in a general meeting, either separately or concurrently once every 12 months, not more than 20% of each of our existing issued A Shares and H Shares, (ii) where our plan to issue A Shares and H Shares at the time of our establishment is implemented within 15 months from the date of approval of the relevant regulatory authorities of the PRC, including the CSRC and (iii) where the transfer of A Shares for listing and trading on the Hong Kong Stock Exchange as H Shares has been approved by the authorized securities approval authorities of the State Council, including the CSRC. Please see the subsection entitled “Transfer of our Company’s A Shares for Listing and Trading on the Hong Kong Stock Exchange as H Shares” in this prospectus for more details.

The differences between the A Shares and H Shares, including provisions on class rights, the dispatch of notices and financial reports to Shareholders, dispute resolution, registration of Shares on different branches of the register of Shareholders, the method of Share transfer and appointment of dividend receiving agents are set out in the Articles of Association and summarized in Appendix VIII to this prospectus. A Shares and H Shares will however rank pari passu with each other in all other respects and, in particular, will rank equally for all dividends or distributions declared, paid or made after the date in this prospectus. H Shareholders are not entitled to any dividend payable in respect of our distributable profits accumulated prior to January 1, 2010, including the distribution of RMB1,767.8 million approved by our Company’s 2009 annual general meeting on March 25, 2010. For further information on this distribution, please see the section entitled “Financial Information — Dividend Policy” in this prospectus. All dividends in respect of the H Shares are to be calculated in RMB and paid by us in Hong Kong dollars whereas all dividends in respect of A Shares are to be paid by us in RMB. In addition to cash, dividends may be distributed in the form of Shares. For holders of H Shares, dividends in the form of Shares will be distributed in the form of additional H Shares. For holders of A Shares, dividends in the form of Shares will be distributed in the form of additional A Shares.

Transfer of our Company’s A Shares for Listing and Trading on the Hong Kong Stock Exchange as H Shares

A Shares and H Shares are generally neither interchangeable nor fungible, and the market prices of our A Shares and H Shares may be different after the Global Offering.

However, if any holder of our A Shares is to transfer its A Shares to overseas investors for listing and trading on the Hong Kong Stock Exchange, such transfer and conversion will need to be approved by the relevant PRC

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SHARE CAPITAL

regulatory authorities, including the CSRC as well as go through the relevant methodology and procedure as disclosed below:

• (1) The holder of A Shares is to obtain the requisite approval of the CSRC or the authorized securities approval authorities of the State Council for the transfer of all or part of its A Shares into H Shares.

• (2) The holder of A Shares is to issue to us a removal request in respect of a specified number of the Shares attaching the relevant documents of title.

• (3) Subject to obtaining the approval of the Board, we would then issue a notice to the H Share Registrar with instructions that, with effect from a specified date, our H Share Registrar is to issue the relevant holder with H Share certificates for such specified number of H Shares.

• (4) Such specified number of A Shares to be transferred to H Shares are then re-registered on the H Share register maintained in Hong Kong on the condition that:

• (a) our H Share Registrar lodges with the Hong Kong Stock Exchange a letter confirming the proper entry of the relevant H Shares on the H Share register and the due dispatch of H Share certificate; and

• (b) the admission of the H Shares (converted from A Shares) to trade in Hong Kong will comply with the Listing Rules and the General Rules of CCASS and the CCASS Operational Procedures in force from time to time.

• (5) Upon completion of the transfer and conversion, the shareholding of the relevant holder of A Shares in our A Share register will be reduced by such number of A Shares transferred and the number of H Shares register will correspondingly be increased by the same number of H Shares.

• (6) We will comply with the Listing Rules to inform our Shareholders and the public by way of an announcement of such fact not less than three days prior to the proposed effective date.

Approval from holders of A Shares regarding the Global Offering

Approval from holders of A Shares is required for our Company to issue H Shares and seek the listing of H Shares on the Hong Kong Stock Exchange. Such approval was obtained by us at the extraordinary general meeting of our Company held on September 25, 2009 and is subject to the following conditions:

• (1) Size of the offer

The proposed number of H Shares to be offered shall not exceed 15% of the total issued share capital after the issuing of H Shares and the Over-allotment Option shall not exceed 15% if exercised.

• (2) Method of listing

The method of listing shall be by way of international offering and public offer for subscription in Hong Kong.

• (3) Target investors

The H Shares shall be issued to professional, institutional, individual investors and the public.

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SHARE CAPITAL

(4) Price determination basis

The issue price of the H Shares will be determined after due consideration of the interests of existing Shareholders of our Company, according to international practice, through the demands for orders and bookbuilding process, subject to the domestic and overseas capital market conditions and by reference to the valuation level of comparable companies in domestic and overseas markets.

(5) Validity period

The issue of H Shares and listing of H Shares on the Hong Kong Stock Exchange shall be completed within 12 months from the Shareholders’ meeting dated September 25, 2009.

Other than the Global Offering, our Company has not approved any other Share issue plan.

Transfer of the State-owned Shares to the NSSF

Pursuant to the Implementing Measures for the Transfer of Part of the State-owned Shares to the NSSF in Domestic Securities Market , or the Transfer Measures, jointly issued by the Ministry of Finance, the SASAC, the CSRC and the NSSF, state-owned enterprises holding the Shares prior to our A Share offering, as approved by the SASAC or other relevant state-owned assets supervision and administrative authorities, shall transfer to the NSSF part of their A Shares in our Company that, in the aggregate, equal to 10% of the aggregate number of A Shares offered in the A Shares offering. If a state-owned Shareholder is obliged to make the transfer to the NSSF under the Transfer Measures and has disposed of its A Shares, it shall discharge its transfer obligations under the Transfer Measures by paying to the NSSF the cash equivalent of the A Shares that it was obligated to transfer. The NSSF succeeds to any statutory or contractual lock ups of the transferring state-owned Shareholder and is subject to an additional lock up period of three years. The NSSF is entitled to investment returns arising from the transferred A Shares and may dispose of such A Shares subject to its lock up obligations. However, the NSSF will not participate in the day-to-day management of our Company.

Pursuant to the Transfer Measures, the supervision and administration agencies of state-owned assets will issue a preliminary approval based on the available information on the identities of our state-owned Shareholders and the number of Shares transferred. The Ministry of Finance, SASAC, CSRC and NSSF will make a joint public announcement stating our Company’s name, the name of the state-owned Shareholders and the number of Shares that should be transferred. Shares to be transferred shall be frozen from the date of the announcement.

We and our state-owned Shareholders who are obliged to transfer their A Shares to NSSF have followed the procedures as required under the Transfer Measures and as confirmed by our PRC legal advisor, our state-owned Shares which shall be transferred have been frozen pending SASAC’s unified arrangement relating to the transfer. As of April 30, 2010, the transfer had not been completed and as it is an administrative measure taken by the relevant government bureau, we have no information and are unable to speculate on when the transfer will be completed. Our PRC legal advisor has confirmed that we and our state-owned Shareholders who are obliged to transfer their A Shares to NSSF have complied with the requirements as stipulated in the Transfer Measures. As the transfer of Shares is conducted between our state-owned Shareholders and the NSSF, the transfer has no material adverse effect on our Group.

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SHARE CAPITAL

The table below sets out the shareholding structure upon the completion of transfer of A Shares to the NSSF and on the assumption that the transfer was completed before the Global Offering:

Xinjiang Wind Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CB Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yuanjing Xinfeng . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wind Power Research Centre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yuanjing Xinneng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yuanfeng Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Directors and Senior Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NSSF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other A Share Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Shareholding structure	Shareholding structure
	Number of shares held 398,246,648 343,316,075 161,280,000 97,776,000 46,690,986 40,320,000 3,024,000 97,505,208 22,400,000 1,029,441,083	percentage (%)
		17.8% 15.3% 7.2% 4.4% 2.1% 1.8% 0.1% 4.4% 1.0% 45.9%

According to the Interim Measures of the State Council on the Management of Reducing State Held Shares and Raising Social Security Funds issued by the State Council and the relevant requirements of SASAC on the transfer of state-owned Shares, our Company’s four state-owned Shareholders, namely Xinjiang Wind Power, China Water, Wind Power Research Centre and Solar Energy Co., shall transfer their state-owned Shares representing 10% of the amount of such H Share offering to the NSSF and convert them into H Shares. Such state-owned Shares will be converted into H Shares on a one-for-one basis and such H Shares converted will not constitute part of the Offer Shares. These four state-owned Shareholders will not receive any proceeds from the transfer of H Shares to the NSSF or any subsequent disposal of such H Shares by the NSSF. They have already submitted an application to the Xinjiang SASAC and issued an undertaking letter regarding the transfer of the stateowned Shares. Such conversion and holding of H Shares by NSSF in relation to the Global Offering has been approved by the relevant authorities including the CSRC on May 11, 2010[(1)] .

The table below sets out the number of H Shares to be transferred to the NSSF before and after the exercise of the Over-allotment Option:

the Over-allotment Option:
Xinjiang Wind Power . . . . . . . . . . . . . . . . . . . . . . . . . China Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wind Power Research Centre . . . . . . . . . . . . . . . . . . . Solar Energy Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	The number of H Shares to be transferred to the NSSF
	(assuming the Over-allotment Option is not exercised) 19,414,146 16,736,333 2,276,142 1,102,779 39,529,400	(assuming the Over-allotment Option is exercised in full)
		22,326,262 19,246,779 2,617,563 1,268,196
		45,458,800

(1) The approval was issued on December 31, 2009 by the SASAC on the condition that the Over-allotment Option may be exercised in full and that up to 454,588,000 H Shares are issued. If the amount of H Shares issued is less than the foregoing amount of Shares stated, the number of Shares transferred by each of the four companies stated above will decrease accordingly. According to the letter issued by the NSSF on February 3, 2010 (Shebaojijingfa [2010] No. 25), the NSSF agreed, among other things, that application be made to have part of the transferable state-owned Shares held by Xinjiang Wind Power, China Water, Wind Power Research Centre and Solar Energy Co. converted into H Shares when we submitted a listing application to CSRC, and that registration be made with the corporate investor account set up by the NSSF at HKSCC with respect to 10% of the actual number of H Shares issued.

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SHARE CAPITAL

Option to Exchange Vensys AG’s Shares

On January 24 and 25, 2008, Vensys/Innowind, Saarwind (both Vensys/Innowind and Saarwind as the sellers), Goldwind Windenergy (as purchaser), our Company (as related party of purchaser) and Vensys AG entered into the Vensys Shares SPA. Vensys/Innowind, Saarwind, Windpark, Goldwind Windenergy, Vensys AG and our Company entered into the Vensys Supplemental Agreements on May 14, 2010. Vensys/Innowind, Saarwind and Windpark are all Independent Third Parties of our Company, save for their interests in Vensys AG as well as Mr. Ju¨rgen Rinck, one of the shareholders of Saarwind, and Mr. Uwe Hinz, one of the shareholders of Vensys/Innowind, being our vice president and chief technology officer, and the deputy engineer of our Company, respectively.

According to the Vensys Shares SPA and the Vensys Supplemental Agreement mentioned above, our Company granted each of the shareholders (i.e. Vensys/Innowind, Saarwind and Windpark) of the remaining 30.0% equity interest of Vensys AG the Vensys Option. Pursuant to the Vensys Option, each of Vensys/Innowind, Saarwind and Windpark has an option to exchange its remaining shares of Vensys AG in part or total into our Shares at the price of EUR11.78 per share of Vensys AG and shall be subject to the PRC laws, the relevant regulations of the PRC securities regulatory authority and the rules of the stock exchange on which our Shares are listed on the date of the exercise of the Vensys Option. The exchange share price of EUR11.78 per share of Vensys AG was the same as the share price at which our Company acquired a 70% equity interest in Vensys AG, which was based on the then valuation of Vensys AG. The number of our Shares to be exchanged upon the exercise of the Vensys Option will be calculated based on multiplying the number of shares of Vensys AG to be exchanged by the price of EUR11.78 divided by the market price of our Shares at the time the Vensys Option is exercised. The fair value of the Vensys Option as at April 30, 2008, the date of completion of our acquisition of the 70% equity interest in Vensys AG, was EUR4.46 million. Vensys/Innowind, Saarwind and Windpark are entitled to request to execute the Vensys Option from December 26, 2010 onwards. If Vensys/Innowind, Saarwind and Windpark fail to, or are unable to, exercise the Vensys Option before December 26, 2011, it will lapse automatically. Grant of the Vensys Option to each of Vensys/Innowind, Saarwind and Windpark was part of terms of the Vensys Shares SPA and the Vensys Supplemental Agreement, based on arm-length negotiations, and served the purposes of (i) incentivizing Vensys/Innowind, Saarwind and Windpark to enhance the synergy resulting from the Vensys AG acquisition; and (ii) enabling us to gain access to the remaining 1.5 million shares in Vensys AG held by Vensys/Innowind, Saarwind and Windpark.

If our Shares cannot be bought and sold freely when Vensys/Innowind, Saarwind and Windpark exercise the Vensys Option in accordance with the above requirements, or if Vensys/Innowind, Saarwind and Windpark as companies cannot convert the shares in Vensys AG to our Shares according to the German laws or the PRC laws, or Vensys/Innowind, Saarwind and Windpark do not want to accept the conversion price prescribed under PRC laws or by the PRC securities regulatory authorities or the stock exchange on which our Shares are listed, Vensys/Innowind, Saarwind and Windpark can sell to Goldwind Windenergy their remaining shares of Vensys AG in part or total at the price of EUR11.78 per share of Vensys AG and this must be accepted by Goldwind Windenergy.

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SHARE CAPITAL

It is uncertain as to whether the holders of the Vensys Option would like to exchange into our A Shares or H Shares in the event that they exercise their Vensys Option. Furthermore, it is also uncertain as to whether the relevant regulatory authorities would approve their application to exchange into our A Shares or H Shares. If Vensys/Innowind, Saarwind and Windpark exercise the Vensys Option to exchange their remaining shares of Vensys AG into our A Shares or H Shares, our Company will comply with the relevant requirements of the SZSE Listing Rules or the Listing Rules requirements. Since Vensys/Innowind, Saarwind and Windpark are only entitled to request to execute the Vensys Option from December 26, 2010 onwards pursuant to the Vensys Shares SPA, we have yet to apply for such approval, including approvals from the CSRC and the Hong Kong Stock Exchange in respect of our Shares upon exercise of the Vensys Option.

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CORNERSTONE INVESTOR

The Cornerstone Placing

In May 2010, we entered into a cornerstone placing agreement with the Cornerstone Investor, who agreed to subscribe at the Offer Price for such number of H Shares that may be purchased with an aggregate amount of US$40 million. Assuming an Offer Price of HK$21.40, the mid-point of the estimated Offer Price range set forth in this prospectus, the total number of H Shares to be subscribed for by the Cornerstone Investor would be 14,549,400 H Shares, representing approximately 0.6% of our issued and outstanding share capital or 3.3% of the H Shares after the Global Offering (assuming that the Over-allotment Option is not exercised). The Cornerstone Investor is independent from our Company. The Cornerstone Investor will not subscribe for any H Shares under the Global Offering other than pursuant to the relevant cornerstone placing agreement. Immediately following the completion of the Global Offering, the Cornerstone Investor will not have any board representation in our Company, nor will the Cornerstone Investor become a Substantial Shareholder of our Company. The shareholding of the Cornerstone Investor will be counted towards the public float of our H Shares.

The cornerstone placing forms part of the International Offering. The H Shares to be subscribed for by the Cornerstone Investor will not be affected by any reallocation of the H Shares between the International Offering and the Hong Kong Public Offering in the event of over-subscription under the Hong Kong Public Offering as described in the section entitled “Structure of the Global Offering — The Hong Kong Public Offering” in this prospectus. Details of the allocations to the Cornerstone Investor will be disclosed in the announcement of results of allocations in the Hong Kong Public Offering to be published on June 21, 2010.

Our Cornerstone Investor

A brief description of our Cornerstone Investor is set out below:

Chow Tai Fook Nominee Limited

Chow Tai Fook Nominee Limited is a company wholly owned by Dato Dr. Cheng Yu-Tung (“ Dr. Cheng ”). Dr. Cheng is the chairman and a director of New World Development Company Limited, which is a public company listed in Hong Kong.

Conditions Precedent

The subscription obligation of the Cornerstone Investor is subject to, among other things, the following conditions precedent:

• (1) the Hong Kong Underwriting Agreement and the International Underwriting Agreement having been entered into and having become effective and unconditional (in accordance with their respective original terms, as subsequently varied by agreement of the parties thereto or waived, to the extent it may be waived, by the relevant parties) by no later than the time and date as specified in such agreements;

• (2) the Listing Committee of the Hong Kong Stock Exchange granted the listing of, and permission to deal in, the H Shares and such approval or permission not having been revoked; and

• (3) neither of the Hong Kong Underwriting Agreement nor the International Underwriting Agreement having been terminated.

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CORNERSTONE INVESTOR

Restrictions on the Cornerstone Investor’s Investment

The Cornerstone Investor has agreed that, without the prior written consent of our Company and the Joint Bookrunners, it will not, whether directly or indirectly, at any time during the period of six months following the Listing Date, dispose of (as defined in the relevant cornerstone placing agreement) any of the H Shares subscribed for by it pursuant to the relevant cornerstone placing agreement (or any interest in any company or entity holding any of the H Shares), other than transfers to any wholly-owned subsidiary or affiliate (as the case may be) of such Cornerstone Investor provided that such wholly-owned subsidiary or affiliate undertakes in writing to, and such Cornerstone Investor undertakes to procure that such wholly-owned subsidiary or affiliate will, abide by the restrictions on disposals imposed on the Cornerstone Investor.

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FINANCIAL INFORMATION

You should read this section in conjunction with our consolidated financial information, including the notes thereto, as set out in “Appendix I — Accountants’ Report” and “Appendix IV — Unaudited Interim Financial Report” to this prospectus. The consolidated financial information has been prepared in accordance with IFRS.

The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. These statements are based on assumptions and analysis made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ significantly from those projected in the forward-looking statements include, but are not limited to, those discussed and elsewhere in this prospectus, particularly in “Risk Factors”.

OVERVIEW

We are a leading manufacturer of wind turbine generators and provider of complete wind power solutions in China. Our primary business is WTG R&D, manufacturing and sales. We also engage in the provision of comprehensive wind power services and the development of wind farms for sale to wind farm operators and investors. As an enterprise with one of the longest track records in the PRC wind power equipment manufacturing industry, we possess substantial technical expertise, strong independent R&D capabilities, and have successfully introduced innovative leading edge wind turbine technologies to the PRC market. Most of our core management team have specialized in wind power for many years, and possess significant industry experience in wind energy development and operation, giving us a deep understanding of our client base and their operational needs. Our comprehensive quality assurance system and after-sales service operations have also contributed to achieving our dominant market position. According to the International Wind Energy Development — World Market Update published by BTM, the accumulated installed capacity of WTGs manufactured by us reached 5.3 GW as of December 31, 2009, representing a market share in the PRC of approximately 21%. In 2009, our market share in the PRC in terms of newly installed capacity increased approximately 2 percentage points as compared to the previous year to approximately 20%, ranking us the fifth largest WTG manufacturer globally and the second largest in the PRC. The WWEA awarded us the World Wind Energy Award 2006 for our contribution to the development of the international wind power industry.

Our revenue primarily derives from our three business segments: WTG R&D, manufacturing and sales, wind power services and wind farm investment, development and sales. In particular, the revenue from WTG R&D, manufacturing and sales is the most significant component of our total revenue. For the three years ended December 31, 2007, 2008 and 2009, revenue from WTG R&D, manufacturing and sales was RMB3,079.2 million, RMB6,299.3 million and RMB10,347.4 million, respectively, accounting for 99.7%, 98.2% and 97.0% of our total revenue.

During the Track Record Period, we have experienced significant growth in revenues and maintained good profitability. For the three years ended December 31, 2007, 2008 and 2009, our revenue was RMB3,089.0 million, RMB6,417.3 million and RMB10,666.5 million, respectively, and our profit attributable to owners of our Company was RMB624.6 million, RMB906.4 million and RMB1,745.6 million, respectively, growing at a CAGR of 85.8% and 67.2% between 2007 and 2009, respectively.

BASIS OF PRESENTATION

Our financial information has been prepared in accordance with IFRS and under the historical cost convention, except for certain derivative financial instruments, which have been measured at fair value.

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FINANCIAL INFORMATION

The preparation of financial information in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgment in the process of applying our accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial information are disclosed in the Accountants’ Report included as Appendix I to this prospectus.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Demand for wind power

Demand for our products and services have been, and will continue to be, affected by demand for wind power. The increase in our total installed capacity sold during the Track Record Period was largely due to the increase in demand for wind power in the PRC. The increase in demand for wind power in the PRC has largely been driven by, among other factors, policy and tariff support from the PRC Government and improvements in local power grids. According to BTM, China’s total installed wind power capacity increased from 406 MW in 2001 to 25,853 MW in 2009, growing at a CAGR of 81.0%. According to data from the CEIC, installed wind power capacity in the PRC exceeded 99% of the total renewable energy installed capacity by December 31, 2009, making wind power the main source of renewable energy in China. In addition, according to BTM, China became the world’s largest wind power market in 2009 in terms of newly installed wind power capacity with 13.8 GWof new installations, which exceeded the total installed wind power capacity in China as at the end of 2008. Going forward, as we increase our overseas sales, we also anticipate demand for our products and services to be affected by the global demand for wind power. Global demand for wind power has been driven by factors including increasing concerns over energy independence and energy security, environmental concerns and increasing costs of fossil fuels, resulting in global installed wind power capacity increasing from 24.9 GW in 2001 to 160.1 GW in 2009 at a CAGR of 26.2%, according to BTM.

In addition, the cost of producing wind power has also decreased and is generally lower than other forms of renewable energy, making wind power a relatively more attractive investment. Moreover, due to the expansion in the scale of wind farm projects, technological advancements, greater economies of scale in the production of wind power equipment as well as more low cost financing opportunities for wind farm projects, the cost of wind power is expected to continue to decline and eventually reach a level comparable to traditional energy sources. In the PRC, the investment risk may be lower than some other countries as power grids in the PRC are required to purchase all power generated from renewable energy sources, thus mitigating the risk of reduced utilization rates caused by a decrease in demand for power. We believe that investments in wind power will continue to increase, which we anticipate will lead to an increase in demand for our products and services.

Government policies encouraging the use and development of renewable energy sources

Demand for our products and services and our results of operations during the Track Record Period have benefited from environmental regulations and programs in the PRC, which encourage the use and development of renewable energy sources, in particular, wind power generation. For instance, according to the Medium and LongTerm Development Plan of Renewable Energy promulgated by the NDRC on August 31, 2007, for investors who have attributable installed capacity of over 5.0 GWof power generation, attributable installed capacity of renewable power generation owned must exceed 3% and 8% of attributable installed capacity owned by 2010 and 2020, respectively. In addition, we have also benefited from certain tax regulations such as the Circular on the Comprehensive Utilization of Some Resources and VAT Policy on Other Products jointly issued by the Ministry of Finance and the State Administration of Taxation on December 1, 2001, which stipulated the policy of reducing the value-added tax levied on electricity generated from wind power by 50%.

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FINANCIAL INFORMATION

These and other relevant policies have benefited our results of operations by encouraging the demand for wind power and thus our products and services, and we anticipate that our results of operations will continue to be affected by government policies encouraging the adoption of renewable energy sources and, in particular, wind power. Please see the section entitled “Regulations” in this prospectus for a more detailed discussion of the various policies and regulations enacted by the PRC Government in relation to renewable energy.

Ability to design and launch technologically advanced and cost-competitive WTGs and WTG components

Our operating results and future growth depend on our ability to continue to develop and launch technologically advanced and cost-competitive WTGs and core components. We have already completed the 2.5 MW and 3.0 MW WTG prototypes and are developing our 5.0 MW WTG. We also continue to optimize the performance of our products through our R&D efforts, and during the Track Record Period, the total amount of our R&D expenditures (including R&D expenses and capitalized R&D costs) were RMB34.1 million, RMB79.8 million and RMB93.2 million, respectively. We have been able to maintain relatively low R&D expenditures due to the low operational costs of our R&D centers in the PRC, including staff costs, components used in our R&D processes and depreciation on our laboratory equipment. For instance, we will continue to develop and introduce more advanced WTGs customized for optimum performance under diverse operating conditions such as low and high temperatures, high altitudes, low wind velocity and coastal areas. As our customers’ needs evolve, the wind turbine specifications they require typically change as well. Our ability to design and develop new products that meet these changing requirements has been and will continue to be critical to our ability to maintain and increase our total installed capacity sold and profitability. As a result, we expect to continue to make significant investments in R&D, particularly with respect to designing and developing more technologically advanced and cost-competitive WTGs and core WTG components.

Total Installed capacity sold and product mix of our WTGs

Our results of operations have been and are expected to continue to be substantially affected by our total installed capacity sold and our WTG product mix. Set out below is a breakdown of our total installed capacity sold by WTG series for the three years ended December 31, 2007, 2008 and 2009, respectively.

WTG 1.5 MW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750 kW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended December 31,	Year ended December 31,	Year ended December 31,	Year ended December 31,
	Installed capacity sold 2007 (MW) % 85.5 11.3 669.0 88.7 754.5 100.0	Installed capacity sold 2008 (MW) % 519.0 37.8 853.5 62.2 1,372.5 100.0	2009
			Installed capacity sold (MW) % 1,591.5 78.2 444.0 21.8 2,035.5 100.0
				100.0

Increases in our revenue during the Track Record Period were largely due to the overall increases in our total installed capacity sold and changes in our WTG product mix. Our total installed capacity sold was 754.5 MW, 1,372.5 MW and 2,035.5 MW for the three years ended December 31, 2007, 2008 and 2009, respectively. The increase in our total installed capacity sold during the Track Record Period was mainly due to market recognition of our direct-drive permanent magnet full-power rectification technology which resulted in increase in demand for our products. We commenced selling our 1.5 MW WTGs during the year ended December 31, 2007 and it became our primary product sold during the year ended December 31, 2009. As our 1.5 MW WTGs generally have a higher ASP

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than our 750 kW WTGs, the increased proportion of 1.5 MW WTGs in our total installed capacity sold during the Track Record Period has also been a significant factor driving our revenue growth.

In addition, changes in our WTG product mix during the Track Record Period have also affected our gross margins. Please see the subparagraph headed “— Results of Operations — Gross profit and gross margin” in this prospectus for further details.

The ASP of our WTGs sold

Our results of operation have been affected by the ASP of our WTGs sold. The ASP of our WTGs sold for the three years ended December 31, 2007, 2008 and 2009 is set out below.

three years ended December 31, 2007, 2008 and 2009 is set out below.
ASP (VAT excluded) 750 kW WTG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 MW WTG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended December 31,
	2007 2008 RMB/kW 3,767 3,868 5,689 5,327	2009
		3,941 5,333

The ASP of our 750 kW WTGs increased slightly during the Track Record Period, mainly due to increased sales of the 750 kW WTGs which were sold together with complementary components such as towers, at a higher price. In addition, the increase in the ASP of our 750 kW WTGs in 2009 was also due to certain tax benefits granted by the PRC Government.

The ASP of our 1.5 MW WTGs decreased in the year ended December 31, 2008, primarily because the prices of our 1.5MW WTGs were reduced to reflect the significant decrease in our cost resulting from increased economies of scale achieved in our production. The ASP of our 1.5 MW WTGs increased in the year ended December 31, 2009, primarily because our 1.5 MW WTGs manufactured in Germany were sold at a higher price than those sold in the PRC.

During the Track Record Period, the ASP of our WTGs had remained largely stable, but we had proactively adjusted our selling prices in the midst of competition, and implemented the following marketing strategies to address increasing competition: (i) increasing our R&D efforts to develop more advanced WTGs and improve the performance of our WTGs; and (ii) reducing costs through investment in cost control measures and optimization of our supply chain to further enhance our price competitiveness.

Supply and cost of raw materials and components

Our results of operations are affected by our ability to procure the raw materials and components necessary to manufacture our products. We have the in-house capabilities to develop, design and manufacture certain core components. We also purchase components from suppliers in the PRC, and have three to five designated suppliers for some of our core components. Although we have maintained stable relationships with most of our suppliers and believe that we are able to purchase the requisite components on reasonable commercial terms from other qualified suppliers when necessary, our results of operations may be materially and adversely affected if we were to encounter any shortages in our supply of components.

In addition, the primary raw materials used in our components include steel, copper and rare earth materials. Accordingly, our results of operations are affected by movements in prices for steel, copper and rare earth materials which have generally fluctuated during the Track Record Period. For instance, a significant fluctuation in the price

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FINANCIAL INFORMATION

of raw materials in China in 2008 affected the price of the components required for our products. The price of copper fluctuated significantly during the Track Record Period, especially in the second half of 2008 and early 2009. For instance, according to the London Metals Exchange, or the LME, the copper price reached a high of approximately US$8,900 per ton in July 2008 and dropped to a low of approximately US$2,800 per ton in late December 2008. In April 2010, the average LME copper price was around US$7,700 per ton. The price of steel also fluctuated significantly during the Track Record Period, especially in the second half of 2008 and the first half of 2009. For instance, according to Shanghai Wind Info, the spot price of 6mm steel plate in Beijing reached a high of approximately RMB7,000 per ton in May 2008 and dropped to a low of approximately RMB3,500 per ton in April 2009. In April 2010, the average spot price of 6mm steel plate in Beijing was around RMB5,000 per ton. Similar price trends have been observed for other raw steel products in the same period. We do not hedge our exposure to movements in the prices of steel, copper, rare earth materials and other raw materials, as we generally do not directly purchase raw materials for our production and we have stable supply of parts and components at relatively favorable prices. We are thus exposed to the risk of increases in the prices of these raw materials and components and to the extent we cannot fully pass on the price increases in these raw materials and components to our customers, or at all, our business operations and financial performance could be affected. However, because we do not directly purchase steel, copper, rare earth materials and other raw materials, historically the fluctuations of our costs had been much less than those of the foregoing raw materials. Going forward, we believe the impact of the fluctuation in the prices of raw materials on our business is limited mainly because (i) we have signed contracts for a term of generally one to two years with suppliers of parts and components to ensure stable component prices; (ii) our suppliers are generally willing to grant us relatively favorable prices as we are often their largest customer, and we have maintained an outstanding credit rating and reputation with them; and (iii) our suppliers may not be able to pass on substantial cost increases to us due to the intense competition among them as a result of our lack of reliance on any particular suppliers.

Our results of operations have historically been subject to seasonal fluctuations

Sales from our WTG R&D, manufacturing and sales business segment have been subject to cyclical fluctuations during the Track Record Period. Depending primarily on the location of our customers’ wind farms, our sales may be higher during the end months of the year due to our customers’ wind farms being located mainly in northern China, where, because of weather conditions, the construction of wind farm projects tends to commence at the beginning of the year, with construction carried out through the year, and installation at the end of the year.

While we anticipate the cyclicality of our business may decrease due to increasing numbers of our customers located in regions other than northern China, our results of operations may continue to fluctuate from quarter to quarter. Comparisons of our sales and operating results between the different periods within a single year, or between the same periods in different financial years, are not necessarily meaningful and should not be relied on as indicators of our performance.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those that require management to exercise judgment and make estimates that yield materially different results if management were to apply different assumptions or make different estimates. Our financial statements have been prepared in accordance with IFRS. Our principal accounting policies are set forth in Note 3.2 to Accountants’ Report, attached as Appendix I to this prospectus. IFRS requires that we adopt accounting policies and make estimates that the Directors believe are most appropriate in the circumstances for the purpose of giving a true and fair view of our results and financial condition. We believe the most complex and

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FINANCIAL INFORMATION

sensitive judgments, because of their significance to our results of operations and financial condition, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Actual results in these areas could differ from our estimates. The critical accounting policies we have adopted are described below.

Revenue recognition

Revenue is recognized when it is probable that the economic benefits will flow to us and when the revenue can be measured reliably on the following bases:

• (a) from the sale of individual wind turbines based on standard solutions (supply-only projects) as well as spare parts sales, when the significant risks and rewards of ownership have been transferred to the buyer, provided that we maintain neither managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold;

• (b) from the sale of electricity, upon the transmission of electric power to the power grid companies, as determined based on the volume of electric power transmitted and the applicable fixed tariff rates agreed with the respective electric power grid companies periodically;

• (c) from construction contracts, on the percentage of completion basis;

• (d) from the rendering of wind power services, when the agreed services are performed, provided over the term of the agreement;

• (e) rental income, on a time proportion basis over the lease terms;

• (f) interest income, on an accrual basis using the effective interest method by applying the rate that discounts the estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset; and

• (g) dividend income, when the shareholders’ right to receive payment has been established.

Basis of consolidation

The consolidated financial statements include the financial statements of our Company and our subsidiaries, including wind farm project companies. The results of subsidiaries are consolidated from the date of incorporation or the date of acquisition, being the date on which our Group obtains control, and continue to be consolidated until the date on which such control ceases. All income, expenses and unrealised gains and losses resulting from intercompany transactions and intercompany balances within our Group are eliminated on consolidation in full. Upon disposal of subsidiaries, including wind farm project companies, gains on disposal of subsidiaries are recorded in other income and gains in the statements of comprehensive income.

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined on the weighted average basis and, in the case of work in progress, semi-finished goods and finished goods, comprises direct materials, direct labor and an appropriate proportion of overheads. Net realizable value is based on estimated selling prices less any estimated costs to be incurred to completion and disposal.

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FINANCIAL INFORMATION

Impairment of trade and bills receivables

In determining impairment losses, we conduct regular reviews of the aging analysis and evaluation of collectibles on a case by case basis. We estimate that certain trade and bills receivables unsettled over one year are still recoverable based on our analyses of the respective credit histories and financial positions of the relevant customers. However, such estimates involve inherent uncertainties, and the actual unrecoverable amount may be higher than the amount estimated.

Provisions

A provision is recognized when a present obligation (legal or constructive) has arisen as a result of a past event, and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

When the effect of discounting is material, the amount recognized for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in “Finance costs” in the statement of comprehensive income.

Provisions for product warranties granted by us on certain products are recognized based on sales volume and past experience of the level of repairs, discounted to their present values as appropriate.

Property, plant and equipment and depreciation

Property, plant and equipment, including wind farms under operation, other than construction in progress, are stated at cost less accumulated depreciation and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the income statement in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation.

Depreciation is calculated on a straight-line basis to write off the cost of each item of property, plant and equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as follows:

ws:
Buildings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2.4% to	3.2%
Machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4.8% to	19.2%
Vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9.6% to	19.2%
Electronic equipment and others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9.6% to	19.2%

Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated on a reasonable basis among the parts and each part is depreciated separately.

Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end.

An item of property, plant and equipment and any significant part initially recognised is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or

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retirement is recognized in profit or loss in the year the asset is derecognized and is equal to the difference between the net sales proceeds and the carrying amount of the relevant asset.

Construction in progress represents property, plant and equipment (including wind farms under construction) which is stated at cost less any impairment losses, and is not depreciated. Cost comprises the direct costs of construction and capitalized borrowing costs on related borrowed funds during the period of construction. Construction in progress is reclassified to the appropriate category of property, plant and equipment when completed and ready for use.

Goodwill

Goodwill arising on the acquisition of subsidiaries, associates and jointly-controlled entities represents the excess of the cost of the business combination over our interest in the net fair value of the acquirees’ identifiable assets acquired, and liabilities and contingent liabilities assumed as at the date of acquisition.

Goodwill arising on acquisition is recognized in the consolidated statement of financial position as an asset, initially measured at cost and subsequently at cost less any accumulated impairment losses. In the case of associates and jointly-controlled entities, goodwill is included in the carrying amount thereof, rather than as a separately identified asset in the consolidated statement of financial positions.

The carrying amount of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. We perform our annual impairment test of goodwill as at December 31. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of our cash-generating units, or group of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether our other assets or liabilities are assigned to those units or groups of units.

Impairment is determined by assessing the recoverable amount of the cash-generating unit, or group of cashgenerating units to which the goodwill relates. Where the recoverable amount of the cash-generating unit, or group of cash-generating units is less than the carrying amount, an impairment loss is recognized. An impairment loss recognized for goodwill is not reversed in a subsequent period.

Where goodwill forms part of a cash-generating unit, or group of cash-generating units and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Intangible assets, other than goodwill

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value as at the date of acquisition. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are subsequently amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each financial year end.

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Patent and licenses

Purchased patents and licenses are stated at cost less any impairment losses and are amortized on the straightline basis over the shorter of their estimated useful lives of seven to ten years and the relevant license periods.

R&D costs

All research costs are charged to the statement of comprehensive income as incurred.

Expenditure incurred on projects to develop new products is capitalized and deferred only when we can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, our intention to complete and our ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Product development expenditure which does not meet these criteria is expensed when incurred.

Deferred development costs are stated at cost less any impairment losses and are amortized using the straightline basis over the commercial lives of the underlying products commencing from the date when the products are put into commercial production.

Derivative financial instrument

We are exposed to foreign currency risk on cash and cash equivalents, receivables, payables and bank loans that are denominated in a currency other than the respective functional currencies of our entities. The currencies giving rise to this risk are primarily the euro and U.S. dollar. We use forward currency contracts to hedge our foreign currency risk. Forward currency contracts are initially recognised at fair value on the date on which such derivative contracts are entered into and are subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. Any gains or losses arising from changes in fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in other comprehensive income. Since the hedge adopted by us could not meet the strict criteria for hedge accounting, all gains or losses arising from changes in fair value of the forward currency contracts are taken directly to profit or loss immediately.

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FINANCIAL INFORMATION

RESULTS OF OPERATIONS FOR THE TRACK RECORD PERIOD

The following discussion addresses the principal trends that have affected our results of operations during the Track Record Period. The following table sets forth our results of operations for the periods indicated.

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other income and gains, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Selling and distribution costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of profits and losses of: Jointly-controlled entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit attributable to: Owners of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007 2008 2009 Year ended December 31, RMB in million 3,089.0 6,417.3 10,666.5 (2,177.2) (4,895.9) (7,908.9) 911.8 1,521.4 2,757.6 38.2 337.3 335.6 (107.2) (286.7) (689.8) (161.9) (237.0) (276.3) (36.3) (145.9) (77.4) (22.9) (43.0) (62.8) — — (0.3) — — 4.0 621.7 1,146.1 1,990.6 8.1 (120.9) (200.0) 629.8 1,025.2 1,790.6 624.6 906.4 1,745.6 5.2 118.8 45.0 629.8 1,025.2 1,790.6

Revenue

We generate revenue from our three business segments: (i) WTG R&D, manufacturing and sales, (ii) wind power services and (iii) wind farm investment, development and sales. We generate revenue in the WTG R&D, manufacturing and sales business segment from our R&D, manufacturing and sales activities relating to our WTGs. We generate revenue in the wind power services business segment primarily from services such as wind farm EPC, transportation and maintenance. We generate revenue in our wind farm investment, development and sales business segment from the tariffs received for the power generated by our wind farms in operation.

The table below sets forth our revenue by our three business segments and their percentage of our total revenue for the periods indicated.

Revenue WTG R&D, manufacturing and sales . . . . . . . . Wind power services. . . . . . . . . . . . . . . . . . . . . Wind farm investment, development and sales . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Year ended December 31,	Year ended December 31,	Year ended December 31,	Year ended December 31,
	2007	% 99.7 0.3 — 100.0	2008	% 98.2 0.4 1.4 100.0	2009
	RMB in million 3,079.2 9.8 — 3,089.0		RMB in million 6,299.3 29.5 88.5 6,417.3		RMB in million 10,347.4 215.4 103.7 10,666.5	% 97.0 2.0 1.0
						100.0

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There was a change in our WTG product mix during the Track Record Period. For the two years ended December 31, 2007 and 2008, our 750 kW WTGs accounted for 88.7% and 62.2% of our total installed capacity sold, respectively. For the year ended December 31, 2009, 1.5 MW WTGs became our primary product and accounted for 78.2% of our total installed capacity sold.

Revenue from our wind power services segment primarily comprise wind farm maintenance and EPC revenue generated by our subsidiary, Beijing Tianyuan and transportation revenue generated by our subsidiary, XJ Tianyun.

Revenue from our wind farm investment, development and sales is generated from tariffs that our wind farms receive. We operate our wind farms and receive fees for the power generated before our wind farms are sold. Gains from the sales of our wind farms are recorded under other income and gains, net.

Cost of sales

Our cost of sales consists primarily of raw materials and components, labor, depreciation and amortization, other production costs and inventory changes and transferred fixed assets. Raw materials and components mainly include blades, generators, structural parts and electric control systems. Labor costs mainly include wages and salaries for our workers directly involved in our production processes and in the provision of wind power services. Depreciation expenses represent depreciation expenses for fixed assets we use in our business. Amortization represents amortization of certain intangible assets used in our business. Inventory changes represent the changes of work in progress and finished goods, and transferred fixed assets represent use of our WTGs as the fixed assets of our wind farms. The following table provides a breakdown of our cost of sales for the periods indicated:

Cost of sales Raw materials and components . . . . . . . . . . . . . Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation and amortization . . . . . . . . . . . . . . Other production costs . . . . . . . . . . . . . . . . . . . Inventory changes and transferred to fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Year ended December 31,	Year ended December 31,	Year ended December 31,	Year ended December 31,	% 116.6 1.1 0.7 4.1 (22.5) 100.0
	2007	% 111.4 0.4 0.2 1.7 (13.7) 100.0	2008	% 116.2 0.8 1.2 2.1 (20.3) 100.0	2009
	RMB in million 2,424.9 9.8 3.4 37.3 (298.2) 2,177.2		RMB in million 5,690.0 38.0 57.1 102.2 (991.4) 4,895.9		RMB in million 9,220.1 83.1 55.0 325.9 (1,775.2) 7,908.9

Gross profit and gross margin

Our gross profit is derived primarily from our WTG R&D, manufacturing and sales business segment. During the Track Record Period, our overall gross margin was 29.5%, 23.7% and 25.9%, respectively, and the gross profit margin for our WTG R&D, manufacturing and sales business segment was 29.3%, 23.0% and 25.4%, respectively.

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The following table shows the gross margins for our 750 kW WTGs and 1.5 MW WTGs during the Track Record Period:

Gross margin 750 kW WTG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 MW WTG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended December 31,	Year ended December 31,	Year ended December 31,
	2007 31.8 16.4	2008 % 28.0 18.5	2009
			32.8 24.1

The gross profit margin for our 750 kW WTGs decreased from 31.8% for the year ended December 31, 2007 to 28.0% for the year ended December 31, 2008, as a result of the increase in raw material prices in 2008. It increased to 32.8% for the year ended December 31, 2009 primarily due to the decrease in the prices of raw materials and components in 2009 as well as the optimization of our supply chain.

The increase in gross profit margin for our 1.5 MW WTGs in 2008 was mainly due to the decrease in cost as a result of the improvement of our economies of scale, even though prices of raw materials and components rose in 2008. The increase in gross profit margin for our 1.5 MW WTGs in 2009 was mainly due to the decrease in the prices of raw materials and components as well as the optimization of our supply chain.

Other income and gains, net

Our net other income and gains consist primarily of gains from sales of wind farms under our wind farm investment, development and sales business segment, including gains realized from the sales of wind power equipment resulting from such sales of wind farms. Expenses to operate wind farms we own are accounted for as part of costs of sales in the income statement rather than being net against other income and gains in the income statement. Other income and gains also include bank interest income, value-added tax refund, insurance compensation on product warranty expenditures, gross rental income and government grants received as financial subsidies for our R&D projects and upgrading of our production facilities.

We sold two wind farms in November 2008 and another two wind farms in March and November 2009. Sales of our wind farms depend on many factors, including our ability to acquire sites with suitable wind resources, our ability to successfully develop and operate newly constructed wind farms, and prevailing market conditions. There is no trend or pattern in the timing of our sale of wind farms. We recognised gains on sales of wind farms through disposals of subsidiaries which own the relevant wind farms.

Selling and distribution costs

Our selling and distribution costs consist primarily of product warranty provisions, delivery charges, insurance expenses, bidding service fees, labor costs, loading and unloading fees, travel expenses and other selling and distribution costs.

Administrative expenses

Administrative expenses consist primarily of R&D expenses, labor costs, taxes, depreciation, consultant fees, travel expenses and other expenses.

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Other expenses

Our other expenses consist primarily of impairment provisions in connection with our trade and bills receivables and bank processing fees.

Income tax

Under the New EIT Law, except for certain preferential tax treatment available to our Company and our subsidiaries, jointly-controlled entities and associates in the PRC, our PRC entities were subject to an enterprise income tax rate of 33%, 25% and 25% for the three years ended December 31, 2007, 2008 and 2009, respectively. Our Company was exempt from enterprise income tax from the start of the Track Record Period to March 31, 2008 in accordance with certain preferential tax policies issued by the government of Xinjiang. From April 1, 2008 to December 31, 2008, our Company was taxed at the preferential tax rate of 15% in accordance with policies encouraging the development of the western regions of the PRC. In addition, our Company has been identified as a “high and new technology enterprise” and is thus entitled to a preferential tax rate of 15% for the year ended December 31, 2009 and the two years ending December 31, 2010 and 2011.

Our overseas subsidiaries were subject to tax rates prevailing in those countries based on existing legislation, interpretations and practices in respect thereof during the Track Record Period. We did not pay any taxes in Hong Kong during the Track Record Period as we did not generate any assessable profits during this period.

YEAR ENDED DECEMBER 31, 2009 COMPARED TO YEAR ENDED DECEMBER 31, 2008

Revenue

Revenue increased by RMB4,249.2 million, or 66.2%, to RMB10,666.5 million for the year ended December 31, 2009 from RMB6,417.3 million for the year ended December 31, 2008. The increase in revenue was primarily due to the increase in revenue generated from our WTG R&D, manufacturing and sales business segment.

Revenue from our WTG R&D, manufacturing and sales business segment increased by RMB4,048.1 million, or 64.3%, from RMB6,299.3 million for the year ended December 31, 2008 to RMB10,347.4 million for the year ended December 31, 2009, primarily due to the increase in our total installed capacity sold and an increase in our ASP resulting from the increased sales of our 1.5 MW WTGs. Our total installed capacity sold increased by 663.0 MW, or 48.3%, from 1,372.5 MW for the year ended December 31, 2008 to 2,035.5 MW for the year ended December 31, 2009, mainly due to market recognition of our direct-drive permanent magnet full-power rectification technology and the subsequent increase in demand for our products. Our ASP also increased, primarily due to an increase in installed capacity sold generated from sales of our 1.5 MW WTGs, which have higher ASP than our 750 kW WTGs. Sales of 1.5 MW WTGs accounted for 78.2% of our total installed capacity sold for the year ended December 31, 2009, as compared to 37.8% of our total installed capacity sold for the year ended December 31, 2008, in line with our strategy of increasing the proportion of our 1.5 MW WTGs in our installed capacity sold.

Revenue from our wind power services increased by RMB185.9 million, or 627.7%, to RMB215.4 million for the year ended December 31, 2009 from RMB29.5 million for the year ended December 31, 2008. The increase was due in part to the RMB110.3 million increase in revenue, as compared to nil in the prior period as EPC services were not provided by Beijing Tianyuan until 2009. The increase was also due to the over twenty fold increase in revenue, from RMB3.4 million for the year ended December 31, 2008 to RMB97.9 million for the year ended December 31, 2009, generated by XJ Tianyun in connection with the transportation services it provides for our

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FINANCIAL INFORMATION

customers. This significant increase occurred because beginning in the fourth quarter of 2008, XJ Tianyun began to contract directly with wind farm operators for the transportation of our WTGs, and we began accounting for this revenue separately from our sales of WTGs.

Revenue from our wind farm investment, development and sales also increased, by RMB15.2 million, or 17.3% to RMB103.7 million for the year ended December 31, 2009 from RMB88.5 million for the year ended December 31, 2008 due to the increase in the installed capacity of our wind farms in operation and increase in the period of time that these wind farms were operated by us before being sold.

Cost of sales

Our cost of sales increased by RMB3,013.0 million, or 61.5%, to RMB7,908.9 million for the year ended December 31, 2009 from RMB4,895.9 million for the year ended December 31, 2008. The increase in cost of sales was primarily due to the increase in our total installed capacity sold, particularly as a result of the substantial increase in installed capacity sold from our 1.5 MW WTGs which has higher ASPs. This increase was partially offset by decreases in the costs of our raw materials and components as well as improved economies of scale in connection with the production of our 1.5 MW WTGs as a result of the improvement of technologies and our expansion of production facilities using part of the proceeds we received from our A Share offering in December 2007.

Gross profit and gross margin

Due to the foregoing, our gross profit was RMB2,757.6 million for the year ended December 31, 2009, representing an increase of RMB1,236.2 million, or 81.3%, from RMB1,521.4 million for the year ended December 31, 2008, and our gross margin increased to 25.9% for the year ended December 31, 2009 from 23.7% for the year ended December 31, 2008.

Other income and gains, net

Our net other income and gains decreased by RMB1.7 million, or 0.5%, to RMB335.6 million for the year ended December 31, 2009 from RMB337.3 million for the year ended December 31, 2008, primarily due to a decrease of gain on disposals of subsidiaries of RMB73.3 million, offset partly by an increase in the government grants we received of RMB41.1 million, or 386.2%, from RMB10.7 million for the year ended December 31, 2008 to RMB51.8 million for the year ended December 31, 2009, and an increase in gain on disposal of available-for-sale investments of RMB12.8 million for the year ended December 31, 2009 in connection with the sale of some of our interests in investee companies as compared to nil for the year ended December 31, 2008.

Selling and distribution costs

Selling and distribution costs for the year ended December 31, 2009 was RMB689.8 million, an increase of RMB403.1 million, or 140.6%, from RMB286.7 million for the year ended December 31, 2008. The increase in our selling and distribution costs was primarily due to the increase in product warranty provisions by RMB327.1 million, or 248.3%, to RMB458.8 million for the year ended December 31, 2009 from RMB131.7 million for the ended December 31, 2008. Product warranty provisions represent provisions for product warranties granted by us on certain products recognized based on sales volume and past experience of the level of repairs, discounted to their present values as appropriate. The increase in product warranty provision was primarily due to the substantial increase in sales of 1.5 MW WTGs, which generally require more expensive raw materials and components than those used for 750 kW WTGs. In addition, our insurance premium increased by

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RMB33.3 million, or 340.7%, from RMB9.8 million for the year ended December 31, 2008 to RMB43.1 million for the year ended December 31, 2009, primarily due to the increase in our total installed capacity sold.

Administrative expenses

Administrative expenses increased by RMB39.3 million, or 16.6%, to RMB276.3 million for the year ended December 31, 2009 from RMB237.0 million for the year ended December 31, 2008 primarily due to an increase in labor costs for our administrative staff. The salaries and benefits for our administrative staff increased by RMB21.1 million, or 26.2%, to RMB101.8 million for the year ended December 31, 2009 from RMB80.7 million for the year ended December 31, 2008, as a result of the increase in staff in connection with the expansion of our business.

Other expenses

Our other expenses decreased by RMB68.5 million, or 46.9%, to RMB77.4 million for the year ended December 31, 2009 from RMB145.9 million for the year ended December 31, 2008. The decrease in our other expenses was primarily due to a decrease in impairment provisions as a result of our improved collections in the year ended December 31, 2009.

Finance costs

Finance costs increased by RMB19.8 million, or 46.1%, to RMB62.8 million for the year ended December 31, 2009 from RMB43.0 million for the year ended December 31, 2008 primarily due to an increase of RMB32.1 million, or 45.3%, in our interest expenses from RMB70.8 million for the year ended December 31, 2008 to RMB102.9 million for the year ended December 31, 2009, in connection with an increase in our bank and other borrowings to RMB2,624.0 million as at December 31, 2009 from RMB1,331.7 million as at December 31, 2008. Our effective interest rate[(1)] decreased to 5.2% for the year ended December 31, 2009 from 7.2% for the year ended December 31, 2008.

Share of loss of jointly-controlled entities

Share of loss of our jointly-controlled entities was RMB0.3 million for the year ended December 31, 2009 versus nil for the year ended December 31, 2008 as we did not have any jointly-controlled entities during the year ended December 31, 2008. We established or acquired jointly-controlled entities during the year ended December 31, 2009.

Share of gains of associates

Share of gains of associates increased to RMB4.0 million for the year ended December 31, 2009 versus nil for the year ended December 31, 2008 as we did not have any associates during the year ended December 31, 2008. We established one associate during the year ended December 31, 2009 and a second became an associate during the year ended December 31, 2009 due to an increase in its registered capital contributed by us.

(1) Effective interest rates are calculated in the following manner: Finance cost (interest capitalized included) divided by average balance of interest-bearing bank and other borrowings (total interest-bearing bank and borrowings at the beginning of the period plus total interest-bearing bank and other borrowings at the end of the period divided by two).

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Profit before tax

For the foregoing reasons, profit before tax increased by RMB844.5 million, or 73.7%, to RMB1,990.6 million for the year ended December 31, 2009 from RMB1,146.1 million for the year ended December 31, 2008.

Income tax

We had a tax charge of RMB200.0 million for the year ended December 31, 2009 while we had a tax charge of RMB120.9 million for the year ended December 31, 2008. Our effective tax rates were 10.0% and 10.5% for the two years ended December 31, 2009 and 2008, respectively.

Profit for the year

As a result of the foregoing, profit for the year increased by RMB765.4 million, or 74.7%, to RMB1,790.6 million for the year ended December 31, 2009 from RMB1,025.2 million for the year ended December 31, 2008.

Profit attributable to minority interests

Our profit attributable to minority interests decrease by RMB73.8 million, or 62.1%, to RMB45.0 million for the year ended December 31, 2009 from RMB118.8 million for the year ended December 31, 2008.

Profit attributable to owners of the Company and net profit margin[(1)]

As a result of the foregoing, profit attributable to owners of our Company increased by RMB839.2 million, or 92.6%, to RMB1,745.6 million for the year ended December 31, 2009 from RMB906.4 million for the year ended December 31, 2008. Our net profit margin increased to 16.4% for the year ended December 31, 2009 from 14.1% for the year ended December 31, 2008, mainly due to our gross margin expansion.

YEAR ENDED DECEMBER 31, 2008 COMPARED TO YEAR ENDED DECEMBER 31, 2007

Revenue

Revenue increased by RMB3,328.3 million, or 107.7%, to RMB6,417.3 million for the year ended December 31, 2008 from RMB3,089.0 million for the year ended December 31, 2007. The increase in our revenue was primarily due to the increase in revenue from our WTG R&D, manufacturing and sales business segment.

Revenue from our WTG R&D, manufacturing and sales business segment increased by RMB3,220.1 million, or 104.6%, to RMB6,299.3 million for the year ended December 31, 2008 from RMB3,079.2 million for the year ended December 31, 2007, primarily due to the increase in our total installed capacity sold and an increase in our ASP. Our total installed capacity sold increased by 618.0 MW, or 81.9%, from 754.5 MW for the year ended December 31, 2007 to 1,372.5 MW for the year ended December 31, 2008, mainly due to market recognition of our direct-drive permanent magnet full-power rectification technology and general increase in demand for our products. Our ASP also increased primarily due to an increase in installed capacity sold generated from sales of our 1.5 MW WTGs, which have higher ASP than our 750 kW WTGs, from 11.3% of our total installed capacity

(1) Net profit margin is calculated in the following manner: profit attributable to owners of our Company divided by revenue.

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sold for the year ended December 31, 2007 to 37.8% of our total installed capacity sold for the year ended December 31, 2008.

Revenue from our wind power services business segment increased by RMB19.7 million, or 200.7%, to RMB29.5 million for the year ended December 31, 2008 from RMB9.8 million for the year ended December 31, 2007. The increase was primarily due to an increase in wind power services fees generated by our subsidiary, Beijing Tianyuan, by RMB16.3 million, or 165.6%, to RMB26.1 million for the year ended December 31, 2008, from RMB9.8 million for the year ended December 31, 2007, as Beijing Tianyuan did not become our subsidiary until May 2007 and thus we did not consolidate Beijing Tianyuan’s revenues into our accounts until then.

Revenue from our wind farm investment, development and sales business segment was nil for the year ended December 31, 2007 and RMB88.5 million for the year ended December 31, 2008, as a result of our wind farms’ commencement of operations during the year ended December 31, 2008, two of which were sold in November 2008.

Cost of sales

Our cost of sales increased by RMB2,718.7 million, or 124.9%, to RMB4,895.9 million for the year ended December 31, 2008 from RMB2,177.2 million for the year ended December 31, 2007. The increase was primarily due to the increase in our installed capacity sold from both our 750 kW and 1.5 MW WTGs and corresponding increase in our purchase of raw materials and components. In addition, our cost of sales increased more than our revenue in part because of significant fluctuations in the prices of raw materials in China in 2008 and because our 1.5 MW WTGs were still new products in 2008 and had not yet achieved significant economies of scale.

Gross profit and gross margin

Due to the foregoing, our gross profit increased by RMB609.6 million, or 66.8%, to RMB1,521.4 million for the year ended December 31, 2008 from RMB911.8 million for the year ended December 31, 2007 and our gross margin decreased to 23.7% for the year ended December 31, 2008 from 29.5% for the year ended December 31, 2007.

Other income and gains, net

Other net income and gains increased by RMB299.1 million, or 783.7%, to RMB337.3 million for the year ended December 31, 2008 from RMB38.2 million for the year ended December 31, 2007. The increase was primarily due to the RMB263.1 million in gains from the sale of two wind farms, each with an installed capacity of 49.5 MW in November 2008. In addition, our bank interest income increased by RMB15.1 million, or 310.8%, to RMB19.9 million for the year ended December 31, 2008 from RMB4.8 million for the year ended December 31, 2007, primarily due to the interest received from our net proceeds in connection with our listing on the SZSE in December 2007.

Selling and distribution costs

Selling and distribution costs increased by RMB179.5 million, or 167.4%, to RMB286.7 million for the year ended December 31, 2008 from RMB107.2 million for the year ended December 31, 2007 primarily as a result of a RMB99.9 million increase, or 314.1%, in our product warranty provisions to RMB131.7 million for the year ended December 31, 2008 from RMB31.8 million for the year ended December 31, 2007. The increase in product warranty provisions was primarily the result of the increased installed capacity sold from our 1.5 MW WTGs. In addition, our delivery charges increased by RMB33.3 million, or 285.4%, to RMB45.0 million for the year ended

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December 31, 2008 from RMB11.7 million for the year ended December 31, 2007, as a result of the increase in our total installed capacity sold, mainly due to market recognition of our direct-drive permanent magnet full-power rectification technology and general increase in demand for our products. Our selling and distribution costs also increased because of an increase in our bidding service fees, labor costs in relation to selling and distribution, and loading and unloading fees by RMB48.7 million, or 148.3% from RMB32.8 million for the year ended December 31, 2007 to RMB81.5 million for the year ended December 31, 2008, due to the increase in our sales.

Administrative expenses

Our administrative expenses were RMB237.0 million for the year ended December 31, 2008, an increase of RMB75.1 million, or 46.4%, from RMB161.9 million for the year ended December 31, 2007. The increase in our administrative expenses was primarily due to a substantial increase in our R&D expenses by RMB47.1 million, or 149.0%, to RMB78.7 million for the year ended December 31, 2008 from RMB31.6 million for the year ended December 31, 2007, in connection with R&D expenses incurred with respect to our 2.5 MW and 3.0 MW WTGs.

Other expenses

Other expenses increased by RMB109.6 million, or 302.7%, to RMB145.9 million for the year ended December 31, 2008 from RMB36.3 million for the year ended December 31, 2007 primarily as a result of an increase in impairment provisions in connection with an increase in our trade and bills receivables and bank processing fees.

Finance costs

Finance costs increased by RMB20.1 million, or 87.3%, to RMB43.0 million for the year ended December 31, 2008 from RMB22.9 million for the year ended December 31, 2007 primarily due to the increase in our interest expenses by RMB44.4 million, or 168.2%, to RMB70.8 million from RMB26.4 million as a result of the increase in our bank and other borrowings to RMB1,331.7 million as at December 31, 2008 from RMB623.0 million as at December 31, 2007. Our effective interest rate increased to 7.2% for the year ended December 31, 2008 from 6.4% for the year ended December 31, 2007.

Profit before tax

As a result of the foregoing, profit before tax increased by RMB524.4 million, or 84.4%, to RMB1,146.1 million for the year ended December 31, 2008 from RMB621.7 million for the year ended December 31, 2007.

Income tax

We had a tax charge of RMB120.9 million for the year ended December 31, 2008 while we had a tax credit of RMB8.1 million for the year ended December 31, 2007. Our effective tax rate was 10.5% and (1.3)% for the two years ended December 31, 2008 and 2007, respectively. During the two years ended December 31, 2008 and 2007, we had current taxes in the amount of RMB210.5 million and RMB0.1 million, respectively, primarily due to our Company being exempt from enterprise income tax in 2007 and the first three months of 2008 and being subject to a preferential tax rate of 15% during the last nine months of 2008 in accordance with certain preferential tax policies issued by the government of Xinjiang.

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Profit for the year

As a result of the foregoing, profit for the year increased by RMB395.4 million, or 62.8%, to RMB1,025.2 million for the year ended December 31, 2008 from RMB629.8 million for the year ended December 31, 2007.

Profit attributable to minority interests

Our profit attributable to minority interests increased by RMB113.6 million, or 2,221.5% to RMB118.8 million for the year ended December 31, 2008 from RMB5.2 million for the year ended December 31, 2007.

Profit attributable to owners of the Company and net profit margin

As a result of the foregoing, profit attributable to owners of the Company increased by RMB281.8 million, or 45.1%, to RMB906.4 million for the year ended December 31, 2008 from RMB624.6 million for the year ended December 31, 2007. Our net profit margin decreased to 14.1% for the year ended December 31, 2008 from 20.2% for the year ended December 31, 2007, mainly due to our gross margin shrinkage.

SELECTED UNAUDITED FINANCIAL INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 2010

Under the rules of the SZSE on which our A Shares are listed, we are required to publish, on a quarterly basis, reports containing unaudited financial statements. Pursuant to Rule 13.09(2) of the Listing Rules, our Company will release price sensitive information simultaneously in Hong Kong and China after the listing of our H shares in Hong Kong, including our Company’s quarterly, interim and annual reports released on the SZSE. Since we published certain financial statements for the three months ended March 31, 2010 in the PRC prior to the date of this prospectus, we have included our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2010 in Appendix IV to this prospectus. The unaudited condensed consolidated financial statements, comprising the unaudited condensed consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2010, and the unaudited condensed consolidated statement of financial position as of March 31, 2010, together with selected explanatory notes, have been prepared in accordance with IFRS and the accounting policies adopted in the preparation of the Accountants’ Report, and have been reviewed by Ernst & Young in accordance with International Standard on Review Engagements 2410 and Review of Interim Financial Information Performed by the Independent Auditor of the Entity.

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Results of Operations for the Three Months Ended March 31, 2010 and 2009

The consolidated results of operations for the three months ended March 31, 2010 and 2009 set forth below are derived from Appendix IV to this prospectus. You should read the following information in conjunction with Appendix IV to this prospectus. Our results of operations for the three months ended March 31, 2010 may not be indicative of our results of operations for the full year ending December 31, 2010.

	**Three months **	ended March 31,
	2009	2010
	(unaudited)	(unaudited)
	RMB in million	RMB in million
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,080.2	1,838.7
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(832.2)	(1,326.5)
Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	248.0	512.2
Other income and gains, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	101.0	35.5
Selling and distribution costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(40.8)	(123.5)
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(38.6)	(62.6)
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19.5	(29.4)
Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(14.5)	(13.1)
Share of profits and losses of:
Jointly-controlled entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	—	—
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	0.8	(1.0)
Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	275.4	318.1
Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(72.2)	(60.5)
Profit for the period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	203.2	257.6
Other comprehensive income:
Exchange differences on translation of foreign operations . . . . . . . . . . . . . . . .	(9.7)	(18.8)
Total comprehensive income for the period, net of tax . . . . . . . . . . . . . . . . . .	193.5	238.8
Profit attributable to:
Owners of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	195.1	248.4
Minority interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8.1	9.2
	203.2	257.6

Revenue

Revenue increased by RMB758.5 million, or 70.2%, to RMB1,838.7 million for the three months ended March 31, 2010 from RMB1,080.2 million for the three months ended March 31, 2009. The increase in revenue was primarily due to the increase in revenue generated from sales of our WTGs, offset by a slight decrease in the WTG ASPs.

Revenue for our WTG R&D, manufacturing and sales business segment was RMB1,781.5 million for the three months ended March 31, 2010 as compared to RMB1,046.4 million for the three months ended March 31, 2009. In particular, revenue from our sales of WTGs increased by RMB834.1 million, or 89.0%, to RMB1,771.0 million for the three months ended March 31, 2010 from RMB936.9 million for the three months ended March 31, 2009, primarily due to our increased total installed capacity sold. Our total installed capacity sold increased by 178.9 MW, or 98.6%, from 181.5 MW for the three months ended March 31, 2009 to 360.4 MW for the three months ended March 31, 2010, due to increased demand for our products and greater market recognition of our direct-drive permanent magnet full-power rectification technology.

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Revenue from our wind power services business segment increased by RMB21.9 million, or 492.4%, to RMB26.4 million for the three months ended March 31, 2010 from RMB4.5 million for the three months ended March 31, 2009. The increase was primarily due to the increase in revenue of RMB26.2 million generated from wind farm EPC services provided by Beijing Tianyuan, partially offset by a decrease of RMB4.0 million in the revenue from wind-farm-related technical services provided by Beijing Tianyuan, as it gradually allocated more resources to its EPC business, which offers a complete service package including individual technical services, to customers.

Revenue from our wind farm investment, development and sales business segment was RMB29.3 million and RMB30.8 million for the three months ended March 31, 2009 and 2010, respectively. Our revenue from this business segment remained stable.

Cost of sales

Our cost of sales increased by RMB494.3 million, or 59.4%, to RMB1,326.5 million for the three months ended March 31, 2010 from RMB832.2 million for the three months ended March 31, 2009. The increase in cost of sales was primarily due to our increased total installed capacity sold. Our cost of sales increased at a lower rate than our revenue because we were able to offset the increase in costs by decreases in WTG unit production cost as a result of greater economies of scale and increased in-house production of core components.

Gross profit and gross margin

Due to the foregoing, our gross profit was RMB512.2 million for the three months ended March 31, 2010, representing an increase of RMB264.2 million, or 106.5%, from RMB248.0 million for the three months ended March 31, 2009, and our gross margin increased to 27.9% for the three months ended March 31, 2010 from 23.0% for the three months ended March 31, 2009.

Other income and gains, net

Our net other income and gains decreased by RMB65.5 million, or 64.8%, to RMB35.5 million for the three months ended March 31, 2010 from RMB101.0 million for the three months ended March 31, 2009, primarily because we recorded a gain of RMB82.3 million from the sale of a wind farm with an installed capacity of 49.5 MW in March 2009 while we did not sell any wind farms during the three months ended March 31, 2010 and thus did not recognize any gain on disposal of subsidiaries during this period. The decrease in our net other income and gains was partially offset by an increase of RMB12.0 million in net exchange gain, due to the effect of the Euro’s depreciation on our Euro-denominated bank borrowings.

Selling and distribution costs

Selling and distribution costs for the three months ended March 31, 2010 was RMB123.5 million, representing an increase of RMB82.7 million, or 202.0%, from RMB40.8 million for the three months ended March 31, 2009. The increase in our selling and distribution costs was primarily due to the increase in product warranty provisions by RMB63.5 million, or 246.0%, to RMB89.3 million for the three months ended March 31, 2010 from RMB25.8 million for the three months ended March 31, 2009, as a result of the substantial increase in our WTG sales volume.

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Administrative expenses

Administrative expenses increased by RMB24.0 million, or 62.4%, to RMB62.6 million for the three months ended March 31, 2010 from RMB38.6 million for the three months ended March 31, 2009, primarily due to an increase in salaries and benefits for our administrative staff and an increase in consulting fees. The salaries and benefits for our administrative staff increased by RMB7.3 million, or 63.2%, to RMB18.9 million for the three months ended March 31, 2010 from RMB11.6 million for the three months ended March 31, 2009, as a result of the increase in staff in connection with the expansion of our business. Our consulting fees increased by RMB2.7 million, or 420.9%, to RMB3.3 million for the three months ended March 31, 2010 from RMB0.6 million for the three months ended March 31, 2009, primarily as a result of market research expenses incurred in connection with the expanded scale of our wind farm investment, development and sales business.

Other expenses/income

Our other income was RMB19.5 million for the three months ended March 31, 2009. Our other expenses were RMB29.4 million for the three months ended March 31, 2010. The increase in our other expenses was primarily due to an increase in impairment provisions in connection with our trade and bills receivables due to the increase in our sales.

Finance costs

Finance costs decreased by RMB1.4 million, or 9.4%, to RMB13.1 million for the three months ended March 31, 2010 from RMB14.5 million for the three months ended March 31, 2009, primarily due to a RMB10.9 million, or 104.0%, increase in our capitalized interest from RMB10.4 million for the three months ended March 31, 2009 to RMB21.3 million for the three months ended March 31, 2010 as a result of expansion of our wind farm investment, development and sales business. This decrease is partially offset by a RMB9.5 million, or 39.1%, increase in our interest expenses from RMB24.3 million for the three months ended March 31, 2009 to RMB33.8 million for the three months ended March 31, 2010, in connection with an increase in our bank and other borrowings to RMB3,069.5 million as at March 31, 2010 from RMB2,624.0 million as at December 31, 2009. Our effective interest rate decreased to 4.9% for the three months ended March 31, 2010 from 7.7% for the three months ended March 31, 2009.

Share of losses of jointly-controlled entities

Share of losses of our jointly-controlled entities was RMB0.02 million for the three months ended March 31, 2010 versus nil for the three months ended March 31, 2009.

Share of profit/losses of associates

Share of losses of associates was RMB1.0 million for the three months ended March 31, 2010, while share of profit of associates was RMB0.8 million for the three months ended March 31, 2009.

Profit before tax

Due to the foregoing, profit before tax increased by RMB42.7 million, or 15.5%, to RMB318.1 million for the three months ended March 31, 2010 from RMB275.4 million for the three months ended March 31, 2009.

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Income Tax

We had a tax charge of RMB60.5 million for the three months ended March 31, 2010 and a tax charge of RMB72.2 million for the three months ended March 31, 2009. Our effective tax rate was 26.2% and 19.0% for the three months ended March 31, 2009 and 2010, respectively. The decrease in our effective tax rates was primarily because from May 2009 (including the three months ended March 31, 2010) our Company was entitled to the preferential enterprise income tax rate of 15% for high-and-new technology enterprises.

Profit for the period

As a result of the foregoing, profit for the period increased by RMB54.4 million, or 26.8%, to RMB257.6 million for the three months ended March 31, 2010 from RMB203.2 million for the three months ended March 31, 2009.

Profit attributable to minority interests

Our profit attributable to minority interests increased by RMB1.1 million, or 13.0%, to RMB9.2 million for the three months ended March 31, 2010 from RMB8.1 million for the three months ended March 31, 2009.

Profit attributable to owners of the Company and net profit margin

Due to the foregoing, profit attributable to owners of our Company increased by RMB53.3 million, or 27.4%, to RMB248.4 million for the three months ended March 31, 2010 from RMB195.1 million for the three months ended March 31, 2009. Our net profit margin decreased to 13.5% for the three months ended March 31, 2010 from 18.1% for the three months ended March 31, 2009, mainly due to the RMB82.3 million in gains from the sale of one wind farm in March 2009, as well as the increase in our selling and distribution costs and administrative expenses for the three months ended March 31, 2010, but partially offset by our gross margin expansion.

CERTAIN BALANCE SHEET ITEMS

We had net current assets of RMB2,639.1 million, RMB3,557.0 million and RMB4,403.5 million as at December 31, 2007, 2008 and 2009, respectively.

Our current assets consisted mainly of inventories, trade and bills receivables, cash and cash equivalents and prepayments, deposits and other receivables. Our current liabilities consisted mainly of trade and bills payables, other payables and interest-bearing bank and other borrowings.

Our net current assets were significantly affected by our rapid growth during the Track Record Period. The increase in our net current assets position during the Track Record Period was primarily attributable to the expansion of our business and the resulting increase in inventories, trade and bills receivables, prepayments, deposits and other receivables and cash and cash equivalents as our sales volume increased, offset by increases in our trade and bills payables and other payables.

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FINANCIAL INFORMATION

The tables below show our current assets and current liabilities as at the dates indicated:

Current assets Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and bills receivables . . . . . . . . . . . . . . . . . . . . . . . . . Prepayments, deposits and other receivables . . . . . . . . . . . . Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . Pledged deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current liabilities Trade and bills payables . . . . . . . . . . . . . . . . . . . . . . . . . . . Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . Interest-bearing bank and other borrowings. . . . . . . . . . . . . . Tax payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	**As at **	**As at **
		2007 934.5 862.2 — 470.0 — 7.9 2,274.6 2,639.1

Inventories

The following table sets forth a breakdown of our inventories as at the date indicated:

Inventories Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finished and semi-finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consigned processing materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Low-value consumables and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at December 31,	As at December 31,
	2007 2008 2009 RMB in million 412.5 760.5 927.6 340.4 942.8 1,239.1 198.1 279.7 543.9 19.5 130.2 137.6 1.1 6.0 5.3 971.6 2,119.2 2,853.5	2009
		2,853.5

Inventories are stated at the lower of cost and net realizable value. We had inventories in the amount of RMB971.6 million, RMB2,119.2 million and RMB2,853.5 million as at December 31, 2007, 2008 and 2009,

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respectively. In order to fulfill increased customer orders, the quantity of our WTGs under production at the balance sheet date increased significantly over the Track Record Period. As a result, the amounts of raw materials and work in progress increased significantly over the Track Record Period. For inventories as of December 31, 2009, an amount of RMB2,044.3 million was sold or used in the first quarter of 2010. As of March 31, 2010, we had inventory balance in the amount of RMB4,006.0 million.

Our accounting policy is to make provision on inventories when obsolete inventories are identified. In addition, we also assess inventory provisions on major inventory items and makes specific provisions where necessary. We made provisions for inventories in the amount of RMB9.0 million and RMB1.4 million for the two years ended December 31, 2008 and 2009, respectively. We made no provision for inventories for the year ended December 31, 2007.

Inventory turnover days(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended December 31,	Year ended December 31,	Year ended December 31,
	2007 106	2008 115	2009
			115

Note:

(1) Inventory turnover days for the three years ended December 31, 2007, 2008 and 2009 are calculated in the following manner: total inventory at the beginning of a given year plus total inventory at the end of a given year, divided by two, then divided by cost of sales and then multiplied by 365.

Trade and bills receivables

The following table shows the breakdown of our trade and bills receivables as at the dates indicated:

Trade and bills receivables Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bills receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retention money receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007 2008 2009 As at December 31, RMB in million 619.6 2,539.5 2,624.7 — 39.0 209.7 189.2 189.3 272.2 (44.7) (148.8) (187.0) 764.1 2,619.0 2,919.6

Our trade and bills receivables as at December 31, 2007, 2008 and 2009 amounted to RMB764.1 million, RMB2,619.0 million and RMB2,919.6 million, respectively, and comprised trade receivables, bills receivables and retention money receivables less impairment for doubtful debts. Our trade and bills receivables increased during the Track Record Period primarily as a result of the increase in our revenue from our WTG R&D, manufacturing and sales business segment. In particular, trade receivables increased by RMB1,919.9 million, or 309.9%, to RMB2,539.5 million as at December 31, 2008 from RMB619.6 million as at December 31, 2007 primarily due to the seasonality we experienced in 2008 where the majority of our revenue for the year ended December 31, 2008 was recognized during the last three months and we did not collect payment on some of these sales until 2009. Retention money receivables reflect retention monies retained by our customers to secure our performance of obligations during the warranty period of our products. Retention money receivables is expected to grow at a slower pace as we have gradually changed our policy to providing our customers letters of guarantee against fulfilment of our warranty obligations. For trade and bills receivables in the amount of RMB2,919.6 million as of December 31, 2009, only an amount of RMB534.7 million was settled in the first quarter of 2010, since payment milestones under

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FINANCIAL INFORMATION

part of our sales contracts have not been reached. As of March 31, 2010, we had trade and bills receivables of RMB2,912.8 million.

Our credit policy towards customers varies for each of our business segments, but for our core business of WTG sales, we generally grant contractual credit terms of around three months. We make provisions for impairment against trade and bills receivables to the extent amounts are considered to be uncollectible or unlikely to be collectible within a reasonable period of time, assessed by us on individual customer basis. This is primarily due to some customers facing temporary cash flow difficulties under certain circumstances, which affects their timely settlement of payment, despite many of them being subsidiaries of China’s large power producers. In addition, for certain outstanding trade and bills receivables still outstanding beyond the credit period granted that are not impaired after carrying out a separate impairment test, as a matter of prudence, we made provisions for impairment estimated based on the length of time exceeded. For the three years ended December 31, 2007, 2008 and 2009, our provisions for impairment amounted to RMB44.7 million, RMB148.8 million and RMB187.0 million, respectively, representing 5.8%, 5.7% and 6.4% of our trade and bills receivables after deducting provision for impairment. The provision for impairment increased during the Track Record Period, primarily due to the increased size of total trade and bills receivables and the slight increase in all aging levels of trade and bills receivables as at December 31, 2007, 2008 and 2009.

The aging analysis of our trade and bills receivables as at the dates indicated is as follows:

Trade and bills receivables Within three months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Three to six months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Six months to one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . One to two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Two to three years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over three years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at December 31,	As at December 31,
	2007 2008 2009 RMB in million 586.8 1,898.1 1,453.0 8.2 51.4 398.6 97.6 505.4 484.1 69.4 131.6 455.7 0.1 31.2 107.4 2.0 1.3 20.8 764.1 2,619.0 2,919.6	2009
		2,919.6

Our trade and bills receivables turnover days increased during the Track Record Period primarily due to the increase in sales volume of our 1.5 MW WTGs, a significant portion of which have longer periods between revenue recognition, which occurs upon product delivery, and the date of the last installment payment, which occurs upon completion of preliminary acceptance and inspection.

completion of preliminary acceptance and inspection.
Debtor turnover days(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Note:	Year ended December 31,
	2007 62	2008 96	2009
			95

(1) Debtor turnover days for the three years ended December 31, 2007, 2008 and 2009 are calculated in the following manner: total trade and bills receivables at the beginning of a given year plus total trade and bills receivables at the end of a given year, divided by two, then divided by revenue and then multiplied by 365.

Our management closely monitors the levels of risk exposure to ensure that proper actions are promptly taken to recover our overdue trade and bills receivables, and, when appropriate, provides for impairment of these receivables. We have an effective credit policy with adequate procedures in place, and our contracts with customers

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are generally standard with similar credit periods and payment terms. This has enabled us to sell to a superior customer base with many of our customers being subsidiaries of China’s large power producers. Further, the high quality of our products and lack of product defects ensures timely payment by our customers. Consequently, we were able to maintain a stable debtor turnover days for the year ended December 31, 2009 as compared to the previous year. Our Directors are of the view that we have made adequate provision on trade and bills receivables during the Track Record Period.

Prepayments, deposits and other receivables

The following table shows the breakdown of our prepayments, deposits and other receivables as at the dates indicated.

indicated.
Prepayments, deposits and other receivables Advances to suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deposits and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	**As at **	**December **	31,
	2007 2008 2009 RMB in million 480.5 760.3 736.6 — 1.1 8.5 18.8 289.9 92.5 (1.0) (14.9) (5.3) 498.3 1,036.4 832.3		2009
			832.3

Prepayments, deposits and other receivables were RMB498.3 million, RMB1,036.4 million and RMB832.3 million as at December 31, 2007, 2008 and 2009, respectively.

Prepayments, deposits and other receivables consisted primarily of advances to suppliers and deposits and other receivables. Advances to suppliers comprise deposits made to our suppliers in respect of our orders for raw materials and components. Deposits and other receivables consisted primarily of bidding deposit fees and receivables from sales of our wind farms. Prepayments, deposits and other receivables decreased to RMB832.3 million as at December 31, 2009 from RMB1,036.4 million as at December 31, 2008 primarily due to a RMB197.4 million, or 68.1%, decrease in our deposits and other receivables from RMB289.9 million as at December 31, 2008 to RMB92.5 million as at December 31, 2009, in connection with the sale of two wind farms in November 2008 for RMB263.1 million, amounts which we did not receive as at December 31, 2008. Prepayments, deposits and other receivables increased to RMB1,036.4 million as at December 31, 2008 from RMB498.3 million as at December 31, 2007 primarily due to a RMB279.8 million or 58.3% increase in our advances to suppliers from RMB480.5 million as at December 31, 2007 to RMB760.3 million as at December 31, 2008, in connection with our greater demand for raw materials and components due to our increased WTG sales.

Available-for-sale investments

Hebei Goldwind Electric Equipment Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Water Baotou . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Water Xi’an . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jiuquan Xinmao Technology Wind Power Equipment Co., Ltd. . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As at December 31,

2007 2008 2009 RMB in million 3.2 3.2 — 1.0 1.0 1.0 — 22.0 7.0 — — 1.0 4.2 26.2 9.0

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FINANCIAL INFORMATION

The above four companies in which we invest are engaged in the manufacturing and sales of wind power equipment and accessories. They were either our suppliers during the Track Record Period or will be our potential suppliers in the future. We make investments in these companies in order to ensure a stable supply of core parts and components from them.

Trade and bills payables

The following table shows the breakdown of our trade and bills payables as at the dates indicated.

Trade and bills payables Trade payables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bills payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at December 31,	As at December 31,
	2007 2008 2009 RMB in million 442.4 1,332.4 1,997.6 492.1 1,212.1 1,762.6 934.5 2,544.5 3,760.2	2009
		3,760.2

Our trade and bills payables as at December 31, 2007, 2008 and 2009 amounted to RMB934.5 million, RMB2,544.5 million and RMB3,760.2 million, respectively, and comprised trade payables and bills payables. The general upward trend for our trade and bills payables during the Track Record Period was primarily due to our increased WTG sales and thus our purchases of raw materials and components.

The aging analysis of our trade and bills payables as at the dates indicated is as follows:

Trade and bills payables Within three months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Three to six months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Six months to one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . One to two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Two to three years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over three years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at December 31,	As at December 31,
	2007 2008 2009 RMB in million 797.7 2,409.9 3,142.6 134.0 104.9 478.5 0.5 24.4 66.2 1.6 3.6 70.9 0.5 1.4 0.9 0.2 0.3 1.1 934.5 2,544.5 3,760.2	2009
		3,760.2

Our suppliers generally granted us an average credit period of three months. During the Track Record Period, the increase in our trade and bills payables turnover days was primarily due to the expansion of our business and the commencement of sales of our 1.5 MW WTGs. As we expanded the scale of our operations, our trade and bills payables increased due to the higher level of production and longer credit periods granted by our suppliers. Our trade and bills payables turnover days increased because certain suppliers granted us favorable credit period terms to allow us to fund our extended production cycle, which was lengthened given we commenced in-house manufacturing of certain components for our 1.5MW WTGs.

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FINANCIAL INFORMATION

Creditor turnover days(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended December 31,	Year ended December 31,	Year ended December 31,
	2007 99	2008 130	2009
			146

Note:

(1) Creditor turnover days for the three years ended December 31, 2007, 2008 and 2009 are calculated in the following manner: total trade and bills payables at the beginning of a given year plus total trade and bills payables at the end of a given year, divided by two, then divided by cost of sales and then multiplied by 365.

Other payables

Other payables were RMB862.2 million, RMB2,671.4 million and RMB2,055.8 million as at December 31, 2007, 2008 and 2009 and consisted primarily of advances from customers, accrued salaries, wages and benefits and other tax payable.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our principal sources of liquidity and capital resources have been, and are expected to be, cash from our operating activities and various forms of financing, including bank borrowings. We expect to increase our liquidity and capital resources with the net proceeds from the Global Offering.

The following table sets forth certain information about our consolidated cash flows during the periods indicated.

Net cash flows from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash flows used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . Effect of foreign exchange rate changes, net . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents at end of year. . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended December 31,	Year ended December 31,
	2007 2008 2009 RMB in million 551.3 1,374.9 1,301.8 (274.1) (1,456.5) (1,616.5) 2,063.7 702.6 1,405.3 2,340.9 621.0 1,090.6 339.8 2,679.7 3,286.4 (1.0) (14.3) 2.0 2,679.7 3,286.4 4,379.0	2009
		1,090.6
		3,286.4 2.0
		4,379.0

Net cash flows from operating activities

Our net cash flows from operating activities primarily represent profit before tax adjusted for non-cash items, movements in working capital and other income and gains.

Net cash flows from operating activities was RMB1,301.8 million for the year ended December 31, 2009, which was principally contributed by profit before tax of RMB1,990.6 million for the year ended December 31, 2009 and a RMB1,069.8 million increase in trade and bills payables as a result of our increased WTG sales and thus our purchases of raw materials and components. These cash inflows were offset by a RMB733.4 million increase in inventories as a result of the increases in our works in progress, raw materials and finished and semi-finished goods due to our business expansion to meet the increased demand for our products, a RMB394.2 million increase in trade and bills receivables as a result of the increase in our revenue from our WTG R&D, manufacturing and sales

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FINANCIAL INFORMATION

business segment and a RMB659.0 million decrease in other payables as a result of the decrease in advances from customers.

Net cash flows from operating activities was RMB1,374.9 million for the year ended December 31, 2008, which was principally contributed by profit before tax of RMB1,146.1 million adjusted for a RMB119.1 million impairment of trade and other receivables, a RMB1,940.7 million increase in trade and bills payable as a result of our increased WTG sales and thus our purchases of raw materials and components and a RMB1,778.0 million increase in other payables as a result of the increase in advances from customers. These cash inflows were offset by an adjustment of RMB263.1 million gain from the disposal of two wind farms, a RMB1,829.7 million increase in trade and bills receivables as a result of the increase in our revenue from our WTG R&D, manufacturing and sales business segment and a RMB1,156.1 million increase in inventories as a result of the increases in our works in progress, raw materials and finished and semi-finished goods due to our business expansion to meet the increased demand for our products.

Net cash flows from operating activities was RMB551.3 million for the year ended December 31, 2007, which was principally contributed by profit before tax of RMB621.7 million, a RMB759.1 million increase in other payables as a result of the increase in advances from customers and a RMB686.9 million increase in trade and bills payable as a result of our increased WTG sales and thus our purchases of raw materials and components. These cash inflows were offset by a RMB679.1 million increase in inventories as a result of the increases in our works in progress, raw materials and finished and semi-finished goods due to our business expansion to meet the increased demand for our products and a RMB510.6 million increase in trade and bills receivables as a result of the increase in our revenue from our WTG R&D, manufacturing and sales business segment.

Net cash flows used in investing activities

Our net cash flows used in investing activities has principally been used for purchases of property, plant and equipment, acquisition of subsidiaries, pledged deposits, non-pledged time deposits with original maturity of three months or more when acquired and purchases of investment properties.

Net cash flows used in investing activities was RMB1,616.5 million for the year ended December 31, 2009, principally due to our payment for purchases of property, plant and equipment in the amount of RMB1,540.1 million, an increase of RMB218.5 million in pledged deposits and additions of prepaid land lease payments of RMB95.2 million, offset partly by RMB304.8 million from disposals of subsidiaries, net of cash disposed of.

Net cash flows used in investing activities was RMB1,456.5 million for the year ended December 31, 2008, principally due to purchases of property, plant and equipment in the amount of RMB1,398.0 million and our acquisition of two subsidiaries including Vensys AG, net of cash acquired, in the amount of RMB330.0 million, offset by RMB253.5 million from the disposals of subsidiaries, net of cash disposed of.

Net cash flows used in investing activities was RMB274.1 million for the year ended December 31, 2007, principally due to the increase in our purchases of property, plant and equipment in the amount of RMB296.4 million and additions of prepaid land lease payments in the amount of RMB45.9 million, offset partly by RMB22.1 million from acquisitions of subsidiaries, net of cash acquired, and government grants received in the amount of RMB58.7 million.

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FINANCIAL INFORMATION

Net cash flows from financing activities

Our cash flows from financing activities were primarily used to repay our bank and other borrowings and to pay dividends to the Shareholders, and our cash inflow from financing activities was generally derived from new bank and other borrowings.

Net cash flows from financing activities was RMB1,405.3 million for the year ended December 31, 2009, which was principally contributed by new bank and other borrowings in the amount of RMB2,249.8 million, offset by RMB424.5 million in repayment of bank and other borrowings and RMB280.0 million in dividends paid to owners of our Company and RMB93.9 million in dividends paid to our minority shareholders.

Net cash flows from financing activities was RMB702.6 million for the year ended December 31, 2008, which was principally contributed by new bank and other borrowings in the amount of RMB1,627.4 million and RMB94.7 million in capital contributions from minority shareholders, offset by repayment of bank and other borrowings in the amount of RMB918.7 million.

Net cash flows from financing activities was RMB2,063.7 million for the year ended December 31, 2007, which was principally contributed by the RMB1,752.0 million in net proceeds we received in connection with our listing on the SZSE in December 2007 and new bank and other borrowings in the amount of RMB825.0 million, offset by repayment of bank and other borrowings in the amount of RMB422.0 million.

WORKING CAPITAL

Taking into account our internal resources, our cash flow from operations, presently available banking facilities and the estimated net proceeds from the Global Offering, the Directors confirm that the working capital available to our Company and our subsidiaries is sufficient for at least the next 12 months from the date of this prospectus.

CONTRACTUAL OBLIGATIONS

As at December 31, 2009, we had total capital expenditure and operating lease commitments in the amount of RMB1,018.8 million. The following table sets forth our capital expenditure and operating lease commitments for the periods indicated:

Capital expenditure commitments Contracted but not provided for property, plant and equipment and land use rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Authorized but not contracted for property, plant and equipment and land use rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sub-total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating lease commitments Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the second to fifth years, inclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sub-total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at December 31,	As at December 31,
	2007 2008 2009 RMB in million 976.8 514.4 609.1 1,186.1 268.9 397.8 — 34.0 — 2,162.9 817.3 1,006.9 0.2 2.2 6.0 — 4.3 5.9 0.2 6.5 11.9 2,163.1 823.8 1,018.8	2009
		1,006.9 6.0 5.9
		11.9
		1,018.8

As at December 31, 2009, we had total capital commitments in respect of the purchase of fixed assets and land use rights in the amount of RMB1,006.9 million.

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FINANCIAL INFORMATION

CAPITAL EXPENDITURE

Our capital expenditure was RMB395.8 million, RMB2,043.0 million and RMB2,078.3 million for the three years ended December 31, 2007, 2008 and 2009, respectively.

Historical capital expenditure WTG R&D, manufacturing and sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wind power services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wind farm investment, development and sales . . . . . . . . . . . . . . . . . . . . . . . . Elimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended December 31,	Year ended December 31,
	2007 2008 2009 RMB in million 271.5 698.9 269.8 19.2 4.4 4.5 105.1 1,495.3 2,023.2 — (155.6) (219.2) 395.8 2,043.0 2,078.3	2009
		2,078.3

Capital expenditure for our WTG R&D, manufacturing and sales business segment during the Track Record Period comprised primarily construction of production, R&D and assembly facilities. Capital expenditure for our wind power services business segment comprised primarily purchases of equipment. Capital expenditure for our wind farm investment, development and sales business segment comprised primarily purchases of land and WTGs.

INDEBTEDNESS

The following table shows our total bank and other borrowings as at the dates indicated:

Bank and other borrowings Secured. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unsecured. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bank and other borrowings are repayable as follows: Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . After one year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2007 2008 2009 2010 As at December 31, As at April 30, (unaudited) RMB in million 68.0 865.7 2,160.5 2,553.5 555.0 466.0 463.5 571.3 623.0 1,331.7 2,624.0 3,124.8 470.0 50.0 601.9 903.9 153.0 1,281.7 2,022.1 2,220.9 623.0 1,331.7 2,624.0 3,124.8	As at April 30,
	2007 68.0 555.0 623.0 470.0 153.0 623.0	2010
		3,124.8
		903.9 2,220.9
		3,124.8

Our total bank and other borrowings amounted to RMB623.0 million, RMB1,331.7 million and RMB2,624.0 million, as at December 31, 2007, 2008 and 2009, respectively. As at April 30, 2010, being the latest practicable date for determining our indebtedness, we had utilized banking facilities of RMB7,480.1 million and unutilized banking facilities of RMB6,791.2 million.

Bank and other borrowings increased by RMB708.7 million, or 113.8%, from RMB623.0 million as at December 31, 2007 to RMB1,331.7 million as at December 31, 2008, primarily in connection with financing the construction of our wind farms, our acquisition of Vensys AG, phase two of the construction of our production base in Xinjiang and the construction of a factory that we subsequently rented to one of our suppliers, as well as the overall expansion of our business. Bank and other borrowings increased by RMB1,292.3 million, or 97.0%, from RMB1,331.7 million as at December 31, 2008 to RMB2,624.0 million as at December 31, 2009, primarily in connection with financing the construction of our wind farms as well as the overall expansion of our business.

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FINANCIAL INFORMATION

Certain of our bank and other borrowings were secured by (i) mortgages over our property, plant and equipment and land use rights, and certain of our subsidiaries’ assets, (ii) pledges of electricity charge rights, future income and our bank deposits, or guaranteed by Independent Third Parties. Certain unsecured bank borrowings in the amount RMB20.0 million as at December 31, 2009 were guaranteed by China Water, a Shareholder of our Company. Such guarantees were released in March 2010.

In December 2009, we provided a guarantee for Beijing On-off Electric Equipment Company Limited (“ Beijing On-off ”), which is a Connected Person of our Group, in respect of its bank loans of RMB21.0 million. Such guarantee will be released in December 2012.

Except as described above, as at April 30, 2010, being the latest practicable date for determining our indebtedness, we did not have any outstanding loan capital issued or agreed to be issued, bank overdrafts, loans, debt securities, borrowings or other similar indebtedness, liabilities under acceptance (other than normal trade bills) or acceptance credits, debentures, mortgages, charges, finance leases, hire purchase commitments, guarantees or other material contingent liabilities.

A majority of our bank and other borrowings were denominated in RMB and the effective interest rates of our bank and other borrowings as at December 31, 2007, 2008 and 2009 were 6.4%, 7.2% and 5.2%, respectively. As of the Latest Practicable Date, we did not and have not breached any covenants in our loan agreements.

During the Track Record Period, no bank has withdrawn any of the banking facilities previously extended to us and have not demanded early repayment. Given our ability to access new bank borrowings and our strong credit profile, we believe we will not be subject to any risk of potential withdrawal of banking facilities, early repayment of outstanding loans or increase in amount of pledged deposits for secured bank borrowings. We also confirm that as of the Latest Practicable Date, we have not received any requests for early repayment of the principal and/or interests on any of our loan agreements.

The table below sets forth the maturity profiles of our bank borrowings as at the dates indicated:

Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Between one and two years . . . . . . . . . . . . . . . . . . . . . . . . . . . Between two and five years . . . . . . . . . . . . . . . . . . . . . . . . . . . Five years or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

**As at December **

2007 470.0 55.0 98.0 — 623.0

As of December 31, 2007, 2008 and 2009, our gearing ratio[(1)] was (9.9)%, 46.9% and 42.1%, respectively. The gearing ratio of (9.9)% as of December 31, 2007 was primarily due to the receipt of proceeds from our A Share offering of RMB1,745 million, net of the issue expenses, by our Company in late 2007. The gearing ratio increased from (9.9)% as of December 31, 2007 to 46.9% as of December 31, 2008, primarily due to increases in our trade and bills payables, other payables and interest-bearing bank and other borrowings. Our gearing ratio decreased slightly from 46.9% as of December 31, 2008 to 42.1% as of December 31, 2009 primarily due to increases in our cash and cash equivalents and profit generated for the year ended December 31, 2009.

(1) Gearing ratio is net debt divided by the capital plus net debt. Net debt includes trade and bills payables, other payables, interest-bearing bank and other borrowings and other long-term liabilities, less cash and cash equivalents and pledged deposits. Capital includes the equity attributable to owners of the Company as stated in the consolidated statements of financial position.

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FINANCIAL INFORMATION

CONTINGENT LIABILITIES

We had contingent liabilities not provided for in the Accountants’ Report in Appendix I to this prospectus in the amount of RMB65.5 million, RMB176.1 million and RMB176.5 million as at December 31, 2007, 2008 and 2009, respectively, in connection with letters of credit we issued relating to our purchases of components from foreign suppliers.

In addition, we had contingent liabilities in the amount of RMB971.6 million, RMB2,365.1 million and RMB3,645.7 million as at December 31, 2007, 2008 and 2009, mainly in connection with our provision of letters of guarantee issued by banks to our customers against our performance and fulfilment of contractual obligations, principally pertaining to product delivery, in the course of our sales activities. The issuing bank assumes the payment obligation on behalf of us as specified in the letter of guarantee, and subsequently recovers any paid amount, if any, from us. As such, the potential liability of the issuing bank is regarded as our contingent liability. Upon expiry of the letters of guarantee, the issuing banks are released from their payment obligations and correspondingly, there will be a decrease in our contingent liabilities.

Our Directors evaluated the current status of our sales orders, fulfillment of our sales orders for the previous year and incidence of payment pursuant to the letters of guarantee for each year during the Track Record Period, and estimated that as of the Latest Practicable Date, the likelihood of any payment arising from or in connection with the letters of guarantee which are still valid was relatively low. The fair value of the guarantees is not significant and therefore the Directors are of the view that no provision for financial guarantees should be made. Consequently, such contingent liabilities do not have a material impact on our financial results.

As at April 30, 2010, the contingent liabilities in connection with letters of credit and those in connection with our provision of letters of guarantee increased to RMB399.6 million and RMB4,257.4 million, respectively, as a result of increases in our purchases of raw materials and our sales during the four-month period ended April 30, 2010.

OFF-BALANCE SHEET ARRANGEMENTS

We did not have any outstanding off-balance sheet guarantees, interest rate swap transactions, foreign currency and commodity forward contracts or other off-balance sheet arrangements. We do not engage in trading activities involving non-exchange traded contracts. In the course of our business operations, we do not enter into transactions involving, or otherwise form relationships with, unconsolidated entities or financial partnerships that are established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

RELATED PARTY TRANSACTIONS

With respect to related parties transactions as set out in Note 41 of Section II in the Accountants’ Report attached as Appendix I to this Prospectus, our Directors have confirmed that the transactions were conducted on normal commercial terms and entered into in the ordinary course of business.

MARKET RISKS

Interest rate risk

We have bank and other borrowings subject to both fixed and floating interest rates and thus are subject to interest rate risk. We regularly review and monitor the mix of our fixed and floating interest rate borrowings in order to manage our interest rate risk. Our interest-bearing bank loans and short term deposits are stated at amortized cost

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FINANCIAL INFORMATION

and not revalued on a periodic basis. Floating rate interest income and expenses are credited or charged to our statement of comprehensive income as earned or incurred.

Foreign currency risk

We are exposed to foreign currency risk on purchases and bank loans that are denominated in a currency other than the respective functional currency of our entities. We had exposure to foreign currencies as at December 31, 2007, 2008 and 2009. We anticipate our foreign currency risk will continue to increase in connection with the overseas expansion of our business.

Credit risk

We have a credit policy in place and will perform credit evaluations on all customers requiring credit over a certain amount.

We establish an allowance for impairment that represents our estimate of losses to be incurred in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures. The allowance account in respect of trade and other receivables is used to record impairment losses unless we are satisfied that no recovery of the amount owing is possible. At that point, the impaired financial asset is considered irrecoverable, and the amount charged to the allowance account is written off against the carrying amount of the impaired financial asset.

Our management evaluates the credit-worthiness of our existing and prospective customers and ensures that the customers have adequate financing for the projects as well as the source of financing. We believe our customers are creditworthy.

The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statements of financial position.

Cash and bank balances are placed with banks and financial institutions which are regulated.

Liquidity risk

Our liquidity risk is primarily dependent on our ability to maintain adequate cash inflows from operations to meet our debt obligations as they fall due and our ability to obtain external financing to meet our committed future capital expenditure. With regard to our future capital commitments and other financing requirements, we have already obtained banking facilities with several banks of up to RMB13,712.0 million as at December 31, 2009, of which an amount of approximately RMB6,986.0 million has been utilized.

PROPERTY INTERESTS AND PROPERTY VALUATION

Particulars of our property interests are set out in Appendix V to this prospectus. Jones Lang LaSalle Sallmanns Limited, an independent property valuer had valued our property interests as at March 31, 2010. The full text of the letter, summary of values and valuation certificates in connection with such property interests are set out in Appendix V to this prospectus.

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FINANCIAL INFORMATION

The table below sets forth the reconciliation of aggregate amounts of property interests from our audited consolidated financial statements as of December 31, 2009 to the unaudited net book value of our property interests as of March 31, 2010:

as of March 31, 2010:
Buildings included in property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepaid land lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net book value as of December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add: Additions during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Depreciation and amortization during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net book value as of March 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Valuation surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Valuation as of March 31, 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	RMB in million
	421.1 81.0 160.6
	662.7 24.5 (4.1) (3.1)
	680.0 248.3
	928.3

PROFIT FORECAST FOR THE YEAR ENDING DECEMBER 31, 2010

Barring unforeseen circumstances, and based on the bases set out in Appendix II to this prospectus, the Directors forecast that the consolidated profit attributable to equity holders of our Company for the year ending December 31, 2010 to be not less than RMB2,235 million.

On the basis of the above profit forecast and on the assumption that our Company had been listed since January 1, 2010 and a total of 2,635,294,000 shares were in issue during the entire year ending December 31, 2010, the unaudited pro forma forecast earnings per share will be RMB0.85, representing a forecast fully diluted price/ earnings multiple on a pro forma basis of approximately 22.1 times (assuming an Offer Price of HK$21.40 being the mid-point of our indicative Offer Price range).

DIVIDEND POLICY

After completion of the Global Offering, our Shareholders will be entitled to receive dividends declared by us. The proposal of payment and the amount of our dividends will be made at the discretion of the Board and will depend on our general business condition and strategies, cash flows, financial results and capital requirements, interests of the Shareholders, taxation conditions, statutory and regulatory restrictions and other factors that the Board deems relevant. Any dividend distribution shall also be subject to the approval of the Shareholders in the Shareholders’ meeting.

Under the PRC Company Law and the Articles of Association, we will pay dividends out of our after-tax profit only after we have made the following allocations:

• k recovery of accumulated losses, if any;

• k allocations to the statutory reserve fund equivalent to 10% of our Company and its subsidiaries after-tax profit; and

• k allocations, if any, to a discretionary reserve fund approved by the shareholders in a shareholders’ meeting.

When the statutory reserve fund reaches and is maintained at or above 50% of our registered capital, no further allocations to this statutory fund will be required. Our profit distributable for the above-mentioned allocations and our dividend distribution shall be our after-tax profit as determined by PRC GAAP or IFRS,

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FINANCIAL INFORMATION

whichever is lower. All of our Shareholders have equal rights to dividends and distributions in the form of stock or cash. For holders of our H Shares, cash dividend payments, if any, will be declared in Renminbi and paid in Hong Kong dollars. According to the Articles of Association, the cumulative profit distribution in cash by our Company for any last-three-most-recent-years period shall be not less than 30% of the average of the same three year’s annual distributable profits.

We distributed dividends in the form of shares and cash amounting to RMB500.0 million and RMB680.0 million during the two years ended December 31, 2007 and 2008, respectively. The Board of Directors on August 31, 2009 and the Shareholders in general meeting on September 25, 2009 approved a resolution that holders of our A Shares are entitled to our distributable profits accumulated prior to January 1, 2010, and holders of our H Shares and A Shares upon the completion of the Global Offering will be equally entitled to our distributable profits accumulated between January 1, 2010 and the Listing Date. On March 25, 2010, our Company’s 2009 annual general meeting approved the distribution of our Company’s consolidated actual distributable profits of RMB1,767.8 million[(1)] . As partial settlement of this distribution, on April 6, 2010, our Company issued 840 million A Shares and paid cash of RMB140.0 million to holders of our A Shares funded with cash from profits generated by our business. On May 26, 2010, our Board of Directors approved the distribution of RMB784.0 million in the form of a cash dividend paid out of our internal cash resources (and not out of our net proceeds from the Global Offering), subject to approval of our Shareholders in a general meeting to be held on June 12, 2010, the settlement date of which will be determined after the general meeting and is expected to be after the Listing. Our H Shareholders shall not be entitled to any portion of this cash dividend. Our PRC legal advisor has confirmed that the declaration and payment of the foregoing dividend distribution is legal and valid under applicable PRC laws and regulations and our Articles of Association. Our historical dividends may not be indicative of the amount of our future dividends.

DISTRIBUTABLE RESERVES

As at December 31, 2009, our Company had a reserve available for distribution to its shareholders in the amount of RMB855.7 million.

UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS

The following is an illustrative statement of our unaudited pro forma adjusted consolidated net tangible assets attributable to owners of our Company which has been prepared for the purpose of illustrating the effect of the Global Offering as if it had been taken place on December 31, 2009 and based on our audited consolidated net assets attributable to the owners of our Company as at December 31, 2009 as shown in the Accountants’ Report set forth in Appendix I to this prospectus and is adjusted as follows:

Based on Offer Price of HK$19.80 per Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . Based on Offer Price of HK$23.00 per Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Audited consolidated net tangible assets attributable to owners of our Company as at December 31, 2009 RMB in million(1) 4,621.1 4,621.1	Estimated net proceeds from the Global Offering RMB in million(2) 6,556.7 7,616.4	Unaudited pro forma adjusted consolidated net tangible assets attributable to owners of our Company RMB in million 11,177.8 12,237.5	Unaudited pro forma adjusted consolidated net tangible assets per Share
				RMB(4) HK$(6) 4.24 4.83 4.64 5.29

(1) Equal to the retained profits of our Group in the amount of RMB1,871.0 million as of December 31, 2009 according to PRC GAAP minus the statutory surplus reserve appropriated by our subsidiaries not distributable to our Shareholders, in the amount of RMB103.2 million.

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FINANCIAL INFORMATION

Notes:

• (1) The consolidated net tangible assets attributable to owners of our Company as of December 31, 2009, was determined as follows:

Audited consolidated net assets of our Company as set out in Appendix I . . . . . . . . . . . . . . . . . . . . . . Less: Minority interests as set out in Appendix I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Goodwill as set out in Appendix I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Other intangible assets as set out in Appendix I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add: Other intangible assets attributable to minority interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated net tangible assets attributable to owners of our Company . . . . . . . . . . . . . . . . . . . . . . .	RMB in million	RMB in million
		5,527.3 326.2 249.9 346.6 16.5 4,621.1

• (2) The estimated net proceeds from the Global Offering are based on the offer price of HK$19.80 per H Share and HK$23.00 per H Share after deduction of the underwriting fees and other related expenses payable by our Company, and do not take into account of any H Shares which may be issued upon the exercise of the Over-allotment Option. The estimated net proceeds from the Global Offering are converted at the PBOC Rate from Hong Kong dollars into Renminbi at an exchange rate of HK$1.00 to RMB0.8772 prevailing on the Latest Practicable Date.

• (3) On March 25, 2010, our Company’s 2009 annual general meeting approved the distribution our Company’s consolidated actual distributable profits of RMB1,767.8 million, which includes:

• (i) cash dividend of RMB140.0 million declared for payment to our A Shareholders which was settled on April 6, 2010; and

• (ii) cash dividend of RMB784.0 million approved by our Board of Directors, subject to approval of our Shareholders in a general meeting to be held on June 12, 2010, the settlement date of which will be determined after the general meeting and is expected to be after Listing.

Our Directors consider that the payment of cash dividends as set out in (i) and (ii) above will have an impact on the expected net tangible assets of our Group attributable to owners of our Company after the Listing.

In addition to the cash dividends above, pursuant to the resolution passed in our 2009 annual general meeting held on March 25, 2010, share dividends amounting to RMB840.0 million were allotted and issued to the Shareholders of our Company. Please see the subsection above entitled “— Dividend Policy” for further details. The Directors consider that the share dividends will not have any impact on the expected net tangible assets of our Group attributable to owners of our Company after the Listing. The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of our Company has not taken into account the aforesaid cash and share dividends.

• (4) The unaudited pro forma adjusted consolidated net tangible assets per Share are determined after the adjustments as described in note 2 above and on the basis that 2,635,294,000 shares (being the number of shares expected to be in issue immediately after completion of the Global Offering, without taking into account of any H Shares which may be issued upon the exercise of the Over-allotment Option) are issued and outstanding during the entire year ended December 31, 2009. If the Over-allotment Option is exercised in full, the adjusted net tangible assets per Share will increase.

• (5) Details of the valuations of our Company’s properties as at March 31, 2010 are set out in “Appendix V — Property Valuation” to this prospectus. The revaluation surplus or deficit of properties included in buildings held for own use, assets under construction, land use rights and investment properties will not be incorporated in our Company’s financial statements for the year ending December 31, 2010. If such revaluation surplus is incorporated in our Company’s financial statements for the year ending December 31, 2010, the annual depreciation charges would increase by approximately RMB4.6 million.

• (6) The translation of Renminbi into Hong Kong dollars has been made at the rate of RMB0.8772 to HK$1.00, the PBOC Rate prevailing on the Latest Practicable Date. No representation is made that the Hong Kong dollar amounts have been, could have been or could be converted to Renminbi, or vice versa, at that rate or at any other rates or at all.

DISCLOSURE PURSUANT TO RULES 13.13 TO 13.19 OF THE LISTING RULES

We confirm that, as of the Latest Practicable Date, we were not aware of any circumstances that would give rise to a disclosure requirement under Rules 13.13 to Rules 13.19 of the Listing Rules.

DIRECTORS’ CONFIRMATION ON NO MATERIAL ADVERSE CHANGE

The Directors confirm that they have performed sufficient due diligence on our Company to ensure that, up to the date in this prospectus, there has been no material adverse change in our financial or trading position or prospects since December 31, 2009, and there is no event since December 31, 2009 which would materially affect the information shown in the Accountants’ Report, the text of which is set out in Appendix I to this prospectus.

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FUTURE PLANS AND USE OF PROCEEDS

FUTURE PLANS

Please see the section entitled “Business — Our Strategies” for a detailed description of our future plans.

USE OF PROCEEDS

Assuming an Offer Price of HK$21.40 per H share (which is the mid-point of the indicative Offer Price range set forth on the cover page of the prospectus), we estimate that we will receive net proceeds of approximately HK$8,078.6 million from the Global Offering after deducting the underwriting commissions and other estimated expenses, if the Over-allotment Option is not exercised. If the Over-allotment Option is exercised in full, we estimate that the additional net proceeds to us from the offering of these additional H Shares will be approximately HK$1,211.8 million, after deducting the underwriting commissions and other estimated expenses, assuming an Offer Price of HK$21.40 per H Share.

In line with our strategies, we intend to use our proceeds from the Global Offering for the purposes and in the amounts set out below:

• k approximately 40.2% will be used for the construction of production bases and optimization of our business operations;

• k approximately 14.6% will be used for the design and development of more advanced WTGs and certain related components;

• k approximately 24.1% will be used for expansion into the international market, primarily the United States, Australia and Europe, and promotional activities as described in the section entitled “Business — Our Strategies — Expand into attractive international markets” in this prospectus;

• k approximately 11.1% will be used for the repayment of bank loans, including, among others (i) two three-year floating term loans in the total amount of EUR16.4 million at an annual interest rate of 120 basis points (bps) above EURIBOR, and EUR20.0 million at an annual interest rate of 115 bps above EURIBOR for the initial 12 months, and subsequently at 115 bps above six-month EURIBOR, which will be due for repayment on March 15, 2011 and April 15, 2011, respectively, (ii) a one-year floating rate short-term bank facility of EUR19.0 million for our subsidiary Vensys AG’s working capital purposes at an annual interest rate of 120 bps above EURIBOR, which will be due on June 15, 2010; (iii) a 10-year term loan in the total amount of EUR3.5 million at an annual interest rate of 7% before June 30, 2013 and adjustable rate after July 1, 2013, which will be due for repayment on September 30, 2018; and

• k approximately 10.0% will be used as our general working capital.

The allocation of the proceeds used for the above will be adjusted in the event that the Offer Price is fixed at a higher or lower level compared to the midpoint of the estimated Offer Price range. Assuming the Over-allotment Option is not exercised, if the Offer Price is fixed at HK$23.00 per H Share, being the high end of the stated Offer Price range, the net proceeds will be increased by approximately HK$604.0 million. In such circumstances, we presently intend to use such additional proceeds to increase the net proceeds applied to the same purposes above (other than for the repayment of bank loans and as general working capital) on a pro rata basis. If the Offer Price is fixed at HK$19.80 per H Share, being the low end of the stated Offer Price range, the net proceeds will be decreased by approximately HK$604.0 million. In such circumstances, we presently intend to reduce the net proceeds applied to our general working capital.

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FUTURE PLANS AND USE OF PROCEEDS

In the event that the Over-allotment Option is exercised in full, the additional net proceeds of approximately HK$1,211.8 million (assuming the Offer Price is determined at the mid-point of the stated Offer Price range), approximately HK$1,302.4 million (assuming the Offer Price is determined at the high end of the stated Offer Price range) or approximately HK$1,121.2 million (assuming the Offer Price is determined at the low end of the stated Offer Price range) will be applied by our Company for the same purposes above (other than for the repayment of bank loans and as general working capital) on a pro rata basis.

To the extent that the net proceeds of the Global Offering are not immediately required for the above purposes, the Directors currently intend that such proceeds will be placed on short-term deposits with licensed banks or financial institutions in Hong Kong or the PRC.

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UNDERWRITING

HONG KONG UNDERWRITERS

Joint Lead Managers

China International Capital Corporation Hong Kong Securities Limited Citigroup Global Markets Asia Limited Taifook Securities Company Limited Credit Suisse (Hong Kong) Limited

UNDERWRITING ARRANGEMENTS AND EXPENSES

Hong Kong Public Offering

Hong Kong Underwriting Agreement

The Hong Kong Underwriting Agreement was entered into on June 4, 2010. Pursuant to the Hong Kong Underwriting Agreement, we are offering the Hong Kong Public Offer Shares for subscription by the public in Hong Kong on the terms and subject to the conditions in this prospectus and the Application Forms at the Offer Price. Subject to the Listing Committee of the Hong Kong Stock Exchange granting listing of, and permission to deal in, the H Shares to be offered pursuant to the Global Offering as mentioned herein (including any additional H Shares which may be issued pursuant to the exercise of the Over-allotment Option), and to certain other conditions set out in the Hong Kong Underwriting Agreement, the Hong Kong Underwriters have agreed severally and not jointly to subscribe or procure subscribers for the Hong Kong Public Offer Shares which are being offered but are not taken up under the Hong Kong Public Offering on the terms and subject to the conditions in this prospectus, the Application Forms and the Hong Kong Underwriting Agreement.

The Hong Kong Underwriting Agreement is conditional upon and subject to the International Underwriting Agreement having been signed and becoming unconditional.

Grounds for Termination

The obligations of the Hong Kong Underwriters to subscribe or procure subscribers for the Hong Kong Public Offer Shares under the Hong Kong Underwriting Agreement are subject to termination, if, at any time prior to 8:00 a.m. on the day that trading in the H Shares commences on the Hong Kong Stock Exchange:

• (a) there shall develop, occur, exist or come into effect:

• (i) any event, or series of events, in the nature of force majeure (including, without limitation, any acts of government, declaration of a national or international emergency or war, calamity, crisis, epidemic, pandemic, outbreak of infectious disease, economic sanctions, strikes, lockouts, fire, explosion, flooding, earthquake, civil commotion, riots, public disorder, acts of war, outbreak or escalation of hostilities (whether or not war is declared), acts of God or acts of terrorism (whether or not responsibility has been claimed) in or affecting Hong Kong, the PRC, the United States, the United Kingdom, the European Union or Japan (collectively, the “ Relevant Jurisdictions ”); or

• (ii) any change or development involving a prospective change, or any event or series of events likely to result in any change or development involving a prospective change, in local, national, regional or international financial, economic, political, military, industrial, fiscal, regulatory, currency, credit or market conditions (including, without limitation, conditions in the stock and bond markets, money and foreign exchange markets, the interbank markets and credit markets) in or affecting any of the Relevant Jurisdictions; or

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UNDERWRITING

• (iii) any moratorium, suspension or restriction (including, without limitation, any imposition of or requirement for any minimum or maximum price limit or price range) in or on trading in securities generally on the Hong Kong Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Market, the London Stock Exchange, the Tokyo Stock Exchange, the Shenzhen Stock Exchange or the Shanghai Stock Exchange; or

• (iv) any general moratorium on commercial banking activities in Hong Kong (imposed by the Financial Secretary or the Hong Kong Monetary authority or other competent authority), New York (imposed at Federal or New York State level or other competent authority), London, the PRC, the European Union, Japan or any disruption in commercial banking or foreign exchange trading or securities settlement or clearance services, procedures or matters in the Relevant Jurisdictions; or

• (v) any new law or regulation or any change or development involving a prospective change in existing laws or regulations or any change or development involving a prospective change in the interpretation or application thereof by any court or other competent authority in or affecting any of the Relevant Jurisdictions; or

• (vi) the imposition of economic sanctions, in whatever form, directly or indirectly, by, or for, the United States or the European Union (or any member thereof) on the PRC or any other jurisdiction relevant to any member of our Group; or

• (vii) a change or development involving a prospective change in taxation or exchange control, currency exchange rates or foreign investment regulations (including without limitation a material devaluation of the HK dollar or the Renminbi against any foreign currencies), or the implementation of any exchange control, in any of the Relevant Jurisdictions; or

• (viii) any litigation or claim of any third party being threatened or instigated against any member of our Group; or

• (ix) a Director being charged with an indictable offence or prohibited by operation of law or otherwise disqualified from taking part in the management of a company; or

• (x) the chairman or president of our Company vacating his or her office; or

• (xi) an authority or a political body or organization in any Relevant Jurisdiction commencing any investigation or other action, or announcing an intention to investigate or take other action, against any Director in his or her capacity as such; or

• (xii) a contravention by any member of our Group of, or non-compliance of this prospectus or any aspect of the Global Offering with, the Listing Rules or applicable laws; or

• (xiii) a contravention by any member of our Group of a material provision of the Companies Ordinance or the Listing Rules or the PRC Company Law; or

• (xiv) a prohibition on our Company for whatever reason from allotting or selling the H Shares (including the additional H Shares to be purchased by, or by investors procured by, the International Underwriters from our Company pursuant to the Over-allotment Option) pursuant to the terms of the Global Offering; or

• (xv) the issue or requirement to issue by our Company of any supplement or amendment to this prospectus (or to any other documents used in connection with the contemplated subscription

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UNDERWRITING

and sale of the H Shares) pursuant to the Companies Ordinance or the Listing Rules or any requirement or request of the Hong Kong Stock Exchange and/or the SFC in circumstances where the matter to be disclosed is, in the sole opinion of the Joint Global Coordinators, materially adverse to the marketing for or implementation of the Global Offering; or

• (xvi) any material adverse change or development involving a reasonably likely material adverse change of any of the risks set out in the section entitled “Risk Factors” in this prospectus; or

• (xvii) an order or petition for the winding up of any member of our Group or any composition or arrangement made by any member of our Group with its creditors or a scheme of arrangement entered into by any member of our Group or any resolution for the winding-up of any member of our Group or the appointment of a provisional liquidator, receiver or manager over all or part of the assets or undertaking of any member of our Group or anything analogous thereto occurring in respect of any member of our Group, which, individually or in the aggregate, in the sole opinion of the Joint Global Coordinators (for themselves and on behalf of the other Hong Kong Underwriters): (1) has or is likely to or will have a material adverse effect on the business, shareholders’ equity, profits, losses, results of operations, financial or trading position, condition or prospects of our Group as a whole; or (2) has or will have or is likely to have a material adverse effect on the success of the Global Offering or the level of applications under the Hong Kong Public Offering or the level of interest under the International Offering; or (3) makes or is likely to make or will make it inadvisable or inexpedient or impracticable to proceed with the Global Offering on the terms contemplated in this prospectus or under applicable laws; or (4) has or will or is likely to have the effect of making any part of the Hong Kong Underwriting Agreement, the Hong Kong Public Offering or the Global Offering incapable of performance in accordance with its terms and has or will have or is likely to have a material adverse effect on the success of the Global Offering or preventing the processing of applications and/or payments pursuant to the Global Offering or pursuant to the underwriting thereof; or

• (b) there has come to the notice of the Joint Bookrunners:

• (xviii) that any statement contained in any of this prospectus and the Application Forms and/or in any notices, announcements, advertisements, communications or other documents issued or used by or on behalf of our Company in connection with the Hong Kong Public Offering (including any supplement or amendment thereto) was, when it was issued, or has become, untrue, incorrect in any material respect or misleading; or that any forecast, estimate, expression of opinion, intention or expectation contained in this prospectus and the Application Forms (including any supplement or amendment thereto) is not fair and honest in any material respect and based on reasonable assumptions when taken as a whole; or

• (xix) that any matter has arisen or has been discovered which would, had it arisen or been discovered immediately before the date of this prospectus, constitute a material omission from any of this prospectus and the Application Forms and/or in any notices, announcements, advertisements, communications or other documents issued or used by or on behalf of our Company in connection with the Hong Kong Public Offering (including any supplement or amendment thereto); or

• (xx) any material breach on the part of our Company of any of the obligations imposed upon it under the Hong Kong Underwriting Agreement or the International Underwriting Agreement; or

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UNDERWRITING

• (xxi) any event, act or omission which gives or is likely to give rise to any material liability of our Company pursuant to Clause 12 of the Hong Kong Underwriting Agreement; or

• (xxii) any material litigation or claim being threatened or instigated against our Company or any of its subsidiaries; or

• (xxiii) any of the reporting accountants, property valuer in relation to the Global Offering, the legal advisors of our Company on PRC law has withdrawn its respective consent to the issue of this prospectus with the inclusion of its reports, letters, summaries of valuations and/or legal opinions (as the case may be) and references to its name included in the form and context in which it respectively appears; or

• (xxiv) approval for the listing of an permission to deal in the H Shares on the Hong Kong Stock Exchange is refused or not granted, other than subject to customary conditions, on or before the listing approval date, or if granted, the approval is subsequently withdrawn, qualified (other than by customary conditions) or withheld; or

• (xxv) any material adverse change or development involving a prospective material adverse change in the assets, liabilities, business, management, prospects, shareholders’ equity, profits, losses, results of operations, condition, financial or otherwise, or performance of our Group, taken as a whole; or

• (xxvi) any breach of, or any event rendering: (i) untrue or incorrect in any respect, any of the warranties qualified as to materiality or (ii) untrue or incorrect in any material respect, any of the warranties not so qualified; or

• (c) the Company withdraws any of the prospectus and the Application Forms or the Global Offering,

in which case the Joint Bookrunners (for themselves and on behalf of the Hong Kong Underwriters) may, upon giving notice to our Company, terminate the Hong Kong Underwriting Agreement with immediate effect.

Undertakings to the Hong Kong Stock Exchange pursuant to the Listing Rules

Pursuant to Rule 10.08 of the Listing Rules, we have undertaken to the Hong Kong Stock Exchange that no further Shares or securities convertible into our equity securities may be issued by us or form the subject of any agreement to such an issue by us within six months from the Listing Date (whether or not such issue of Shares or our securities will be completed within six months from the commencement of dealing), except in certain circumstances prescribed by Rule 10.08 of the Listing Rules.

Undertakings to the Hong Kong Underwriters

We have, pursuant to the Hong Kong Underwriting Agreement, undertaken to each of the Joint Bookrunners, the Joint Sponsors and the Hong Kong Underwriters that except pursuant to the Global Offering (including the Over-Allotment Option), at any time after the date of the Hong Kong Underwriting Agreement up to and including the date falling six months after the date on which dealings in the H Shares commence on the Hong Kong Stock Exchange, we will not, without the Joint Bookrunners’ prior written consent (subject to the requirements of the Listing Rules):

• (a) offer, pledge, charge, allot, issue, sell, contract to allot, issue or sell, any option or contract to purchase, purchase any option or contract to sell, grant or agree to grant any option, right or warrant to purchase or subscribe for, lend or otherwise transfer or dispose of, either directly or indirectly, or repurchase, any of

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UNDERWRITING

the share capital of our Company or any securities convertible into or exercisable or exchangeable for or that represent the right to receive such share capital; or

• (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the share capital of our Company; or

• (c) enter into any transaction with the same economic effect as any transaction described in (a) or (b) above; or

• (d) offer or agree or contract to, or publicly announce any intention to enter into, any such capital or securities, in cash or otherwise,

whether any of the foregoing transactions described above is to be settled by delivery of the share capital of our Company or such other securities, in cash or otherwise, or publicly disclose an intention to effect any of the foregoing, provided that the foregoing restrictions shall not apply to the issue of H Shares by our Company pursuant to the Global Offering (including pursuant to the Over-allotment Option). In the event of a disposal as described in (a) or (b) above of any H Shares or any interest therein or any of our securities after the date falling six months after the date on which dealings in the H Shares commence on the Hong Kong Stock Exchange, we will take all reasonable steps to ensure that such an issue or disposal will not create a disorderly or false market for the H Shares.

Indemnity

We have agreed to indemnify the Joint Bookrunners, the Joint Sponsors and the Hong Kong Underwriters for certain losses which they may suffer, including, among other matters, losses arising from the performance of their obligations under the Hong Kong Underwriting Agreement.

Commission and Expenses

The Hong Kong Underwriters will receive an underwriting commission of 2.5% of the aggregate Offer Price payable for the Hong Kong Public Offer Shares initially offered under the Hong Kong Public Offering, out of which they will pay any sub-underwriting commission. For unsubscribed Hong Kong Public Offer Shares reallocated to the International Offering, we will pay an underwriting commission at the rate applicable to the International Offering and such commission will be paid to the Joint Bookrunners and the relevant International Underwriters (but not the Hong Kong Underwriters).

Hong Kong Underwriters’ interest in our Company

Save for its obligations under the Hong Kong Underwriting Agreement, none of the Hong Kong Underwriters has any shareholding interests in our Company or any other member of our Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in our Company or any member of our Group.

The International Offering

In connection with the International Offering, it is expected that we will enter into the International Underwriting Agreement with the Joint Bookrunners and the International Underwriters on or about June 12, 2010, shortly after the determination of the Offer Price. Under the International Underwriting Agreement, the International Underwriters would, subject to certain conditions, severally and not jointly, agree to procure subscribers to subscribe for, or failing which to subscribe for themselves, their respective applicable

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proportions of the International Offer Shares being offered pursuant to the International Offering which are not taken up under the International Offering.

Restrictions on the Offer Shares

The Hong Kong Public Offer Shares are offered solely on the basis of the information contained and representations made in this prospectus and the Application Forms, and on the terms and subject to the conditions set out herein and therein. No action has been taken to permit a public offering of the Offer Shares other than in Hong Kong, or the distribution of this prospectus in any jurisdiction other than Hong Kong. Accordingly, this prospectus may not be used for the purpose of, and does not constitute, an offer or invitation in any jurisdiction or in any circumstances in which such an offer or invitation is not authorized or to any person to whom it is unlawful to make such an offer or invitation. In particular, the Offer Shares have not been offered or sold, and will not be offered or sold, directly or indirectly, in the PRC.

Over-allotment and Stabilization

Stabilization is a practice used by underwriters in some markets to facilitate the distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities in the secondary market, during a specified period of time, to retard and, if possible, prevent, any decline in the market price of the securities below the offer price. In Hong Kong and certain other jurisdictions, the price at which stabilization is effected is not permitted to exceed the offer price.

In connection with the Global Offering, the Stabilizing Manager or any person or affiliates acting for them, on behalf of the Underwriters, may over-allocate or effect short sales or any other stabilizing transactions with a view to stabilizing or maintaining the market price of the H Shares at a level higher than that which might otherwise prevail in the open market. Short sales involve the sale by the Stabilizing Manager of a greater number of H Shares than the Underwriters are required to purchase in the Global Offering. “Covered” short sales are sales made in an amount not greater than the Over-allotment Option. The Stabilizing Manager may close out the covered short position by either exercising the Over-allotment Option to purchase additional H Shares or purchasing H Shares in the open market. In determining the source of the H Shares to close out the covered short position, the Stabilizing Manager will consider, among other things, the price of H Shares in the open market as compared to the price at which they may purchase additional H Shares pursuant to the Over-allotment Option. Stabilizing transactions consist of certain bids or purchases made for the purpose of preventing or retarding a decline in the market price of the H Shares while the Global Offering is in progress. Any market purchases of the H Shares may be effected on any stock exchange, including the Hong Kong Stock Exchange, any over-the-counter market or otherwise, provided that they are made in compliance with all applicable laws and regulatory requirements. However, there is no obligation on the Stabilizing Manager or any person acting for it to conduct any such stabilizing activity, which if commenced, will be done at the absolute discretion of the Stabilizing Manager and may be discontinued at any time. Any such stabilizing activity is required to be brought to an end within 30 days of the last day for the lodging of applications under the Hong Kong Public Offering. The number of the H Shares that may be over-allocated will not exceed the number of the H Shares that may be sold under the Over-allotment Option, namely, 59,294,000 H Shares, which is 15% of the number of Offer Shares initially available under the Global Offering, in the event that the whole or part of the Over-allotment Option is exercised.

In Hong Kong, stabilizing activities must be carried out in accordance with the Securities and Futures (Price Stabilizing) Rules. Stabilizing actions permitted pursuant to the Securities and Futures (Price Stabilizing) Rules include:

(a) over-allocation for the purpose of preventing or minimizing any reduction in the market price;

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(b)	selling or agreeing to sell the H Shares so as to establish a short position in them for the purpose of
	preventing or minimizing any deduction in the market price;
(c)	subscribing, or agreeing to subscribe, for the H Shares pursuant to the Over-allotment Option in order to
	close out any position established under (a) or (b) above;
(d)	purchasing, or agreeing to purchase, the H Shares for the sole purpose of preventing or minimizing any
	reduction in the market price;
(e)	selling the H Shares to liquidate a long position held as a result of those purchases; and
(f)	offering or attempting to do anything described in (b), (c), (d) and (e) above.

Stabilizing actions by the Stabilizing Manager, or any person acting for it, will be entered into in accordance with the laws, rules and regulations in place in Hong Kong on stabilization.

As a result of effecting transactions to stabilize or maintain the market price of the H Shares, the Stabilizing Manager, or any person acting for it, may maintain a long position in the H Shares. The size of the long position, and the period for which the Stabilizing Manager, or any person acting for it, will maintain the long position is at the discretion of the Stabilizing Manager and is uncertain. In the event that the Stabilizing Manager liquidates this long position by making sales in the open market, this may lead to a decline in the market price of the H Shares.

Stabilizing action by the Stabilizing Manager, or any person acting for it, is not permitted to support the price of the H Shares for longer than the stabilizing period, which begins on the day on which trading of the H Shares commences on the Hong Kong Stock Exchange and ends on the thirtieth day after the last day for the lodging of applications under the Hong Kong Public Offering. The stabilizing period is expected to end on July 10, 2010. As a result, demand for the H Shares, and their market price, may fall after the end of the stabilizing period. These activities by the Stabilizing Manager may stabilize, maintain or otherwise affect the market price of the H Shares. As a result, the price of the H Shares may be higher than the price that otherwise may exist in the open market. Any stabilizing action taken by the Stabilizing Manager, or any person acting for it, may not necessarily result in the market share of the H Shares staying at or above the Offer Price either during or after the stabilizing period. Bids for or market purchases of the H Shares by the Stabilizing Manager, or any person acting for it, may be made at a price at or below the Offer Price and therefore at or below the price paid for the H Shares by purchasers. A public announcement in compliance with the Securities and Futures (Price Stabilizing) Rules will be made within seven days of the expiration of the stabilizing period.

INDEPENDENCE OF THE JOINT SPONSORS

Each of China International Capital Corporation Hong Kong Securities Limited, Citigroup Global Markets Asia Limited and Hai Tong Capital (HK) Limited satisfies the independence criteria applicable to sponsors set out in Rule 3A.07 of the Listing Rules.

One of the Joint Sponsors, Hai Tong Capital (HK) Limited, is an indirect wholly-owned subsidiary of Hai Tong Securities Co., Ltd. (“ Hai Tong Securities ”). Hai Tong Securities holds a 10% equity interest in CB Fund, which in turn holds a 7.2% equity interest in our Company. Haitong-Fortis Private Equity Fund Management Co., Ltd., which is 67% held by Hai Tong Securities, is the fund manager of CB Fund.

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THE GLOBAL OFFERING

This prospectus is published in connection with the Hong Kong Public Offering as part of the Global Offering. The Global Offering consists of (subject to adjustment and the Over-allotment Option):

• (a) the Hong Kong Public Offering of 39,529,600 H Shares (subject to adjustment as mentioned below) in Hong Kong as described below under “— The Hong Kong Public Offering”); and

• (b) the International Offering of an aggregate of 355,764,400 H Shares (subject to adjustment as mentioned below) outside the United States (including to professional and institutional investors within Hong Kong) in offshore transactions in reliance on Regulation S, and in the United States to QIBs in reliance on Rule 144A.

Investors may apply for the H Shares under the Hong Kong Public Offering or indicate an interest, if qualified to do so, for the H Shares under the International Offering, but may not do both.

Our Company has obtained the requisite PRC governmental approvals, including the approval of the CSRC, in respect of the Global Offering.

The number of H Shares to be offered under the Hong Kong Public Offering and the International Offering respectively may be subject to reallocation as described in the subsection entitled “— The Hong Kong Public Offering — Reallocation” below.

THE HONG KONG PUBLIC OFFERING

Number of H Shares initially offered

We are initially offering 39,529,600 H Shares at the Offer Price, representing 10.0% of the H Shares initially available under the Global Offering, for subscription by the public in Hong Kong. Subject to the reallocation of Offer Shares between the International Offering and the Hong Kong Public Offering, the number of H Shares initially offered under the Hong Kong Public Offering will represent approximately 1.5% of our Company’s enlarged issued share capital immediately after completion of the Global Offering, assuming that the Overallotment Option is not exercised.

The Hong Kong Public Offering is open to members of the public in Hong Kong as well as to institutional and professional investors. Professional investors generally include brokers, dealers, companies (including fund managers) whose ordinary business involves dealing in shares and other securities and corporate entities which regularly invest in shares and other securities.

Completion of the Hong Kong Public Offering is subject to the conditions as set out in the subsection below entitled “Conditions of the Global Offering”.

Allocation

Allocation of H Shares to investors under the Hong Kong Public Offering will be based solely on the level of valid applications received under the Hong Kong Public Offering. The basis of allocation may vary, depending on the number of Hong Kong Public Offer Shares validly applied for by applicants. The allocation of Hong Kong Public Offer Shares could, where appropriate, consist of balloting, which would mean that some applicants may receive a higher allocation than others who have applied for the same number of Hong Kong Public Offer Shares, and those applicants who are not successful in the ballot may not receive any Hong Kong Public Offer Shares.

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The total number of Hong Kong Public Offer Shares available under the Hong Kong Public Offering will initially be divided into two pools for allocation purposes as follows:

• k Pool A: The Offer Shares in Pool Awill be allocated on an equitable basis to applicants who have applied for Offer Shares with a total subscription amount (excluding brokerage, SFC transaction levy and the Hong Kong Stock Exchange trading fee) of HK$5.0 million or less; and

• k Pool B: The Offer Shares in Pool B will be allocated on an equitable basis to applicants who have applied for Offer Shares with a total subscription amount (excluding brokerage, SFC transaction levy and the Hong Kong Stock Exchange trading fee) of more than HK$5.0 million and up to the value of Pool B.

Applicants should be aware that applications in Pool A and Pool B are likely to receive different allocation ratios. If Hong Kong Public Offer Shares in one pool (but not both pools) are under-subscribed, the surplus Hong Kong Public Offer Shares will be transferred to the other pool to satisfy demand in that other pool and be allocated accordingly.

Applicants can only receive an allocation of Hong Kong Public Offer Shares from either Pool A or Pool B but not from both pools. Multiple or suspected multiple applications and any application for more than 19,764,800 Offer Shares will be rejected.

Reallocation

Paragraph 4.2 of the Practice Note 18 of the Listing Rules requires a clawback mechanism to be put in place, which would have the effect of increasing the number of Hong Kong Public Offer Shares to certain percentages of the total number of Offer Shares offered in the Global Offering if certain prescribed total demand levels are reached. An application has been made for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with Paragraph 4.2 of Practice Note 18 of the Listing Rules such that the allocation of the Offer Shares between the Hong Kong Public Offering and the International Offering is subject to the following adjustments:

• k If the number of the Offer Shares validly applied for under the Hong Kong Public Offering represents ten times or more but less than 40 times the number of the Offer Shares initially available for subscription under the Hong Kong Public Offering, then Offer Shares will be reallocated to the Hong Kong Public Offering from the International Offering, so that the total number of the Offer Shares available under the Hong Kong Public Offering will be 59,294,400 Offer Shares, representing 15% of the Offer Shares initially available under the Global Offering;

• k If the number of the Offer Shares validly applied for under the Hong Kong Public Offering represents 40 times or more but less than 50 times the number of the Offer Shares initially available for subscription under the Hong Kong Public Offering, then the number of Offer Shares to be reallocated to the Hong Kong Public Offering from the International Offering will be increased so that the total number of the Offer Shares available under the Hong Kong Public Offering will be 79,058,800 Offer Shares, representing 20% of the Offer Shares initially available under the Global Offering; and

• k If the number of the Offer Shares validly applied for under the Hong Kong Public Offering represents 50 times or more the number of the Offer Shares initially available for subscription under the Hong Kong Public Offering, then the number of Offer Shares to be reallocated to the Hong Kong Public Offering from the International Offering will be increased, so that the total number of the Offer Shares available under the Hong Kong Public Offering will be 118,588,400 Offer Shares, representing 30% of the Offer Shares initially available under the Global Offering.

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The Offer Shares to be offered in the Hong Kong Public Offering and the International Offering may, in certain circumstances, be reallocated as between these offerings at the discretion of the Joint Bookrunners. Subject to the foregoing paragraph, the Joint Bookrunners may in their discretion reallocate H Shares from the International Offering to the Hong Kong Public Offering to satisfy valid applications under the Hong Kong Public Offering. In addition, if the Hong Kong Public Offering is not fully subscribed, the Joint Bookrunners will have the discretion (but shall not be under any obligation) to reallocate to the International Offering all or any unsubscribed Hong Kong Public Offer Shares in such amounts as they deem appropriate.

References in this prospectus to applications, Application Forms, application monies or to the procedure for application relate solely to the Hong Kong Public Offering.

THE INTERNATIONAL OFFERING

Number of H Shares initially offered

Subject to the reallocation as described above, the number of H Shares to be initially offered under the International Offering will be 355,764,400 H Shares, representing 90.0% of the Offer Shares under the Global Offering. Subject to the reallocation of the Offer Shares between the International Offering and the Hong Kong Public Offering, the number of H Shares initially offered under the International Offering will represent 13.5% of our total issued share capital immediately after completion of the Global Offering, assuming that the Overallotment Option is not exercised.

Allocation

Pursuant to the International Offering, the International Offer Shares will be conditionally placed on behalf of our Company by the International Underwriters or through selling agents appointed by them. International Offer Shares will be selectively placed with certain professional and institutional investors and other investors anticipated to have a sizeable demand for such Offer Shares in Hong Kong, Europe and other jurisdictions outside the United States (other than the PRC) in offshore transactions in reliance on Regulation S and in the United States to QIBs as defined in Rule 144A. The International Offering is subject to the Hong Kong Public Offering being unconditional.

Allocation of Offer Shares pursuant to the International Offering will be effected in accordance with the “book-building” process described in the paragraph headed “Pricing and Allocation” below and based on a number of factors, including the level and timing of demand, total size of the relevant investor’s invested assets or equity assets in the relevant sector and whether or not it is expected that the relevant investor is likely to buy further, and/or hold or sell, H Shares after the listing of the H Shares on the Hong Kong Stock Exchange. Such allocation is intended to result in a distribution of H Shares on a basis which would lead to the establishment of a solid shareholder base which would be to our benefit and to that of the shareholders as a whole.

The Joint Bookrunners (on behalf of the Underwriters) may require any investor who has been offered Offer Shares under the International Offering, and who has made an application under the Hong Kong Public Offering, to provide sufficient information to the Joint Bookrunners so as to allow them to identify the relevant applications under the Hong Kong Public Offering and to ensure that they are excluded from any application of Offer Shares under the Hong Kong Public Offering.

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PRICING AND ALLOCATION

Determining the Offer Price

The International Underwriters are soliciting from prospective investors indications of interest in acquiring the H Shares in the International Offering. Prospective investors will be required to specify the number of H Shares under the International Offering they would be prepared to acquire either at different prices or at a particular price. This process, known as “book-building”, is expected to continue up to, and to cease on or around, the last day for lodging applications under the Hong Kong Public Offering.

Pricing for the Offer Shares for the purpose of the various offerings under the Global Offering will be fixed on the Price Determination Date, which is expected to be on or around June 12, 2010 and in any event on or before June 20, 2010, by agreement between the Joint Bookrunners, on behalf of the Underwriters, and our Company and the number of Offer Shares to be allocated under the various offerings will be determined shortly thereafter.

Offer price range

The Offer Price will be not more than HK$23.00 per H Share and is expected to be not less than HK$19.80 per H Share, unless otherwise announced not later than the morning of the last day for lodging applications under the Hong Kong Public Offering, as further explained below. Prospective investors should be aware that the Offer Price to be determined on the Price Determination Date may be, but is not expected to be, lower than the indicative Offer Price range stated in this prospectus.

Price payable on application

Applicants for Hong Kong Public Offer Shares under the Hong Kong Public Offering are required to pay, on application, the maximum Offer Price of HK$23.00 for each Hong Kong Public Offer Share (plus 1% brokerage, 0.004% SFC transaction levy, and 0.005% Hong Kong Stock Exchange trading fee). If the Offer Price is less than HK$23.00, appropriate refund payments (including the brokerage, SFC transaction levy and the Hong Kong Stock Exchange trading fee attributable to the surplus application monies, without any interest) will be made to successful applications.

If, for any reason, our Company and the Joint Bookrunners (on behalf of the Underwriters) are unable to reach agreement on the Offer Price on or before June 20, 2010, the Global Offering will not proceed and will lapse.

Reduction in indicative offer price range and/or number of Offer Shares

The Joint Bookrunners, on behalf of the Underwriters, may where considered appropriate, based on the level of interest expressed by prospective institutional, professional and other investors during the book-building process, reduce the indicative Offer Price range and/or the number of Offer Shares below those stated in this prospectus at any time on or prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. In such a case, we will, as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the last day for lodging applications under the Hong Kong Public Offering, cause to be published in the South China Morning Post (in English) and the Hong Kong Economic Times (in Chinese) and posted on the website of the Hong Kong Stock Exchange (www.hkexnews.hk) and on the website of our Company (www.goldwind.cn) notices of the reduction. Upon issue of such a notice, the revised indicative Offer Price range and/or number of Offer Shares will be final and conclusive and the Offer Price, if agreed upon by the Joint Bookrunners, on behalf of the Underwriters, and our Company, will be fixed within such revised range. Such notice will also include confirmation or revision, as appropriate, of the working capital statement and the Global Offering

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statistics as currently set out in this prospectus, and any other financial information which may change materially as a result of such reduction.

Before submitting applications for Hong Kong Public Offer Shares, applicants should have regard to the possibility that any announcement of a reduction in the indicative offer price range and/or number of Offer Shares may not be made until the day which is the last day for lodging applications under the Hong Kong Public Offering. Applicants under the Hong Kong Public Offering should note that in no circumstances can applications be withdrawn once submitted, even if the indicative Offer Price range and/or number of Offer Shares is so reduced. In the absence of any such announcement so published, the number of Offer Shares will not be reduced and/or the Offer Price, if agreed upon by the Joint Bookrunners, on behalf of the Underwriters, and our Company, will under no circumstances be set outside the Offer Price range as stated in this prospectus.

In the event of a reduction in the number of Offer Shares, the Joint Bookrunners may, at their discretion, reallocate the number of Offer Shares to be offered in the Hong Kong Public Offering and the International Offering, provided that the number of Offer Shares comprised in the Hong Kong Public Offering shall not be less than 10% of the total number of Offer Shares available under the Global Offering (assuming the Over-allotment Option is not exercised). The Offer Shares to be offered in the Hong Kong Public Offering and the Offer Shares to be offered in the International Offering may, in certain circumstances, be reallocated between these offerings at the discretion of the Joint Bookrunners.

Announcement of Offer Price and basis of allocations

The final Offer Price, the level of indications of interest in the Global Offering, the results of applications and the basis of allotment of the Hong Kong Public Offer Shares are expected to be announced on June 21, 2010 in the South China Morning Post (in English) and the Hong Kong Economic Times (in Chinese) and to be posted on the website of the Hong Kong Stock Exchange (www.hkexnews.hk) and on the website of our Company (www.goldwind.cn).

Net proceeds

The net proceeds from the Global Offering accruing to us (after deduction of underwriting fees and estimated expenses payable by us in relation to the Global Offering, assuming that the Over-allotment Option is not exercised), are estimated to be approximately HK$8,078.6 million, assuming an Offer price of HK$21.40 per H Share, being the mid-point of the indicative Offer Price range of HK$19.80 to HK$23.00 (or if the Over-allotment Option is exercised in full, approximately HK$8,595.8 million, assuming an Offer Price of HK$19.80 per H Share, or approximately HK$9,985.0 million, assuming an Offer Price of HK$23.00 per H Share).

UNDERWRITING

The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters under the terms of the Hong Kong Underwriting Agreement and is subject to our Company and the Joint Bookrunners, on behalf of the Underwriters, agreeing on the Offer Price.

We expect to enter into the International Underwriting Agreement relating to the International Offering on the Price Determination Date.

These underwriting arrangements, and the Underwriting Agreements, are summarized in the section entitled “Underwriting” in this prospectus.

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CONDITIONS OF THE GLOBAL OFFERING

Acceptance of all applications for the Offer Shares will be conditional on:

• k the Listing Committee of the Hong Kong Stock Exchange granting listing of, and permission to deal in, the H Shares to be issued pursuant to the Global Offering (including the additional H Shares which may be made available pursuant to the exercise of the Over-allotment Option) (subject only to allotment);

• k the Offer Price having been duly agreed between us and the Joint Bookrunners (on behalf of the Underwriters);

• k the execution and delivery of the International Underwriting Agreement on or around the Price Determination Date; and

• k the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement and the obligations of the International Underwriters under the International Underwriting Agreement becoming and remaining unconditional and not having been terminated in accordance with the terms of the respective agreements, in each case on or before the dates and times specified in the Hong Kong Underwriting Agreement or the International Underwriting Agreement (unless and to the extent such conditions are validly waived on or before such dates and times) and in any event not later than the date which is 30 days after the date of this prospectus.

If, for any reason, the Offer Price is not agreed between our Company and the Joint Bookrunners (on behalf of the Underwriters) on or before June 20, 2010, the Global Offering will not proceed and will lapse.

The consummation of each of the Hong Kong Public Offering and the International Offering is conditional upon, among other things, the other offering becoming unconditional and not having been terminated in accordance with their respective terms.

If the above conditions are not fulfilled or waived prior to the dates and times specified, the Global Offering will lapse and the Hong Kong Stock Exchange will be notified immediately. Notice of the lapse of the Hong Kong Public Offering will be published by us in the South China Morning Post (in English) and the Hong Kong Economic Times (in Chinese) on the next day following such lapse. In such eventuality, all application monies will be returned, without interest, on the terms set out in the subsection entitled “How to Apply for Hong Kong Public Offer Shares — Dispatch/Collection of H Share Certificates and Refund Monies” in this prospectus. In the meantime, all application monies will be held in separate bank account(s) with the receiving bankers or other bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong) (as amended).

H Share certificates for the Offer Shares will only become valid certificates of title at 8:00 a.m. on June 22, 2010, provided that (a) the Global Offering has become unconditional in all respects and (b) the right of termination as described in the subsection entitled “Underwriting — Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for Termination” in this prospectus has not been exercised.

H SHARES WILL BE ELIGIBLE FOR CCASS

All necessary arrangements have been made enabling the H Shares to be admitted into the Central Clearing and Settlement System, or CCASS, established and operated by the Hong Kong Securities Clearing Company Limited, or HKSCC.

If the Hong Kong Stock Exchange grants the listing of, and permission to deal in, the H Shares and our Company complies with the stock admission requirements of HKSCC, the H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement

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of dealings in the H Shares on the Hong Kong Stock Exchange or any other date HKSCC chooses. Settlement of transactions between participants of the Hong Kong Stock Exchange is required to take place in CCASS on the second business day after any trading day.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

DEALING ARRANGEMENTS

Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m. in Hong Kong on June 22, 2010, it is expected that dealings in the H Shares on the Hong Kong Stock Exchange will commence at 9:30 a.m. on June 22, 2010.

The H Shares will be traded in board lots of 200 H Shares each.

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HOW TO APPLY FOR HONG KONG PUBLIC OFFER SHARES

WHO CAN APPLY FOR THE HONG KONG PUBLIC OFFER SHARES

You can apply for Hong Kong Public Offer Shares if you or any person(s) for whose benefit you are applying, are an individual, and:

• k are 18 years of age or older;

• k have a Hong Kong address;

• k are outside the United States; and

• k are not a legal or natural person of the PRC (except qualified domestic institutional investors).

If the applicant is a firm, the application must be in the names of the individual members, not the firm’s name. If the applicant is a body corporate, the Application Form must be signed by a duly authorized officer, who must state his or her representative capacity.

If an application is made by a person duly authorized under a valid power of attorney, the Joint Bookrunners (or their respective agents and nominees) may accept it at their discretion, and subject to any conditions they think fit, including production of evidence of the authority of the attorney.

The number of joint applicants may not exceed four.

If you wish to apply for Hong Kong Public Offer Shares online through the White Form eIPO service ( www.eipo.com.hk ), you must also:

• k have a valid Hong Kong identity card number; and

• k be willing to provide a valid e-mail address and a contact telephone number.

You may apply by means of the White Form eIPO service only if you are an individual applicant. Corporations or joint applicants may not apply by means of White Form eIPO .

We, the Joint Bookrunners and the designated White Form eIPO Service Provider, in their capacity as our agents, have full discretion to reject or accept any application, in full or in part, without assigning any reason.

The Hong Kong Public Offer Shares are not available to existing beneficial owners of Shares, the Directors, Supervisors or chief executive or their respective or any of our other Connected Persons or persons who will become our Connected Persons immediately upon completion of the Global Offering.

You may apply for Hong Kong Public Offer Shares under the Hong Kong Public Offering or indicate an interest for International Offer Shares under the International Offering, but may not do both.

CHANNELS OF APPLYING FOR THE HONG KONG PUBLIC OFFER SHARES

There are four channels to make an application for the Hong Kong Public Offer Shares:

• k You may apply for the Hong Kong Public Offer Shares by using a WHITE Application Form. Use a WHITE Application Form if you want the H Shares to be issued in your own name;

• k Instead of using a WHITE Application Form, you may apply for the Hong Kong Public Offer Shares by means of White Form eIPO by submitting applications online through the designated website of the White Form eIPO Service Provider at www.eipo.com.hk . Use White Form eIPO if you want the H Shares to be issued in your own name;

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HOW TO APPLY FOR HONG KONG PUBLIC OFFER SHARES

• k You may apply for the Hong Kong Public Offer Shares by using a YELLOW Application Form. Use a YELLOW Application Form if you want the Hong Kong Public Offer Shares to be issued in the name of HKSCC Nominees and deposited directly into CCASS for credit to your CCASS Investor Participant stock account or your designated CCASS Participant’s stock account; or

• k Instead of using a YELLOW Application Form, you may give electronic application instructions to HKSCC to cause HKSCC Nominees to apply for the Hong Kong Public Offer Shares on your behalf.

WHERE TO COLLECT THE PROSPECTUS AND APPLICATION FORMS

You can collect a WHITE Application Form and a prospectus during normal business hours from 9:00 a.m. on June 7, 2010 till 12:00 noon on June 10, 2010 from:

Any of the following addresses of the Hong Kong Underwriters:

China International Capital Corporation Hong Kong Securities Limited

29/F, One International Finance Centre

1 Harbour View Street

Central, Hong Kong

Citigroup Global Markets Asia Limited 50/F, Citibank Tower 3 Garden Road Central, Hong Kong

Taifook Securities Company Limited

25/F, New World Tower

16-18 Queen’s Road Central Hong Kong

Credit Suisse (Hong Kong) Limited 45th Floor, Two Exchange Square

8 Connaught Place Central, Hong Kong

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or any of the following branches of:

(a) Bank of China (Hong Kong) Limited

Hong Kong. . . . . . . . . . . Kowloon. . . . . . . . . . . . . New Territories . . . . . . .	Branch Name Bank of China Tower Branch Connaught Road Central Branch Quarry Bay Branch King’s Road Branch Hoi Yuen Road Branch Mong Kok (President Commercial Centre) Branch Humphrey’s Avenue Branch Mei Foo Mount Sterling Mall Branch East Point City Branch Sheung Shui Branch	Address
		3/F, 1 Garden Road 13-14 Connaught Road Central Parkvale, 1060 King’s Road, Quarry Bay 131-133 King’s Road, North Point 55 Hoi Yuen Road, Kwun Tong 608 Nathan Road, Mong Kok 4-4A Humphrey’s Avenue, Tsim Sha Tsui Shop N47-49 Mount Sterling Mall, Mei Foo Sun Chuen Shop 101, East Point City, Tseung Kwan O 61 San Fung Avenue, Sheung Shui

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(b) Standard Chartered Bank (Hong Kong) Limited Branch Name Hong Kong. . . . . . . . . . . 88 Des Voeux Road Branch Wanchai Southorn Branch North Point Centre Branch Aberdeen Branch Kowloon. . . . . . . . . . . . . Cheung Sha Wan Branch Lok Fu Shopping Centre Branch Telford Gardens Branch New Territories . . . . . . . Tai Po Branch Shatin Centre Branch Yuen Long Fung Nin Road Branch (c) China Construction Bank (Asia) Corporation Limited Branch Name Hong Kong. . . . . . . . . . . Sheung Wan Des Voeux Road Branch Causeway Bay Plaza Branch Kowloon. . . . . . . . . . . . . Mongkok Nathan Road Branch Jordan Branch Hunghom Whampoa Branch New Territories . . . . . . . Tsuen Wan Branch Shatin Plaza Branch Yuen Long Branch	Address
	88 Des Voeux Road Central, Central Shop C2 on G/F and 1/F, Lee Wing Building, No. 156-162 Hennessy Road, Wanchai North Point Centre, 284 King’s Road, North Point Shop 4A, G/F, Aberdeen Centre Site 5, No.6 Nam Ning Street, Aberdeen 828 Cheung Sha Wan Road, Cheung Sha Wan Shop G101, G/F., Lok Fu Shopping Centre Shop P9-12, Telford Centre, Telford Gardens, Tai Yip Street Kwun Tong 23 & 25 Kwong Fuk Road, Tai Po Market, Tai Po Shop 32C, Level 3, Shatin Shopping Arcade, Shatin Centre, 2-16 Wang Pok Street, Shatin Shop B at G/F and 1/F, Man Cheong Building, 247 Castle Peak Road, Yuen Long Address
	237 Des Voeux Road Central, Central G/F, Causeway Bay Plaza 1, Causeway Bay 788 Nathan Road, Mongkok, Kowloon 316 Nathan Road, Kowloon Shop A3, G/F, Yuen Wah Building, Whampoa Estates, Kowloon 282 Sha Tsui Road, Tsuen Wan Shop 5, Level 1, Shatin Plaza Shatin 68 Castle Peak Road, Yuen Long

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You can collect a YELLOW Application Form and a prospectus during normal business hours from 9:00 a.m. on June 7, 2010 until 12:00 noon on June 10, 2010 from the Depository Counter of HKSCC at 2nd Floor, Vicwood Plaza, 199 Des Voeux Road Central, Hong Kong.

Your stockbroker may also have Application Forms and this prospectus available.

HOW TO APPLY USING A WHITE OR YELLOW APPLICATION FORM

• (a) Obtain an Application Form as described in the subsection above entitled “Where to Collect the Prospectus and Application Forms”.

• (b) Complete the Application Form in English using blue or black ink, and sign it. There are detailed instructions on each Application Form. You should read these instructions carefully. If you do not follow the instructions, your application may be rejected and returned by ordinary post together with the accompanying cheque(s) or banker’s cashier order(s) to you (or the first-named applicant in the case of joint applicants) at your own risk at the address given on the Application Form.

• (c) Each Application Form must be accompanied by payment, in the form of either one cheque or one banker’s cashier order. You should read the detailed instructions set out on the Application Form carefully, as an application is liable to be rejected if the cheque or banker’s cashier order does not meet the requirements set out on the Application Form.

• (d) Lodge the Application Form in one of the special collection boxes by the time and at one of the locations as described in the subsection above entitled “Where to Collect the Prospectus and Application Forms”.

You should note that by completing and submitting a WHITE or YELLOW Application Form, among other things:

• (a) you agree with our Company and each of the Shareholders, and our Company agrees with each of the Shareholders, to observe and comply with PRC laws, the Companies Ordinance and the Articles of Association;

• (b) you confirm that you have only relied on the information and representations contained in this prospectus in making your application and will not rely on any other information or representations save as set out in any supplement to this prospectus;

• (c) you agree that none of our Company, the Joint Global Coordinators, the Joint Bookrunners, the Underwriters, their respective directors, officers, employees, partners, agents, advisors and any other parties involved in the Global Offering is or will be liable for any information and representations not contained in this prospectus (and any supplement thereto);

• (d) you undertake and confirm that you (if the application is made for your benefit) or the person(s) for whose benefit you have made the application have not applied for or taken up, or indicated an interest for, and will not apply for or take up, or indicate an interest for, any International Offer Share nor otherwise participated in the International Offering; and

• (e) you agree to disclose to our Company, and/or our H Share Registrar, receiving bankers, the Joint Bookrunners, the Underwriters and their respective advisors and agents any personal data which they require about you and the person(s) for whose benefit you have made the application.

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In order for an application made on a YELLOW Application Form to be valid:

You, as the applicant(s), must complete the Application Form as indicated below and sign on the first page of the Application Form. Only written signatures will be accepted.

(a) If the application is made through a designated CCASS Participant (other than a CCASS Investor Participant):

• (i) the designated CCASS Participant must endorse the Application Form with its company chop (bearing its company name) and insert its participant I.D. in the appropriate box in the Application Form.

• (b) If the application is made by an individual CCASS Investor Participant :

• (i) the Application Form must contain the CCASS Investor Participant’s full name and Hong Kong Identity Card number; and

• (ii) the CCASS Investor Participant must insert its participant I.D. in the appropriate box in the Application Form.

• (c) If the application is made by a joint individual CCASS Investor Participant :

• (i) the Application Form must contain all joint CCASS Investor Participants’ full names and the Hong Kong Identity Card numbers of all joint CCASS Investor Participants; and

• (ii) the participant I.D. must be inserted in the appropriate box in the Application Form.

• (d) If the application is made by a corporate CCASS Investor Participant :

• (i) the Application Form must contain your company name and the Hong Kong business registration number; and

• (ii) the participant I.D. and company chop (bearing its company name) must be inserted in the appropriate box in the Application Form.

Incorrect or omission of details of the CCASS Participant or (including participant I.D. and/or company chop bearing the Company name) or other similar matters may render your application invalid.

If your application is made through a duly authorized attorney, we and the Joint Bookrunners, the Underwriters and their respective agents or nominees as our agents may accept it at our discretion, and subject to any conditions we think fit, including evidence of the authority of your attorney. We and the Joint Bookrunners, in their capacity as our agents, will have full discretion to reject or accept any application, in full or in part, without assigning any reason.

APPLYING THROUGH WHITE FORM eIPO SERVICE

General

• (a) If you are an individual and meet the criteria set out above in the subsection entitled “Who can apply for the Hong Kong Public Offer Shares”, you may apply through White Form eIPO service by submitting an application through designated website at www.eipo.com.hk . If you apply through White Form eIPO service, the H Shares will be issued in your own name.

• (b) Detailed instructions for application through the White Form eIPO service are set out on the designated website at www.eipo.com.hk . You should read these instructions carefully. If you do not follow the

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instructions, your application may be rejected by the designated White Form eIPO Service Provider and may not be submitted to our Company.

• (c) In addition to the terms and conditions set out in this prospectus, the designated White Form eIPO Service Provider may impose additional terms and conditions upon you for the use of the White Form eIPO service. Such terms and conditions are set out on the designated website at www.eipo.com.hk . You will be required to read, understand and agree to such terms and conditions in full prior to making any application.

• (d) By submitting an application to the designated White Form eIPO Service Provider through the White Form eIPO service ( www.eipo.com.hk ), you are deemed to have authorized the designated White Form eIPO Service Provider to transfer the details of your application to our Company and our H Share Registrar.

• (e) You may submit an application through the White Form eIPO service in respect of a minimum of 200 Hong Kong Public Offer Shares. Each electronic application instruction in respect of more than 200 Hong Kong Public Offer Shares must be in one of the numbers set out in the table in the Application Forms, or as otherwise specified on the designated website at www.eipo.com.hk .

• (f) You may submit your application to the designated White Form eIPO Service Provider through the designated website at www.eipo.com.hk from 9:00 a.m. on June 7, 2010 until 11:30 a.m. on June 10, 2010 or such later time as described under the subsection entitled “Effect of bad weather on the opening of the application lists” below (24 hours daily, except on the last application day). The latest time for completing full payment of application monies in respect of such applications will be 12:00 noon on June 10, 2010, the last application day, or, if the application lists are not open on that day, then by the time and date stated in the subsection entitled “Effect of bad weather on the opening of the application lists” below.

• (g) You will not be permitted to submit your application to the designated White Form eIPO Service Provider through the designated website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you have already submitted your application and obtained an application reference number from the website prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment of application monies) until 12:00 noon on the last day for submitting applications, when the application lists close. If you do not make complete payment of the application monies (including any related fees) on or before 12:00 noon on June 10, 2010, or such later time as described under the subsection entitled “Effect of bad weather on the opening of the application lists” below , the designated White Form eIPO Service Provider will reject your application and your application monies will be returned to you in the manner described in the designated website at www.eipo.com.hk .

• (h) Warning: The application for Hong Kong Public Offer Shares through the White Form eIPO service ( www.eipo.com.hk ) is only a facility provided by the designated White Form eIPO Service Provider to public investors. Our Company, the Directors, the Joint Bookrunners, the Underwriters and the White Form eIPO Service Provider take no responsibility for such applications, and provide no assurance that applications through the White Form eIPO service ( www.eipo.com.hk ) will be submitted to our Company or that you will be allotted any Hong Kong Public Offer Shares.

Environmental Protection

The obvious advantage of White Form eIPO is to save the use of papers via the self-serviced and electronic application process. Computershare Hong Kong Investor Services Limited being the designated White Form eIPO Service Provider will contribute HK$2.00 for each “Xinjiang Goldwind Science & Technology Co., Ltd.” White

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Form eIPO application submitted via www.eipo.com.hk to support the funding of “Source of DongJiang — Hong Kong Forest” project initiated by Friends of the Earth (HK).

Please note that Internet services may have capacity limitations and/or be subject to service interruptions from time to time. To ensure that you can submit your applications through the White Form eIPO service ( www.eipo.com.hk ), you are advised not to wait until the last day for submitting applications in the Hong Kong Public Offering to submit your electronic application instructions. In the event that you have problems connecting to the designated website for the White Form eIPO service ( www.eipo.com.hk ), you should submit a WHITE Application Form. However, once you have submitted electronic application instructions and completed payment in full using the application reference number provided to you on the designated website, you will be deemed to have made an actual application and should not submit a WHITE Application Form. Please see the subsection entitled “How many applications may be made” below.

Additional information

For the purposes of allocating Hong Kong Public Offer Shares, each applicant giving electronic application instructions through White Form eIPO service to the White Form eIPO Service Provider through the designated website at www.eipo.com.hk will be treated as an applicant.

If your payment of application monies is insufficient, or in excess of the required amount, having regard to the number of Hong Kong Public Offer Shares for which you have applied, or if your application is otherwise rejected by the designated White Form eIPO Service Provider, the designated White Form eIPO Service Provider may adopt alternative arrangements for the refund of monies to you. Please refer to the additional information provided by the designated White Form eIPO Service Provider on the designated website at www.eipo.com.hk .

APPLYING BY GIVING ELECTRONIC APPLICATION INSTRUCTIONS TO HKSCC VIA CCASS

General

CCASS Participants may give electronic application instructions to HKSCC to apply for the Hong Kong Public Offer Shares and to arrange payment of the monies due on application and payment of refunds. This will be in accordance with their participant agreements with HKSCC and the General Rules of CCASS and the CCASS Operational Procedures.

If you are a CCASS Investor Participant, you may give electronic application instructions through the CCASS Phone System by calling +852 2979 7888 or through the CCASS Internet System (https://ip.ccass.com) (under the procedures contained in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time). HKSCC can also input electronic application instructions for you if you go to:

Hong Kong Securities Clearing Company Limited

Customer Service Counter 2nd Floor, Vicwood Plaza 199 Des Voeux Road Central Hong Kong

and complete an input request form. Prospectuses are available for collection from the above address.

If you are not a CCASS Investor Participant, you may instruct your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instructions via CCASS terminals to apply for the Hong Kong Public Offer Shares on your behalf.

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You are deemed to have authorized HKSCC and/or HKSCC Nominees to transfer the details of your application, whether submitted by you or through your broker or custodian, to our Company and the H Share Registrar.

Giving electronic application instructions to HKSCC to apply for Hong Kong Public Offer Shares by HKSCC Nominees on your behalf

Where a WHITE Application Form is signed by HKSCC Nominees on behalf of persons who have given electronic application instructions to apply for the Hong Kong Public Offer Shares:

• (i) HKSCC Nominees is only acting as a nominee for those persons and shall not be liable for any breach of the terms and conditions of the WHITE Application Form or this prospectus;

• (ii) HKSCC Nominees does the following things on behalf of each such person:

• k agrees that the Hong Kong Public Offer Shares to be allotted shall be issued in the name of HKSCC Nominees and deposited directly into CCASS for the credit of the stock account of the CCASS Participant who has inputted electronic application instructions on that person’s behalf or that person’s CCASS Investor Participant stock account;

• k undertakes and agrees to accept the Hong Kong Public Offer Shares in respect of which that person has given electronic application instructions or any lesser number;

• k undertakes and confirms that person has not indicated an interest for, applied for or taken up or indicated an interest for, any Offer Shares under the International Offering nor otherwise participated in the International Offering;

• k (if the electronic application instructions are given for that person’s own benefit) declares that only one set of electronic application instructions has been given for that person’s benefit;

• k (if that person is an agent for another person) declares that person has only given one set of electronic application instructions for the benefit of that other person and that person is duly authorized to give those instructions as that other person’s agent;

• k understands that the above declaration will be relied upon by our Company, the Directors and the Joint Bookrunners in deciding whether or not to make any allotment of the Hong Kong Public Offer Shares in respect of the electronic application instructions given by that person and that person may be prosecuted if he makes a false declaration;

• k authorizes our Company to place the name of HKSCC Nominees on our register of members as the holder of the Hong Kong Public Offer Shares allotted in respect of that person’s electronic application instructions and to send share certificate(s) and/or refund monies in accordance with the arrangements separately agreed between us and HKSCC;

• k confirms that person has read the terms and conditions and application procedures set out in this prospectus and agrees to be bound by them;

• k confirms that person has only relied on the information and representations in this prospectus in giving that person’s electronic application instructions or instructing that person’s broker or custodian to give electronic application instructions on that person’s behalf save as set out in any supplement to this prospectus;

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• k agrees that our Company, the Joint Bookrunners, the Underwriters, their respective directors, officers, employees, partners, agents, advisors and any other parties involved in the Global Offering are liable only for the information and representations contained in this prospectus and any supplement thereto;

• k agrees to disclose that person’s personal data to our Company, the Joint Bookrunners and/or their respective agents and any information which they may require about that person;

• k agrees (without prejudice to any other rights which that person may have) that once the application of HKSCC Nominees has been accepted, the application cannot be rescinded for innocent misrepresentation;

• k agrees that any application made by HKSCC Nominees on behalf of that person pursuant to electronic application instructions given by that person is irrevocable before the 5th day after the time of the opening of the application lists (excluding for this purpose any day which is Saturday, Sunday or a public holiday in Hong Kong), such agreement to take effect as a collateral contract with us and to become binding when that person gives the instructions and such collateral contract to be in consideration of our Company agreeing that we will not offer any Hong Kong Public Offer Shares to any person before the fifth day after the time of the opening of the application lists (excluding for this purpose any day which is Saturday, Sunday or a public holiday in Hong Kong), except by means of one of the procedures referred to in this prospectus. However, HKSCC Nominees may revoke the application before the fifth day after the time of the opening of the application lists (excluding for this purpose any day which is a Saturday, Sunday or public holiday in Hong Kong) if a person responsible for this prospectus under Section 40 of the Companies Ordinance gives a public notice under that section which excludes or limits the responsibility of that person for this prospectus;

• k agrees that once the application of HKSCC Nominees is accepted, neither that application nor that person’s electronic application instructions can be revoked, and that acceptance of that application will be evidenced by the announcement of the results of the Hong Kong Public Offering published by our Company;

• k agrees to the arrangements, undertakings and warranties specified in the participant agreement between that person and HKSCC, read with the General Rules of CCASS and the CCASS Operational Procedures, in respect of the giving of electronic application instructions relating to Hong Kong Public Offer Shares;

• k agrees with our Company, for ourselves and for the benefit of each of the Shareholders (and so that we will be deemed by our acceptance in whole or in part of the application by HKSCC Nominees to have agreed, for ourselves and on behalf of each of the Shareholders, with each CCASS Participant giving electronic application instructions ) to observe and comply with the PRC Company Law, the Companies Ordinance and the Articles of Association;

• k agrees with the Company, for itself and for the benefit of each shareholder of the Company and each director, supervisor, manager and other senior officer of the Company (and so that the Company will be deemed by its acceptance in whole or in part of this application to have agreed, for itself and on behalf of each shareholder of the Company and each director, supervisor,

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manager and other senior officer of the Company, with each CCASS Participant giving electronic application instructions):

• (a) to refer all differences and claims arising from the Articles of Association of the Company or any rights or obligations conferred or imposed by the Company Law or other relevant laws and administrative regulations concerning the affairs of the Company to arbitration in accordance with the Articles of Association of the Company;

• (b) that any award made in such arbitration shall be final and conclusive; and

• (c) that the arbitration tribunal may conduct hearings in open sessions and publish its award;

• k agrees with the Company (for the Company itself and for the benefit of each shareholder of the Company) that H shares in the Company are freely transferable by their holders;

• k authorizes the Company to enter into a contract on its behalf with each director and officer of the Company whereby each such director and officer undertakes to observe and comply with his obligations to shareholders stipulated in the Articles of Association of the Company; and

• k agrees that that person’s application, any acceptance of it and the resulting contract will be governed by and construed in accordance with the laws of Hong Kong.

Effect of giving electronic application instructions to HKSCC via CCASS

By giving electronic application instructions to HKSCC or instructing your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give such instructions to HKSCC, you (and, if you are joint applicants, each of you jointly and severally) are deemed to have done the following things. Neither HKSCC nor HKSCC Nominees shall be liable to our Company or any other person in respect of the things mentioned below:

• k instructed and authorized HKSCC to cause HKSCC Nominees (acting as nominee for the relevant CCASS Participants) to apply for the Hong Kong Public Offer Shares on your behalf;

• k instructed and authorized HKSCC to arrange payment of the maximum offer price, brokerage, SFC transaction levy and Hong Kong Stock Exchange trading fee by debiting your designated bank account and, in the case of a wholly or partially unsuccessful application and/or if the Offer Price is less than the offer price per H Share initially paid on application, refund of the application monies, in each case including brokerage, SFC transaction levy and Hong Kong Stock Exchange trading fee, by crediting your designated bank account; and

• k instructed and authorized HKSCC to cause HKSCC Nominees to do on your behalf all the things which it is stated in the WHITE Application Form.

Multiple Applications

If you are suspected of having made multiple applications or if more than one application is made for your benefit, the number of Hong Kong Public Offer Shares applied for by HKSCC Nominees will be automatically reduced by the number of Hong Kong Public Offer Shares in respect of which you have given such instructions and/or in respect of which such instructions have been given for your benefit. Any electronic application instructions to make an application for the Hong Kong Public Offer Shares given by you or for your benefit to

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HKSCC shall be deemed to be an actual application for the purposes of considering whether multiple applications have been made.

Minimum Subscription Amount and Permitted numbers

You may give or cause your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instructions in respect of a minimum of 200 Hong Kong Public Offer Shares. Each electronic application instruction in respect of more than 200 Hong Kong Public Offer Shares must be in one of the numbers set out in the table in the WHITE and YELLOW Application Forms. No application for any other number of Hong Kong Public Offer Shares will be considered and any such application is liable to be rejected.

Allocation of the Hong Kong Public Offer Shares

For the purposes of allocating the Hong Kong Public Offer Shares, HKSCC Nominees will not be treated as an applicant. Instead, each CCASS Participant who gives electronic application instructions or each person for whose benefit each such instructions is given will be treated as an applicant.

Timing for Inputting electronic application instructions to HKSCC via CCASS

CCASS Clearing/Custodian Participants can input electronic application instructions at the following times on the following dates:

Monday, 7 June 2010 — 9:00 a.m. to 8:30 p.m.[(1)] Tuesday, 8 June 2010 — 8:00 a.m. to 8:30 p.m.[(1)] Wednesday, 9 June 2010 — 8:00 a.m. to 8:30 p.m.[(1)] Thursday, 10 June 2010 — 8:00 a.m.[(1)] to 12:00 noon

(1) These times are subject to change as HKSCC may determine from time to time with prior notification to CCASS Clearing/Custodian Participants.

CCASS Investor Participants can input electronic application instructions from 9:00 a.m. on June 7, 2010 until 12:00 noon on June 10, 2010 (24 hours daily, except the last application day).

The latest time for inputting electronic application instructions will be 12:00 noon on June 10, 2010, the last application day, or if the application lists are not open on that day, by the time and date stated in the subsection entitled “Effects of bad weather conditions on the opening of the application lists” below.

Section 40 of the Companies Ordinance

For the avoidance of doubt, our Company and all other parties involved in the preparation of this prospectus acknowledge that each CCASS Participant who gives or causes to give electronic application instructions is a person who may be entitled to compensation under Section 40 of the Companies Ordinance (as applied by section 342E of the Companies Ordinance).

Personal Data

The section of the Application Form entitled “Personal Data” applies to any personal data held by us and our H Share Registrar about you in the same way as it applies to personal data about applicants other than HKSCC Nominees.

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Warning

The subscription for the Hong Kong Public Offer Shares by giving electronic application instructions to HKSCC is only a facility provided to CCASS Participants. Our Company, the Directors, the Joint Bookrunners and the Underwriters take no responsibility for the application and provide no assurance that any CCASS Participant will be allotted any Hong Kong Public Offer Shares.

To ensure that CCASS Investor Participants can give their electronic application instructions to HKSCC through the CCASS Phone System or the CCASS Internet System, CCASS Investor Participants are advised not to wait until the last minute to input their electronic application instructions . In the event that CCASS Investor Participants have problems connecting to the CCASS Phone System or the CCASS Internet System to submit their electronic application instructions , they should either:

• (i) submit a WHITE or YELLOW Application Form; or

• (ii) go to HKSCC’s Customer Service Centre to complete an input request form for electronic application instructions before 12:00 noon on June 10, 2010, or such later time as described under the subsection entitled “Effect of Bad Weather Conditions on the Opening of the Application Lists” below.

HOW MANY APPLICATIONS MAY BE MADE

You may make more than one application for the Hong Kong Public Offer Shares if and only if you are a nominee , in which case you may make an application as a nominee by (i) giving electronic application instructions to HKSCC (if you are a CCASS Participant) or; (ii) using a WHITE or YELLOW Application Form, and lodging more than one Application Form in your own name if each application is made on behalf of different beneficial owners. In the box on the Application Form marked “For nominees” you must include:

• k an account number; or

• k some other identification code,

for each beneficial owner or, in the case of joint beneficial owners, for each such beneficial owner. If you do not include this information, the application will be treated as being made for your benefit.

Otherwise, multiple applications are not allowed. It will be a term and condition of all applications that by completing and delivering an Application Form, you:

• k (if the application is made for your own benefit) warrant that this is the only application which has been or will be made for your benefit on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC or to the designated White Form eIPO Service Provider through White Form eIPO service ( www.eipo.com.hk );

• k (if you are an agent for another person) warrant that reasonable enquiries have been made of that other person that this is the only application which has been or will be made for the benefit of that other person on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC or to the designated White Form eIPO Service Provider through White Form eIPO service ( www.eipo.com.hk ) and that you are duly authorized to sign the Application Form as that other person’s agent.

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Except where you are a nominee and provide the information required to be provided in your application, all of your applications will be rejected as multiple applications if you, or you and your joint applicant(s) together:

• k make more than one application (whether individually or jointly) on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC or to the designated White Form eIPO Service Provider through White Form eIPO service ( www.eipo.com.hk ); or

• k apply both (whether individually or jointly) on one WHITE Application Form and one YELLOW Application Form or on one WHITE or YELLOW Application Form and give electronic application instructions to HKSCC or to the designated White Form eIPO Service Provider through White Form eIPO service ( www.eipo.com.hk ); or

• k apply (whether individually or jointly) on one WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC or to the designated White Form eIPO Service Provider through White Form eIPO service ( www.eipo.com.hk ) for more than 19,764,800 H Shares, being 50% of the Offer Shares initially being offered for public subscription under the Hong Kong Public Offering, as more particularly described in the subsection entitled “Structure of the Global Offering — The Hong Kong Public Offering” in this prospectus; or

• k have applied for or taken up, or indicated an interest for, or have been or will be placed or allocated (including conditionally and/or provisionally) Offer Shares under the International Offering.

All of your applications will also be rejected as multiple applications if more than one application on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC or to the designated White Form eIPO Service Provider through White Form eIPO service is made for your benefit (including the part of the application made by HKSCC Nominees acting on electronic application instructions). If an application is made by an unlisted company and:

• k the principal business of that company is dealing in securities; and

• k you exercise statutory control over that company,

then the application will be treated as being for your benefit.

Unlisted company means a company with no equity securities listed on the Hong Kong Stock Exchange.

Statutory control in relation to a company means you:

• k control the composition of the board of directors of the company; or

• k control more than half of the voting power of the company; or

• k hold more than half of the issued share capital of the company (not counting any part of it which carries no right to participate beyond a specified amount in a distribution of either profits or capital).

HOW MUCH ARE THE HONG KONG PUBLIC OFFER SHARES

The maximum Offer Price is HK$23.00 per H Share. You must also pay brokerage of 1%, SFC transaction levy of 0.004% and the Hong Kong Stock Exchange trading fee of 0.005%. This means that for one board lot of 200 H Shares you will pay approximately HK$4,646.41. The Application Forms have tables showing the exact amount payable for numbers of H Shares up to 19,764,800 H Shares.

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You must pay the maximum Offer Price, brokerage, SFC transaction levy and the Hong Kong Stock Exchange trading fee in full upon application for the H Shares by a cheque or a banker’s cashier order in accordance with the terms set out in the Application Forms (if you apply by an Application Form).

If your application is successful, brokerage is paid to participants of the Hong Kong Stock Exchange, the SFC transaction levy and the Hong Kong Stock Exchange trading fee are paid to the Hong Kong Stock Exchange (in the case of the SFC transaction levy, collected on behalf of the SFC).

REFUND OF APPLICATION MONIES

If you do not receive any Hong Kong Public Offer Shares for any reason, we will refund your application monies, including brokerage of 1%, SFC transaction levy of 0.004% and Hong Kong Stock Exchange trading fee of 0.005%. No interest will be paid thereon. All interest accrued on such monies prior to the date of dispatch of e-Refund payment instructions/refund cheques/share certificates will be retained for our benefit.

If your application is accepted only in part, we will refund the appropriate portion of your application monies, including the related brokerage of 1%, SFC transaction levy of 0.004% and Hong Kong Stock Exchange trading fee of 0.005%, without interest.

If the Offer Price as finally determined is less than HK$23.00 per H Share, appropriate refund payments, including the brokerage of 1%, SFC transaction levy of 0.004% and Hong Kong Stock Exchange trading fee of 0.005% attributable to the surplus application monies will be made to successful applicants, without interest. Details of the procedure for refund are set out below in the subsection entitled “Dispatch/Collection of Share Certificates and Refund Monies” below.

In a contingency situation involving a substantial over-subscription, at the discretion of our Company and the Joint Bookrunners, cheques for applications for certain small denominations of Hong Kong Public Offer Shares on Application Forms (apart from successful applications) may not be cleared.

Refund of your application monies (if any) will be made on June 21, 2010 in accordance with the various arrangements as described in this section.

MEMBERS OF THE PUBLIC — TIME FOR APPLYING FOR HONG KONG PUBLIC OFFER SHARES

Completed WHITE or YELLOW Application Forms, together with payment attached, must be lodged by 12:00 noon on June 10, or, if the application lists are not open on that day, then by the time and date stated in the subsection entitled “Effect of bad weather on the opening of the application lists” below.

Your completed Application Form, together with payment attached, should be deposited in the special collection boxes provided at any of the branches of the receiving banks listed under the section entitled “Where to collect the Prospectus and Application Forms” above at the following times:

Monday, 7 June 2010 — 9:00 a.m. to 5:00 p.m. Tuesday, 8 June 2010 — 9:00 a.m. to 5:00 p.m. Wednesday, 9 June 2010 — 9:00 a.m. to 5:00 p.m. Thursday, 10 June 2010 — 9:00 a.m. to 12:00 noon

The application lists will be open from 11:45 a.m. to 12:00 noon on June 10, 2010.

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HOW TO APPLY FOR HONG KONG PUBLIC OFFER SHARES

No proceedings will be taken on applications for the Offer Shares and no allotment of any such Offer Shares will be made until the closing of the application lists. No allotment of any of the Offer Shares will be made later than June 10, 2010.

EFFECT OF BAD WEATHER ON THE OPENING OF THE APPLICATION LISTS

The application lists will not open if there is:

• k a tropical cyclone warning signal number 8 or above; or

• k a “black” rainstorm warning

in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on June 10, 2010. Instead they will open between 11:45 a.m. and 12:00 noon on the next Business Day which does not have either of those warnings in Hong Kong in force at any time between 9:00 a.m. and 12:00 noon on such day.

Business Day means a day that is not a Saturday, Sunday or a public holiday in Hong Kong.

PUBLICATION OF RESULTS

We expect to announce the Offer Price, the indication of the level of interest in the International Offering, the basis of allotment of the Hong Kong Public Offer Shares and the indication of the level of applications under the Hong Kong Public Offering on June 21, 2010 in the South China Morning Post (in English) and the Hong Kong Economic Times (in Chinese). The allotment results as published in the newspapers will also be posted on the website of the Hong Kong Stock Exchange ( www.hkexnews.hk ) and on the website of our Company ( www.goldwind.cn ) on June 21, 2010.

In addition, we expect to announce the results of applications and the Hong Kong identity card/passport/Hong Kong business registration numbers of successful applicants under the Hong Kong Public Offering at the times and dates and in the manner specified below:

• (a) Results of allocations for the Hong Kong Public Offering will be available from our designated results of allocations website at www.iporesults.com.hk on a 24-hour basis from 8:00 a.m. on June 21, 2010 to 12:00 midnight on June 27, 2010. The user will be required to key in the Hong Kong identity card/ passport/Hong Kong business registration number provided in his/her/its application to search for his/ her/its own allocation result;

• (b) Results of allocations will be available from our Hong Kong Public Offering allocation results telephone enquiry line. Applicants may find out whether or not their applications have been successful and the number of Offer Shares allocated to them, if any, by calling +852 2862 8669 between 9:00 a.m. and 10:00 p.m. from June 21, 2010 to June 24, 2010; and

• (c) Special allocation results booklets setting out the results of allocations will be available for inspection during opening hours of individual branches and sub-branches from June 21, 2010 to June 23, 2010 at all the receiving bank branches and sub-branches at the addresses set out in the subsection entitled “Where to collect the Prospectus and the Application Forms” above.

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HOW TO APPLY FOR HONG KONG PUBLIC OFFER SHARES

CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOTTED HONG KONG PUBLIC OFFER SHARES

Full details of the circumstances in which you will not be allotted the Hong Kong Public Offer Shares are set out in the notes attached to the relevant Application Forms (whether you are making your application by an Application Form or electronically instructing HKSCC to cause HKSCC Nominees to apply on your behalf), and you should read them carefully. You should note in particular the following situations in which the Hong Kong Public Offer Shares will not be allotted to you:

k If your application is revoked:

By completing and submitting an Application Form or giving an electronic application instruction , you agree that your application or the application made by HKSCC Nominees or to the designated White Form eIPO Service Provider through White Form eIPO service ( www.eipo.com.hk ) on your behalf cannot be revoked on or before July 6, 2010. This agreement will take effect as a collateral contract with our Company, and will become binding when you lodge your Application Form or give your electronic application instruction to HKSCC and an application has been made by HKSCC Nominees on your behalf accordingly. This collateral contract will be in consideration of our Company agreeing that we will not offer any Hong Kong Public Offer Shares to any person on or before June 10, 2010 except by means of one of the procedures referred to in this prospectus.

Your application or the application made by HKSCC Nominees or to the designated White Form eIPO Service Provider through White Form eIPO service ( www.eipo.com.hk ) on your behalf may only be revoked on or before July 6, 2010 if a person responsible for this prospectus under section 40 of the Companies Ordinance (as applied by section 342E of the Companies Ordinance) gives a public notice under that section which excludes or limits the responsibility of that person for this prospectus.

If any supplement to this prospectus is issued, applicant(s) who have already submitted an application may or may not (depending on the information contained in the supplement) be notified that they can withdraw their applications. If applicant(s) have not been so notified, or if applicant(s) have been notified but have not withdrawn their applications in accordance with the procedure to be notified, all applications that have been submitted remain valid and may be accepted. Subject to the above, an application once made is irrevocable and applicants shall be deemed to have applied on the basis of the prospectus as supplemented.

If your application or the application made by HKSCC Nominees or to the designated White Form eIPO Service Provider through White Form eIPO service ( www.eipo.com.hk ) on your behalf has been accepted, it cannot be revoked. For this purpose, acceptance of applications which are not rejected will be constituted by notification in the press of the results of allocation, and where such basis of allocation is subject to certain conditions or provides for allocation by ballot, such acceptance will be subject to the satisfaction of such conditions or results of the ballot respectively.

k

Full discretion of our Company or our agents to reject or accept your application:

Our Company, the Joint Bookrunners (as our agents) and the White Form eIPO Service Provider or the respective agents and nominees, have full discretion to reject or accept any application, or to accept only part of any application.

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HOW TO APPLY FOR HONG KONG PUBLIC OFFER SHARES

Our Company, the Joint Bookrunners, the Hong Kong Underwriters and the White Form eIPO Service Provider in their capacity as our agents, and the respective agents and nominees do not have to give any reason for any rejection or acceptance.

k

If the allotment of Hong Kong Public Offer Shares is void:

The allotment of Hong Kong Public Offer Shares to you or to HKSCC Nominees (if you give electronic application instructions or apply by a YELLOW Application Form) will be void if the Listing Committee of the Hong Kong Stock Exchange does not grant permission to list the H Shares either:

• k within three weeks from the closing of the application lists; or

• k within a longer period of up to six weeks if the Listing Committee of the Hong Kong Stock Exchange notifies our Company of that longer period within three weeks of the closing date of the application lists.

• k

You will not receive any allotment if:

• k you make multiple applications or suspected multiple applications;

• k you or the person for whose benefit you are applying have applied for or taken up, or indicated an interest for, or have been or will be placed or allocated (including conditionally and/or provisionally) Hong Kong Public Offer Shares and/or Offer Shares in the International Offering. By filling in any of the Application Forms or applying by giving electronic application instructions you agree not to apply for Hong Kong Public Offer Shares as well as the International Offer Shares in the International Offering. Reasonable steps will be taken to identify and reject applications in the Hong Kong Public Offering from investors who have received Offer Shares in the International Offering, and to identify and reject indications of interest in the International Offering from investors who have received Hong Kong Public Offer Shares in the Hong Kong Public Offering;

• k the number of shares you have applied for is not one of the numbers as set out in the payment tables in the Application Forms;

• k your application is not completed in accordance with the instructions as stated in the Application Forms (if you apply by an Application Form) or on the White Form eIPO website;

• k your payment is not made correctly or you pay by cheque or banker’s cashier order and the cheque or banker’s cashier order is dishonored upon its first presentation;

• k the Underwriting Agreements do not become unconditional;

• k the Underwriting Agreements are terminated in accordance with their respective terms;

• k our Company or the Joint Bookrunners believe that by accepting your application, they would violate the applicable securities or other laws, rules or regulations; or

• k your application is for more than 50% of the Hong Kong Public Offer Shares initially offered for public subscription under the Hong Kong Public Offering.

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HOW TO APPLY FOR HONG KONG PUBLIC OFFER SHARES

DISPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND MONIES

If an application is rejected, not accepted or accepted in part only, or if the Offer Price as finally determined is less than the Offer Price of HK$23.00 per H Share (excluding brokerage, SFC transaction levy and Hong Kong Stock Exchange trading fee thereon) initially paid on application, or if the conditions of the Hong Kong Public Offering are not fulfilled in accordance with the subsection entitled “Structure of the Global Offering — Conditions of the Global Offering” in this prospectus or if any application is revoked or any allotment pursuant thereto has become void, the application monies, or the appropriate portion thereof, together with the related brokerage, SFC transaction levy and Hong Kong Stock Exchange trading fee, will be refunded, without interest. It is intended that special efforts will be made to avoid any undue delay in refunding application monies where appropriate.

You will receive one H Share certificate for all the Hong Kong Public Offer Shares issued to you under the Hong Kong Public Offering (except pursuant to applications made on YELLOW Application Forms or by electronic application instructions to HKSCC via CCASS where the H Share certificates will be deposited into CCASS as described below).

No temporary document of title will be issued in respect of the H Shares. No receipt will be issued for sums paid on application but, subject to personal collection as mentioned below, in due course they will be sent to you (or, in the case of joint applicants, to the first-named applicant) by ordinary post, at your own risk, to the address specified on the application:

• (a) for applications on WHITE Application Forms or White Form eIPO :

• (i) H Share certificate(s) for all the Hong Kong Public Offer Shares applied for, if the application is wholly successful; or

• (ii) H Share certificate(s) for the number of Hong Kong Public Offer Shares successfully applied for, if the application is partially successful; and/or

• (b) for applications on WHITE or YELLOW Application Forms, refund cheque(s) will be crossed “Account Payee Only” in favor of the applicant (or, in the case of joint applicants, the first-named applicant) for (i) the surplus application monies for the Hong Kong Public Offer Shares unsuccessfully applied for, if the application is partially unsuccessful; or (ii) all the application monies, if the application is wholly unsuccessful; and/or (iii) the difference between the Offer Price and the maximum offer price per H Share paid on application in the event that the Offer Price is less than the offer price per H Share initially paid on application, in each case including brokerage of 1%, SFC transaction levy of 0.004% and Hong Kong Stock Exchange trading fee of 0.005%, attributable to such refund/surplus monies but without interest. Part of your Hong Kong identity card number/passport number, or, if you are joint applicants, part of the Hong Kong identity card number/passport number of the first-named applicant, provided by you may be printed on your refund cheque, if any. Such data would also be transferred to a third party for refund purpose. Your banker may require verification of your Hong Kong identity card number/passport number before encashment of your refund cheque. Inaccurate completion of your Hong Kong identity card number/passport number may lead to delay in encashment of, or may invalidate, your refund cheque.

Subject to personal collection as mentioned below, refund cheques for surplus application monies (if any) in respect of wholly and partially unsuccessful applications and the difference between the Offer Price and the offer price per H Share initially paid on application (if any) under WHITE or YELLOWApplication Forms; and H Share certificates for wholly and partially successful applicants under WHITE Application Forms and the White Form

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HOW TO APPLY FOR HONG KONG PUBLIC OFFER SHARES

eIPO service are expected to be posted on or around June 21, 2010. The right is reserved to retain any H Share certificate(s) and any surplus application monies pending clearance of cheque(s).

H Share certificates will only become valid certificates of title at 8:00 a.m. on June 22, 2010 provided that the Hong Kong Public Offering has become unconditional in all respects and the right of termination described in the subsection entitled “Underwriting — Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for Termination” in this prospectus has not been exercised.

(a) If you apply using a WHITE Application Form:

If you apply for 1,000,000 or more Hong Kong Public Offer Shares and have indicated your intention in your WHITE Application Form respectively to collect your refund cheque(s) (where applicable) and/or H Share certificate(s) (where applicable) in person and have provided all information required by your Application Form, you may collect your refund cheque(s) (where applicable) and H Share certificate(s) (where applicable) from our H Share Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th floor, Hopewell Center, 183 Queen’s road East, Wanchai, Hong Kong from 9:00 a.m. to 1:00 p.m. on June 21, 2010 or such other date as notified by us in the newspapers as the date of collection/ dispatch of e-Refund payment instructions/refund cheques/share certificates. If you are an individual who opts for personal collection, you must not authorize any other person to make collection on your behalf. If you are a corporate applicant which opts for personal collection, you must attend by your authorized representative bearing a letter of authorization from your corporation stamped with your corporation’s chop. Both individuals and authorized representatives (if applicable) must produce, at the time of collection, evidence of identity acceptable to our H Share Registrar. If you do not collect your refund cheque(s) (where applicable) and/or H Share certificate(s) (where applicable) personally within the time specified for collection, they will be sent to the address as specified in your Application Form promptly thereafter by ordinary post and at your own risk.

If you apply for less than 1,000,000 Hong Kong Public Offer Shares or if you apply for 1,000,000 Hong Kong Public Offer Shares or more but have not indicated on your Application Form that you will collect your refund cheque(s) (where applicable) and/or H Share certificate(s) (where applicable) in person, your refund cheque(s) (where applicable) and/or H Share certificate(s) (where applicable) will be sent to the address on your Application Form on June 21, 2010, by ordinary post and at your own risk.

(b) If you apply using a YELLOW Application Form:

If you apply for 1,000,000 Hong Kong Public Offer Shares or more and you have elected on your YELLOW Application Form to collect your refund cheque (where applicable) in person, please follow the same instructions as those for WHITE Application Form applicants as described above.

If you apply for Hong Kong Public Offer Shares using a YELLOW Application Form and your application is wholly or partially successful, your H Share certificate(s) will be issued in the name of HKSCC Nominees and deposited into CCASS for credit to your CCASS Investor Participant stock account or the stock account of your designated CCASS Participant as instructed by you in your Application Form at the close of business on June 21, 2010, or under contingent situation, on any other date as shall be determined by HKSCC or HKSCC Nominees.

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HOW TO APPLY FOR HONG KONG PUBLIC OFFER SHARES

If you are applying through a designated CCASS Participant (other than a CCASS Investor Participant):

• k for Hong Kong Public Offer Shares credited to the stock account of your designated CCASS Participant (other than a CCASS Investor Participant), you can check the number of Hong Kong Public Offer Shares allocated to you with that CCASS Participant.

If you are applying as a CCASS Investor Participant:

• k our Company expects to publish the results of CCASS Investor Participants’ applications together with the results of the Hong Kong Public Offer in the newspapers on June 21, 2010. You should check the announcement published by our Company and report any discrepancies to HKSCC before 5:00 p.m. on June 21, 2010 or such other date as shall be determined by HKSCC or HKSCC Nominees. Immediately after the credit of the Hong Kong Public Offer Shares to your stock account, you can check your new account balance via the CCASS Phone System and the CCASS Internet System (under the procedures contained in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time). HKSCC will also make available to you an activity statement showing the number of Hong Kong Public Offer Shares credited to your stock account.

(c) If you apply through White Form eIPO service:

If you apply for 1,000,000 Hong Kong Public Offer Shares or more through the White Form eIPO service and your application is wholly or partially successful, you may collect your H Share certificate(s) in person from our H Share Registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, from 9:00 a.m. to 1:00 p.m. on June 21, 2010, or such other date as notified by our Company in the newspapers as the date of dispatch of e-Refund payment instructions/refund cheque(s)/share certificate(s).

If you do not collect your H Share certificate(s) personally within the specified period for collection, they will be sent to the address specified in your instructions to the White Form eIPO Service Provider promptly thereafter by ordinary post and at your own risk.

If you apply for less than 1,000,000 Hong Kong Public Offer Shares, your H Share certificate(s) will be sent to the address specified in your application instructions to the designated White Form eIPO Service Provider through the designated website at www.eipo.com.hk on June 21, 2010, by ordinary post and at your own risk.

If you apply through the White Form eIPO service ( www.eipo.com.hk ) by paying the application monies through a single bank account and your application is wholly or partially unsuccessful and/or the final Offer Price being different from the offer price initially paid on your application, e-refund payment instructions (if any) will be dispatched to your application payment bank account on June 21, 2010.

If you apply through the White Form eIPO service ( www.eipo.com.hk ) by paying the application monies through multiple bank accounts and your application is wholly or partially unsuccessful and/or the final Offer Price being different from the offer price initially paid on your application, refund cheque(s) will be sent to the address specified in your application instructions to the designated White Form eIPO Service Provider on June 21, 2010, by ordinary post and at your own risk.

Please also note the additional information relating to refund of application monies overpaid, application money underpaid or applications rejected by the designated White Form eIPO Service Provider set out in the subsection entitled “Applying through White Form eIPO service — Additional Information” above.

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HOW TO APPLY FOR HONG KONG PUBLIC OFFER SHARES

• (d) If you apply by giving electronic application instructions to HKSCC:

Allocation of Hong Kong Public Offer Shares

For the purposes of allocating Hong Kong Public Offer Shares, HKSCC Nominees will not be treated as an applicant. Instead, each CCASS Participant who gives electronic application instructions or each person for whose benefit each such instructions is given will be treated as an applicant.

Deposit of H Share Certificates into CCASS and Refund of application monies

• k No temporary document of title will be issued. No receipt will be issued for application monies received.

• k If your application is wholly or partially successful, your H Share certificate(s) will be issued in the name of HKSCC Nominees and deposited into CCASS for the credit of the stock account of the CCASS Participant which you have instructed to give electronic application instructions on your behalf or your CCASS Investor Participant stock account at the close of business on June 21, 2010, or, in the event of a contingency, on any other date as shall be determined by HKSCC or HKSCC Nominees.

• k We expect to publish the application results of CCASS Participants (and where the CCASS Participant is a broker or custodian, we will include information relating to the relevant beneficial owner), your Hong Kong Identity Card/passport number or other identification code (Hong Kong business registration number for corporations) and the basis of allotment of the Hong Kong Public Offer in the manner described in the subsection entitled “Publication of Results” above on June 21, 2010. You should check the announcement published by us and report any discrepancies to HKSCC before 5:00 p.m. on June 21, 2010 or such other date as shall be determined by HKSCC or HKSCC Nominees.

• k If you have instructed your broker or custodian to give electronic application instructions on your behalf, you can also check the number of Hong Kong Public Offer Shares allotted to you and the amount of refund monies (if any) payable to you with that broker or custodian.

• k If you have applied as a CCASS Investor Participant, you can also check the number of Hong Kong Public Offer Shares allotted to you and the amount of refund monies (if any) payable to you via the CCASS Phone System and the CCASS Internet System (under the procedures contained in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time) on June 21, 2010. Immediately after the credit of the Hong Kong Public Offer Shares to your CCASS Investor Participant stock account and the credit of refund monies to your designated bank account, HKSCC will also make available to you an activity statement showing the number of Hong Kong Public Offer Shares credited to your CCASS Investor Participant stock account and the amount of refund monies (if any) credited to your designated bank account.

• k Refund of your application monies (if any) in respect of wholly and partially unsuccessful applications and/or difference between the Offer Price and the offer price per H Share initially paid on application, in each case including brokerage of 1%, SFC transaction levy of 0.004% and Hong Kong Stock Exchange trading fee of 0.005%, will be credited to your designated bank account or the designated bank account of your broker or custodian on June 21, 2010. No interest will be paid thereon.

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HOW TO APPLY FOR HONG KONG PUBLIC OFFER SHARES

H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

If the Hong Kong Stock Exchange grants the listing of, and permission to deal in, the H Shares and we comply with the stock admission requirements of HKSCC, the H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in the H Shares on the Hong Kong Stock Exchange or any other date HKSCC chooses. Settlement of transactions between participants of the Hong Kong Stock Exchange is required to take place in CCASS on the second Business Day after any trading day.

All activities under CCASS are subject to the General Rules of CCASS and Operational Procedures in effect from time to time.

Investors should seek the advice of their stockbroker or other professional advisor for details of the settlement arrangement as such arrangements may affect their rights and interests.

All necessary arrangements have been made enabling the H Shares to be admitted into CCASS.

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ACCOUNTANTS’ REPORT

APPENDIX I

The following is the text of a report, prepared for the purpose of incorporation in this prospectus, received from our reporting accountants, Ernst & Young, Certified Public Accountants, Hong Kong.

==> picture [86 x 32] intentionally omitted <==

Ernst & Young

18th Floor Two International Finance Centre 8 Finance Street, Central Hong Kong Tel: +852 2846 9888 Fax: +852 2868 4432 www.ey.com 7 June 2010

==> picture [70 x 45] intentionally omitted <==

The Directors

Xinjiang Goldwind Science & Technology Co., Ltd. China International Capital Corporation Hong Kong Securities Limited Citigroup Global Markets Asia Limited Hai Tong Capital (HK) Limited

Dear Sirs,

We set out below our report on the financial information regarding Xinjiang Goldwind Science & Technology Co., Ltd. (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”) for each of the three years ended 31 December 2007, 2008 and 2009 (the “Relevant Years”) (the “Financial Information”) for inclusion in the prospectus of the Company dated 7 June 2010 (the “Prospectus”) in connection with the listing of the shares of the Company on the Main Board of The Stock Exchange of Hong Kong Limited.

The Group is principally engaged in the development, manufacture and sale of wind turbine generators and wind power components; development of wind farms; and the provision of wind power related consultancy, wind farm construction, maintenance and transportation services.

The Company was established as a joint stock company with limited liability on 26 March 2001 in the People’s Republic of China (the “PRC”, or Mainland China, which excludes for the purpose of this report, the Hong Kong Special Administrative Region of the PRC or Hong Kong, the Macau Special Administrative Region of the PRC or Macau, and Taiwan). In December 2007, the Company conducted an initial public offering of its domestic common shares (“A shares”) in the Mainland China. The Company’s A shares have been listed on the Shenzhen Stock Exchange since 26 December 2007.

The Group, its jointly-controlled entities and associates have adopted 31 December as their financial year end date for statutory reporting purposes. The financial statements of these companies were prepared in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance (the “MOF”) of the PRC in 2006, and other related regulations issued by the MOF, or other accounting principles applicable to these companies in their respective jurisdictions. The statutory consolidated financial statements of the Group for the year ended 31 December 2007, 2008 and 2009 were audited by Wuzhou Songde Certified Public Accountants (“Wuzhou Songde”, ), a certified public accounting firm registered in the PRC. Particulars of the Company and its subsidiaries, jointly-controlled entities and associates are set out in note 1 of Section II below.

For the purpose of this report, the directors of the Company (the “Directors”) have prepared the consolidated financial statements of the Group for the Relevant Years and the statements of financial position of the Company as at 31 December 2007, 2008 and 2009 in accordance with International Financial Reporting Standards (“IFRSs”)

– I-1 –

APPENDIX I

ACCOUNTANTS’ REPORT

promulgated by the International Accounting Standards Board (the “IASB”) (the “IFRS Financial Statements”). We have carried out an independent audit on the IFRS Financial Statements in accordance with International Standards on Auditing issued by the International Auditing and Assurance Standards Board (the “IAASB”).

The Financial Information set out in this report, including the consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows of the Group for the Relevant Years, the consolidated statements of financial position of the Group and the statements of financial position of the Company as at 31 December 2007, 2008 and 2009, together with the notes thereto, has been prepared from the IFRS Financial Statements.

We have carried out an independent audit on the Financial Information in accordance with International Standards on Auditing issued by the IAASB and carried out such additional procedures as we considered necessary in accordance with Auditing Guideline 3.340 “Prospectuses and the Reporting Accountant” issued by the Hong Kong Institute of Certified Public Accountants. No adjustments were considered necessary to adjust the IFRS Financial Statements to conform to the accounting policies referred to in note 3.2 of Section II of this report for the Relevant Years.

The IFRS Financial Statements are the responsibility of the Directors who approved their issuance. The Directors are also responsible for the contents of the Prospectus, including the preparation and the true and fair presentation of the Financial Information in accordance with IFRSs. In preparing the Financial Information, it is fundamental that appropriate accounting policies are selected and applied consistently, and that judgements and estimates made are prudent and reasonable. It is our responsibility to form an independent opinion based on our audit of the Financial Information for the Relevant Years and to report our opinion thereon.

Our responsibility is to express an opinion on the Financial Information based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the Financial Information is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Information. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Financial Information, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and true and fair presentation of the Financial Information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the Financial Information.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

In our opinion, the Financial Information gives, for the purpose of this report, a true and fair view of the consolidated results and cash flows of the Group for each of the Relevant Years and the state of affairs of the Company and of the Group as at 31 December 2007, 2008 and 2009 in accordance with IFRSs.

– I-2 –

ACCOUNTANTS’ REPORT

APPENDIX I

I. FINANCIAL INFORMATION

(A) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

		**Year **	ended 31 December	ended 31 December
	Notes	2007	2008	2009
		RMB’000	RMB’000	RMB’000
REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6	3,089,045	6,417,271	10,666,505
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(2,177,242)	(4,895,945)	(7,908,882)
Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		911,803	1,521,326	2,757,623
Other income and gains, net . . . . . . . . . . . . . . . . . . . . . . . .	6	38,167	337,298	335,583
Selling and distribution costs . . . . . . . . . . . . . . . . . . . . . . . .		(107,213)	(286,699)	(689,847)
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .		(161,930)	(237,012)	(276,341)
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(36,221)	(145,869)	(77,440)
Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8	(22,930)	(42,950)	(62,759)
Share of profits and losses of:
Jointly-controlled entities . . . . . . . . . . . . . . . . . . . . . . . . .	20	—	—	(289)
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		—	—	4,028
PROFIT BEFORE TAX. . . . . . . . . . . . . . . . . . . . . . . . . . . .	7	621,676	1,146,094	1,990,558
Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10	8,084	(120,898)	(199,955)
PROFIT FOR THE YEAR. . . . . . . . . . . . . . . . . . . . . . . . . .		629,760	1,025,196	1,790,603
Other comprehensive income:
Exchange differences on translation of foreign operations . . .		1,824	(24,328)	7,892
TOTAL COMPREHENSIVE INCOME FOR THE YEAR,
NET OF TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		631,584	1,000,868	1,798,495
Profit attributable to:
Owners of the Company . . . . . . . . . . . . . . . . . . . . . . . . .	11	624,643	906,407	1,745,580
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		5,117	118,789	45,023
		629,760	1,025,196	1,790,603
Total comprehensive income attributable to:
Owners of the Company . . . . . . . . . . . . . . . . . . . . . . . . .		626,467	889,232	1,753,472
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		5,117	111,636	45,023
		631,584	1,000,868	1,798,495
Earnings per share attributable to ordinary equity holders of
the Company:
Basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13	RMB0.31	RMB0.40	RMB0.78

– I-3 –

ACCOUNTANTS’ REPORT

APPENDIX I

I. FINANCIAL INFORMATION — continued

(B) CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Notes NON-CURRENT ASSETS Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . 14 Investment properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Prepaid land lease payments. . . . . . . . . . . . . . . . . . . . . . . . . . 16 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Interests in jointly-controlled entities . . . . . . . . . . . . . . . . . . . 20 Interests in associates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Available-for-sale investments . . . . . . . . . . . . . . . . . . . . . . . . 22 Deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CURRENT ASSETS Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Trade and bills receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Prepayments, deposits and other receivables . . . . . . . . . . . . . . 26 Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . 30 Pledged deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CURRENT LIABILITIES Trade and bills payables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Other payables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . 30 Interest-bearing bank and other borrowings. . . . . . . . . . . . . . . 31 Tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NET CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . TOTAL ASSETS LESS CURRENT LIABILITIES . . . . . . . . .	As at 31 December	As at 31 December	As at 31 December
	2007 RMB’000 404,243 53,268 62,807 16 17,677 — — 4,171 11,710 — — 553,892 971,552 764,066 498,398 — — 2,679,663 4,913,679 934,525 862,104 — 470,000 — 7,920 2,274,549 2,639,130 3,193,022	2008 RMB’000 1,303,428 76,938 79,112 240,195 320,067 — — 26,171 101,903 323 2,021 2,150,158 2,119,196 2,619,021 1,036,061 — — 3,286,400 9,060,678 2,544,530 2,671,398 2,279 50,000 184,373 51,059 5,503,639 3,557,039 5,707,197	2009
			RMB’000 2,440,655 80,954 160,637 249,882 346,550 69,741 47,370 9,000 190,504 1,935 —
			3,597,228
			2,853,546 2,919,607 830,409 4,667 218,538 4,458,950
			11,285,717
			3,760,207 2,055,786 10,746 601,892 212,335 241,297
			6,882,263
			4,403,454
			8,000,682

continued/...

– I-4 –

APPENDIX I ACCOUNTANTS’ REPORT

I. FINANCIAL INFORMATION — continued

TOTAL ASSETS LESS CURRENT LIABILITIES . . . . . . . . . NON-CURRENT LIABILITIES Interest-bearing bank and other borrowings . . . . . . . . . . . . . . . Deferred tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity attributable to owners of the Company Issued share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proposed final dividend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Notes 31 23 32 33 34 35(a) 12	**As **	at 31 December
		2007 RMB’000 3,193,022 153,000 — 16,022 75,086 — 244,108 2,948,914 500,000 2,333,252 50,000 2,883,252 65,662 2,948,914	2008 RMB’000 5,707,197 1,281,675 85,571 80,253 98,387 23,646 1,569,532 4,137,665 1,000,000 2,442,484 280,000 3,722,484 415,181 4,137,665	2009
				RMB’000 8,000,682
				2,022,121 90,937 195,795 140,588 23,984
				2,473,425
				5,527,257
				1,400,000 3,661,057 140,000
				5,201,057 326,200
				5,527,257

– I-5 –

ACCOUNTANTS’ REPORT

APPENDIX I

I. FINANCIAL INFORMATION — continued

(C) CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

As at 1 January 2007. . . . . . . . . . . . . . . . Profit for the year . . . . . . . . . . . . . . . . . . Other comprehensive income . . . . . . . . . . . Final 2006 dividend declared . . . . . . . . . . . Profit appropriation to reserves. . . . . . . . . . Capitalisation of reserves (note 34(a)) . . . . . Issue of bonus shares (note 34(a)) . . . . . . . . Issue of new shares (note 34(b)) . . . . . . . . . Share issue expenses . . . . . . . . . . . . . . . . Transfer to capital reserve (note 35(b)(i)) . . . Capital contribution from a minority shareholder . . . . . . . . . . . . . . . . . . . . Acquisition of subsidiaries (note 36(ii)) . . . . Disposal of a subsidiary (note 37) . . . . . . . . Proposed final 2007 dividend . . . . . . . . . . . As at 31 December 2007 and 1 January 2008 . . . . . . . . . . . . . . . . . . . . . . . . Profit for the year . . . . . . . . . . . . . . . . . . Other comprehensive income . . . . . . . . . . . Final 2007 dividend declared . . . . . . . . . . . Profit appropriation to reserves. . . . . . . . . . Capitalisation of reserves (note 34(c)) . . . . . Issue of bonus shares (note 34(c)) . . . . . . . . Capital contribution from minority shareholders . . . . . . . . . . . . . . . . . . . . Acquisition of subsidiaries (note 36(i)(ii)) . . . Proposed final 2008 dividend . . . . . . . . . . . As at 31 December 2008 and 1 January 2009 . . . . . . . . . . . . . . . . . . . . . . . . Profit for the year . . . . . . . . . . . . . . . . . . Other comprehensive income . . . . . . . . . . . Final 2008 dividend declared . . . . . . . . . . . Profit appropriation to reserves. . . . . . . . . . Dividend declared to minority shareholders . . Issue of bonus shares (note 34(d)) . . . . . . . . Share of reserves of an associate. . . . . . . . . Capital contribution from minority shareholders . . . . . . . . . . . . . . . . . . . . Acquisition of subsidiaries (note 36(ii)) . . . . Disposal of subsidiaries (note 37) . . . . . . . . Proposed final 2009 dividend . . . . . . . . . . . As at 31 December 2009 . . . . . . . . . . . . .		A	ttributable	to owners of t	he Company		Total RMB’000 612,121 624,643 1,824 (100,000) — — — 1,752,000 (7,336) — — — — — 2,883,252 906,407 (17,175) (50,000) — — — — — — 3,722,484 1,745,580 7,892 (280,000) — — — 5,101 — — — — 5,201,057	Minority interests RMB’000 4,858 5,117 — — — — — — — — 39,000 21,393 (4,706) — 65,662 118,789 (7,153) — — — — 94,673 143,210 — 415,181 45,023 — — — (93,867) — — 22,977 69,610 (132,724) — 326,200	Total equity RMB’000 616,979 629,760 1,824 (100,000) — — — 1,752,000 (7,336) — 39,000 21,393 (4,706) — 2,948,914 1,025,196 (24,328) (50,000) — — — 94,673 143,210 — 4,137,665 1,790,603 7,892 (280,000) — (93,867) — 5,101 22,977 69,610 (132,724) — 5,527,257
	Issued share capital (note 34) RMB’000 100,000 — — — — 164,000 186,000 50,000 — — — — — — 500,000 — — — — 50,000 450,000 — — — 1,000,000 — — — — — 400,000 — — — — — 1,400,000	Capital reserve RMB’000 150,695 — — — — (130,000) — 1,702,000 (7,336) 4,187 — — — — 1,719,546 — — — — (50,000) — — — — 1,669,546 — — — — — — 569 — — — — 1,670,115*	Statutory surplus reserve RMB’000 59,916 — — — 60,460 (34,000) — — — — — — — — 86,376 — — — 70,924 — — — — — 157,300 — — — 109,663 — — 453 — — — — 267,416*	Retained profits RMB’000 201,510 624,643 — — (60,460) — (186,000) — — (4,187) — — — (50,000) 525,506 906,407 — — (70,924) — (450,000) — — (280,000) 630,989 1,745,580 — — (109,663) — (400,000) 4,079 — — — (140,000) 1,730,985*	Exchange fluctuation reserve RMB’000 — — 1,824 — — — — — — — — — — — 1,824 — (17,175) — — — — — — — (15,351) — 7,892 — — — — — — — — — (7,459)*	Proposed final dividend RMB’000 100,000 — — (100,000) — — — — — — — — — 50,000 50,000 — — (50,000) — — — — — 280,000 280,000 — — (280,000) — — — — — — — 140,000 140,000

• As at 31 December 2007, 2008 and 2009, these reserve accounts comprise the consolidated reserves of RMB2,333,252,000, RMB2,442,484,000 and RMB3,661,057,000, respectively, in the consolidated statements of financial position.

– I-6 –

ACCOUNTANTS’ REPORT

APPENDIX I

I. FINANCIAL INFORMATION — continued

(D) CONSOLIDATED STATEMENTS OF CASH FLOWS

(D) CONSOLIDATED STATEMENTS OF CASH FLOWS
Notes CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments for: Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Foreign exchange differences, net . . . . . . . . . . . . . . . . . . . . . 7 Bank interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Share of profits and losses of jointly-controlled entities . . . . . Share of profits and losses of associates . . . . . . . . . . . . . . . . Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Amortisation of prepaid land lease payments. . . . . . . . . . . . . 7 Amortisation of other intangible assets . . . . . . . . . . . . . . . . . 7 Loss on disposals of items of property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Loss/(gain) on disposals of subsidiaries . . . . . . . . . . . . . . . . . 37 Gain on disposal of available-for-sale investments . . . . . . . . . 6 Dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair value loss, net, on derivative financial instruments . . . . . 30 Fair value adjustment of other long-term liabilities . . . . . . . . Impairment of trade and other receivables . . . . . . . . . . . . . . . 7 Write-down of inventories to net realisable value. . . . . . . . . . 7 Government grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Excess over the cost of investment to associates . . . . . . . . . . Increase in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase in trade and bills receivables . . . . . . . . . . . . . . . . . . . . (Increase)/decrease in prepayments, deposits and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase in trade and bills payables . . . . . . . . . . . . . . . . . . . . . Increase/(decrease) in other payables . . . . . . . . . . . . . . . . . . . . Increase in provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash generated from operations . . . . . . . . . . . . . . . . . . . . . . . . Income tax paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash flows from operating activities . . . . . . . . . . . . . . . . . .	**Year **	2008 2009 ended 31 December RMB’000 RMB’000 1,146,094 1,990,558 42,950 62,759 7,884 3,988 (19,872) (23,879) — 289 — (4,028) 49,613 67,475 1,800 2,101 24,458 12,557 124 9,205 (263,132) (189,815) — (12,750) — — 2,279 3,800 (750) — 119,052 31,045 9,014 1,405 (10,662) (51,839) — (1,342) 1,108,852 1,901,529 (1,156,136) (733,366) (1,829,664) (394,203) (527,472) 98,223 1,940,705 1,069,838 1,777,960 (659,033) 97,722 305,156 1,411,967 1,588,144 (37,109) (286,352) 1,374,858 1,301,792 continued/...
	2007 RMB’000 621,676 22,930 958 (4,837) — — 8,413 836 2,578 23 335 — (1,508) — — 30,176 — (18,331) — 663,249 (679,143) (510,608) (392,002) 686,862 759,141 23,942 551,441 (108) 551,333

– I-7 –

APPENDIX I

ACCOUNTANTS’ REPORT

I. FINANCIAL INFORMATION — continued Notes CASH FLOWS FROM INVESTING ACTIVITIES Purchases of items of property, plant and equipment. . . . . . . . Purchases of investment properties. . . . . . . . . . . . . . . . . . . . . Additions of prepaid land lease payments . . . . . . . . . . . . . . . Additions of other intangible assets . . . . . . . . . . . . . . . . . . . . Acquisitions of subsidiaries, net of cash acquired . . . . . . . . . . 36 Purchase of shareholding in jointly-controlled entities . . . . . . Purchase of shareholding in associates . . . . . . . . . . . . . . . . . . Purchases of available-for-sale investments . . . . . . . . . . . . . . Proceeds from disposals of items of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from disposals of other intangible assets . . . . . . . . . Disposals of subsidiaries, net of cash disposed of . . . . . . . . . . 37 Disposal of a jointly-controlled entity . . . . . . . . . . . . . . . . . . Disposal of available-for-sale investments . . . . . . . . . . . . . . . Increase in pledged deposits . . . . . . . . . . . . . . . . . . . . . . . . . Decrease/(increase) in non-pledged time deposits with original maturity of three months or more when acquired . . Government grants received. . . . . . . . . . . . . . . . . . . . . . . . . . Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash flows used in investing activities . . . . . . . . . . . . . . . CASH FLOWS FROM FINANCING ACTIVITIES New bank and other borrowings . . . . . . . . . . . . . . . . . . . . . . Repayment of bank and other borrowings . . . . . . . . . . . . . . . Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from issue of new shares. . . . . . . . . . . . . . . . . . . . . Share issue expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital contributions from minority shareholders . . . . . . . . . . Dividend paid to owners of the Company. . . . . . . . . . . . . . . . Dividend paid to minority shareholders . . . . . . . . . . . . . . . . . Net cash flows from financing activities. . . . . . . . . . . . . . . . . NET INCREASE IN CASH AND CASH EQUIVALENTS. . . Cash and cash equivalents at beginning of the year . . . . . . . . Effect of foreign exchange rate changes, net. . . . . . . . . . . . . . CASH AND CASH EQUIVALENTS AT END OF THE YEAR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27	**Year **	2008 2009 ended 31 December RMB’000 RMB’000 (1,398,024) (1,540,106) — — (12,665) (95,199) (4,802) (42,770) (329,994) (9,772) — (70,030) — (31,608) (22,000) (1,000) 3,603 13,866 — 7,566 253,526 304,834 — 3,300 — 27,750 — (218,538) — (80,000) 33,963 94,040 19,872 21,182 (1,456,521) (1,616,485) 1,627,377 2,249,840 (918,702) (424,500) (50,730) (69,155) — — — — 94,673 22,977 (50,000) (280,000) — (93,867) 702,618 1,405,295 620,955 1,090,602 2,679,663 3,286,400 (14,218) 1,948 3,286,400 4,378,950
	2007 RMB’000 (296,358) (13,141) (45,925) (8,128) 22,109 — — (677) 10 24 (4,139) — — — 8,660 58,651 4,837 (274,077) 825,000 (422,000) (22,930) 1,752,000 (7,336) 39,000 (100,000) — 2,063,734 2,340,990 339,676 (1,003) 2,679,663	2008 RMB’000 (1,398,024) — (12,665) (4,802) (329,994) — — (22,000) 3,603 — 253,526 — — — — 33,963 19,872 (1,456,521) 1,627,377 (918,702) (50,730) — — 94,673 (50,000) — 702,618 620,955 2,679,663 (14,218) 3,286,400

– I-8 –

ACCOUNTANTS’ REPORT

APPENDIX I

I. FINANCIAL INFORMATION — continued

(E) STATEMENTS OF FINANCIAL POSITION

(E) STATEMENTS OF FINANCIAL POSITION
Notes NON-CURRENT ASSETS Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . 14 Investment properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Prepaid land lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Investments in subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Investment in a jointly-controlled entity . . . . . . . . . . . . . . . . . . 20 Investments in associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Available-for-sale investments . . . . . . . . . . . . . . . . . . . . . . . . . 22 Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CURRENT ASSETS Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Trade and bills receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Prepayments, deposits and other receivables . . . . . . . . . . . . . . . 26 Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . 30 Pledged deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CURRENT LIABILITIES Trade and bills payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . 30 Interest-bearing bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Tax payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NET CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . TOTAL ASSETS LESS CURRENT LIABILITIES . . . . . . . . . .	**As **	at 31 December
	2007 RMB’000 141,735 53,268 19,305 17,677 206,158 — — 3,171 10,139 451,453 965,185 755,751 603,500 — — 2,573,341 4,897,777 929,308 873,948 — 470,000 — 9,993 2,283,249 2,614,528 3,065,981	2008 RMB’000 206,899 73,557 31,002 18,426 1,239,604 — — 25,171 54,524 1,649,183 1,548,237 2,240,838 710,381 — — 1,643,067 6,142,523 1,692,819 2,139,776 2,279 50,000 87,527 36,636 4,009,037 2,133,486 3,782,669	2009
			RMB’000 205,806 77,762 44,159 22,929 1,367,164 17,500 44,140 8,000 93,191
			1,880,651
			1,967,234 2,285,100 783,211 4,667 218,538 2,215,797
			7,474,547
			2,266,854 1,938,308 10,746 259,492 143,812 133,300
			4,752,512
			2,722,035
			4,602,686

continued/...

– I-9 –

APPENDIX I

ACCOUNTANTS’ REPORT

I. FINANCIAL INFORMATION — continued

I. FINANCIAL INFORMATION — continued
TOTAL ASSETS LESS CURRENT LIABILITIES . . . . . . . . . NON-CURRENT LIABILITIES Interest-bearing bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . Net assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EQUITY Issued share capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proposed final dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Notes 31 32 33 34 35(b) 35(b)	**As **	at 31 December
		2007 RMB’000 3,065,981 135,000 20,215 55,291 210,506 2,855,475 500,000 2,305,475 50,000 2,855,475	2008 RMB’000 3,782,669 115,000 74,110 78,841 267,951 3,514,718 1,000,000 2,234,718 280,000 3,514,718	2009
				RMB’000 4,602,686
				— 153,209 116,268
				269,477
				4,333,209
				1,400,000 2,793,209 140,000
				4,333,209

– I-10 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION

1. Corporate Information

The Company was established as a joint stock company with limited liability on 26 March 2001 in the PRC. The Company’s A shares have been listed on The Shenzhen Stock Exchange from 26 December 2007 onwards. The registered office of the Company is located at 107 Shanghai Road, Economic & Technology Development District, Urumqi, Xinjiang, the PRC.

In the opinion of the Directors, the Company has no controlling shareholder.

As at 31 December 2009, the Company had interests in the following subsidiaries, jointly-controlled entities and associates, all of which are private companies:

Subsidiaries

Subsidiaries
Company name* Beijing Goldwind Science & Creation Wind Power Equipment Co., Ltd. ( ) . . . . . . . Inner Mongolia Goldwind Science & Technology Co., Ltd. ( ) . . . . . . Goldwind Windenergy GmbH (“Goldwind Windenergy”) . . . . . . . . . . . . . . . . . . . . . . . Vensys Energy AG (“Vensys AG”) . . . . . . . . . . . . Vensys Elektrotechnik GmbH . . . . . . . . . . . . . . . Vensys Windenergie Gescha¨ftsfu¨hrungs GmbH . . . . . Vensys Windpark Tholey GmbH & Co. KG . . . . . . Vensys Windpark Wagenfeld Betriebsgesellschaft mbH & Co. KG . . . . . . . . . . . . . . . . . . . . . . Vensys Windpark Wagenfeld Verwaltungs-GmbH . . . Beijing Tianrun New Energy Investment Co., Ltd. ( ) . . . . . . . . . . Beijing Tianyuan Science & Creation Wind Power Technology Co., Ltd. (“Beijing Tianyuan”) ( ). . . . Xinjiang Tianyun Wind Power Equipment Distribution Co., Ltd. ( ) . . . . . . . Gansu Goldwind Wind Power Equipment Manufacture Co., Ltd. ( ) . . . . . . .	Notes (i) (i) (vi) (v) (vi) (vii) (vii) (vii) (vii) (ii) (iii) (ii) (iv)	Place and date of incorporation/ operations The PRC/ Mainland China 13 February 2006 The PRC/ Mainland China 28 April 2006 Germany 18 May 2006 Germany 14 February 2000 Germany 13 November 1998 Germany 10 November 2009 Germany 10 November 2009 Germany 13 October 2009 Germany 10 December 2009 The PRC/ Mainland China 11 April 2007 The PRC/ Mainland China 29 September 2005 The PRC/ Mainland China 11 June 2007 The PRC/ Mainland China 26 March 2008	Nominal value of authorised/ issued and fully paid-up capital RMB350,000,000 RMB150,000,000 EUR350,000 EUR5,000,000 EUR100,000 EUR25,000 EUR10,000 EUR1,000 EUR25,000 RMB331,600,000 RMB45,000,000 RMB4,000,000 RMB88,600,000	Direct Indirect Percentage of equity interest attributable to the Company 100 — 100 — 100 — — 70 — 63 — 70 — 70 — 63 — 63 100 — 83.33 — 100 — 100 —	Principal activities
				Direct 100 100 100 — — — — — — 100 83.33 100 100
					Manufacture and sale of wind power equipment and accessories Manufacture and sale of wind power equipment and accessories Investment holding Provision of technical services and manufacture and sale of wind power equipment and accessories Provision of technical services and manufacture and sale of wind power equipment and accessories Investment holding Construction and operation of wind farm Construction and operation of wind farm Investment holding Investment holding Provision of wind farm construction and technical services and sale of wind power accessories Transportation agent Manufacture and sale of wind power equipment and accessories

– I-11 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

1. Corporate Information — continued

Subsidiaries — continued

Subsidiaries — continued
Company name* Xi’an Goldwind Science & Technology Co., Ltd. ( ) . . . . . . . . . . . . . . Nanjing Goldwind Science & Technology Co., Ltd. ( ). . . . . . . . . . . . . . Beijing Techwin Electric Co., Ltd. ( ) . . . . . . . . . . Urumchi Goldwind Tianyi Wind Power Co., Ltd. ( ) . . . . . . . Beijing Goldwind Tiantong Import and Export Trading Co., Ltd. ( ) . . . . . Jiangsu Goldwind Wind Power Equipment Manufacture Co., Ltd. ( ) . . . . . . . Tianrun Wind Power (Beijing) Logistics Co., Ltd. ( ). . . . . . . . . Goldwind USA, Inc. . . . . . . . . . . . . . . . . . . . . Goldwind Australia Pty Ltd. . . . . . . . . . . . . . . . Inner Mongolia Bayannur Fuhui Wind Energy Electricity Co., Ltd. (“Bayannur Fuhui”) ( ) . . Damao Qi Tianrun Wind Power Co., Ltd. ( ) . . . . . . . . . . . . Buerjin Tianrun Wind Power Co., Ltd. ( ) . . . . . . . . . . Shangdu Tianrun Wind Power Co., Ltd. ( ) . . . . . . . . . . . . Hami Tianrun New Energy Co., Ltd. ( ) . . . . . . . . . . . . Xianghuang Qi Tianrun Wind Power Co., Ltd. ( ) . . . . . . . . . . . . Tacheng Tianrun New Energy Co., Ltd. ( ) . . . . . . . . . . . . Guazhou Tianrun Wind Power Co., Ltd. ( ) . . . . . . . . . . . . . .	Notes (iv) (iv) (iv), (xiii) (viii) (viii) (viii) (viii) (ix) (ix) (iii), (xiii) (ii) (ii) (ii) (iv) (iv) (viii) (viii)	Place and date of incorporation/ operations The PRC/ Mainland China 8 May 2008 The PRC/ Mainland China 12 September 2008 The PRC/ Mainland China 16 December 2008 The PRC/ Mainland China 27 October 2009 The PRC/ Mainland China 30 November 2009 The PRC/ Mainland China 13 November 2009 The PRC/ Mainland China 22 December 2009 United States of America 30 November 2009 Australia 21 December 2009 The PRC/ Mainland China 26 April 2004 The PRC/ Mainland China 26 July 2007 The PRC/ Mainland China 21 September 2007 The PRC/ Mainland China 28 September 2007 The PRC/ Mainland China 12 November 2008 The PRC/ Mainland China 18 November 2008 The PRC/ Mainland China 2 March 2009 The PRC/ Mainland China 6 March 2009	Nominal value of authorised/ issued and fully paid-up capital RMB60,000,000 RMB116,000,000 RMB10,000,000 RMB5,000,000 RMB3,000,000 RMB65,000,000 RMB4,000,000 US$100,000 US$87,500 RMB40,000,000 RMB100,000,000 RMB57,500,000 RMB84,000,000 RMB2,000,000 RMB1,000,000 RMB1,000,000 RMB20,000,000	Direct Indirect Percentage of equity interest attributable to the Company 100 — 100 — 75 — 100 — 100 — 100 — 100 — 100 — 100 — — 51 — 100 — 100 — 51 — 100 — 100 — 100 — 100	Principal activities
				Direct 100 100 75 100 100 100 100 100 100 — — — — — — — —
					Manufacture and sale of wind power equipment and accessories Manufacture and sale of wind power equipment and accessories Manufacture and sale of wind power equipment and accessories Construction and operation of wind farm Machinery and technology trader Manufacture and sale of wind power equipment and accessories Transportation agent Manufacture and sale of wind power equipment and accessories Manufacture and sale of wind power equipment and accessories Investment holding Construction and operation of wind farm Construction and operation of wind farm Construction and operation of wind farm Construction and operation of wind power and solar power generation projects Construction and operation of wind farm Construction and operation of wind power and solar power generation projects Construction and operation of wind farm

– I-12 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

1. Corporate Information — continued

Subsidiaries — continued

Subsidiaries — continued
Company name* Sunite Youqi Tianrunlong Wind Power Co., Ltd. ( ) . . . . . . . Qianguo Fuhui Wind Energy Co., Ltd. (“Qianguo Fuhui”) ( ). . . . . . . . . Yichun Taiyangfeng New Energy Co., Ltd. (“Yichun Taiyangfeng”) ( ) . . . . . . . . . . Tongyu Fuhui Wind Energy Co., Ltd. ( ). . . . . . . . . . . . . . Boli Double Star Wind Power Development Co., Ltd. (“Double Star”) ( ) . . . . . Beijing Xingqiyuan Energy Conservation Technology Co., Ltd. (“Xingqiyuan”) ( ). . . . . . . . . TianRun USA, Inc. . . . . . . . . . . . . . . . . . . . . . TianRun Uilk, LLC (“TianRun Uilk”) . . . . . . . . . . Uilk Wind Farm LLC . . . . . . . . . . . . . . . . . . . . Chifeng Huifeng New Energy Co., Ltd. ( ) . . . . . . . . . . Tacheng Tianrun Wind Power Co., Ltd. ( ) . . . . . . . . . . . . . . Urumchi Tianrun Wind Power Co., Ltd. ( ) . . . . . . . . . . Chifeng Tianrun Xinneng New Energy Co., Ltd. ( ) . . . . . . .	Notes (viii) (x), (xiii) (x) (viii), (xiii) (x) (x) (xi) (xi) (xi) (x), (xiii) (viii) (viii) (viii)	Place and date of incorporation/ operations The PRC/ Mainland China 1 April 2009 The PRC/ Mainland China 26 March 2007 The PRC/ Mainland China 7 December 2007 The PRC/ Mainland China 15 July 2009 The PRC/ Mainland China 20 March 2009 The PRC/ Mainland China 15 November 2004 United States of America 10 June 2009 United States of America 24 March 2009 United States of America 6 February 2008 The PRC/ Mainland China 19 November 2007 The PRC/ Mainland China 19 October 2009 The PRC/ Mainland China 27 October 2009 The PRC/ Mainland China 24 November 2009	Nominal value of authorised/ issued and fully paid-up capital RMB1,000,000 RMB40,000,000 RMB75,000,000 RMB126,000,000 RMB500,000 RMB12,500,000 US$1,500,000 US$2,000,000 US$10,000 RMB64,000,000 RMB1,000,000 RMB2,000,000 RMB5,000,000	Direct Indirect Percentage of equity interest attributable to the Company — 51 — 51 — 66 — 51 — 100 — 56 — 100 — 75 — 72.75 — 51 — 100 — 100 — 90	Principal activities
				Direct — — — — — — — — — — — — —
					Construction and operation of wind farm Construction and operation of wind farm Construction and operation of wind farm Construction and operation of wind farm Construction and operation of wind farm Construction and operation of wind farm Investment holding Construction and operation of wind farm Construction and operation of wind farm Construction and operation of wind farm Construction and operation of wind farm Construction and operation of wind farm Manufacture and sale of wind power equipment and accessories

– I-13 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

1. Corporate Information — continued

Jointly-controlled entities

Jointly-controlled entities
Company name* Gannan Town Fuhui Wind Energy Co., Ltd. (“Gannan Fuhui”) ( ) . . . . . . . . . . . . Jilin Tongli Wind Power Co., Ltd (“Jilin Tongli”) ( ) . . . . . . . . . . Shanghai Yicheng Electric Power Engineering Co., Ltd. (“Shanghai Yicheng”) ( ) . . . . . . . . . . Jiangsu Chenfeng New Material Technology Co., Ltd. (“Jiangsu Chenfeng”) ( ). . . . . . . . .	Notes (xii) (xii) (xii) (xii)	Place and date of incorporation/ operations The PRC/ Mainland China 3 July 2009 The PRC/ Mainland China 1 June 2006 The PRC/ Mainland China 18 May 2009 The PRC/ Mainland China 16 November 2009	Nominal value of issued and fully paid-up capital RMB2,000,000 RMB96,000,000 RMB5,000,000 RMB50,000,000	Direct Indirect Percentage of equity interest attributable to the Company — 51 — 51 — 51 35 —	Principal activities
					Construction and operation of wind farm Construction and operation of wind farm Construction and operation of wind farm and other industrial architecture Research and development of new materials

Associates

Associates
Company name* Hebei Goldwind Electric Equipment Co., Ltd. (“Hebei Goldwind”) ( ) . . . . . . . . . . Jiangxi Jinli Mag Rare-Earth Co., Ltd. (“Jiangxi Jinli”) ( ) . . . . . .	Notes (xii) (xii)	Place and date of incorporation/ operations The PRC/ Mainland China 7 September 2004 The PRC/ Mainland China 19 August 2008	Nominal value of issued and fully paid-up capital RMB26,000,000 RMB100,000,000	Direct Indirect Percentage of equity interest attributable to the Company 27.22 — 34 —	Principal activities
				Direct 27.22 34
					Manufacture and sale of wind power equipment and accessories Manufacture and sale of ndfed magnet, and permanent magnet wind power equipment and accessories

• The English names of the companies registered in the PRC represent the best efforts of the management of the Company in directly translating the Chinese names of the companies as no English names have been registered.

All the above companies are limited liability companies.

Notes:

• (i) The statutory accounts of these subsidiaries for the three years ended 31 December 2007, 2008 and 2009 were audited by Wuzhou Songde.

• (ii) The statutory accounts of these subsidiaries for the periods from the dates of incorporation to 31 December 2007 and for the two years ended 31 December 2008 and 2009 were audited by Wuzhou Songde.

• (iii) The statutory accounts of these subsidiaries for the three years ended 31 December 2007, 2008 and 2009 were audited by Wuzhou Songde. These subsidiaries were acquired by the Group in May 2007 and June 2007, respectively.

• (iv) The statutory accounts of these subsidiaries for the periods from the dates of incorporation to 31 December 2008 and for the year ended 31 December 2009 were audited by Wuzhou Songde.

• (v) The statutory accounts of this subsidiary, which was acquired by the Group in April 2008, for the two years ended 31 December 2008 and 2009 were audited by Susat & Partner oHG Wirtschaftspru¨fungsgesellschaft, a certified public accounting firm registered in Germany.

• (vi) No statutory accounts had been prepared for these subsidiaries for each of the three years ended 31 December 2009 as a statutory audit was not required for these subsidiaries in Germany. Goldwind Windenergy is the parent company of Vensys AG whereas Vensys Elektrotechnik GmbH is the subsidiary of Vensys AG.

• (vii) These subsidiaries were incorporated by the Group during the year ended 31 December 2009. No statutory accounts had been prepared for these subsidiaries for the periods from the dates of incorporation to 31 December 2009 as a statutory audit was not required for these subsidiaries in Germany. These subsidiaries are the subsidiaries of Vensys AG.

• (viii) These subsidiaries were incorporated by the Group during the year ended 31 December 2009, and the statutory accounts of these subsidiaries for the periods from the dates of incorporation to 31 December 2009 were audited by Wuzhou Songde.

– I-14 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

1. Corporate Information — continued

• (ix) These subsidiaries were incorporated by the Group during the year ended 31 December 2009. No statutory accounts had been prepared for these subsidiaries for the year ended 31 December 2009 as they were dormant companies as of 31 December 2009.

• (x) These subsidiaries were acquired by the Group during the year ended 31 December 2009, and the statutory accounts of these subsidiaries for the year ended 31 December 2009 were audited by Wuzhou Songde.

• (xi) TianRun Uilk was acquired by the Group during the year ended 31 December 2009. Uilk Wind Farm LLC is a subsidiary of TianRun Uilk. The statutory accounts of Uilk Wind Farm LLC for the year ended 31 December 2009 were audited by Eide Bailly LLP, a certified public accounting firm registered in the United States of America. No statutory accounts had been prepared for TianRun Uilk and TianRun USA, Inc. for the year ended 31 December 2009 as a statutory audit was not required for these subsidiaries in the United States of America.

• (xii) These companies became the Group’s jointly-controlled entities or associates during the year ended 31 December 2009. The statutory accounts of Jilin Tongli, Jiangsu Chenfeng, Hebei Goldwind and Jiangxi Jinli for the year ended 31 December 2009 were audited by Baicheng Sanyuan Certified Public Accountants ( ), Yancheng Zhongxingning United Certified Public Accountants ( ), Chengde Beifang Certified Public Accountants Limited Company ( ), the three certified public accounting firms registered in the PRC, and Wuzhou Songde, respectively. No statutory accounts had been prepared for Gannan Fuihui and Shanghai Yicheng for the year ended 31 December 2009 as a statutory audit was not required for these jointly-controlled entities by local government.

• (xiii) During the Relevant Years, the Company directly or indirectly owns more than half of equity interests in these companies but the voting power attached to the equity interests does not allow the Company to have the power to govern the financial and operating activities of these companies according to the articles of association of these companies. According to the articles of association, the Company or one of the Company’s subsidiaries (the “Subsidiary”), as the case may be, is the biggest equity owner of these companies and no other equity owners individually or in the aggregate had the power to control these companies. The Company or the Subsidiary, as the case may be, which holds the shareholding interests in these companies, had signed the voting right agreements with the other equity owners of these companies during the Relevant Years, whereby such equity owners have agreed to vote unanimously with the Company or the Subsidiary in the financial and operating activities of these companies. Such equity owners have also confirmed that the unanimous voting with the Company or the Subsidiary existed since these entities were incorporated or acquired by the Company or the Subsidiary. The PRC lawyer of the Company confirmed that the voting right agreements are valid under the relevant PRC laws. Considering the above mentioned factors, the Directors are of the opinion that the Company or the Subsidiary, as the case may be, controlled these entities during the period from the date of their establishment or acquisition by the Group to 31 December 2009 or to the date that these companies were ceased to be controlled by the Company or the Subsidiary. Therefore the financial statements of these companies are consolidated by the Company during the period from the date of their establishment or acquisition by the Group to 31 December 2009 or to the date that these companies were ceased to be controlled by the Company or the Subsidiary.

2. Basis of Presentation and Preparation

• (a) The Financial Information has been prepared in accordance with IFRSs, which comprise standards and interpretations approved by the IASB, and the International Accounting Standards (“IASs”) and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee and the disclosure requirements of the Hong Kong Companies Ordinance. All IFRSs effective for the accounting periods commencing from 1 January 2007, 2008 and 2009, together with the relevant transitional provisions, have been early adopted by the Group in the preparation of the Financial Information throughout the Relevant Years.

• (b) This Financial Information has been prepared under the historical cost convention, except for certain derivative financial instruments, which have been measured at fair value. In addition, this Financial Information is presented in Renminbi (“RMB”) and all values are rounded to the nearest thousand, except when otherwise indicated.

– I-15 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

3.1 Issued But Not Yet Effective IFRSs

The Group has not applied the following new and revised IFRSs, that have been issued but are not yet effective, in the Financial Information herein.

IFRS 1 (Revised) . . . . . . . . . . . . . . . . . . . . . . . .

IFRS 1 Amendments . . . . . . . . . . . . . . . . . . . . .

IFRS 1 Amendments . . . . . . . . . . . . . . . . . . . . .

IFRS 2 Amendments . . . . . . . . . . . . . . . . . . . . .

IFRS 3 (Revised) . . . . . . . . . . . . . . . . . . . . . . . . IFRS 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IAS 24 (Revised) . . . . . . . . . . . . . . . . . . . . . . . . IAS 27 (Revised) . . . . . . . . . . . . . . . . . . . . . . . . IAS 32 Amendment . . . . . . . . . . . . . . . . . . . . . . IAS 39 Amendment . . . . . . . . . . . . . . . . . . . . . .

IFRIC 14 Amendments. . . . . . . . . . . . . . . . . . . . IFRIC 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFRIC 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amendments to IFRS 5 included in Improvements to IFRSs issued in May 2008. . .

Annual Improvements Project . . . . . . . . . . . . . . .

First-time Adoption of International Financial Reporting Standards[(1)]

Amendments to IFRS 1 First-time Adoption of International Financial Report Standards — Additional Exemptions for First-time Adopters[(2)] Amendments to IFRS 1 Limited Exemption from Comparative IFRS 7 Disclosure of First-time Adopters[(4)]

Amendments to IFRS 2 Share-based Payment — Group Cash-settled Share-based Payment Transactions[(2)]

Business Combinations[(1)] Financial Instruments[(6)] Related Party Disclosures[(5)] Consolidated and Separate Financial Statements[(1)] Amendment to IAS 32 Financial Instruments: Presentation — Classification of Rights Issues[(3)] Amendment to IAS 39 Financial Instruments: Recognition and Measurement — Eligible Hedged Items[(1)] Amendments to IFRIC 14 Prepayments of a Minimum Funding Requirement[(5)] Distributions of Non-cash Assets to Owners[(1)] Extinguishing Financial Liabilities with Equity Instruments[(4)]

Amendments to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations — Plan to Sell the Controlling Interest in a Subsidiary[(1)] Improvements to IFRSs — a collection of amendments to seven International Financial Reporting Standards[(5)]

(1) Effective for annual periods beginning on or after 1 July 2009

(2) Effective for annual periods beginning on or after 1 January 2010

(3) Effective for annual periods beginning on or after 1 February 2010

(4) Effective for annual periods beginning on or after 1 July 2010

(5) Effective for annual periods beginning on or after 1 January 2011

• (6) Effective for annual periods beginning on or after 1 January 2013

Apart from the above, the IASB has issued Improvements to IFRSs 2009 which sets out amendments to a number of IFRSs primarily with a view to removing inconsistencies and clarifying wording. The amendments to IFRS 2, IAS 38, IFRIC 9 and IFRIC 16 are effective for annual periods beginning on or after 1 July 2009 while the

– I-16 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

3.1 Issued But Not Yet Effective IFRSs — continued

amendments to IFRS 5, IFRS 8, IAS 1, IAS 7, IAS 17, IAS 36 and IAS 39 are effective for annual periods beginning on or after 1 January 2010 although there are separate transitional provisions for each standard or interpretation.

IFRS 1 (Revised) was issued with an aim to improve the structure of the standard. The revised version of the standard does not make any changes to the substance of accounting by first-time adopters.

The IFRS 1 Amendments provide relief from the full retrospective application of IFRSs for the measurement of oil and gas assets and leases. As a result of extending the options for determining deemed cost to oil and gas assets, the existing exemption relating to decommissioning liabilities has also been revised. The amendments will not have any financial impact on the Group.

The IFRS 2 Amendments provide guidance on how to account for cash-settled share-based payment transactions in the separate financial statements of the entity receiving the goods and services when the entity has no obligation to settle the share-based payment transactions. The amendments also incorporate guidance that was previously included in IFRIC 8 Scope of IFRS 2 and IFRIC 11 IFRS 2 — Group and Treasury Share Transactions . The Group expects to adopt the IFRS 2 Amendments from 1 January 2010. The amendments will not have any financial impact on the Group’s accounting for share-based payments.

IFRS 3 (Revised) introduces a number of changes in the accounting for business combinations that will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results.

IAS 27 (Revised) requires that a change in the ownership interest of a subsidiary without loss of control is accounted for as an equity transaction. Therefore, such a change will have no impact on goodwill, nor will it give rise to a gain or loss. Furthermore, the revised standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. Other consequential amendments were made to IAS 7 Statement of Cash Flows , IAS 12 Income Taxes , IAS 21 The Effects of Changes in Foreign Exchange Rates , IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures .

The Group expects to adopt IFRS 3 (Revised) and IAS 27 (Revised) from 1 January 2010. The changes introduced by these revised standards must be applied prospectively and will affect the accounting of future acquisitions, loss of control and transactions with minority interests.

IFRS 9 issued in November 2009 is the first part of phase 1 of a comprehensive project to entirely replace IAS 39 Financial Instruments: Recognition and Measurement . This phase focuses on the classification and measurement of financial assets. Instead of classifying financial assets into four categories, an entity shall classify financial assets as subsequently measured at either amortised cost or fair value, on the basis of both the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset. This aims to improve and simplify the approach for the classification and measurement of financial assets compared with the requirements of IAS 39.

IAS 39 is aimed to be replaced by IFRS 9 in its entirety by the end of 2010. The Group expects to adopt IFRS 9 from 1 January 2013.

IAS 24 (Revised) clarifies and simplifies the definition of related parties. It also provides for a partial exemption of related party disclosure to government-related entities for transactions with the same government or entities that are controlled, jointly controlled or significantly influenced by the same government. The Group

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II. NOTES TO FINANCIAL INFORMATION — continued

3.1 Issued But Not Yet Effective IFRSs — continued

expects to adopt IAS 24 (Revised) from 1 January 2011 and the comparative related party disclosures will be amended accordingly. While the adoption of the revised standard will result in changes in the accounting policy, the revised standard is unlikely to have any impact on the related party disclosures as the Group currently does not have any significant transactions with government related entities.

The IAS 32 Amendment revises the definition of financial liabilities such that rights, options or warrants issued to acquire a fixed number of the entity’s own equity instruments for a fixed amount of any currency are equity instruments, provided that the entity offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. The Group expects to adopt the IAS 32 Amendments from 1 January 2011. As the Group currently has no such rights, options or warrants in issue, the amendment is unlikely to have any financial impact on the Group.

The IAS 39 Amendment addresses the designation of a one-sided risk in a hedged item, and the designation of inflation as a hedged risk or portion in particular situations. It clarifies that an entity is permitted to designate a portion of the fair value changes or cash flow variability of financial instrument as a hedged item. The Group expects to adopt the IAS 39 Amendment from 1 January 2010. As the Group has not entered into any such hedges, the amendment is unlikely to have any financial impact on the Group.

The IFRIC 14 Amendment removes an unintended consequence arising from the treatment of prepayments of future contributions in certain circumstances when there is a minimum funding requirement. The amendments require an entity to treat the benefit of an early payment as a pension asset. The Group expects to adopt the IFRIC 14 Amendments from 1 January 2011. As the Group has no defined benefit scheme, the amendments will not have any financial impact on the Group.

IFRIC 17 standardises practice in the accounting for non-reciprocal distributions of non-cash assets to owners. The Group expects to apply the interpretation from 1 January 2010 prospectively. The interpretation clarifies that (i) a dividend payable should be recognised when the dividend is appropriately authorised and is no longer at the discretion of the entity; (ii) an entity should measure the dividend payable at the fair value of the net assets to be distributed; and (iii) an entity should recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss. Other consequential amendments were made to IAS 10 Events after the Reporting Period and IFRS 5 Non-current Assets Held for Sale and Discontinued Operations . While the adoption of the interpretation may result in changes in certain accounting policies, the interpretation is unlikely to have any material financial impact on the Group.

IFRIC 19 addresses the accounting by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor of the entity to extinguish all or part of the financial liability. The Group expects to adopt the interpretation from 1 January 2011. The interpretation clarifies that equity instruments issued to a creditor to extinguish a financial liability are consideration paid in accordance with IAS 39 Financial Instruments: Recognition and Measurement and the difference between the carrying amount of the financial liability extinguished, and the consideration paid, shall be recognised in profit or loss. The consideration paid should be measured based on the fair value of the equity instrument issued or, if the fair value of the equity instrument cannot be reliably measured, the fair value of the financial liability extinguished. As the Group has not undertaken such transactions, the interpretation is unlikely to have any material financial impact on the Group.

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3.1 Issued But Not Yet Effective IFRSs — continued

The amendments to IFRS 5 clarify that all assets and liabilities of a subsidiary shall be classified as held for sale if an entity has a sale plan involving loss of control of the subsidiary, regardless of whether the entity will retain a minority interest. The Group expects to adopt the amendments from 1 January 2010. The changes must be applied prospectively and will affect future sale transactions or plans involving loss of control of a subsidiary.

Improvements to IFRSs 2009 issued in May 2009 sets out amendments to a number of IFRSs. Except for the amendment to IAS 18, the Group expects to adopt the amendments from 1 January 2010. There are separate transitional provisions for each standard. While the adoption of some of the amendments may result in changes in accounting policies, none of these amendments are expected to have a significant financial impact on the Group.

Improvements to IFRSs 2010 issued in May 2010 sets out a collection of amendments to seven IFRSs — as its latest set of annual improvements. The Group expects to adopt the amendments from 1 January 2011. There are separate transitional provisions for each standard. The Group is in the process of making an assessment of the impact of these amendments.

3.2 Summary of Significant Accounting Policies

Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries for the Relevant Years. The results of subsidiaries are consolidated from the date of incorporation or the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. All income, expenses and unrealised gains and losses resulting from intercompany transactions and intercompany balances within the Group are eliminated on consolidation in full. Upon disposal of subsidiaries, including wind farm project companies, gains on disposal of subsidiaries are recorded in other income and gains in the statements of comprehensive income.

The acquisition of subsidiaries during the Relevant Years has been accounted for using the purchase method of accounting. This method involves allocating the cost of the business combinations to the fair value of the identifiable assets acquired, and liabilities and contingent liabilities assumed at the date of acquisition. The cost of the acquisition is measured at the aggregate of the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

Minority interests represent the interests of outside shareholders not held by the Group in the results and net assets of the Company’s subsidiaries.

Subsidiaries

A subsidiary is an entity whose financial and operating policies the Company controls, directly or indirectly, so as to obtain benefits from its activities.

The results of subsidiaries are included in the Company’s profit or loss to the extent of dividends received and receivable. The Company’s investments in subsidiaries are stated at cost less any impairment losses.

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II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Joint ventures

A joint venture is an entity set up by contractual arrangement, whereby the Group and other parties undertake an economic activity. The joint venture operates as a separate entity in which the Group and the other parties have an interest.

The joint venture agreement between the ventures stipulates the capital contributions of the joint venture parties, the duration of the joint venture and the basis on which the assets are to be realised upon its dissolution. The profits and losses from the joint venture’s operations and any distributions of surplus assets are shared by the ventures, either in proportion to their respective capital contributions, or in accordance with the terms of the joint venture agreement.

A joint venture is treated as:

• (a) a subsidiary, if the Group/Company has unilateral control, directly or indirectly, over the joint venture;

• (b) a jointly-controlled entity, if the Group/Company does not have unilateral control, but has joint control, directly or indirectly, over the joint venture;

• (c) an associate, if the Group/Company does not have unilateral or joint control, but holds, directly or indirectly, generally not less than 20% of the joint venture’s registered capital and is in a position to exercise significant influence over the joint venture; or

• (d) an equity investment accounted for in accordance with IAS 39, if the Group/Company holds, directly or indirectly, less than 20% of the joint venture’s registered capital and has neither joint control of, nor is in a position to exercise significant influence over, the joint venture.

Jointly-controlled entities

A jointly-controlled entity is a joint venture that is subject to joint control, resulting in none of the participating parties having unilateral control over the economic activity of the jointly-controlled entity.

The Group’s interests in jointly-controlled entities are stated in the consolidated statement of financial position at the Group’s share of net assets under the equity method of accounting, less any impairment losses. The Group’s share of the post-acquisition results and reserves of jointly-controlled entities is included in the profit or loss and consolidated reserves, respectively. Unrealised gains and losses resulting from transactions between the Group and its jointly-controlled entities are eliminated to the extent of the Group’s interests in the jointly-controlled entities, except where unrealised losses provide evidence of an impairment of the asset transferred. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

The results of jointly-controlled entities are included in the Company’s profit or loss to the extent of dividends received and receivable. The Company’s interests in jointly-controlled entities are treated as non-current assets and are stated at cost less any impairment losses.

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II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Associates

An associate is an entity, not being a subsidiary or a jointly-controlled entity, in which the Group has a long term interest of generally not less than 20% of the equity voting rights and over which it is in a position to exercise significant influence.

The Group’s interests in associates are stated in the consolidated statement of financial position at the Group’s share of net assets under the equity method of accounting, less any impairment losses. The Group’s share of the post-acquisition results and reserves of associates is included in profit or loss and consolidated reserves, respectively. Unrealised gains and losses resulting from transactions between the Group and its associates are eliminated to the extent of the Group’s interests in the associates, except where unrealised losses provide evidence of an impairment of the asset transferred. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

The results of associates are included in the Company’s profit or loss to the extent of dividends received and receivable. The Company’s interests in associates are treated as non-current assets and are stated at cost less any impairment losses.

Goodwill

Goodwill arising on the acquisition of subsidiaries, associates and jointly-controlled entities represents the excess of the cost of the business combination over the Group’s interest in the net fair value of the acquirees’ identifiable assets acquired, and liabilities and contingent liabilities assumed as at the date of acquisition.

Goodwill arising on acquisition is recognised in the consolidated statement of financial position as an asset, initially measured at cost and subsequently at cost less any accumulated impairment losses. In the case of associates and jointly-controlled entities, goodwill is included in the carrying amount thereof, rather than as a separately identified asset in the consolidated statement of financial position.

The carrying amount of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cashgenerating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Where goodwill forms part of a cash-generating unit (group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

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ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Excess over the cost of business combinations

Any excess of the Group’s interest in the net fair value of the acquirees’ identifiable assets, liabilities and contingent liabilities over the cost of acquisition of subsidiaries, associates and jointly-controlled entities (previously referred to as negative goodwill), after reassessment, is recognised immediately in profit or loss.

The excess for associates and jointly-controlled entities is included in the Group’s share of the associates’ and jointly-controlled entities’ profits or losses in the period in which the investments are acquired.

Impairment of non-financial assets other than goodwill

Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than inventories, deferred tax assets, financial assets, investment properties and goodwill), the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs to sell, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to profit or loss in the period in which it arises in those expense categories consistent with the function of the impaired asset.

An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation/ amortisation) had no impairment loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to profit or loss in the period in which it arises.

Related parties

A party is considered to be related to the Group if:

• (a) the party, directly or indirectly through one or more intermediaries, (i) controls, is controlled by, or is under common control with, the Group; (ii) has an interest in the Group that gives it significant influence over the Group; or (iii) has joint control over the Group;

• (b) the party is an associate;

• (c) the party is a jointly-controlled entity;

• (d) the party is a member of the key management personnel of the Group or its parent;

• (e) the party is a close member of the family of any individual referred to in (a) or (d); or

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II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Related parties — continued

• (f) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e).

Property, plant and equipment and depreciation

Property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation.

Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as follows:

s:
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2.4% to 3.2%
Machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4.8% to 19.2%
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9.6% to 19.2%
Electronic equipment and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9.6% to 19.2%

Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated on a reasonable basis among the parts and each part is depreciated separately.

Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement recognised in profit or loss in the year the asset is derecognised is the difference between the net sales proceeds and the carrying amount of the relevant asset.

Construction in progress representing property, plant and equipment under construction is stated at cost less any impairment losses, and is not depreciated. Cost comprises the direct costs of construction and capitalised borrowing costs on related borrowed funds during the period of construction. Construction in progress is reclassified to the appropriate category of property, plant and equipment when completed and ready for use.

Investment properties

Investment properties are interests in land and buildings held to earn rental income and/or for capital appreciation, rather than for use in the production or supply of goods or services or for administrative purposes; or for sale in the ordinary course of business. Such properties are measured initially at cost, including transaction costs.

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II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Investment properties — continued

Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and any impairment losses. Depreciation is charged so as to write off the cost of investment properties using the straight-line method over the estimated useful lives of 20 to 50 years. Owner-occupied property is transferred to investment property when there is a change in use evidenced by the end of owner occupation.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposals. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year in which the item is derecognised.

Intangible assets (other than goodwill)

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value as at the date of acquisition. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are subsequently amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end.

Patents and licenses

Purchased patents and licenses are stated at cost less any impairment losses and are amortised on the straightline basis over the shorter of their estimated useful lives of 7 to 10 years and the relevant license periods.

Research and development costs

All research costs are charged to profit or loss as incurred.

Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Product development expenditure which does not meet these criteria is expensed when incurred.

Deferred development costs are stated at cost less any impairment losses and are amortised using the straightline basis over the commercial lives of the underlying products commencing from the date when the products are put into commercial production.

Leases

Leases that transfer substantially all the rewards and risks of ownership of assets to the Group, other than legal title, are accounted for as finance leases. At the inception of a finance lease, the cost of the leased asset is capitalised at the present value of the minimum lease payments and recorded together with the obligation, excluding the interest element, to reflect the purchase and financing. Assets held under capitalised finance leases are included in property, plant and equipment, and depreciated over the shorter of the lease terms and the estimated useful lives of

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II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Leases — continued

the assets. The finance costs of such leases are charged to profit or loss so as to provide a constant periodic rate of charge over the lease terms.

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Where the Group is the lessor, assets leased by the Group under operating leases are included in non-current assets, and rentals receivable under the operating leases are credited to profit or loss on the straight-line basis over the lease terms. Where the Group is the lessee, rentals payable under operating leases are charged to the statement of comprehensive income on the straight-line basis over the lease terms.

Prepaid land lease payments under operating leases are initially stated at cost and subsequently recognised on the straight-line basis over the lease terms. When the lease payments cannot be allocated reliably between the land and buildings elements, the entire lease payments are included in the cost of the land and buildings as a finance lease in property, plant and equipment.

Investments and other financial assets

Initial recognition and measurement

Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

The Group’s financial assets include cash and bank balances, trade and bills receivables, other receivables, other long-term assets, derivative financial instruments and available-for-sale investments.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading. Financial assets are classified as held for trading if they are acquired for the purpose of sale in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IAS 39. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with changes in fair value recognised in

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II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Investments and other financial assets — continued

profit or loss. These net fair value changes not include any dividends on these financial assets, which are recognised in accordance with the policy set out for “Revenue recognition” below.

The Group evaluates its financial assets at fair value through profit or loss (held for trading) to assess whether the intent to sell them in the near term is still appropriate. When the Group is unable to trade these financial assets due to inactive markets and management’s intent to sell them in the foreseeable future significantly changes, the Group may elect to reclassify these financial assets in rare circumstances. The reclassification from financial assets at fair value through profit or loss to loans and receivables, available-for-sale financial assets or held-to-maturity investments depends on the nature of the assets.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such assets are subsequently measured at amortised cost using the effective interest rate method less any allowance for impairment. Amortised cost is calculated taking into account any discount or premium on acquisition and includes fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance income in profit or loss. The loss arising from impairment is recognised in profit or loss in other operating expenses.

Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held to maturity when the Group has the positive intention and ability to hold to maturity. Held-to-maturity investments are subsequently measured at amortised cost less any allowance for impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in financial income in profit or loss. The loss arising from impairment is recognised in the financial costs in profit or loss.

Available-for-sale financial investments

Available-for-sale financial investments are non-derivative financial assets in unlisted equity. Equity investments classified as available for sale are those which are neither classified as held for trading nor designated at fair value through profit or loss.

After initial recognition, available-for-sale financial investments are subsequently measured at fair value, with unrealised gains or losses recognised as other comprehensive income in the available-for-sale investment valuation reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in profit or loss in other income, or until the investment is determined to be impaired, at which time the cumulative gain or loss is recognised in profit or loss and removed from the available-for-sale investment valuation reserve. Interest and dividends earned are reported as interest income and dividend income, respectively and are recognised in profit or loss as other income in accordance with the policies set out for “Revenue recognition” below.

When the fair value of unlisted equity securities cannot be reliably measured because (a) the variability in the range of reasonable fair value estimates is significant for that investment or (b) the probabilities of the various

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3.2 Summary of Significant Accounting Policies — continued

Investments and other financial assets — continued

Available-for-sale financial investments — continued

estimates within the range cannot be reasonably assessed and used in estimating fair value, such securities are stated at cost less any impairment losses.

The Group evaluates its available-for-sale financial assets whether the ability and intention to sell them in the near term are still appropriate. When the Group is unable to trade these financial assets due to inactive markets and management’s intent to do so significantly changes in the foreseeable future, the Group may elect to reclassify these financial assets in rare circumstances. Reclassification to loans and receivables is permitted when the financial assets meet the definition of loans and receivables and the Group has the intent and ability to hold these assets for the foreseeable future or to maturity. The reclassification to the held-to-maturity category is permitted only when the entity has the ability and intent to hold until the maturity date of the financial asset.

For a financial asset reclassified out of the available-for-sale category, any previous gain or loss on that asset that has been recognised in equity is amortised to profit or loss over the remaining life of the investment using the effective interest rate. Any difference between the new amortised cost and the expected cash flows is also amortised over the remaining life of the asset using the effective interest rate. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to profit or loss.

Fair value of financial assets

The fair value of financial instruments that are traded in active markets is determined by reference to quoted market prices or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs. For financial instruments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions; reference to the current market value of another instrument which is substantially the same; a discounted cash flow analysis; and other valuation models.

Impairment of financial assets

The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses individually whether objective evidence of impairment exists for financial assets that are individually significant, or collectively for financial assets that are

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3.2 Summary of Significant Accounting Policies — continued

Impairment of financial assets — continued

Financial assets carried at amortised cost — continued

not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate (i.e., the effective interest rate computed at initial recognition). If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.

The carrying amount of the asset is reduced either directly or through the use of an allowance account and the amount of the loss is recognised in profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans and receivables together with any associated allowance are written off when there is no realistic prospect of future recovery.

If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to finance costs in profit or loss.

Available-for-sale financial investments

For available-for-sale financial investments, the Group assesses at the end of each reporting period whether there is objective evidence that an investment or a group of investments is impaired.

If an available-for-sale asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is removed from other comprehensive income and recognised in profit or loss.

In the case of equity investments classified as available for sale, objective evidence would include a significant or prolonged decline in the fair value of an investment below its cost. The determination of what is “significant” or “prolonged” requires judgement. “Significant” is to be evaluated against the original cost of the investment and “prolonged” against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss — measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the profit or loss — is removed from other comprehensive income and recognised in the profit or loss. Impairment losses on equity instruments classified as available for sale are not reversed through the profit or loss. Increases in their fair value after impairment are recognised directly in other comprehensive income.

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ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

• k the rights to receive cash flows from the asset have expired;

• k the Group has transferred its rights to receive cash flows from the asset, or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Financial liabilities

Initial recognition and measurement

Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs.

The Group’s financial liabilities include trade and bills payables, other payables, other long-term liabilities, derivative financial instruments and interest-bearing bank and other borrowings.

Subsequent measurement

The measurement of financial liabilities depends on their classification as follows:

Loans and borrowings

After initial recognition, interest-bearing bank and other borrowings are subsequently measured at amortised cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the effective interest rate method amortisation process.

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APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Financial liabilities — continued

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in profit or loss.

Financial guarantee contracts

Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. A financial guarantee contract is recognised initially as a liability at its fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, the Group measures the financial guarantee contract at the higher of: (i) the amount of the best estimate of the expenditure required to settle the present obligation at the end of the reporting period; and (ii) the amount initially recognised less, when appropriate, cumulative amortisation.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognised in profit or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if, and only if, there is currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Fair value of financial instruments

The fair value of financial instruments that are traded in active markets is determined by reference to quoted market prices or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs. For financial instruments where there is no active market, the fair value is determined using appropriate valuation techniques. Such techniques include using recent arm’s length market transactions; reference to the current market value of another instrument which is substantially the same; a discounted cash flow analysis; and other valuation models.

Derivative financial instruments

Initial recognition and subsequent measurement

The Group uses derivative financial instruments such as forward currency contracts to hedge its foreign currency risk. Forward currency contracts are initially recognised at fair value on the date on which such derivative

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ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Derivative financial instruments — continued

contracts are entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

Any gains or losses arising from changes in fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in other comprehensive income.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis and, in the case of work in progress, semi-finished goods and finished goods, comprises direct materials, direct labour and an appropriate proportion of overheads. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to completion and disposal.

Construction contracts

Contract revenue comprises the agreed contract amount and appropriate amounts from variation orders, claims and incentive payments. Contract costs incurred comprise direct materials, the costs of subcontracting, direct labour and an appropriate proportion of variable and fixed construction overheads.

Revenue from fixed price construction contracts is recognised on the percentage of completion method, measured by reference to the proportion of costs incurred to date to the estimated total cost of the relevant contract.

Revenue from cost plus construction contracts is recognised on the percentage of completion method, by reference to the recoverable costs incurred during the period plus the related fee earned, measured by the proportion of costs incurred to date to the estimated total cost of the relevant contract.

Provision is made for foreseeable losses as soon as they are anticipated by management. Where contract costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is treated as an amount due from contract customers. Where progress billings exceed contract costs incurred to date plus recognised profits less recognised losses, the surplus is treated as an amount due to contract customers.

Cash and cash equivalents

For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and demand deposits, and short term highly liquid investments which are readily convertible into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the Group’s cash management.

For the purpose of the statement of financial position, cash and cash equivalents comprise cash on hand and at banks, including term deposits, which are not restricted as to use.

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ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Provisions

A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

When the effect of discounting is material, the amount recognised for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in finance costs in profit or loss.

Provisions for product warranties granted by the Group on certain products are recognised based on sales volume and past experience of the level of repairs, discounted to their present values as appropriate.

Income tax

Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is recognised outside profit or loss, either in other comprehensive income or directly in equity.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the Group operates.

Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

• k where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• k in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in jointly-controlled entities, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carryforward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:

• k where the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• k in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in jointly-controlled entities, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

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ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Income tax — continued

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Government grants

Government grants are recognised at their fair values where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as income over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate. Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to profit or loss over the expected useful life of the relevant asset by equal annual instalments.

Revenue recognition

Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the revenue can be measured reliably, on the following bases:

• (a) from the sale of individual wind turbines based on standard solutions (supply-only projects) as well as spare parts sales, when the significant risks and rewards of ownership have been transferred to the buyer, provided that the Group maintains neither managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold;

• (b) from the sale of electricity, upon the transmission of electric power to the power grid companies, as determined based on the volume of electric power transmitted and the applicable fixed tariff rates agreed with the respective electric power grid companies periodically;

• (c) from construction contracts, on the percentage of completion basis, as further explained in the accounting policy for “Construction contracts” above;

• (d) from the rendering of wind power services, when the agreed services are performed, provided over the term of the agreement;

• (e) rental income, on a time proportion basis over the lease terms;

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ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Revenue recognition — continued

• (f) interest income, on an accrual basis using the effective interest method by applying the rate that discounts the estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset; and

• (g) dividend income, when the shareholders’ right to receive payment has been established.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs capitalised. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Dividends

Final dividends proposed by the Directors are classified as a separate allocation of retained profits within the equity section of the statement of financial position, until they have been approved by the shareholders in a general meeting. When these dividends have been approved by the shareholders and declared, they are recognised as a liability.

Interim dividends are simultaneously proposed and declared. Consequently, interim dividends are recognised immediately as a liability when they are proposed and declared.

Foreign currencies

These financial statements are presented in RMB, which is the Company’s functional and presentation currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions recorded by the entities in the Group are initially recorded using their respective functional currency rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rates of exchange ruling at the end of the reporting period. All differences are taken to profit or loss. Nonmonetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

The functional currencies of certain overseas subsidiaries and jointly-controlled entities are currencies other than RMB. As at the end of the reporting period, the assets and liabilities of these entities are translated into the presentation currency of the Company at the exchange rates ruling at the end of the reporting period and their statements of comprehensive income are translated into RMB at the weighted average exchange rates for the year. The resulting exchange differences are recognised in other comprehensive income and accumulated in the exchange

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ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

3.2 Summary of Significant Accounting Policies — continued

Foreign currencies — continued

fluctuation reserve. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on acquisition are treated as assets and liabilities of the foreign operation and translated at the closing rate.

For the purpose of the consolidated statement of cash flows, the cash flows of overseas subsidiaries are translated into RMB at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash flows of overseas subsidiaries which arise throughout the year are translated into RMB at the weighted average exchange rates for the year.

Employee benefits

Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognised as expenses in profit or loss as incurred.

Short term employee benefits

Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short term cash bonus or profit- sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

4. Summary of Significant Judgements and Estimates

Judgements

In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which has the most significant effect on the amounts recognised in the financial statements:

Operating lease commitments — Group as lessor

The Group has entered into commercial property leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of these properties which are leased out on operating leases.

Classification between investment properties and owner-occupied properties

The Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets

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ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

4. Summary of Significant Judgements and Estimates — continued

Judgements — continued

held by the Group. Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately, the Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.

Estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

Useful lives and residual values of items of property, plant and equipment

In determining the useful lives and residual values of items of property, plant and equipment, the Group periodically reviews the changes in market conditions, expected physical wear and tear, and the maintenance of the asset. The estimation of the useful life of the asset is based on historical experience of the Group with similar assets that are used in a similar way. Depreciation amount will be adjusted if the estimated useful lives and/or the residual values of items of property, plant and equipment are different from previous estimation. Useful lives and residual values are reviewed, at each date of the statement of financial position, based on changes in circumstances.

The carrying amounts of property, plant and equipment as at 31 December 2007, 2008 and 2009 were approximately RMB404,243,000, RMB1,303,428,000 and RMB2,440,655,000, respectively. More details are given in note 14.

Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating units and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amounts of goodwill as at 31 December 2007, 2008 and 2009 were approximately RMB16,000, RMB240,195,000 and RMB249,882,000, respectively. More details are given in note 17.

Current income tax

The Group is subject to income taxes in numerous jurisdictions in the PRC. Judgement is required in determining the provision for taxation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts originally recorded, the differences will impact on the current income tax and deferred income tax in the periods in which the differences arise.

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ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

4. Summary of Significant Judgements and Estimates — continued

Estimation uncertainty — continued

The carrying amounts of tax payables as at 31 December 2007, 2008 and 2009 were Nil, RMB184,373,000 and RMB212,335,000, respectively.

Deferred income tax

Deferred tax assets relating to certain temporary differences and tax losses are recognised as management considers it is probable that future taxable profit will be available against which the temporary differences or tax losses can be utilised. The realisation of the deferred tax assets mainly depends on whether sufficient future profits or taxable temporary differences will be available in the future. In cases where the actual future profits generated are less than expected, a material reversal of deferred tax assets may arise, which will be recognised in profit or loss in the period in which such a reversal takes place.

The carrying amounts of deferred tax assets as at 31 December 2007, 2008 and 2009 were RMB11,710,000, RMB101,903,000 and RMB190,504,000, respectively. More details are given in note 23.

The carrying amounts of deferred tax liabilities as at 31 December 2007, 2008 and 2009 were Nil, RMB85,571,000 and RMB90,937,000, respectively. More details are given in note 23.

Impairment of trade and bills receivables

The Group maintains an allowance for estimated loss arising from the inability of its customers to make the required payments. The Group makes its estimates based on the ageing of its trade and bills receivable balances, customers’ creditworthiness, and historical write-off experience. If the financial condition of its customers will deteriorate such that the actual impairment loss might be higher than expected, the Group would be required to revise the basis for making the allowance and its future results would be affected.

The carrying amounts of trade and bills receivables as at 31 December 2007, 2008 and 2009 were RMB764,066,000, RMB2,619,021,000 and RMB2,919,607,000, respectively. More details are given in note 25.

Warranty provision

Provision for product warranties granted by the Group to certain products is recognised based on sales volume and past experience of the level of repairs, discounted to their present values as appropriate. At 31 December 2007, 2008 and 2009, the best estimates of the carrying amounts of warranty provisions were RMB23,942,000, RMB131,312,000 and RMB437,092,000, respectively. More details are given in note 32.

5. Segment Information

For management purposes, the Group is organised into business units based on their products and services and has three reportable operating segments as follows:

• (a) The manufacturing segment engages in the research and development, manufacture and sale of wind turbine generators and wind power components;

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ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

5. Segment Information — continued

• (b) The wind power services segment provides wind power related consultancy, wind farm construction, maintenance and transportation services; and

• (c) The wind farm development segment engages in development of wind farms, consisting of wind power generation service provided by the Group’s wind farms as well as sale of wind farms, if appropriate.

Management monitors the operating results of its operating segments separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment profit or loss, which is a measure of adjusted profit or loss before tax from continuing operations. The adjusted profit or loss before tax from continuing operations is measured consistently with the Group’s profit or loss before tax from continuing operations.

Intersegment revenues are eliminated on consolidation. Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the then prevailing market prices.

The following tables present revenue, profit and certain asset, liability and expenditure information for the Group’s operating segments for the three years ended 31 December 2007, 2008 and 2009.

Segment revenue: Sales to external customers . . . . . . . . . . Intersegment sales . . . . . . . . . . . . . . . . Total revenue . . . . . . . . . . . . . . . . . . . . Segment results . . . . . . . . . . . . . . . . . . Interest income. . . . . . . . . . . . . . . . . . . Finance cost. . . . . . . . . . . . . . . . . . . . . Profit/(loss) before tax . . . . . . . . . . . . . Segment assets . . . . . . . . . . . . . . . . . . . Segment liabilities . . . . . . . . . . . . . . . . Other segment information: Depreciation and amortisation. . . . . . . . Impairment of trade and other receivables . . . . . . . . . . . . . . . . . . . . Product warranty provision . . . . . . . . . . Capital expenditure(1) . . . . . . . . . . . . . .		Year ended 31 December 2007	Year ended 31 December 2007	Year ended 31 December 2007	Total RMB’000 3,089,045 — 3,089,045 639,769 4,837 (22,930) 621,676 5,467,571 2,518,657 11,827 30,176 31,810 395,783
	Wind turbine generator manufacturing and sales RMB’000 3,079,212 — 3,079,212 620,464 4,494 (21,941) 603,017 5,380,841 2,510,582 10,774 31,332 52,768 271,467	Wind power services RMB’000 9,833 22,013 31,846 15,649 12 (989) 14,672 80,820 23,316 990 1,166 — 19,194	Wind farm development RMB’000 — — — (5,085) 331 — (4,754) 140,196 44,730 63 152 — 105,122	Eliminations RMB’000 — (22,013) (22,013) 8,741 — — 8,741 (134,286) (59,971) — (2,474) (20,958) —

(1) Capital expenditure mainly consists of additions of property, plant and equipment, other intangible assets, prepaid land lease payments and investment properties including assets from the acquisition of subsidiaries.

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APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

5. Segment Information — continued

5. Segment Information — continued
Segment revenue: Sales to external customers . . . . . . . . . Intersegment sales . . . . . . . . . . . . . . . Total revenue . . . . . . . . . . . . . . . . . . . Segment results . . . . . . . . . . . . . . . . . Interest income. . . . . . . . . . . . . . . . . . Finance cost . . . . . . . . . . . . . . . . . . . . Profit before tax . . . . . . . . . . . . . . . . . Segment assets . . . . . . . . . . . . . . . . . . Segment liabilities . . . . . . . . . . . . . . . Other segment information: Depreciation and amortisation . . . . . . . Write-down of inventories to net realisable value . . . . . . . . . . . . . . . . Impairment of trade and other receivables . . . . . . . . . . . . . . . . . . . Product warranty provision . . . . . . . . . Capital expenditure(1) . . . . . . . . . . . . .		Year ended 31 December 2008			Total RMB’000 6,417,271 — 6,417,271 1,169,172 19,872 (42,950) 1,146,094 11,210,836 7,073,171 75,871 9,014 119,052 131,713 2,042,951
	Wind turbine generator manufacturing and sales RMB’000 6,299,251 449,579 6,748,830 981,868 18,564 (35,883) 964,549 10,003,855 6,263,074 48,916 9,014 109,937 149,272 698,865	Wind power services RMB’000 29,564 84,503 114,067 24,026 285 (1,031) 23,280 205,229 115,322 1,486 — 5,323 — 4,375	Wind farm development RMB’000 88,456 — 88,456 295,431 1,023 (6,036) 290,418 1,914,005 1,180,305 26,430 — 15,770 — 1,495,284	Eliminations RMB’000 — (534,082) (534,082) (132,153) — — (132,153) (912,253) (485,530) (961) — (11,978) (17,559) (155,573)

(1) Capital expenditure mainly consists of additions of property, plant and equipment, other intangible assets and prepaid land lease payments including assets from the acquisition of subsidiaries.

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ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

5. Segment Information — continued

Segment revenue: Sales to external customers . . . . . . . . . Intersegment sales . . . . . . . . . . . . . . . Total revenue . . . . . . . . . . . . . . . . . . . Segment results . . . . . . . . . . . . . . . . . Interest income. . . . . . . . . . . . . . . . . . Finance cost . . . . . . . . . . . . . . . . . . . . Profit before tax . . . . . . . . . . . . . . . . . Segment assets . . . . . . . . . . . . . . . . . . Segment liabilities . . . . . . . . . . . . . . . Other segment information: Share of profits and losses of: Jointly-controlled entities . . . . . . . . Associates . . . . . . . . . . . . . . . . . . . Depreciation and amortisation . . . . . . . Write-down of inventories to net realisable value . . . . . . . . . . . . . . . . Impairment/(reversal of impairment) of trade and other receivables . . . . . Product warranty provision . . . . . . . . . Interests in jointly-controlled entities. . Interests in associates . . . . . . . . . . . . . Capital expenditure(1) . . . . . . . . . . . . .		Year ended 31 December 2009	Year ended 31 December 2009	Year ended 31 December 2009	Total RMB’000 10,666,505 — 10,666,505 2,029,438 23,879 (62,759) 1,990,558 14,882,945 9,355,688 (289) 4,028 82,133 1,405 31,045 458,775 69,741 47,370 2,078,339
	Wind turbine generator manufacturing and sales RMB’000 10,347,350 1,855,648 12,202,998 2,043,000 20,535 (30,896) 2,032,639 12,856,741 7,449,870 — 4,028 58,522 1,405 53,962 496,029 17,500 47,370 269,776	Wind power services RMB’000 215,368 110,000 325,368 54,127 791 (427) 54,491 408,894 297,576 — — 1,911 — 1,963 — — — 4,535	Wind farm development RMB’000 103,787 — 103,787 90,937 2,553 (31,967) 61,523 3,027,529 2,360,626 (289) — 25,944 — (6,572) — 52,241 — 2,023,164	Eliminations RMB’000 — (1,965,648) (1,965,648) (158,626) — 531 (158,095) (1,410,219) (752,384) — — (4,244) — (18,308) (37,254) — — (219,136)

(1) Capital expenditure mainly consists of additions of property, plant and equipment, other intangible assets and prepaid land lease payments including assets from the acquisition of subsidiaries.

Information about a major customer

For the year ended 31 December 2007, revenue generated from only one of the Group’s customers amounting to RMB371,362,000 had individually accounted for over 10% of the Group’s total revenue. For the year ended 31 December 2008, revenue generated from only one of the Group’s customers amounting to RMB1,024,097,000 had individually accounted for over 10% of the Group’s total revenue. Similarly, for the year ended 31 December 2009, revenue generated from only one of the Group’s customers amounting to RMB1,534,143,000 had individually accounted for over 10% of the Group’s total revenue.

– I-40 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

5. Segment Information — continued

Geographical information

No further geographical segment information is presented as over 95% of the Group’s revenue is derived from customers based in Mainland China, and most of the Group’s assets are located in Mainland China.

6. Revenue, Other Income and Gains

Revenue, which is also the Group’s turnover, represents the net invoiced value of goods sold, after allowances for returns and trade discounts; and the values of services rendered.

An analysis of the Group’s revenue, other income and gains is as follows:

Note Revenue Sale of wind turbine generators and wind power components . . Wind power services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wind power generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other income Bank interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Value-added tax refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance compensation on product warranty expenditures . . . . Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gains Gain on disposals of subsidiaries, including wind farm project companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Gain on disposal of available-for-sale investments . . . . . . . . . . Gain on disposals of items of property, plant and equipment . . Realised gain on derivative financial instruments . . . . . . . . . . . Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December	Year ended 31 December	Year ended 31 December
	2007 RMB’000 3,079,212 9,833 — 3,089,045 4,837 3,125 18,331 385 7,709 — 34,387 — — — — 3,780 3,780 38,167	2008 RMB’000 6,299,251 29,564 88,456 6,417,271 19,872 11,392 10,662 7,860 8,320 9,969 68,075 263,132 — 51 2,490 3,550 269,223 337,298	2009
			RMB’000 10,347,350 215,368 103,787
			10,666,505
			23,879 16,879 51,839 1,810 19,714 7,379
			121,500
			189,815 12,750 93 8,184 3,241
			214,083
			335,583

– I-41 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

7. Profit Before Tax

The Group’s profit before tax is arrived at after charging/(crediting):

Notes Cost of inventories sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Write-down of inventories to net realisable value . . . . . . . . . . . Depreciation (note (a)) provided for: Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . 14 Investment properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Amortisation of prepaid land lease payments . . . . . . . . . . . . . . 16 Amortisation of other intangible assets . . . . . . . . . . . . . . . . . . . 18 Impairment of trade and bills receivables . . . . . . . . . . . . . . . . . 25 Impairment/(reversal of impairment) of prepayments, deposits and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Loss on disposals of items of property, plant and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minimum lease payments under operating leases of land and buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Auditors’ remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee benefit expenses (including directors’ and supervisors’ remuneration): Wages and salaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension scheme contributions (defined contribution scheme) (note (b)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Welfare and other expenses . . . . . . . . . . . . . . . . . . . . . . . . . Foreign exchange differences, net. . . . . . . . . . . . . . . . . . . . . . . Research and development costs: Staff costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation and depreciation . . . . . . . . . . . . . . . . . . . . . . . Materials expenditure and others . . . . . . . . . . . . . . . . . . . . . Product warranty provision . . . . . . . . . . . . . . . . . . . . . . . . . . . 32	2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 2,173,856 4,838,705 7,708,089 — 9,014 1,405 7,932 47,930 65,243 481 1,683 2,232 8,413 49,613 67,475 836 1,800 2,101 2,578 24,458 12,557 3,414 26,258 14,658 29,677 104,909 40,736 499 14,143 (9,691) 30,176 119,052 31,045 23 124 9,205 156 16 4,122 472 573 789 109,923 155,905 213,701 3,870 7,681 12,507 7,966 19,330 28,231 121,759 182,916 254,439 958 7,884 3,988 21,309 35,482 25,831 2,117 4,591 3,236 8,171 38,595 28,528 31,597 78,668 57,595 31,810 131,713 458,775	2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 2,173,856 4,838,705 7,708,089 — 9,014 1,405 7,932 47,930 65,243 481 1,683 2,232 8,413 49,613 67,475 836 1,800 2,101 2,578 24,458 12,557 3,414 26,258 14,658 29,677 104,909 40,736 499 14,143 (9,691) 30,176 119,052 31,045 23 124 9,205 156 16 4,122 472 573 789 109,923 155,905 213,701 3,870 7,681 12,507 7,966 19,330 28,231 121,759 182,916 254,439 958 7,884 3,988 21,309 35,482 25,831 2,117 4,591 3,236 8,171 38,595 28,528 31,597 78,668 57,595 31,810 131,713 458,775
	2007 RMB’000 2,173,856 — 7,932 481 8,413 836 2,578 3,414 29,677 499 30,176 23 156 472 109,923 3,870 7,966 121,759 958 21,309 2,117 8,171 31,597 31,810	2008 RMB’000 4,838,705 9,014 47,930 1,683 49,613 1,800 24,458 26,258 104,909 14,143 119,052 124 16 573 155,905 7,681 19,330 182,916 7,884 35,482 4,591 38,595 78,668 131,713

Notes:

• (a) Depreciation of approximately RMB3,408,000, RMB34,489,000 and RMB41,837,000 is included in the cost of sales on the face of the consolidated statements of comprehensive income for each of the three years ended 31 December 2007, 2008 and 2009, respectively.

• (b) As at 31 December 2007 and 2008, the Group had no forfeited contributions available to reduce its contributions to the pension schemes in future years. As at 31 December 2009, the Group’s forfeited contributions available to reduce its contributions to the pension schemes in future years amounted to RMB7,000.

– I-42 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

8. Finance Costs

8. Finance Costs
Interest on bank loans wholly repayable within five years . . . . . . . . . . . . . . . Interest on other borrowings wholly repayable within five years . . . . . . . . . . Less: Interest capitalised (note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 26,405 — 26,405 (3,475) 22,930	2008 RMB’000 69,415 1,393 70,808 (27,858) 42,950	2009
			RMB’000 100,329 2,565
			102,894 (40,135)
			62,759

9. Directors’ and Supervisors’ Remuneration and Five Highest Paid Individuals

(a) Directors’ and supervisors’ remuneration

The aggregate amounts of remuneration of the Directors and supervisors of the Company (the “Supervisors”) during the Relevant Years are as follows:

Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other emoluments: — Salaries, allowances and benefits in kind . . . . . . . . . . . . . . . . . . . . . . . — Performance related bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — Pension scheme contributions (defined contribution scheme) . . . . . . . .	Year ended 31 December	Year ended 31 December	Year ended 31 December
	2007 RMB’000 190 4,120 10,720 69 15,099	2008 RMB’000 233 4,350 7,670 184 12,437	2009
			RMB’000 160 3,818 6,029 196
			10,203

The names of the Directors and the Supervisors and their remuneration for the Relevant Years are as follows:

Directors Wu Gang . . . . . . . . . . . . . . . . . . . . . . . . Li Ying . . . . . . . . . . . . . . . . . . . . . . . . . . Pan Shijie . . . . . . . . . . . . . . . . . . . . . . . . Guo Jian . . . . . . . . . . . . . . . . . . . . . . . . . Liu Tongliang . . . . . . . . . . . . . . . . . . . . . Lv Houjun . . . . . . . . . . . . . . . . . . . . . . . Yang Yongbao* . . . . . . . . . . . . . . . . . . . .		Year ended 31 December 2007	Year ended 31 December 2007	Year ended 31 December 2007
	Fees RMB’000 — — — — — — — —	Salaries, allowances, and benefits in kind RMB’000 1,430 — — 1,434 709 — — 3,573	Performance related bonuses RMB’000 5,336 — — 4,281 659 — — 10,276	Pension scheme contributions RMB’000 18 — — 14 13 — — 45	Total remuneration
					RMB’000 6,784 — — 5,729 1,381 — —
					13,894

– I-43 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

9. Directors’ and Supervisors’ Remuneration and Five Highest Paid Individuals — continued

• (a) Directors’ and supervisors’ remuneration — continued

Independent directors Wang Yousan. . . . . . . . . . . . . . . . . . . . Shi Pengfei . . . . . . . . . . . . . . . . . . . . . Song Chang . . . . . . . . . . . . . . . . . . . . . . Ni Weidou. . . . . . . . . . . . . . . . . . . . . . . Peng Chengwu . . . . . . . . . . . . . . . . . . . Lin Zhijun. . . . . . . . . . . . . . . . . . . . . . . Supervisors Zhang Hua . . . . . . . . . . . . . . . . . . . . . . . Wang Dunchun . . . . . . . . . . . . . . . . . . . . Luo Jun . . . . . . . . . . . . . . . . . . . . . . . . . Wang Haibo . . . . . . . . . . . . . . . . . . . . . . Zheng Chengjiang . . . . . . . . . . . . . . . . Nie Xinhui . . . . . . . . . . . . . . . . . . . . . .		Year ended 31 December 2007	Year ended 31 December 2007	Year ended 31 December 2007
	Fees RMB’000 60 60 70 — — — 190 — — — — — — — 190	Salaries, allowances, and benefits in kind RMB’000 — — — — — — — — — — 287 236 24 547 4,120	Performance related bonuses RMB’000 — — — — — — — — — — 225 219 — 444 10,720	Pension scheme contributions RMB’000 — — — — — — — — — — 6 14 4 24 69	Total remuneration
					RMB’000 60 60 70 — — —
					190
					— — — 518 469 28
					1,015
					15,099

• Yang Yongbao, Ni Weidou, Peng Chengwu and Lin Zhijun, and Nie Xinhui resigned as a Director, independent Directors and a Supervisor of the Company, respectively, with effect from 24 March 2007.

** Wang Yousan and Shi Pengfei, and Zheng Chengjiang were appointed as independent Directors and a Supervisor of the Company, respectively, with effect from 24 March 2007.

Directors Wu Gang . . . . . . . . . . . . . . . . . . . . . . . . Li Ying . . . . . . . . . . . . . . . . . . . . . . . . . . Gao Zhong* . . . . . . . . . . . . . . . . . . . . . Pan Shijie . . . . . . . . . . . . . . . . . . . . . . . Guo Jian . . . . . . . . . . . . . . . . . . . . . . . . . Liu Tongliang . . . . . . . . . . . . . . . . . . . . . Lv Houjun . . . . . . . . . . . . . . . . . . . . . . .		Year ended 31 December 2008	Year ended 31 December 2008	Year ended 31 December 2008
	Fees RMB’000 — — — — — — — —	Salaries, allowances and benefits in kind RMB’000 1,466 — — — 1,465 948 — 3,879	Performance related bonuses RMB’000 3,110 — — — 3,110 800 — 7,020	Pension scheme contributions RMB’000 62 — — — 62 22 — 146	Total remuneration
					RMB’000 4,638 — — — 4,637 1,770 —
					11,045

– I-44 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

9. Directors’ and Supervisors’ Remuneration and Five Highest Paid Individuals — continued

• (a) Directors’ and supervisors’ remuneration — continued

Independent directors Wang Yousan . . . . . . . . . . . . . . . . . . . . . Shi Pengfei . . . . . . . . . . . . . . . . . . . . . . . Song Chang . . . . . . . . . . . . . . . . . . . . . . Supervisors Zhang Hua . . . . . . . . . . . . . . . . . . . . . . . Wang Mengqiu* . . . . . . . . . . . . . . . . . . Wang Dunchun . . . . . . . . . . . . . . . . . . . Luo Jun . . . . . . . . . . . . . . . . . . . . . . . . . Wang Haibo . . . . . . . . . . . . . . . . . . . . . . Zheng Chengjiang . . . . . . . . . . . . . . . . . .		Year ended 31 December 2008	Year ended 31 December 2008	Year ended 31 December 2008
	Fees RMB’000 73 80 80 233 — — — — — — — 233	Salaries, allowances and benefits in kind RMB’000 — — — — — — — — 287 184 471 4,350	Performance related bonuses RMB’000 — — — — — — — — 475 175 650 7,670	Pension scheme contributions RMB’000 — — — — — — — — 20 18 38 184	Total remuneration
					RMB’000 73 80 80
					233
					— — — — 782 377
					1,159
					12,437

• Pan Shijie and Wang Dunchun resigned as a Director and a Supervisor of the Company with effect from 11 and 23 June 2008, respectively.

** Gao Zhong and Wang Mengqiu were appointed as a Director and a Supervisor of the Company, respectively, with effect from 14 August 2008.

Directors Wu Gang . . . . . . . . . . . . . . . . . . . . . . . . Li Ying . . . . . . . . . . . . . . . . . . . . . . . . . . Guo Jian . . . . . . . . . . . . . . . . . . . . . . . . . Gao Zhong . . . . . . . . . . . . . . . . . . . . . . . Liu Tongliang . . . . . . . . . . . . . . . . . . Lv Houjun . . . . . . . . . . . . . . . . . . . . . . . Independent directors Wang Yousan . . . . . . . . . . . . . . . . . . . . . Shi Pengfei . . . . . . . . . . . . . . . . . . . . . . . Song Chang . . . . . . . . . . . . . . . . . . . .		Year ended 31 December 2009	Year ended 31 December 2009	Year ended 31 December 2009
	Fees RMB’000 — — — — — — — — 80 80 160	Salaries, allowances, and benefits in kind RMB’000 1,406 — 1,425 — 388 — 3,219 — — — —	Performance related bonuses RMB’000 2,500 — 2,480 — — — 4,980 — — — —	Pension scheme contributions RMB’000 64 — 64 — 17 — 145 — — — —	Total remuneration
					RMB’000 3,970 — 3,969 — 405 —
					8,344
					— 80 80
					160

– I-45 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

9. Directors’ and Supervisors’ Remuneration and Five Highest Paid Individuals — continued

• (a) Directors’ and supervisors’ remuneration — continued

Supervisors Zhang Hua . . . . . . . . . . . . . . . . . . . . . . Wang Mengqiu . . . . . . . . . . . . . . . . . . . . Luo Jun . . . . . . . . . . . . . . . . . . . . . . . . . Wang Shiwei . . . . . . . . . . . . . . . . . . . . Wang Haibo**. . . . . . . . . . . . . . . . . . . . Zheng Chengjiang . . . . . . . . . . . . . . . . . .		Year ended 31 December 2009	Year ended 31 December 2009	Year ended 31 December 2009
	Fees RMB’000 — — — — — — — 160	Salaries, allowances, and benefits in kind RMB’000 — — — — 412 187 599 3,818	Performance related bonuses RMB’000 — — — — 799 250 1,049 6,029	Pension scheme contributions RMB’000 — — — — 30 21 51 196	Total remuneration
					RMB’000 — — — — 1,241 458
					1,699
					10,203

• Zhang Hua resigned as a Supervisor of the Company with effect from 5 August 2009.

• ** Wang Shiwei was appointed as a Supervisor of the Company with effect from 9 September 2009.

• *** Liu Tongliang, Song Chang and Wang Haibo resigned as a Director, an independent Director and a Supervisor of the Company, respectively, with effect from 25 March 2010. Wei Hongliang, Li Man Bun and Xiao Zhiping were appointed as a Director, an independent Director and a Supervisor of the Company, respectively, with effect from 25 March 2010.

Those Directors or Supervisors receiving no emoluments for the Relevant Years is because they did not receive any remuneration in the capacity of their service as Directors and Supervisors.

(b) Five highest paid employees

An analysis of the headcounts of five highest paid employees within the Group for the Relevant Years is as follows:

follows:
		Year ended
		31 December
	2007	2008	2009
Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2	2	2
Non-director and non-supervisor employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3	3	3
	5	5	5

– I-46 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

9. Directors’ and Supervisors’ Remuneration and Five Highest Paid Individuals — continued

(b) Five highest paid employees — continued

Details of the remuneration of the above non-director and non-supervisor highest paid employees are as follows:

Salaries, allowances and benefits in kind . . . . . . . . . . . . . . . . . . . . . . . . . . . Performance related bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension scheme contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December	Year ended 31 December	Year ended 31 December
	2007 RMB’000 2,107 6,888 51 9,046	2008 RMB’000 2,253 5,132 92 7,477	2009
			RMB’000 2,248 6,727 71
			9,046

The number of non-director and non-supervisor, highest paid employees whose remuneration fell within the following bands is as follows:

Nil to HK$1,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$1,000,001 – HK$2,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$2,000,001 – HK$2,500,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$2,500,001 – HK$3,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$3,000,001 – HK$3,500,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$3,500,001 – HK$4,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year ended 31 December

2007 2008 2009 — — — — — — — — — 1 3 — 2 — 2 — — 1

During the Relevant Years, no Directors, Supervisors or any of the non-director and non-supervisor highest paid individuals waived or agreed to waive any emoluments and no emoluments were paid by the Group to the Directors, Supervisors or any of the non-director and non-supervisor highest paid individuals as an inducement to join or upon joining the Group or as compensation for loss of office.

10. Income Tax

Under the relevant PRC Corporate Income Tax Law and the respective regulations, except for the Company’s subsidiaries overseas and certain preferential treatment available to the Company, the Company’s subsidiaries, jointly-controlled entities and associates in the PRC, which were exempted from income tax or taxed at a preferential rate of 15% primarily due to their status as entities engaging in technology development or their involvement in the important public infrastructure investment projects that were supported by the government and development projects in the western region of PRC, the entities within the Group were subject to corporate income tax at a rate of 33% during the year ended 31 December 2007, and at 25% during the two years ended 31 December 2008 and 2009.

No Hong Kong profits tax has been provided because the Group did not generate any assessable profits in Hong Kong during the Relevant Years.

Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the countries in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.

– I-47 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

10. Income Tax — continued

During the 5th Session of the 10th National People’s Congress, which was concluded on 16 March 2007, the PRC Corporate Income Tax Law (the “New Corporate Income Tax Law”) was approved and became effective on 1 January 2008. The New Corporate Income Tax Law introduced a wide range of changes which include, but are not limited to, the unification of the income tax rates for domestic-invested enterprises and foreign-invested enterprises, which results in a reduction in the income tax rate from 33% to 25% applicable to all domestic-invested enterprises and foreign-invested enterprises. The New Corporate Income Tax Law also removed the levy of local income tax. The effect of this change has been reflected in the calculation of deferred income tax as at 31 December 2007.

The Company was exempted from income tax in the PRC for the period from 1 April 2004 to 31 March 2008 in accordance with preferential tax policies issued by the government of Xinjiang Uygur Autonomous Region and was taxed at a preferential income tax rate of 15% for the period from 1 April 2008 to 31 December 2008 in accordance with the preferential tax policies in the western region of the PRC. In addition, the Company has been identified as a “high and new technology enterprise” and was entitled to a preferential income tax rate of 15% for the three years ending 31 December 2011 in accordance with the New Corporate Income Tax Law.

Current — Mainland China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred (note 23). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax charge/(credit) for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 5 197,475 255,332 103 13,005 33,597 108 210,480 288,929 (8,192) (89,582) (88,974) (8,084) 120,898 199,955	2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 5 197,475 255,332 103 13,005 33,597 108 210,480 288,929 (8,192) (89,582) (88,974) (8,084) 120,898 199,955
	2007 RMB’000 5 103 108 (8,192) (8,084)	2008 RMB’000 197,475 13,005 210,480 (89,582) 120,898

– I-48 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

10. Income Tax — continued

A reconciliation of the income tax expense applicable to profit before tax using the statutory income tax rate applicable to the Company to the income tax expense (credit) at the Group’s effective income tax rate for each of the Relevant Years:

Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax charge at the statutory income tax rate of 25% (2007: 33%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect of different income tax rates for overseas entities . . . . . . . . . . . . . Tax exemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect on opening deferred income tax due to change in income tax rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect of lower enacted tax rate used for the recognition of deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses not deductible for tax purposes (note) . . . . . . . . . . . . . . . . . . . Tax losses not recognised. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional tax deduction on research and development expenditure . . . . . Profits and losses attributable to jointly-controlled entities . . . . . . . . . . . Profits and losses attributable to associates . . . . . . . . . . . . . . . . . . . . . . . Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax charge/(credit) for the year at the effective rate . . . . . . . . . . . . . . . .	Year ended 31 December	Year ended 31 December	Year ended 31 December
	2007 RMB’000 621,676 205,153 (4) (210,010) (4,971) (7,794) 6,933 — (1,395) — — 4,004 (8,084)	2008 RMB’000 1,146,094 286,523 2,296 (186,718) — — 33,211 80 (13,073) — — (1,421) 120,898	2009
			RMB’000 1,990,558 497,639 5,578 (298,144) — — 4,337 485 (7,589) (72) 1,007 (3,286)
			199,955

Note: Expenses not deductible for tax purpose generally refer to expenses without proper tax-deductible documents and other miscellaneous expenses which are in excess of the allowable tax deduction limit, such as entertainment expenses and advertising expenses. Certain expenses accrued but unpaid as at 31 December 2007 were not deductible for income tax purpose for the year ended 31 December 2007. As the Company was in its tax holiday in fiscal year 2007 and exempted from income tax for the year ended 31 December 2007, when these unpaid expenses were settled by the Company in 2008, they were accounted for as non-deductible expenses and needed to be added back for income tax calculation for the year ended 31 December 2008.

11. Profit Attributable to Owners of the Company

The consolidated profit attributable to owners of the Company for the Relevant Years includes the profits of approximately RMB599,646,000, RMB709,243,000 and RMB1,093,390,000, respectively, which have been dealt with in the financial statements of the Company (note 35(b)).

12. Dividends

Proposed final cash dividend of the Company (RMB0.1, RMB0.28 and RMB0.1 per ordinary share for the three years ended 31 December 2007, 2008 and 2009, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December	Year ended 31 December	Year ended 31 December
	2007 RMB’000 50,000	2008 RMB’000 280,000	2009
			RMB’000 140,000

– I-49 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

13. Earnings Per Share Attributable to Ordinary Equity Holders of the Company

The calculation of basic earnings per share amounts for each of the Relevant Years is based on the profit attributable to ordinary equity holders of the Company for each of the Relevant Years and the weighted average number of ordinary shares in issue during each of the Relevant Years.

number of ordinary shares in issue during each of the Relevant Years.	number of ordinary shares in issue during each of the Relevant Years.
2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 Earnings Profit attributable to ordinary equity holders of the Company, used in the basic earnings per share calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624,643 906,407 1,745,580 2007 2008 2009 Year ended 31 December Shares Weighted average number of ordinary shares in issue during the Relevant Years used in the basic earnings per share calculation, after taking into consideration of the issuance of bonus shares from the beginning of the Relevant Years up to the date of this report . . . . . . . . . . 2,016,000,000 2,240,000,000 2,240,000,000		Year ended 31 December
					2009
					RMB’000 1,745,580
	2007 2,016,000,000		2008 2,240,000,000		2009
				2,240,000,000

The Company did not have any dilutive potential ordinary shares during the Relevant Years.

– I-50 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

14. Property, Plant and Equipment

GROUP

GROUP
Cost: At 1 January 2007 . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . Acquisitions of subsidiaries (note 36(ii)) . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . Disposal of a subsidiary (note 37) . . Transfers . . . . . . . . . . . . . . . . . . . . . Transferred to investment properties (note 15) . . . . . . . . . . . . . . . . . . . At 31 December 2007 . . . . . . . . . . . Accumulated depreciation: At 1 January 2007 . . . . . . . . . . . . . . Depreciation charge for the year (note 7) . . . . . . . . . . . . . . . . . . . . Acquisitions of subsidiaries (note 36(ii)) . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . Disposal of a subsidiary (note 37) . . At 31 December 2007 . . . . . . . . . . . Net carrying amount: At 31 December 2007 . . . . . . . . . . . At 1 January 2007 . . . . . . . . . . . . . .		Year ended 31 December 2007				Total RMB’000 126,730 307,824 18,232 (120) (393) — (25,142) 427,131 (14,600) (7,932) (505) 92 57 (22,888) 404,243 112,130
	Buildings RMB’000 18,302 2,271 15,802 — — 78,931 — 115,306 (1,366) (1,425) (413) — — (3,204) 112,102 16,936	Machinery RMB’000 51,108 17,873 — — (102) 29,308 — 98,187 (10,790) (4,468) — — 12 (15,246) 82,941 40,318	Vehicles RMB’000 3,836 3,887 — — (142) 337 — 7,918 (620) (503) — — 21 (1,102) 6,816 3,216	Electronic equipment and others RMB’000 5,133 6,283 1,285 (120) (149) 5,484 — 17,916 (1,824) (1,536) (92) 92 24 (3,336) 14,580 3,309	Construction in progress RMB’000 48,351 277,510 1,145 — — (114,060) (25,142) 187,804 — — — — — — 187,804 48,351

– I-51 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

14. Property, Plant and Equipment — continued

Cost: At 1 January 2008 . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . Acquisitions of subsidiaries (note 36(i)(ii)) . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . Disposals of subsidiaries (note 37) . . . . . . . . . . . . . . . . . Transfers . . . . . . . . . . . . . . . . . . . Transferred to investment properties (note 15) . . . . . . . . . Exchange realignment . . . . . . . . . At 31 December 2008 . . . . . . . . . Accumulated depreciation: At 1 January 2008 . . . . . . . . . . . . Depreciation charge for the year (note 7) . . . . . . . . . . . . . . . . . . Acquisitions of subsidiaries (note 36(i)(ii)) . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . Disposals of subsidiaries (note 37) . . . . . . . . . . . . . . . . . Transferred to investment properties (note 15) . . . . . . . . . Exchange realignment . . . . . . . . . At 31 December 2008 . . . . . . . . . Net carrying amount: At 31 December 2008 . . . . . . . . . At 1 January 2008 . . . . . . . . . . . .		**Year ended 31 **	**Year ended 31 **	December 2008	December 2008	Total RMB’000 427,131 1,488,913 155,177 (7,168) (673,958) — (32,810) (597) 1,356,688 (22,888) (47,930) (3,781) 1,208 19,154 480 497 (53,260) 1,303,428 404,243
	Buildings RMB’000 115,306 47,432 14,759 — — 177,272 (3,954) (30) 350,785 (3,204) (6,012) (63) — — 480 16 (8,783) 342,002 112,102	Machinery RMB’000 98,187 40,523 27,988 (6,067) (673,779) 1,303,334 — (191) 789,995 (15,246) (36,546) (1,151) 745 19,128 — 167 (32,903) 757,092 82,941	Vehicles RMB’000 7,918 4,557 2,771 (999) (142) — — (121) 13,984 (1,102) (1,559) (758) 460 20 — 79 (2,860) 11,124 6,816	Electronic equipment and others RMB’000 17,916 19,384 4,986 (102) (37) 656 — (253) 42,550 (3,336) (3,813) (1,809) 3 6 — 235 (8,714) 33,836 14,580	Construction in progress RMB’000 187,804 1,377,017 104,673 — — (1,481,262) (28,856) (2) 159,374 — — — — — — — — 159,374 187,804

– I-52 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

14. Property, Plant and Equipment — continued

Cost: At 1 January 2009. . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . Acquisitions of subsidiaries (note 36(ii)). . . . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . Disposals of subsidiaries (note 37) . . . . . . . . . . . . . . . . . . Transfers. . . . . . . . . . . . . . . . . . . . Exchange realignment . . . . . . . . . . At 31 December 2009 . . . . . . . . . . Accumulated depreciation: At 1 January 2009. . . . . . . . . . . . . Depreciation charge for the year (note 7) . . . . . . . . . . . . . . . . . . . Acquisitions of subsidiaries (note 36(ii)). . . . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . Disposals of subsidiaries (note 37) . . . . . . . . . . . . . . . . . . Exchange realignment . . . . . . . . . . At 31 December 2009 . . . . . . . . . . Net carrying amount: At 31 December 2009 . . . . . . . . . . At 1 January 2009. . . . . . . . . . . . .		Year ended 31 December 2009	Year ended 31 December 2009	Year ended 31 December 2009	Year ended 31 December 2009	Total RMB’000 1,356,688 1,755,172 78,734 (110,827) (564,735) — 5,643 2,520,675 (53,260) (65,243) (145) 17,529 24,428 (3,329) (80,020) 2,440,655 1,303,428
	Buildings RMB’000 350,785 12,692 — (226) (52,449) 59,108 2,891 372,801 (8,783) (9,838) — 19 1,444 (940) (18,098) 354,703 342,002	Machinery RMB’000 789,995 43,456 — (104,275) (510,340) 476,301 1,376 696,513 (32,903) (43,077) — 15,742 22,429 (1,171) (38,980) 657,533 757,092	Vehicles RMB’000 13,984 12,669 1,165 (2,702) (1,276) — 209 24,049 (2,860) (1,960) (105) 423 396 (206) (4,312) 19,737 11,124	Electronic equipment and others RMB’000 42,550 25,545 567 (1,966) (670) 500 1,038 67,564 (8,714) (10,368) (40) 1,345 159 (1,012) (18,630) 48,934 33,836	Construction in progress RMB’000 159,374 1,660,810 77,002 (1,658) — (535,909) 129 1,359,748 — — — — — — — 1,359,748 159,374

– I-53 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

14. Property, Plant and Equipment — continued

COMPANY

Cost: At 1 January 2007 . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . Transfers . . . . . . . . . . . . . . . . . . . . . Transferred to investment properties (note 15) . . . . . . . . . . . . . . . . . . . At 31 December 2007 . . . . . . . . . . . Accumulated depreciation: At 1 January 2007 . . . . . . . . . . . . . . Depreciation charge for the year. . . . Disposals. . . . . . . . . . . . . . . . . . . . . At 31 December 2007 . . . . . . . . . . . Net carrying amount: At 31 December 2007 . . . . . . . . . . . At 1 January 2007 . . . . . . . . . . . . . .		Year ended 31 December 2007	Year ended 31 December 2007	Year ended 31 December 2007	Year ended 31 December 2007	Total RMB’000 84,002 103,679 (105) — (25,142) 162,434 (14,515) (6,261) 77 (20,699) 141,735 69,487
	Buildings RMB’000 18,302 — — — — 18,302 (1,365) (511) — (1,876) 16,426 16,937	Machinery RMB’000 50,841 15,725 — 15,802 — 82,368 (10,426) (4,422) — (14,848) 67,520 40,415	Vehicles RMB’000 2,764 2,331 — — — 5,095 (581) (324) — (905) 4,190 2,183	Electronic equipment and others RMB’000 5,085 4,968 (105) — — 9,948 (2,143) (1,004) 77 (3,070) 6,878 2,942	Construction in progress RMB’000 7,010 80,655 — (15,802) (25,142) 46,721 — — — — 46,721 7,010

– I-54 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

14. Property, Plant and Equipment — continued

Cost: At 1 January 2008 . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . Transfers . . . . . . . . . . . . . . . . . . . . . Transferred to investment properties (note 15) . . . . . . . . . . . . . . . . . . . At 31 December 2008 . . . . . . . . . . . Accumulated depreciation: At 1 January 2008 . . . . . . . . . . . . . . Depreciation charge for the year. . . . Disposals. . . . . . . . . . . . . . . . . . . . . At 31 December 2008 . . . . . . . . . . . Net carrying amount: At 31 December 2008 . . . . . . . . . . . At 1 January 2008 . . . . . . . . . . . . . . Cost: At 1 January 2009 . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . Transfers . . . . . . . . . . . . . . . . . . . . . At 31 December 2009 . . . . . . . . . . . Accumulated depreciation: At 1 January 2009 . . . . . . . . . . . . . . Depreciation charge for the year. . . . Disposals. . . . . . . . . . . . . . . . . . . . . At 31 December 2009 . . . . . . . . . . . Net carrying amount: At 31 December 2009 . . . . . . . . . . . At 1 January 2009 . . . . . . . . . . . . . .		Year ended 31 December 2008	Year ended 31 December 2008	Year ended 31 December 2008	Year ended 31 December 2008	Total RMB’000 162,434 109,741 (1,972) — (28,856) 241,347 (20,699) (14,290) 541 (34,448) 206,899 141,735 Total RMB’000 241,347 66,555 (65,664) — 242,238 (34,448) (18,934) 16,950 (36,432) 205,806 206,899
	Buildings RMB’000 18,302 — — 67,258 — 85,560 (1,876) (1,545) — (3,421) 82,139 16,426	Machinery Vehicles Electronic equipment and others Construction in progress RMB’000 RMB’000 RMB’000 RMB’000 82,368 5,095 9,948 46,721 18,753 1,062 4,821 85,105 (962) (999) (11) — 25,338 — 161 (92,757) — — — (28,856) 125,497 5,158 14,919 10,213 (14,848) (905) (3,070) — (9,575) (477) (2,693) — 79 460 2 — (24,344) (922) (5,761) — 101,153 4,236 9,158 10,213 67,520 4,190 6,878 46,721 Year ended 31 December 2009
	Buildings RMB’000 85,560 1,166 (3) 4,359 91,082 (3,421) (2,410) — (5,831) 85,251 82,139	Machinery RMB’000 125,497 25,752 (63,632) 11,139 98,756 (24,344) (13,175) 15,722 (21,797) 76,959 101,153	Vehicles RMB’000 5,158 1,610 (705) — 6,063 (922) (556) 10 (1,468) 4,595 4,236	Electronic equipment and others RMB’000 14,919 3,069 (1,324) 19 16,683 (5,761) (2,793) 1,218 (7,336) 9,347 9,158	Construction in progress RMB’000 10,213 34,958 — (15,517) 29,654 — — — — 29,654 10,213

– I-55 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

14. Property, Plant and Equipment — continued

The carrying amount of construction in progress of the Group included capitalised interest of approximately RMB3,475,000, RMB27,858,000 and RMB40,135,000 charged for the three years ended 31 December 2007, 2008 and 2009 (note 8) prior to being transferred to buildings and machinery.

As at 31 December 2009, the Group was in the process of applying for the title certificates of certain of its buildings with an aggregate net carrying amount of approximately RMB57,201,000. The Directors are of the view that the Group is entitled to lawfully and validly occupy and use the above-mentioned buildings. The Directors are also of the opinion that the aforesaid matter will not have any significant impact on the Group’s financial position as at 31 December 2009.

As at 31 December 2007, 2008 and 2009, certain of the Group’s property, plant and equipment with carrying values of approximately RMB47,471,000, RMB492,417,000 and RMB1,574,101,000 were pledged to secure certain of the Group’s bank and other borrowings (note 31).

15. Investment Properties

GROUP

GROUP
Cost: At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Addition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer from property, plant and equipment (note 14) . . . . . . . . . . . . . . . . . Transfer from prepaid land lease payments (note 16) . . . . . . . . . . . . . . . . . . Transfer to prepaid land lease payments (note 16) . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated depreciation: At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation charge for the year (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer from property, plant and equipment (note 14) . . . . . . . . . . . . . . . . . Transfer from prepaid land lease payments (note 16) . . . . . . . . . . . . . . . . . . Transfer to prepaid land lease payments (note 16) . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net carrying amount: At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 — 13,141 25,142 15,466 — 53,749 — (481) — — — (481) 53,268 —	2008 RMB’000 53,749 — 32,810 — (7,087) 79,472 (481) (1,683) (480) — 110 (2,534) 76,938 53,268	2009
			RMB’000 79,472 — — 6,523 —
			85,995
			(2,534) (2,232) — (275) —
			(5,041)
			80,954
			76,938

– I-56 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

15. Investment Properties — continued

COMPANY

COMPANY
Cost: At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Addition from acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer from property, plant and equipment (note 14) . . . . . . . . . . . . . . . . . Transfer from prepaid land lease payments (note 16) . . . . . . . . . . . . . . . . . . Transfer to prepaid land lease payments (note 16) . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated depreciation: At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer from prepaid land lease payments (note 16) . . . . . . . . . . . . . . . . . . Transfer to prepaid land lease payments (note 16) . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net carrying amount: At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 — 13,141 25,142 15,466 — 53,749 — (481) — — (481) 53,268 —	2008 RMB’000 53,749 — 28,856 — (7,087) 75,518 (481) (1,590) — 110 (1,961) 73,557 53,268	2009
			RMB’000 75,518 — — 6,523 —
			82,041
			(1,961) (2,043) (275) —
			(4,279)
			77,762
			73,557

The Group’s investment properties were valued on 31 December 2007, 2008 and 2009 by Jones Lang LaSalle Sallmanns, an independent professionally qualified valuer, at approximately RMB111,149,000, RMB145,179,000 and RMB150,750,000, respectively, on an open market, existing use basis.

The Group’s investment properties are leased to third parties under operating leases, further summary details of which are included in note 39(a).

As at 31 December 2008, certain of the Group’s investment properties with a carrying value of approximately RMB3,954,000 was pledged to secure certain of the Group’s bank and other borrowings (note 31).

As at 31 December 2009, certain of the Group’s investment properties with carrying value of approximately RMB33,559,000 were pledged to secure certain of the Group’s letter of guarantees.

– I-57 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

16. Prepaid Land Lease Payments

GROUP

GROUP
Carrying amount at beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of a subsidiary (note 36(ii)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer from investment properties (note 15) . . . . . . . . . . . . . . . . . . . . . . . Transfer to investment properties (note 15). . . . . . . . . . . . . . . . . . . . . . . . . . Disposal of subsidiaries (note 37) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation for the year (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carrying amount at end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 33,184 45,925 — — (15,466) — (836) 62,807	2008 RMB’000 62,807 12,665 2,923 6,977 — (4,460) (1,800) 79,112	2009
			RMB’000 79,112 95,199 — — (6,248) (5,325) (2,101)
			160,637

COMPANY

COMPANY
Carrying amount at beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer from investment properties (note 15) . . . . . . . . . . . . . . . . . . . . . . . Transfer to investment properties (note 15). . . . . . . . . . . . . . . . . . . . . . . . . . Disposals to a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation for the year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carrying amount at end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 13,190 21,884 — (15,466) — (303) 19,305	2008 RMB’000 19,305 7,785 6,977 — (2,329) (736) 31,002	2009
			RMB’000 31,002 20,152 — (6,248) — (747)
			44,159

As at 31 December 2009, the Group was in the process of applying for the title certificates of certain of its land use rights with an aggregate net carrying amount of approximately RMB46,376,000. The Directors are of the view that the Group is entitled to lawfully and validly occupy and use the above-mentioned land use rights. The Directors are also of the opinion that the aforesaid matter will not have any significant impact on the Group’s financial position as at 31 December 2009.

As at 31 December 2007 and 2008, certain of the Group’s land use rights with carrying values of approximately RMB3,541,000 and RMB5,935,000 respectively were pledged to secure certain of the Group’s bank loans (note 31).

– I-58 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

17. Goodwill

GROUP

GROUP
Cost and carrying amount at beginning of the year . . . . . . . . . . . . . . . . . . . . Acquisitions of subsidiaries (note 36(i)(ii)). . . . . . . . . . . . . . . . . . . . . . . . . . Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost and carrying amount at end of the year . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 — 16 — 16	2008 RMB’000 16 270,968 (30,789) 240,195	2009
			RMB’000 240,195 6,252 3,435
			249,882

Goodwill acquired through business combination in 2008 in the amount of approximately RMB270,968,000 has been allocated to the wind turbine generator manufacturing cash-generating unit, which is a reportable segment, for impairment testing.

The recoverable amount of the wind turbine generator manufacturing cash-generating unit has been determined based on a value in use calculation using cash flow projections based on a financial budget covering a five-year period approved by senior management. The discount rate applied to the cash flow projections is 15.70%.

Key assumptions were used in the value in use calculation of the wind turbine generator manufacturing cashgenerating unit for 31 December 2008 and 2009. The following describes each key assumption on which management has based its cash flow projection to undertake impairment testing of goodwill:

Budgeted gross margins — The basis used to determine the value assigned to the budgeted gross margins is the average gross margin achieved in the year immediately before the budget year, increased for expected efficiency improvements and expected market development.

Discount rate — The discount rate used is before tax and reflects specific risks relating to the relevant unit.

The values assigned to key assumptions reflect past experience of the management.

– I-59 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

18. Other Intangible Assets

GROUP

GROUP
Cost: At 1 January 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of a subsidiary (note 36(ii)) . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated amortisation: At 1 January 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation for the year (note 7) . . . . . . . . . . . . . . . . . . . . . . Acquisition of a subsidiary (note 36(ii)) . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net carrying amount: At 31 December 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 1 January 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost: At 1 January 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of a subsidiary (note 36(i)) . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated amortisation: At 1 January 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation for the year (note 7) . . . . . . . . . . . . . . . . . . . . . . Acquisition of a subsidiary (note 36(i)) . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net carrying amount: At 31 December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 1 January 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2007			Total RMB’000 16,316 8,126 21 (27) 24,436 (4,184) (2,578) (2) 5 (6,759) 17,677 12,132 Total RMB’000 24,436 4,802 355,173 (990) (33,853) 349,568 (6,759) (24,458) (3,033) 990 3,759 (29,501) 320,067 17,677
	Technology license Office software Patent RMB’000 RMB’000 RMB’000 13,234 3,082 — 3,384 2,236 2,506 — 21 — — (27) — 16,618 5,312 2,506 (3,570) (614) — (1,697) (881) — — (2) — — 5 — (5,267) (1,492) — 11,351 3,820 2,506 9,664 2,468 — Year ended 31 December 2008
	Technology license RMB’000 16,618 731 — — — 17,349 (5,267) (1,888) — — — (7,155) 10,194 11,351	Office software RMB’000 5,312 2,911 1,015 (990) (522) 7,726 (1,492) (1,524) (548) 990 121 (2,453) 5,273 3,820	Patent RMB’000 2,506 1,160 354,158 — (33,331) 324,493 — (21,046) (2,485) — 3,638 (19,893) 304,600 2,506

– I-60 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

18. Other Intangible Assets — continued

18. Other Intangible Assets — continued
Cost: At 1 January 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposal of a subsidiary (note 37) . . . . . . . . . . . . . . . . . . . . . . Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated amortisation: At 1 January 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation for the year (note 7) . . . . . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposal of a subsidiary (note 37) . . . . . . . . . . . . . . . . . . . . . . Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net carrying amount: At 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 1 January 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2009
	Technology license RMB’000 17,349 140 (9,324) — — 8,165 (7,155) (1,625) 6,025 — — (2,755) 5,410 10,194	Office software RMB’000 7,726 6,856 (211) (425) 31 13,977 (2,453) (1,590) 154 45 (12) (3,856) 10,121 5,273	Patent RMB’000 324,493 35,775 (4,220) — 7,244 363,292 (19,893) (9,342) — — (3,038) (32,273) 331,019 304,600	Total
				RMB’000 349,568 42,771 (13,755) (425) 7,275
				385,434
				(29,501) (12,557) 6,179 45 (3,050)
				(38,884)
				346,550
				320,067

COMPANY Cost: At 1 January 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated amortisation: At 1 January 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net carrying amount: At 31 December 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 1 January 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2007	Year ended 31 December 2007	Year ended 31 December 2007
	Technology license RMB’000 13,234 3,384 16,618 (3,570) (1,697) (5,267) 11,351 9,664	Office software RMB’000 3,057 2,236 5,293 (614) (859) (1,473) 3,820 2,443	Patent RMB’000 — 2,506 2,506 — — — 2,506 —	Total
				RMB’000 16,291 8,126
				24,417
				(4,184) (2,556)
				(6,740)
				17,677
				12,107

– I-61 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

18. Other Intangible Assets — continued

18. Other Intangible Assets — continued
Cost: At 1 January 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated amortisation: At 1 January 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net carrying amount: At 31 December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 1 January 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost: At 1 January 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated amortisation: At 1 January 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net carrying amount: At 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At 1 January 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2008
	Technology license Office software Patent RMB’000 RMB’000 RMB’000 16,618 5,293 2,506 871 1,828 1,160 — (971) — 17,489 6,150 3,666 (5,267) (1,473) — (1,888) (1,222) — — 971 — (7,155) (1,724) — 10,334 4,426 3,666 11,351 3,820 2,506 Year ended 31 December 2009			Total
				RMB’000 24,417 3,859 (971)
				27,305
				(6,740) (3,110) 971
				(8,879)
				18,426
				17,677
	Technology license RMB’000 17,489 — (9,324) 8,165 (7,155) (1,625) 6,024 (2,756) 5,409 10,334	Office software RMB’000 6,150 1,478 (211) 7,417 (1,724) (1,029) 153 (2,600) 4,817 4,426	Patent RMB’000 3,666 13,398 (4,220) 12,844 — (141) — (141) 12,703 3,666	Total
				RMB’000 27,305 14,876 (13,755)
				28,426
				(8,879) (2,795) 6,177
				(5,497)
				22,929
				18,426

– I-62 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

19. Investments in Subsidiaries

19. Investments in Subsidiaries
Unlisted investments, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 206,158	2008 RMB’000 1,239,604	2009
			RMB’000 1,367,164

Particulars of all subsidiaries of the Company are set out in note 1 of Section II above.

20. Interests in Jointly-controlled Entities/Investment in a Jointly-controlled Entity

Unlisted investments, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 Group RMB’000 — 69,741 69,741	Company
		As at 31 December 2009
		RMB’000 17,500 —
		17,500

Particulars of the jointly-controlled entities of the Group are set out in note 1 of Section II above.

The following tables illustrate the summarised financial information of the Group’s jointly-controlled entities:

Share of the jointly-controlled entities’ assets and liabilities: Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009
	RMB’000 151,841 20,058 (158) (102,000)
	69,741

Share of the jointly-controlled entities’ results: Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2009
	RMB’000 881 (281) (876) (13)
	(289)

– I-63 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

21. Interests/Investments in Associates

Unlisted investments, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 GROUP RMB’000 — 47,370 47,370	COMPANY
		As at 31 December 2009
		RMB’000 44,140 —
		44,140

Particulars of the associates of the Group are set out in note 1 of Section II above.

The following tables illustrate the summarised financial information of the Group’s associates extracted from their management accounts:

The associates’ financial position: Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The associates’ operating results: Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009
	RMB’000 57,305 162,471 (21,349) (27,770)
	170,657
	Year ended 31 December 2009
	RMB’000 53,486
	13,584

22. Available-for-sale Investments

GROUP

GROUP
Unlisted equity investments, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . COMPANY Unlisted equity investments, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 2008 2009 RMB’000 RMB’000 RMB’000 4,171 26,171 9,000 As at 31 December		2009
			RMB’000 9,000
	2007 RMB’000 3,171	2008 RMB’000 25,171	2009
			RMB’000 8,000

The unlisted equity investments are equity securities issued by private entities established in the PRC. They are measured at cost less impairment at each reporting date because the range of reasonable fair value estimates is so

– I-64 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

22. Available-for-sale Investments — continued

significant that the Directors are of the opinion that their fair values cannot be measured reliably. The Group does not intend to dispose of them in the near future.

23. Deferred Tax Assets and Deferred Tax Liabilities

The movements in deferred tax assets and deferred tax liabilities during the Relevant Years are as follows:

GROUP

GROUP
At beginning of the year, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of a subsidiary (note 36(i)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposals of subsidiaries (note 37) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax credited to profit or loss during the year (note 10) . . . . . . . . . . Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 3,518 — — 8,192 — 11,710	2008 RMB’000 11,710 (100,133) (719) 89,582 15,892 16,332	2009
			RMB’000 16,332 — (419) 88,974 (5,320)
			99,567

COMPANY

COMPANY
At beginning of the year, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax credited to profit or loss during the year. . . . . . . . . . . . . . . . . . At end of the year, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2007 2008 2009 RMB’000 RMB’000 RMB’000 Year ended 31 December 3,518 10,139 54,524 6,621 44,385 38,667 10,139 54,524 93,191
		2008 RMB’000 10,139 44,385 54,524	2009
			RMB’000 54,524 38,667
			93,191

– I-65 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

23. Deferred Tax Assets and Deferred Tax Liabilities — continued

The deferred tax assets and deferred tax liabilities are attributed to the following items, which are reflected in the consolidated statements of financial position:

GROUP

GROUP
Deferred tax assets: Provision for impairment of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Difference in amortisation for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . Provisions and accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government grants received not yet recognised as income . . . . . . . . . . . . . . Unrealised gains arising from intra-group sales. . . . . . . . . . . . . . . . . . . . . . . Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax liabilities: Excess of fair values of identifiable assets and liabilities over carrying values in acquisition of a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 10,398 — — — — 1,312 11,710 — — — 11,710	2008 RMB’000 31,669 455 27,390 3,287 36,605 2,497 101,903 76,351 9,220 85,571 16,332	2009
			RMB’000 29,649 999 92,226 3,297 63,511 822
			190,504
			73,760 17,177
			90,937
			99,567

COMPANY

COMPANY
Deferred tax assets: Provision for impairment of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Difference in amortisation for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . Provisions and accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government grants received not yet recognised as income . . . . . . . . . . . . . . Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 10,139 — — — — 10,139 10,139	2008 RMB’000 22,608 455 27,380 3,287 794 54,524 54,524	2009
			RMB’000 27,027 999 62,017 2,868 280
			93,191
			93,191

There are no income tax consequences attaching to the payment of dividends by the Company to its shareholders.

– I-66 –

APPENDIX I

ACCOUNTANTS’ REPORT

II. NOTES TO FINANCIAL INFORMATION — continued

24. Inventories

GROUP

GROUP
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finished and semi-finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consigned processing materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Low-value consumables and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 412,524 340,449 198,073 19,542 964 971,552	2008 RMB’000 760,450 942,847 279,711 130,163 6,025 2,119,196	2009
			RMB’000 927,554 1,239,104 543,912 137,597 5,379
			2,853,546

COMPANY

COMPANY
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finished and semi-finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consigned processing materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Low-value consumables and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 407,174 340,449 197,712 19,542 308 965,185	2008 RMB’000 596,138 569,630 264,506 117,265 698 1,548,237	2009
			RMB’000 588,257 1,037,300 233,651 107,350 676
			1,967,234

25. Trade and Bills Receivables

GROUP

GROUP
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bills receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retention money receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 619,582 — 189,165 (44,681) 764,066	2008 RMB’000 2,539,564 39,000 189,300 (148,843) 2,619,021	2009
			RMB’000 2,624,662 209,799 272,182 (187,036)
			2,919,607

COMPANY

COMPANY
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bills receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retention money receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 610,787 — 189,165 (44,201) 755,751	2008 RMB’000 2,141,156 39,000 189,300 (128,618) 2,240,838	2009
			RMB’000 1,996,877 202,381 237,508 (151,666)
			2,285,100

– I-67 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

25. Trade and Bills Receivables — continued

The Group normally allows a credit period of not more than three months to its customers. The Group seeks to maintain strict control over its outstanding receivables. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and the fact that the Group’s trade and bills receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. Trade and bills receivables are unsecured and non-interest-bearing.

An aging analysis of trade and bills receivables, based on the invoice date and net of provisions, as at the respective reporting dates is as follows:

GROUP

GROUP
Within 3 months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 6 months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 months to 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 to 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 586,782 8,217 97,551 69,424 87 2,005 764,066	2008 RMB’000 1,898,080 51,395 505,435 131,556 31,219 1,336 2,619,021	2009
			RMB’000 1,453,034 398,581 484,080 455,656 107,439 20,817
			2,919,607

COMPANY

COMPANY
Within 3 months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 6 months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 months to 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 to 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 580,140 7,267 97,551 68,701 87 2,005 755,751	2008 RMB’000 1,523,767 48,217 505,216 131,145 31,157 1,336 2,240,838	2009
			RMB’000 962,740 384,502 391,922 417,966 107,153 20,817
			2,285,100

The Group has no trade and bills receivables that are neither individually nor collectively considered to be impaired.

– I-68 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

25. Trade and Bills Receivables — continued

Movements in the provision for impairment of trade and bills receivables are as follows:

GROUP

GROUP
At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses recognised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses reversed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposal of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 15,082 — 38,797 (9,120) (78) — 44,681	2008 RMB’000 44,681 1,694 129,534 (24,625) (2,441) — 148,843	2009
			RMB’000 148,843 — 126,583 (85,847) (2,594) 51
			187,036

COMPANY

COMPANY
At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses recognised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses reversed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 15,046 38,275 (9,120) 44,201	2008 RMB’000 44,201 109,042 (24,625) 128,618	2009
			RMB’000 128,618 93,254 (70,206)
			151,666

The amount due from Xinjiang Wind Power Company Limited (“Xinjiang Wind Power”) ( ), the 18%-owned shareholder of the Company, included in the trade and bills receivables is as follows:

receivables is as follows:
18%-owned shareholder of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2008 RMB’000 3	2009
		RMB’000 68,175

The above amount is unsecured, non-interest-bearing and repayable on similar credit terms to those offered to other independent customers of the Group.

– I-69 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

26. Prepayments, Deposits and Other Receivables

GROUP

Advance to suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deposits and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for impairment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Portion classified as non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	**As **	at 31 December	2009 RMB’000 736,593 8,503 92,547 (5,299) 832,344 (1,935) 830,409
	2007 RMB’000 480,454 — 18,993 (1,049) 498,398 — 498,398	2008 RMB’000 760,325 1,063 289,890 (14,894) 1,036,384 (323) 1,036,061

COMPANY

Advance to suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deposits and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Portion classified as non-current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2007 2008 2009 As at 31 December RMB’000 RMB’000 RMB’000 457,793 577,509 449,730 — 361 4,810 154,523 141,838 352,691 (8,816) (9,327) (24,020) 603,500 710,381 783,211 — — — 603,500 710,381 783,211	2007 2008 2009 As at 31 December RMB’000 RMB’000 RMB’000 457,793 577,509 449,730 — 361 4,810 154,523 141,838 352,691 (8,816) (9,327) (24,020) 603,500 710,381 783,211 — — — 603,500 710,381 783,211
	2007 RMB’000 457,793 — 154,523 (8,816) 603,500 — 603,500	2008 RMB’000 577,509 361 141,838 (9,327) 710,381 — 710,381

The Group has no deposits and other receivables that are neither individually nor collectively considered to be impaired.

Movements in the provision for impairment of prepayments, deposits and other receivables are as follows:

GROUP

At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses recognised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses reversed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Written off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposals of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 554 1,049 14,894 605 14,357 20,444 (106) (214) (30,135) — (298) — (4) — (33) — — 129 1,049 14,894 5,299	2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 554 1,049 14,894 605 14,357 20,444 (106) (214) (30,135) — (298) — (4) — (33) — — 129 1,049 14,894 5,299
	2007 RMB’000 554 605 (106) — (4) — 1,049	2008 RMB’000 1,049 14,357 (214) (298) — — 14,894

– I-70 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

26. Prepayments, Deposits and Other Receivables — continued

COMPANY

At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses recognised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses reversed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Written off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December	Year ended 31 December	Year ended 31 December
	2007 RMB’000 1,540 7,382 (106) — 8,816	2008 RMB’000 8,816 6,214 (5,405) (298) 9,327	2009
			RMB’000 9,327 17,378 (2,685) —
			24,020

The amount due from Xinjiang Wind Power included in the prepayments, deposits and other receivables is as follows:

18%-owned shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2009
	RMB’000 1,560

The above amount is unsecured, non-interest-bearing and repayable on similar credit terms to those offered to independent third parties.

27. Cash and Cash Equivalents and Pledged Deposits

GROUP

Cash and bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Pledged time deposits for — bank loans (note 31). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents in the consolidated statements of financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Non-pledged time deposits with original maturity of three months or more when acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents in the consolidated statements of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents and pledged deposits denominated in: — RMB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — other currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	**As **	at 31 December
	2007 RMB’000 2,133,302 546,361 2,679,663 — 2,679,663 — 2,679,663 2,643,057 36,606 2,679,663	2008 RMB’000 1,647,685 1,638,715 3,286,400 — 3,286,400 — 3,286,400 3,231,787 54,613 3,286,400	2009
			RMB’000 2,576,460 2,101,028
			4,677,488 (218,538)
			4,458,950 (80,000)
			4,378,950
			4,469,305 208,183
			4,677,488

– I-71 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

27. Cash and Cash Equivalents and Pledged Deposits — continued

COMPANY

COMPANY
Cash and bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Pledged time deposits for — bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents and pledged deposits denominated in: — RMB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — other currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	**As **	at 31 December
	2007 RMB’000 2,035,948 537,393 2,573,341 — 2,573,341 2,572,831 510 2,573,341	2008 RMB’000 860,953 782,114 1,643,067 — 1,643,067 1,642,954 113 1,643,067	2009
			RMB’000 1,470,293 964,042
			2,434,335 (218,538
			2,215,797
			2,429,920 4,415
			2,434,335

The RMB is not freely convertible into other currencies. However, under Mainland China’s prevailing rules and regulations over foreign exchange, the Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange business.

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term time deposits are made for varying periods of between seven days and three months depending on the immediate cash requirements of the Group, and earn interest at the respective short term time deposit rates. The bank balances and pledged deposits are deposited with creditworthy banks with no recent history of default.

28. Trade and Bills Payables

GROUP

GROUP
Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bills payables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 442,397 492,128 934,525	2008 RMB’000 1,332,390 1,212,140 2,544,530	2009
			RMB’000 1,997,643 1,762,564
			3,760,207

COMPANY

COMPANY
Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bills payables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 437,180 492,128 929,308	2008 RMB’000 876,741 816,078 1,692,819	2009
			RMB’000 1,219,036 1,047,818
			2,266,854

Trade and bills payables are non-interest-bearing and are normally settled within 90 days.

– I-72 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

28. Trade and Bills Payables — continued

An aging analysis of the Group’s trade and bills payables as at the end of each of the Relevant Years is as follows:

GROUP

GROUP
Within 3 months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 6 months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 months to 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 to 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 797,679 133,951 549 1,592 475 279 934,525	2008 RMB’000 2,409,862 104,926 24,448 3,567 1,431 296 2,544,530	2009
			RMB’000 3,142,625 478,464 66,212 70,852 893 1,161
			3,760,207

COMPANY

COMPANY
Within 3 months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 6 months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 months to 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 to 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 798,889 127,585 488 1,592 475 279 929,308	2008 RMB’000 1,600,536 80,207 9,489 860 1,431 296 1,692,819	2009
			RMB’000 1,838,631 328,839 28,529 68,892 802 1,161
			2,266,854

The amount due to one of the Group’s associates included in the trade and bills payables is as follows:

Associate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009
	RMB’000 16,473

29. Other Payables

GROUP

GROUP
Advances from customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued salaries, wages and benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . Other taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 679,398 68,166 110,216 4,324 862,104	2008 RMB’000 2,362,385 76,254 111,650 121,109 2,671,398	2009
			RMB’000 1,814,295 129,142 16,600 95,749
			2,055,786

– I-73 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

29. Other Payables — continued

COMPANY

COMPANY
Advances from customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued salaries, wages and benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . Other taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 692,942 67,334 109,931 3,741 873,948	2008 RMB’000 1,750,654 52,926 100,030 236,166 2,139,776	2009
			RMB’000 1,671,584 76,051 182,736 7,937
			1,938,308

The amount due to one of the Group’s jointly-controlled entities included in advances from customers is as follows:

Jointly-controlled entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009
	RMB’000 190,003

Other payables are non-interest-bearing and have no fixed terms of repayment.

30. Derivative Financial Instruments

GROUP AND COMPANY

GROUP AND COMPANY
Forward currency contracts Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2008 RMB’000 — 2,279	2009
		RMB’000 4,667
		10,746

The carrying amounts of the forward currency contracts are the same as their fair values. The above transactions involving derivative financial instruments are with Bank of China.

The Company entered into forward currency contracts to manage its exchange rate exposures which did not meet the criteria for hedge accounting. Changes in the fair value of non-hedging currency derivatives amounting to RMB2,279,000 and RMB3,800,000 were charged to the statements of comprehensive income for the two years ended 31 December 2008 and 2009, respectively.

– I-74 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

31. Interest-bearing Bank and Other Borrowings

GROUP

Current Secured . . . . . . . . . . . Unsecured . . . . . . . . . Non-current Secured . . . . . . . . . . . Unsecured . . . . . . . . . Interest-bearing bank and other borrowings denominated in: — RMB . . . . . . . . . . — EUR . . . . . . . . . . . — US . . . . . . . . . . . .				As at 31 December	As at 31 December	As at 31 December
		2007	RMB’000 — 470,000 470,000 68,000 85,000 153,000 623,000 623,000 — — 623,000		2008	RMB’000 — 50,000 50,000 865,667 416,008 1,281,675 1,331,675 943,298 388,377 — 1,331,675		2009
	Effective interest rate (%) — 5.27-5.83 6.12-7.13 6.48-6.75	Maturity — 2008 2009-2011 2009-2010		Effective interest rate (%) — 5.91 7.00-7.83 7.56-7.74	Maturity — 2009 2010-2020 2010-2013		Effective interest rate (%) 1.33-7.00 6.61-7.56 2.44 5.35-7.00	Maturity 2010 2010 2011-2021 2011-2014	RMB’000
									494,393 107,499
									601,892
									1,666,095 356,026
									2,022,121
									2,624,013
									1,935,800 646,948 41,265
									2,624,013

COMPANY

Current Secured. . . . . . . . . . . . Unsecured . . . . . . . . . . Non-current Secured. . . . . . . . . . . . Unsecured . . . . . . . . . . Interest-bearing bank loans denominated in: — RMB . . . . . . . . . . . — EUR . . . . . . . . . . . — US. . . . . . . . . . . . .				As at 31 December	As at 31 December	As at 31 December
		2007	RMB’000 — 470,000 470,000 50,000 85,000 135,000 605,000 605,000 — — 605,000		2008	RMB’000 — 50,000 50,000 50,000 65,000 115,000 165,000 165,000 — — 165,000		2009
	Effective interest rate (%) — 5.43-5.83 6.12 6.48-6.75	Maturity — 2008 2009-2011 2009-2010		Effective interest rate (%) — 5.91 7.74 7.56-7.74	Maturity — 2009 2010-2011 2010		Effective interest rate (%) 1.33-1.99 6.61-7.56 — —	Maturity 2010 2010 — —	RMB’000
										224,492 35,000 259,492 — — — 259,492 35,000 183,227 41,265 259,492

– I-75 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

31. Interest-bearing Bank and Other Borrowings — continued

The maturity profile of the interest-bearing bank and other borrowings as at the end of each of the Relevant Years is as follows:

GROUP

GROUP
Analysed into: Bank loans repayable: Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the second year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the third to fifth years, inclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . Above five years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other borrowings repayable: Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the second year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the third to fifth years, inclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . Above five years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 470,000 55,000 98,000 — 623,000 — — — — — 623,000	2008 RMB’000 50,000 105,000 529,306 610,000 1,294,306 — 9,793 15,647 11,929 37,369 1,331,675	2009
			RMB’000 598,990 454,527 408,000 1,127,300
			2,588,817
			2,902 3,110 10,946 18,238
			35,196
			2,624,013

COMPANY Bank loans repayable: Within one year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the second year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the third to fifth years, inclusive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December	As at 31 December	As at 31 December
	2007 RMB’000 470,000 50,000 85,000 605,000	2008 RMB’000 50,000 65,000 50,000 165,000	2009
			RMB’000 259,492 — —
			259,492

The Group’s bank loans of approximately RMB118,000,000, RMB1,251,675,000 and RMB2,609,013,000 at 31 December 2007, 2008 and 2009, respectively, were secured and guaranteed by:

• (a) Certain of the Group’s bank loans amounting to RMB50,000,000 and RMB300,000,000 as at 31 December 2007 and 2008, respectively, were secured by mortgages over the Group’s property, plant and equipment and land use rights (prepaid land lease payments), which had aggregate carrying values of approximately RMB36,192,000 and RMB430,682,000 as at 31 December 2007 and 2008, respectively.

• (b) Certain of the Group’s bank loans amounting to approximately RMB519,000,000 and RMB788,000,000 as at 31 December 2008 and 2009, respectively, were secured by pledge of

– I-76 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

31. Interest-bearing Bank and Other Borrowings — continued

• certain of the Company’s subsidiaries’ electricity charge right and their future income thereon. These subsidiaries commenced operation in 2009; the receivables under this charge amounted to RMB23,672,000 as at 31 December 2009.

• (c) Certain of the Group’s bank loans amounting to approximately RMB1,112,800,000 as at 31 December 2009 were secured by mortgages over certain of the Company’s subsidiaries’ property, plant and equipment and by pledge of these subsidiaries’ electricity charge right and their future income thereon. As at 31 December 2009, the aggregate carrying values of the property, plant and equipment, and the receivables under the electricity charge amounted to RMB1,517,803,000 and RMB18,511,000, respectively.

• (d) Certain of the Group’s bank loans amounting to approximately RMB224,492,000 as at 31 December 2009 were secured by pledge of certain of the Group’s bank deposits amounting to approximately RMB218,538,000 (note 27) as at 31 December 2009.

• (e) Certain of the Group’s bank loans amounting to RMB50,000,000, RMB35,000,000 and RMB20,000,000 as at 31 December 2007, 2008 and 2009 were guaranteed by China Water Resources Investment Group Company, a shareholder of the Company. The guarantee by China Water Resources Investment Group Company was released in March 2010.

• (f) The bank loans of one of the Company’s subsidiaries, Beijing Tianyuan, amounting to approximately RMB18,000,000 and RMB9,298,000 as at 31 December 2007 and 2008, respectively, were guaranteed by China Orienwise Group (FS) Ltd. (“China Orienwise”) ( ), an independent third party. Beijing Tianyuan in turn provided counter-guarantees by mortgages over certain of its property, plant and equipment and investment properties with carrying values aggregating RMB14,820,000 and RMB14,636,000 as at 31 December 2007 and 2008, respectively, to China Orienwise.

• (g) Certain of the bank loans of one of the Company’s subsidiaries, Goldwind Windenergy, amounting to approximately EUR36,340,000 (equivalent to approximately RMB351,008,000) and EUR36,340,000 (equivalent to approximately RMB356,027,000) as at 31 December 2008 and 2009, respectively, were guaranteed by China Construction Bank in the form of letter of guarantees. The Company in turn provided counter-guarantees of the same amount to China Construction Bank as at 31 December 2008 and 2009.

• (h) Certain of the bank loans of one of the Company’s subsidiaries, Goldwind Windenergy, amounting to EUR7,400,000 (equivalent to approximately RMB72,498,000) as at 31 December 2009 was guaranteed by Bank of China in the form of letter of guarantees. The Company in turn provided counter-guarantees of the same amount to Bank of China as at 31 December 2009.

• (i) The Group’s other borrowing amounting to EUR3,868,000 (equivalent to approximately RMB37,369,000) and EUR3,593,000 (equivalent to approximately RMB35,196,000) as at 31 December 2008 and 2009, respectively, was secured by mortgages over certain of the Group’s property, plant and equipment of carrying values aggregating RMB56,988,000 and RMB56,298,000 as at 31 December 2008 and 2009, respectively.

– I-77 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

31. Interest-bearing Bank and Other Borrowings — continued

Other interest rate information:

GROUP

GROUP
Bank loans: Secured . . . . . . . . . . . . . . . . Unsecured . . . . . . . . . . . . . . Other borrowings: Secured . . . . . . . . . . . . . . . . COMPANY		As at 31 December
	Fixed rate Floating rate 2007 RMB’000 RMB’000 — 68,000 470,000 85,000 — — 470,000 153,000	Fixed rate Floating rate 2008 RMB’000 RMB’000 — 828,298 — 466,008 37,369 — 37,369 1,294,306	2009
	Fixed rate RMB’000 — 470,000 — 470,000	Fixed rate RMB’000 — — 37,369 37,369	Fixed rate RMB’000 224,492 — 35,196 259,688	Floating rate
				RMB’000 1,900,800 463,525 —
				2,364,325

COMPANY
Bank loans: Secured . . . . . . . . . . . . . . . . Unsecured . . . . . . . . . . . . . .		As at 31 December
	Fixed rate Floating rate 2007 RMB’000 RMB’000 — 50,000 470,000 85,000 470,000 135,000	Fixed rate Floating rate 2008 RMB’000 RMB’000 — 50,000 — 115,000 — 165,000	2009
	Fixed rate RMB’000 — 470,000 470,000	Fixed rate RMB’000 — — —	Fixed rate RMB’000 224,492 — 224,492	Floating rate
				RMB’000 — 35,000
				35,000

The carrying amounts of the Group’s bank loans, current other borrowings and non-current floating rate other borrowings approximate to their fair values.

The carrying amounts and fair values of the Group’s non-current fixed rate secured other borrowings are as follows:

GROUP

GROUP
Other borrowings: Secured . . . . . . . . . . . . . . . . . . . . . .		As at 31 December
	Carrying amount Fair value 2007 RMB’000 RMB’000 — —	Carrying amount Fair value 2008 RMB’000 RMB’000 37,369 37,386	2009
	Carrying amount RMB’000 —	Carrying amount RMB’000 37,369	Carrying amount RMB’000 35,196	Fair value
				RMB’000 32,295

32. Provision

The Group generally provides two-year warranties to its customers on the wind turbine generators sold by the Group, under which faulty components are repaired or replaced. The amount of the provision for the warranties is estimated based on sales volumes and past experience of the level of repairs. The estimation basis is reviewed on an ongoing basis and revised where appropriate.

– I-78 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

32. Provision — continued

GROUP

GROUP
At beginning of the year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional provision (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of a subsidiary (note 36(i)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts utilised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Portion classified as current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 — 23,942 131,312 31,810 131,713 458,775 — 11,488 — (7,868) (33,991) (153,447) — (1,840) 452 23,942 131,312 437,092 (7,920) (51,059) (241,297) 16,022 80,253 195,795
	2007 RMB’000 — 31,810 — (7,868) — 23,942 (7,920) 16,022	2008 RMB’000 23,942 131,713 11,488 (33,991) (1,840) 131,312 (51,059) 80,253

COMPANY

COMPANY
At beginning of the year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts utilised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Portion classified as current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 — 30,208 110,746 52,768 136,774 311,652 (22,560) (56,236) (135,889) 30,208 110,746 286,509 (9,993) (36,636) (133,300) 20,215 74,110 153,209
	2007 RMB’000 — 52,768 (22,560) 30,208 (9,993) 20,215	2008 RMB’000 30,208 136,774 (56,236) 110,746 (36,636) 74,110

The carrying amounts of the Group’s provisions approximate to their fair values.

33. Government Grants

The movements of government grants during the Relevant Years are as follows:

GROUP

At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recognised as income during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007 2008 2009 RMB’000 RMB’000 RMB’000 Year ended 31 December 32,168 75,086 98,387 52,711 28,473 61,664 (9,793) (5,172) (19,463) 75,086 98,387 140,588

– I-79 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

33. Government Grants — continued

COMPANY

COMPANY
At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recognised as income during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2007 2008 2009 RMB’000 RMB’000 RMB’000 Year ended 31 December 32,168 55,291 78,841 32,916 27,896 56,890 (9,793) (4,346) (19,463) 55,291 78,841 116,268
	2007 RMB’000 32,168 32,916 (9,793) 55,291	2008 RMB’000 55,291 27,896 (4,346) 78,841

Government grants are received by the Group as financial subsidies for the research and development projects and improvement of manufacturing facilities of the Group. Government grants are recognised as income over the periods necessary to match the grant on a systematic basis to the research and development costs that they are intended to compensate or over the weighted average of the expected useful life of the relevant property, machinery and equipment.

34. Issued Share Capital

34. Issued Share Capital
Shares Registered, issued and fully paid: Domestic shares of RMB1.00 each . . . . . . . . . . . . . . . . . . . A shares of RMB1.00 each . . . . Movements in the share capital At beginning of the year . . . . . . . . Capitalisation of capital reserve . . . Capitalisation of statutory surplus reserve . . . . . . . . . . . . . . . . . . . Issue of bonus shares . . . . . . . . . . Issue of new shares . . . . . . . . . . . . At end of the year . . . . . . . . . . . . .		As at 31 December	Number of shares Nominal value ’000 RMB’000 2009 — — 1,400,000 1,400,000 1,400,000 1,400,000 Number of shares Nominal value ’000 RMB’000 2009 1,000,000 1,000,000 — — — — 400,000(d) 400,000(d) — — 1,400,000 1,400,000
	Number of shares Nominal value Number of shares Nominal value ’000 RMB’000 ’000 RMB’000 2007 2008 — — — — 500,000 500,000 1,000,000 1,000,000 500,000 500,000 1,000,000 1,000,000 during the Relevant Years were as follows: Year ended 31 December
			Number of shares ’000 — 1,400,000 1,400,000
	Number of shares Nominal value ’000 RMB’000 2007 100,000 100,000 130,000(a) 130,000(a) 34,000(a) 34,000(a) 186,000(a) 186,000(a) 50,000(b) 50,000(b) 500,000 500,000	Number of shares Nominal value ’000 RMB’000 2008 500,000 500,000 50,000(c) 50,000(c) — — 450,000(c) 450,000(c) — — 1,000,000 1,000,000
	Number of shares ’000 100,000 130,000(a) 34,000(a) 186,000(a) 50,000(b) 500,000	Number of shares ’000 500,000 50,000(c) — 450,000(c) — 1,000,000	Number of shares ’000 1,000,000 — — 400,000(d) — 1,400,000

Notes:

(a) Pursuant to the resolution of the annual general meeting on 24 March 2007, the registered capital of the Company was increased by capitalising the capital reserve of RMB130,000,000 and statutory surplus reserve of RMB34,000,000, respectively, and issuing bonus

– I-80 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

34. Issued Share Capital — continued

shares amounting to RMB186,000,000. Bonus shares were allotted and issued to the shareholders of the Company on the basis of 18.6 bonus shares for every 10 shares held by the shareholders on the record date. The registered capital of the Company increased from RMB100,000,000 to RMB450,000,000, accordingly, upon completion of capitalisation of capital reserve and statutory surplus reserve and the issue of bonus shares.

• (b) On 26 December 2007, the Company completed the placement of 50,000,000 A shares of the Company. The gross proceeds received from the issue of the A shares amounted to RMB1,752,000,000. Part of the proceeds amounting to RMB50,000,000 was credited as issued share capital, and the remaining balance of the proceeds of RMB1,702,000,000 was credited to capital reserve. The registered capital of the Company increased from RMB450,000,000 to RMB500,000,000, accordingly, upon completion of the issue of the new shares.

• (c) Pursuant to the resolution of the annual general meeting on 19 February 2008, the registered capital of the Company was increased by capitalising the capital reserve of RMB50,000,000 and issuing the bonus shares amounting to RMB450,000,000. Bonus shares were allotted and issued to the shareholders of the Company on the basis of 9 bonus shares for every 10 shares held by the shareholders on the record date. The registered capital of the Company increased from RMB500,000,000 to RMB1,000,000,000, accordingly, upon completion of capitalisation of capital reserve and the issue of bonus shares.

• (d) Pursuant to the resolution of the annual general meeting on 14 April 2009, bonus shares amounting to RMB400,000,000 were allotted and issued to the shareholders of the Company on the basis of 4 bonus shares for every 10 shares held by the shareholders on the record date. The registered capital of the Company increased from RMB1,000,000,000 to RMB1,400,000,000, accordingly, upon completion of the issue of bonus shares.

35. RESERVES

(a) GROUP

The amounts of the Group’s reserves and the movements therein are presented in the consolidated statements of changes in equity for the Relevant Years in Section I (C) above.

– I-81 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

35. RESERVES — continued

(b) COMPANY

At 1 January 2007 . . . . . . . . . . . . . . . . . . . . . . Profit for the year (note 11) . . . . . . . . . . . . . . . Final 2006 dividend declared . . . . . . . . . . . . . . Profit appropriation to reserves. . . . . . . . . . . . . Capitalisation of reserves (note 34(a)). . . . . . . . Issue of bonus shares (note 34(a)) . . . . . . . . . . Issue of new shares (note 34(b)) . . . . . . . . . . . . Share issue expenses . . . . . . . . . . . . . . . . . . . . Transfer to capital reserve (note (i)) . . . . . . . . . Proposed final 2007 dividend . . . . . . . . . . . . . . At 31 December 2007 and 1 January 2008 . . . . Profit for the year (note 11) . . . . . . . . . . . . . . . Final 2007 dividend declared . . . . . . . . . . . . . . Profit appropriation to reserves. . . . . . . . . . . . . Capitalisation of reserves (note 34(c)). . . . . . . . Issue of bonus shares (note 34(c)) . . . . . . . . . . Proposed final 2008 dividend . . . . . . . . . . . . . . At 31 December 2008 and 1 January 2009 . . . . Profit for the year (note 11) . . . . . . . . . . . . . . . Final 2008 dividend declared . . . . . . . . . . . . . . Profit appropriation to reserves. . . . . . . . . . . . . Issue of bonus shares (note 34(d)) . . . . . . . . . . Share of reserves of an associate . . . . . . . . . . . Proposed final 2009 dividend . . . . . . . . . . . . . . At 31 December 2009 . . . . . . . . . . . . . . . . . . .	Capital reserve RMB’000 150,695 — — — (130,000) — 1,702,000 (7,336) 4,187 — 1,719,546 — — — (50,000) — — 1,669,546 — — — — 569 — 1,670,115*	Statutory surplus reserve (note (ii)) RMB’000 59,916 — — 60,460 (34,000) — — — — — 86,376 — — 70,924 — — — 157,300 — — 109,663 — 453 — 267,416*	Retained profits RMB’000 200,554 599,646 — (60,460) — (186,000) — — (4,187) (50,000) 499,553 709,243 — (70,924) — (450,000) (280,000) 407,872 1,093,390 — (109,663) (400,000) 4,079 (140,000) 855,678*	Proposed final dividend RMB’000 100,000 — (100,000) — — — — — — 50,000 50,000 — (50,000) — — — 280,000 280,000 — (280,000) — — — 140,000 140,000	Total RMB’000 511,165 599,646 (100,000) — (164,000) (186,000) 1,702,000 (7,336) — — 2,355,475 709,243 (50,000) — (50,000) (450,000) — 2,514,718 1,093,390 (280,000) — (400,000) 5,101 — 2,933,209

Notes:

• As at 31 December 2007, 2008 and 2009, these reserve accounts comprise the reserves of RMB2,305,475,000, RMB2,234,718,000 and RMB2,793,209,000, respectively, in the statements of financial position.

• (i) During the year ended 31 December 2007, certain of the Company’s government grants amounting to RMB4,187,000, were credited to the capital reserve in the Company’s financial statements prepared in accordance with the accounting principles generally accepted in the PRC and according to the instruction of the local government, the provider of these government grants, as a non-distributable reserve. In accordance with IAS 20, these government grants were recognised as income in the consolidated statements of comprehensive income, and then transferred to the capital reserve.

• (ii) Statutory surplus reserve is presented as part of the reserve funds in the consolidated statement of changes in equity. According to the relevant PRC regulations and the articles of association of the Company and its subsidiaries in the PRC, these subsidiaries are required to transfer 10% of their profit after income tax, as determined under the Chinese Accounting Standards, to the statutory surplus reserve until the reserve balance reaches 50% of their respective registered capital. The transfer to this reserve must be made before the distribution of dividends to equity owners. Statutory surplus reserve can be used to make good previous years’ losses, if any, and may be converted into paid-in capital in proportion to the existing interests of equity owners, provided that the balance after such conversion is not less than 25% of the registered capital. This reserve fund can be utilised in setting off accumulated losses or increasing capital of the Company and its subsidiaries and is non-distributable other than in liquidation.

– I-82 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

36. Acquisition of Subsidiaries

(i) Vensys AG

In January 2008, one of the Company’s subsidiaries, Goldwind Windenergy, entered into a share purchase agreement with Vensys/Innowind Beteiligungs-GmbH & Co. Kommanditgesellschaft (“Vensys/Innowind”) and Saarwind Beteiligungs-Kommanditgesellschaft (“Saarwind”), two independent third parties, to acquire a total of 70% equity interests in Vensys AG (51.68% and 18.32% from Vensys/Innowind and Saarwind, respectively) at a cash consideration of EUR41,240,000 (equivalent to approximately RMB449,401,000) and a deferred consideration of EUR2,448,000 (equivalent to approximately RMB26,677,000). Vensys AG is engaged in the provision of technical services and manufacture and sale of wind power equipment and accessories. In the opinion of the Directors, the effective acquisition date was 30 April 2008 when Goldwind Windenergy took over the voting right over the operating and financial decision making of the Vensys AG.

The fair values of the identifiable assets and liabilities of Vensys AG as at the date of acquisition and the corresponding carrying amounts immediately before the acquisition were as follows:

Notes Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and bills receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepayments, deposits and other receivables . . . . . . . . . . . . . . . Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and bills payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Goodwill on acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Total consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Fair value recognised on acquisition RMB’000 49,507 352,140 40,203 37,996 39,538 105,412 (24,655) (188,363) (3,093) (11,488) (100,133) (272) 296,792 (89,038) 270,968 478,722	Previous carrying amount
		RMB’000 40,184 56,332 40,203 37,996 39,538 105,412 (24,655) (188,363) (3,093) (11,488) (8,594) (272)
		83,200

The total cost of purchase consideration was EUR43,931,000 (equivalent to approximately RMB478,722,000) and comprised a cash consideration of EUR41,240,000 (equivalent to approximately RMB449,401,000), a deferred consideration of EUR2,448,000 (equivalent to approximately RMB26,677,000) which is estimated based on the present value of royalty income of EUR9,000,000 (equivalent to approximately RMB98,075,000) minus related costs to be recognised by Vensys AG in the first five years after conclusion of the license agreement with a specific independent third party, and costs directly attributable to the business combination amounting to RMB2,644,000.

– I-83 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

36. Acquisition of Subsidiaries — continued

(i) Vensys AG — continued

An analysis of the net outflow of cash and cash equivalents in respect of the acquisition of Vensys AG is as follows:

follows:
Cash consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Direct cost incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net outflow of cash and cash equivalents in respect of the acquisition . . . . . . . . . . . . . . . . . . . . . . .	RMB’000
	449,401 2,644 (105,412)
	346,633

(ii) Others

During the Relevant Years, in addition to the acquisition of Vensys AG above, certain equity interests in subsidiaries now or ever comprising the Group were acquired from third parties for the purpose of expanding business. Acquisitions of equity interests in these subsidiaries have been accounted for using the acquisition method of accounting effective from the dates when the subsidiaries were controlled by the Group. Details are as follows:

Company name Beijing Tianyuan . . . . . . . . . . . . . . . . . . . . . . . . . . . Bayannur Fuhui . . . . . . . . . . . . . . . . . . . . . . . . . . . . Keshiketengqi Huifeng New Energy Co., Ltd. (“Keshiketengqi Huifeng”) ( ) . . . . . . . . Qianguo Fuhui . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Double Star . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Xingqiyuan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yichun Taiyangfeng . . . . . . . . . . . . . . . . . . . . . . . . . TianRun Uilk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chifeng Huifeng . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Acquisition date May 2007 June 2007 June 2008 June 2009 April 2009 August 2009 September 2009 July 2009 November 2009	Percentage of interests acquired 70% 51% 51% 51% 100% 56% 66% 75% 51%	Cash consideration
			RMB26,600,000 RMB51,000,000 RMB56,100,000 RMB 5,100,000 RMB 6,125,000 RMB 7,000,000 RMB49,500,000 US$ 1,500,000 RMB32,640,000

– I-84 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

36. Acquisition of Subsidiaries — continued

(ii) Others — continued

The fair values of the identifiable assets and liabilities of the above-mentioned other subsidiaries acquired as at the date of acquisition approximate to the corresponding carrying values. Details are as follows:

Notes Property, plant and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . 14 Available-for-sale investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepaid land lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepayments, deposits and other receivables. . . . . . . . . . . . . . . . . . . Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest-bearing bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Goodwill on acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Satisfied by cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December	Year ended 31 December	Year ended 31 December
	2007 RMB’000 17,727 323 — 19 836 4,096 9,264 99,709 (1,457) (20,000) (11,540) 98,977 (21,393) 16 77,600	2008 RMB’000 101,889 — 2,923 — — 20,786 23,985 72,739 (20,682) — (91,640) 110,000 (53,900) — 56,100	2009
			RMB’000 78,589 — — — — — 52,075 100,836 (257) — (57,277) 173,966 (69,610) 6,252 110,608

An analysis of the net outflow/(inflow) of cash and cash equivalents in respect of the acquisitions of other subsidiaries is as follows:

Cash consideration paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents acquired. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net outflow/(inflow) of cash and cash equivalents in respect of the acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December	Year ended 31 December	Year ended 31 December
	2007 RMB’000 77,600 (99,709) (22,109)	2008 RMB’000 56,100 (72,739) (16,639)	2009
			RMB’000 110,608 (100,836)
			9,772

(iii) Acquirees’ contributions

Contributions of Vensys AG and other acquirees to the Group’s revenue and the Group’s profit before tax for the period between the date of acquisition and the year end date of the respective year are as follows:

Contributions to: Group’s revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group’s profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December	Year ended 31 December	Year ended 31 December
	2007 RMB’000 43,179 17,925	2008 RMB’000 132,324 34,526	2009
			RMB’000 — (3)

– I-85 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

36. Acquisition of Subsidiaries — continued

(iii) Acquirees’ contributions — continued

Had the acquisitions taken place at the beginning of the year, the revenue of the Group and the profit before tax of the Group would have been as follows:

Group’s revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group’s profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December	Year ended 31 December	Year ended 31 December
	2007 RMB’000 3,104,773 622,689	2008 RMB’000 6,506,485 1,145,983	2009
			RMB’000 10,666,505 1,990,550

37. Disposals of Subsidiaries

• (i) On 15 May 2007, the Company dissolved one of its subsidiaries, Zhejiang Huayi Goldwind Wind Power Co., Ltd. ( ), and received a consideration in the form of cash of RMB2,170,000 and trade receivables of RMB2,392,000 resulting from the disposal of the assets of this subsidiary.

• (ii) On 16 November 2008, the Group disposed of its entire shareholding interest in Bayannur Wulate Zhongqi Fuhui Wind Energy Electricity Co., Ltd. ( ) and Bayannur Wulate Houqi Fuhui Wind Energy Electricity Co., Ltd. ( ) to an independent third party, for a consideration in the form of cash of RMB233,000,000 and RMB209,460,000, respectively. These two companies were engaged in wind farm operation.

• (iii) On 31 March 2009, the Group disposed of its 48% shareholding interest in Keshiketengqi Huifeng to two independent third parties for a consideration in the form of cash of RMB90,365,000. Keshiketengqi Huifeng was engaged in wind farm operation.

• (iv) On 30 November 2009, the Group disposed of its 51% shareholding interest in Tacheng Tianrun Wind Power Co., Ltd. ( ) to an independent third party for a consideration in the form of cash of RMB86,300,000. Tacheng Tianrun Wind Power Co., Ltd. is engaged in wind farm operation.

The net assets of the subsidiaries disposed of during the Relevant Years were as follows:

Notes Net assets disposed of: Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . 14 Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Prepaid land lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Other intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepayments, deposits and other receivables . . . . . . . . . . . . . . . . Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December	Year ended 31 December	Year ended 31 December
	2007 RMB’000 336 — — — — 6,309 2,713 245 —	2008 RMB’000 654,804 719 4,460 — 2,343 2,934 46,388 7,819 (481,749)	2009
			RMB’000 540,307 419 5,325 380 512 32,753 55,663 14,251 (12,314)

– I-86 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

37. Disposals of Subsidiaries — continued

37. Disposals of Subsidiaries — continued
Notes Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest-bearing bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net assets not disposed of and remained as interest in a jointly- controlled entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain/(loss) on disposals of subsidiaries . . . . . . . . . . . . . . . . . . . . . 6 Total consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Satisfied by cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Satisfied by trade receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 — — — (4,706) 4,897 — (335) 4,562 2,170 2,392 4,562	2008 RMB’000 (50,407) (7,983) — — 179,328 — 263,132 442,460 442,460 — 442,460	2009
			RMB’000 (12,126) 30,704 (533,000) (132,724)
			(9,850) (3,300) 189,815
			176,665
			176,665 —
			176,665

An analysis of the net inflow/(outflow) of cash and cash equivalents in respect of the disposals of subsidiaries is as follows:

Cash consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Cash consideration receivable at year end)/Settlement of prior year’s unsettled receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents disposed of . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net inflow/(outflow) of cash and cash equivalents in respect of the disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 2,170 442,460 176,665 — (186,000) 160,922 (6,309) (2,934) (32,753) (4,139) 253,526 304,834	2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 2,170 442,460 176,665 — (186,000) 160,922 (6,309) (2,934) (32,753) (4,139) 253,526 304,834	2007 2008 2009 Year ended 31 December RMB’000 RMB’000 RMB’000 2,170 442,460 176,665 — (186,000) 160,922 (6,309) (2,934) (32,753) (4,139) 253,526 304,834
		2008 RMB’000 442,460 (186,000) (2,934) 253,526	2009 RMB’000 176,665 160,922 (32,753) 304,834

38. Contingent Liabilities

At the end of each of the Relevant Years, contingent liabilities not provided for in this report were as follows:

GROUP

Letters of credit issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Letters of guarantee issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Guarantee given to a bank in connection with bank loan granted to a third party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	**As **	at 31 December
	2007 RMB’000 65,468 971,559 — 1,037,027	2008 RMB’000 176,054 2,365,053 — 2,541,107	2009
			RMB’000 176,507 3,645,669 21,000
			3,843,176

– I-87 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

38. Contingent Liabilities — continued

COMPANY

COMPANY
Letters of credit issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Letters of guarantee issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Guarantee given to a bank in connection with bank loan granted to a third party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	**As **	at 31 December
	2007 RMB’000 65,468 971,559 — 1,037,027	2008 RMB’000 176,054 2,365,053 — 2,541,107	2009
			RMB’000 170,869 3,597,286 21,000
			3,789,155

The fair value of the guarantees is not significant and therefore the Directors are of the view that no provision for financial guarantees should be made.

39. Operating Lease Arrangements

(a) As lessor

The Group leases its investment properties (note 15) under operating lease arrangements, with leases negotiated for terms ranging from one to five years. At the end of each of the Relevant Years, the Group and the Company had total future minimum lease receivables under non-cancellable operating leases with its tenants falling due as follows:

GROUP

GROUP
Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the second to fifth years, inclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 7,500 26,875 34,375	2008 RMB’000 17,629 48,098 65,727	2009
			RMB’000 14,522 30,726
			45,248

COMPANY

COMPANY
Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the second to fifth years, inclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 7,500 26,875 34,375	2008 RMB’000 15,000 47,500 62,500	2009
			RMB’000 14,100 30,550
			44,650

– I-88 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

39. Operating Lease Arrangements — continued

(b) As lessee

At the end of each of the Relevant Years, the Group and the Company had the following total future minimum lease payments under non-cancellable operating leases in respect of land:

GROUP

GROUP
		**As **	at 31 December
	2007		2008	2009
	RMB’000		RMB’000	RMB’000
Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	160		2,174	5,990
In the second to fifth years, inclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	35		4,315	5,862
	195		6,489	11,852
COMPANY
		**As **	at 31 December
	2007		2008	2009
	RMB’000		RMB’000	RMB’000
Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	160		10	—
In the second to fifth years, inclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	35		25	—
	195		35	—

40. Commitments

In addition to the operating lease commitments detailed in note 39(b) above, the Group and the Company had the following capital commitments at the end of each of the Relevant Years:

Group

Group
Contracted, but not provided for: Property, plant and equipment and land use rights . . . . . . . . . . . . . . . . Authorised, but not contracted for: Property, plant and equipment and land use rights . . . . . . . . . . . . . . . . Equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December
	2007 RMB’000 976,804 1,186,113 — 2,162,917	2008 RMB’000 514,329 268,939 34,000 817,268	2009
			RMB’000 609,041 397,833 —
			1,006,874

– I-89 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

40. Commitments — continued

Company

Contracted, but not provided for: Property, plant and equipment and land use rights. . . . . . . . . . . . . . . . . . . Authorised, but not contractor for: Property, plant and equipment and land use rights. . . . . . . . . . . . . . . . . . . Equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December	As at 31 December	As at 31 December
	2007 RMB’000 12,565 371,903 331,790 716,258	2008 RMB’000 8,949 37,072 197,044 243,065	2009
			RMB’000 4,251 — —
			4,251

41. Related Party Transactions

• (a) The Group had the following significant transactions with related parties during the Relevant Years:

Continuing transaction:

• (i) In 2009, the Group sold wind turbine generators to Xinjiang Wind Power, amounting to approximately RMB124,256,000.

• (ii) In 2009, the Group purchased spare parts and processing services from one of its associates, Hebei Goldwind, amounting to approximately RMB24,763,000.

Non-continuing transaction:

In May and July 2009, the Company disposed of eleven experimental wind turbine generators to Xinjiang Wind Power, the 18%-owned shareholder of the Company, for a consideration of approximately RMB42,511,000.

In the opinion of the Directors, the transactions between the Group and the related parties were based on prices mutually agreed between the parties after taking into account the market prices.

In the opinion of the Directors, the above related party transactions were conducted in the ordinary course of business.

• (b) Outstanding balances with related parties

Details of the outstanding balances with related parties are set out in notes 25, 26, 28 and 29 of Section II above.

• (c) Compensation of key management personnel of the Group

Save as disclosed in note 9 of Section II above, no remuneration has been paid or is payable in respect of any of the Relevant Years referred to in this report by the Company or any of the companies now comprising the Group, to the Directors.

– I-90 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

41. Related Party Transactions — continued

41. Related Party Transactions — continued
Short term employee benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension scheme contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 29,544 162 29,706	2008 RMB’000 27,968 396 28,364	2009
			RMB’000 28,950 418
			29,368

42. Financial Instruments By Category

The carrying amounts of each of the categories of financial instruments as at the end of each of the Relevant Years are as follows:

GROUP

GROUP
Financial assets Financial assets at fair value through profit or loss: Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loans and receivables: Trade and bills receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial assets included in prepayments, deposits and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pledged deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Available-for-sale financial assets: Available-for-sale investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial liabilities Financial liabilities at fair value through profit or loss: Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial liabilities at amortised cost: Trade and bills payables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial liabilities included in other payables . . . . . . . . . . . . . . . . . . . Interest-bearing bank and other borrowings . . . . . . . . . . . . . . . . . . . . . . Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	**As **	at 31 December
	2007 RMB’000 — 764,066 17,944 — — 2,679,663 3,461,673 4,171 — 934,525 4,324 623,000 — 1,561,849	2008 RMB’000 — 2,619,021 274,996 2,021 — 3,286,400 6,182,438 26,171 2,279 2,544,530 121,109 1,331,675 23,646 4,020,960	2009
			RMB’000 4,667
			2,919,607 87,248 — 218,538 4,458,950
			7,684,343
			9,000
			10,746
			3,760,207 95,749 2,624,013 23,984
			6,503,953

– I-91 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

42. Financial Instruments By Category — continued

COMPANY

Financial assets Financial assets at fair value through profit or loss: Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loans and receivables: Trade and bills receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial assets included in prepayments, deposits and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pledged deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Available-for-sale financial assets: Available-for-sale investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial liabilities Financial liabilities at fair value through profit or loss: Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial liabilities at amortised cost: Trade and bills payables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial liabilities included in other payables . . . . . . . . . . . . . . . . . . . Interest-bearing bank loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	**As **	at 31 December
	2007 RMB’000 — 755,751 145,707 — 2,573,341 3,474,799 3,171 — 929,308 3,741 605,000 1,538,049	2008 RMB’000 — 2,240,838 132,511 — 1,643,067 4,016,416 25,171 2,279 1,692,819 236,166 165,000 2,093,985	2009
			RMB’000 4,667
			2,285,100 328,671 218,538 2,215,797
			5,048,106
			8,000
			10,746
			2,266,854 7,937 259,492
			2,534,283

43. Financial Risk Management Objectives and Policies

The Group’s principal financial instruments, other than derivatives, comprise interest-bearing bank loans, cash and cash equivalents and pledged deposits. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other financial assets and liabilities such as trade and bills receivables and trade and bills payables, which arise directly from its operations.

The main risks arising from the Group’s financial instruments are fair value and cash flow interest rate risks, foreign currency risk, credit risk and liquidity risk. Generally, the senior management of the Company meets regularly to analyse and formulate measures to manage the Group’s exposure to these risks. In addition, the board of directors of the Company holds meetings regularly to analyse and approve the proposals made by the senior management of the Company. Generally, the Group introduces conservative strategies on its risk management. The Group’s accounting policies in relation to derivative financial instruments are set out in note 3.2 of Section II above.

– I-92 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

43. Financial Risk Management Objectives and Policies — continued

(a) Fair value and cash flow interest rate risks

Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate because of changes in market interest rates. Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. With its borrowings issued at fixed and floating interest rates, the Group is exposed to both fair value and cash flow interest rate risks.

The Group regularly reviews and monitors the mix of fixed and floating interest rate borrowings in order to manage its interest rate risk. The Group’s interest-bearing bank loans and short term deposits are stated at amortised cost and not revalued on a periodic basis. Floating rate interest income and expenses are credited/charged to profit or loss as earned/incurred.

If there would be a general increase/decrease in the interest rates of bank loans with floating interest rates by one percentage point, with all other variables held constant, the consolidated pre-tax profit would have decreased/ increased by approximately RMB1,530,000, RMB12,943,000 and RMB23,643,000 for the three years ended 31 December 2007, 2008 and 2009, respectively, and there is no impact on other components of the consolidated equity, except for retained profits, of the Group. The sensitivity analysis above has been determined assuming that the change in interest rates had occurred at the end of each reporting period and has applied the exposure to interest rate risk to those financial instruments in existence at those dates. The estimated one percentage point increase or decrease represents management’s assessment of a reasonably possible change in interest rates over the period until the end of the next reporting period.

(b) Foreign currency risk

The Group is exposed to foreign currency risk on cash and cash equivalents, receivables, payables and bank loans that are denominated in a currency other than the respective functional currencies of the Group’s entities. The currencies giving rise to this risk are primarily the Euro and United States dollar.

The Group’s and the Company’s exposures to foreign currencies as at 31 December 2007, 2008 and 2009 are as follows:

GROUP

GROUP
Trade receivables . . . . . . . . . . . Prepayments, deposits and other receivables . . . . . . . . . Cash and cash equivalents . . . . Trade payables . . . . . . . . . . . . Other payables. . . . . . . . . . . . . Interest-bearing bank loans. . . .		As at 31 December
	Euro United States dollar 2007 RMB’000 RMB’000 — — — — 80 430 — — — — — — 80 430	Euro United States dollar 2008 RMB’000 RMB’000 — 37,117 2,074 — 25 10,479 (6,152) — — (149) — — (4,053) 47,447	2009
	Euro RMB’000 — — 80 — — — 80	Euro RMB’000 — 2,074 25 (6,152) — — (4,053)	Euro RMB’000 — 2,926 1 (3,804) — (183,227) (184,104)	United States dollar
				RMB’000 5,058 — 13,935 — — (178,205)
				(159,212)

– I-93 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

43. Financial Risk Management Objectives and Policies — continued

(b) Foreign currency risk — continued

COMPANY

COMPANY
Trade receivables . . . . . . . . . . . Cash and cash equivalents . . . . Trade payables . . . . . . . . . . . . Interest-bearing bank loans. . . .		As at 31 December
	Euro United States dollar 2007 RMB’000 RMB’000 — — 80 430 — — — — 80 430	Euro United States dollar 2008 RMB’000 RMB’000 — 37,117 25 88 (6,152) — — — (6,127) 37,205	2009
	Euro RMB’000 — 80 — — 80	Euro RMB’000 — 25 (6,152) — (6,127)	Euro RMB’000 — 1 — (183,227) (183,226)	United States dollar
				RMB’000 5,058 4,415 — (178,205)
				(168,732)

Sensitivity analysis

The following table demonstrates the sensitivity to a reasonably possible change in exchange rates by 10%, with all other variables held constant, of the Group’s profit before tax and the Group’s and the Company’s equity.

Effect on increase/(decrease) of the Group’s pre-tax profit

Effect on increase/(decrease) of the Group’s pre-tax profit
If RMB weakens against Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If RMB strengthens against Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If RMB weakens against United States dollar. . . . . . . . . . . . . . . . . . . . . . . . If RMB strengthens against United States dollar. . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December
	2007 RMB’000 8 (8) 43 (43)	2008 RMB’000 (405) 405 4,745 (4,745)	2009
			RMB’000 (18,410) 18,410 (15,921) 15,921

Effect on increase/(decrease) of the Group’s equity

If RMB weakens against Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If RMB strengthens against Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If RMB weakens against United States dollar. . . . . . . . . . . . . . . . . . . . . . . . If RMB strengthens against United States dollar. . . . . . . . . . . . . . . . . . . . . .	As at 31 December	As at 31 December	As at 31 December
	2007 RMB’000 8 (8) 43 (43)	2008 RMB’000 (365) 365 4,271 (4,271)	2009
			RMB’000 (15,662) 15,662 (13,676) 13,676

Effect on increase/(decrease) of the Company’s equity

If RMB weakens against Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If RMB strengthens against Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If RMB weakens against United States dollar. . . . . . . . . . . . . . . . . . . . . . . . If RMB strengthens against United States dollar. . . . . . . . . . . . . . . . . . . . . .	As at 31 December	As at 31 December	As at 31 December
	2007 RMB’000 8 (8) 43 (43)	2008 RMB’000 (521) 521 3,162 (3,162)	2009
			RMB’000 (15,574) 15,574 (14,342) 14,342

– I-94 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

43. Financial Risk Management Objectives and Policies — continued

(b) Foreign currency risk — continued

The sensitivity analysis above has been determined assuming that the change in foreign currency rates had occurred at the end of each of the Relevant Years and had applied the exposure to foreign currency risk to those monetary assets and liabilities and net investment operations in existence at those dates. The estimated percentage increase or decrease represents management’s assessment of a reasonably possible change in foreign currency rates over the period until the end of the next reporting period. The sensitivity analysis is performed on the same basis for the entire Relevant Years.

(c) Credit risk

The Group trades only with recognised and creditworthy parties. The Group has a credit policy in place which requires credit evaluations on all customers who wish to trade on credit terms. Receivable balances are monitored on an ongoing basis. In most instances, advance payments are required for customers of wind turbine generators. Otherwise, the credit quality of customers is assessed after taking into account the Group’s financial position and past experience with the customers.

The Group establishes an allowance for impairment that represents its estimate of losses to be incurred in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures.

The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible. At that point, the impaired financial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired financial asset.

Management evaluates the creditworthiness of the Group’s existing and prospective customers and ensures that the customers have adequate financing for the projects as well as the source of the financing.

The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statements of financial position.

Cash and bank balances are placed with banks and financial institutions which are regulated.

(d) Liquidity risk

The liquidity of the Group is primarily dependent on its ability to maintain adequate cash inflows from operations to meet its debt obligations as they fall due, and its ability to obtain external financing to meet its committed future capital expenditure. With regard to its future capital commitments and other financing requirements, the Group has already obtained banking facilities with several banks of up to an amount of RMB13,712,000,000 as at 31 December 2009, of which an amount of approximately RMB6,986,000,000 has been utilised.

– I-95 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

43. Financial Risk Management Objectives and Policies — continued

(d) Liquidity risk — continued

The maturity profile of the Group’s and the Company’s financial liabilities as at the dates of the statements of financial position, based on the contractual undiscounted payments, is as follows:

GROUP

31 December 2007 Interest-bearing bank loans . . . . . . . . . . . . . . . . Interest payments on bank loans . . . . . . . . . . . . Trade and bills payables . . . . . . . . . . . . . . . . . . Financial liabilities included in other payables . . 31 December 2008 Interest-bearing bank and other borrowings . . . . Interest payments on bank and other borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and bills payables . . . . . . . . . . . . . . . . . . Derivative financial instruments. . . . . . . . . . . . . Financial liabilities included in other payables . . Other long-term liabilities . . . . . . . . . . . . . . . . . 31 December 2009 Interest-bearing bank and other borrowings . . . . Interest payments on bank and other borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and bills payables . . . . . . . . . . . . . . . . . . Derivative financial instruments. . . . . . . . . . . . . Financial liabilities included in other payables . . Other long-term liabilities . . . . . . . . . . . . . . . . .	Within 1 year RMB’000 470,000 15,984 934,525 4,324 1,424,833 50,000 85,537 2,544,530 2,279 121,109 — 2,803,455 601,892 115,748 3,760,207 10,746 95,749 — 4,584,342	1 to 2 years RMB’000 55,000 7,903 — — 62,903 114,793 69,030 — — — — 183,823 457,637 96,554 — — — — 554,191	2 to 5 years RMB’000 98,000 7,947 — — 105,947 544,953 86,063 — — — 23,646 654,662 418,946 239,674 — — — 23,984 682,604	Over 5 years RMB’000 — — — — — 621,929 60,688 — — — — 682,617 1,145,538 243,563 — — — — 1,389,101	Total
					RMB’000 623,000 31,834 934,525 4,324
					1,593,683
					1,331,675 301,318 2,544,530 2,279 121,109 23,646
					4,324,557
					2,624,013 695,539 3,760,207 10,746 95,749 23,984
					7,210,238

– I-96 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

43. Financial Risk Management Objectives and Policies — continued

(d) Liquidity risk — continued

COMPANY

31 December 2007 Interest-bearing bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . Interest payments on bank loans . . . . . . . . . . . . . . . . . . . . . . Trade and bills payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial liabilities included in other payables . . . . . . . . . . . . 31 December 2008 Interest-bearing bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . Interest payments on bank loans . . . . . . . . . . . . . . . . . . . . . . Trade and bills payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments. . . . . . . . . . . . . . . . . . . . . . . Financial liabilities included in other payables . . . . . . . . . . . . 31 December 2009 Interest-bearing bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . Interest payments on bank loans . . . . . . . . . . . . . . . . . . . . . . Trade and bills payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments. . . . . . . . . . . . . . . . . . . . . . . Financial liabilities included in other payables . . . . . . . . . . . .	Within 1 year RMB’000 470,000 14,701 929,308 3,741 1,417,750 50,000 8,432 1,692,819 2,279 236,166 1,989,696 259,492 3,637 2,266,854 10,746 7,937 2,548,666	1 to 2 years RMB’000 50,000 6,762 — — 56,762 65,000 5,891 — — — 70,891 — — — — — —	2 to 5 years RMB’000 85,000 6,308 — — 91,308 50,000 1,935 — — — 51,935 — — — — — —	Total
				RMB’000 605,000 27,771 929,308 3,741
				1,565,820
				165,000 16,258 1,692,819 2,279 236,166
				2,112,522
				259,492 3,637 2,266,854 10,746 7,937
				2,548,666

(e) Capital management

The Group’s primary objective for managing capital is to safeguard the Group’s ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits to other stakeholders, by pricing services and products commensurately with the level of risk.

The Group sets the amount of capital in proportion to risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debts.

The Group monitors capital using a gearing ratio, which is net debt divided by the capital plus net debt. Net debt includes trade and bills payables, other payables, interest-bearing bank and other borrowings and other longterm liabilities, less cash and cash equivalents and pledged deposits. Capital includes the equity attributable to owners of the Company stated in the consolidated statements of financial position.

– I-97 –

ACCOUNTANTS’ REPORT

APPENDIX I

II. NOTES TO FINANCIAL INFORMATION — continued

43. Financial Risk Management Objectives and Policies — continued

(e) Capital management — continued

The Group’s strategy is to maintain the gearing ratio at a healthy capital level in order to support its businesses. The principal strategies adopted by the Group include, but are not limited to, reviewing future cash flow requirements and the ability to meet debt repayment schedules when they fall due, maintaining a reasonable level of available banking facilities and adjusting investment plans and financing plans, if necessary, to ensure that the Group has a reasonable level of capital to support its businesses. The gearing ratios at the end of each reporting period financial position are as follows:

Trade and bills payables (note 28). . . . . . . . . . . . . . . . . . . . . . . . . . . Other payables (note 29) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest-bearing bank and other borrowings (note 31). . . . . . . . . . . . . Other long-term liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Cash and cash equivalents (note 27) . . . . . . . . . . . . . . . . . . . . . Pledged deposits (note 27). . . . . . . . . . . . . . . . . . . . . . . . . . . . Net debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity attributable to owners of the Company . . . . . . . . . . . . . . . . . . Capital and net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gearing ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	**As **	at 31 December	2009 RMB’000 3,760,207 2,055,786 2,624,013 23,984 (4,458,950) (218,538) 3,786,502 5,201,057 8,987,559 42.13%
	2007 RMB’000 934,525 862,104 623,000 — (2,679,663) — (260,034) 2,883,252 2,623,218 (9.91)%	2008 RMB’000 2,544,530 2,671,398 1,331,675 23,646 (3,286,400) — 3,284,849 3,722,484 7,007,333 46.88%

III. SUBSEQUENT EVENTS

Pursuant to the resolution of the 2009 annual general meeting of the Company held on 25 March 2010, a final dividend of RMB0.1 per share was approved, and bonus shares amounting to RMB840,000,000 were allotted and issued to the shareholders of the Company on the basis of 6 bonus shares for every 10 shares held by the shareholders on the record date, 2 April 2010. The issued capital of the Company increased from RMB1,400,000,000 to RMB2,240,000,000, accordingly, upon completion of the issue of bonus shares.

In addition to the dividend mentioned above, pursuant to the resolution of the 2009 annual general meeting of the Company held on 25 March 2010, a plan to make further cash dividend of RMB787,766,000 was approved. On 26 May 2010, the Board of Directors of the Company approved the distribution of RMB784.0 million in the form of a cash dividend, subject to approval of the shareholders of the Company in a general meeting to be held on 12 June 2010, which is expected to be settled after the listing of the Company’s H Shares on The Stock Exchange of Hong Kong Limited.

– I-98 –

ACCOUNTANTS’ REPORT

APPENDIX I

IV. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Group and the Company in respect of any period subsequent to 31 December 2009. Save as disclosed in Section III above, no dividend has been declared, made or paid by the Company or any of the companies now comprising the Group in respect of any period subsequent to 31 December 2009.

Yours faithfully, Ernst & Young Certified Public Accountants Hong Kong

– I-99 –

PROFIT FORECAST

APPENDIX II

A. BASES AND ASSUMPTIONS

Our Directors have prepared the forecast of the consolidated profit attributable to equity holders of the Company for the year ending December 31, 2010 on the basis of our reviewed consolidated financial results for the three-month period ended March 31, 2010 and a forecast of the consolidated results of the Group for the remaining nine-month period ending December 31, 2010.

The profit forecast has been prepared on the basis of accounting policies consistent in all material respects with those currently adopted by the Group, as summarized in the Accountants’ Report set out in Appendix I, and on the following principal assumptions:

• k there will be no material change in existing political, legal, fiscal, market or economic conditions in China, Hong Kong or any other country or territory in which we currently operate or which are otherwise material to our revenues;

• k there will be no material change in legislation, regulations or rules governing the renewable energy industry in China, Hong Kong or any other country or territory in which we operate or with which we have arrangements or agreements, which may materially adversely affect our business including but not limited to sales of WTGs and disposal of wind farms;

• k there will be no material change in the bases or rates of taxation in the countries or territories in which we operate, except as otherwise disclosed in this prospectus;

• k there will be no material change in interest rates or foreign currency exchange rates from those currently prevailing;

• k the Group is not adversely affected by any of the risk factors set out in “Risk Factors” in this prospectus.

– II-1 –

PROFIT FORECAST

APPENDIX II

B. LETTER FROM THE REPORTING ACCOUNTANTS ON THE PROFIT FORECAST

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Ernst & Young 18th Floor Two International Finance Centre 8 Finance Street, Central Hong Kong Tel: +852 2846 9888 Fax: +852 2868 4432 www.ey.com

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June 7, 2010

The Directors

Xinjiang Goldwind Science & Technology Co., Ltd. China International Capital Corporation Hong Kong Securities Limited Citigroup Global Markets Asia Limited Hai Tong Capital (HK) Limited

Dear Sirs,

We have reviewed the calculations of and accounting policies adopted in arriving at the forecast of the consolidated profit attributable to owners of Xinjiang Goldwind Science & Technology Co., Ltd. (the “Company”) for the year ending December 31, 2010 (the “Profit Forecast”) as set out in the subsection headed “Profit Forecast For The Year Ending December 31, 2010” under the section entitled “Financial Information” in the prospectus of the Company dated June 7, 2010 (the “Prospectus”), for which the directors of the Company are solely responsible.

We conducted our work with reference to Auditing Guideline 3.341 on “Accountants’ Report on Profit Forecasts” issued by the Hong Kong Institute of Certified Public Accountants.

The Profit Forecast has been prepared by the Directors of the Company based on the reviewed consolidated results of the Company and its subsidiaries (the “Group”) for the three-month period ended March 31, 2010 and a forecast of the consolidated results of the Group for the remaining nine-month period ending December 31, 2010.

In our opinion, the Profit Forecast, so far as the calculations and accounting policies are concerned, has been properly compiled in accordance with the bases and assumptions made by the Directors of the Company as set out in Part A of Appendix II to the Prospectus, and is presented on a basis consistent in all material respects with the accounting policies currently adopted by the Group as set out in our accountants’ report dated June 7, 2010, the text of which is set out in Appendix I to the Prospectus.

Yours faithfully, Ernst & Young Certified Public Accountants Hong Kong

– II-2 –

PROFIT FORECAST

APPENDIX II

C. LETTER FROM THE JOINT SPONSORS ON THE PROFIT FORECAST

29/F One International Finance Centre 1 Harbour View Street Central, Hong Kong

50/F, Citibank Tower 3 Garden Road Central, Hong Kong

21/F, Li Po Chun Chambers 189 Des Voeux Road Central Central, Hong Kong

June 7, 2010

The Directors

Xinjiang Goldwind Science & Technology Co., Ltd.

Dear Sirs,

We refer to the forecast of the consolidated profit attributable to owners of Xinjiang Goldwind Science & Technology Co., Ltd. (the “Company”) for the year ending December 31, 2010 (the “Profit Forecast”) as set out in the subsection headed “Profit Forecast For The Year Ending December 31, 2010” under the section headed “Financial Information” in the prospectus of the Company dated June 7, 2010 (the “Prospectus”).

We understand that the Profit Forecast has been prepared by the Directors of the Company based on the reviewed consolidated results of the Company and its subsidiaries (the “Group”) for the three-months ended March 31, 2010 and a forecast of the consolidated results of the Group for the remaining nine months ending December 31, 2010.

We have discussed with you the bases and assumptions made by the Directors of the Company as set out in Part A of Appendix II to the Prospectus upon which the Profit Forecast has been made. We have also considered the letter dated June 7, 2010 addressed to yourselves and ourselves from Ernst & Young, Certified Public Accountants, Hong Kong, regarding the accounting policies and calculations upon which the Profit Forecast has been made.

On the basis of the information the Profit Forecast and on the basis of the accounting policies and calculations adopted by you and reviewed by Ernst & Young, Certified Public Accountants, Hong Kong, we are of the opinion that the Profit Forecast, for which you as Directors of the Company are solely responsible, has been made after due and careful enquiry.

Yours faithfully,

For and on behalf of For and on behalf of For and on behalf of China International Citigroup Global Markets Hai Tong Capital (HK) Limited Capital Corporation Asia Limited Hong Kong Securities Limited Huang Zhaohui Florence Fan Jianfeng Sun Freeman Lau Managing Director Managing Director Managing Director Managing Director

– II-3 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION

For illustrative purposes only, the unaudited pro forma financial information prepared in accordance with Rule 4.29 of the Listing Rules is set out herein to provide prospective investors with further information about (i) how the proposed listing might have affected the consolidated net tangible assets of the Group after completion of the Global Offering; and (ii) how the proposed listing might have affected the forecast earnings per Share of our Company for the year ending December 31, 2010 as if the Global Offering had taken place on January 1, 2010.

The accompanying unaudited pro forma financial information of our Company is based on currently available information along with a number of assumptions, estimates and uncertainties. As a result of these assumptions, estimates and uncertainties, the accompanying unaudited pro forma financial information of our Company does not purport to predict our Company’s future financial position.

Although reasonable care has been exercised in preparing the said information, prospective investors who read the information should bear in mind that these figures are inherently subject to adjustments and may not give a true picture of our Company’s financial position following the completion of the Global Offering.

(A) UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS

The following unaudited pro forma adjusted consolidated net tangible assets of our Company have been prepared based on the audited consolidated net tangible assets of our Company attributable to owners of the Company as at December 31, 2009 as extracted from the Accountants’ Report, the text of which is set out in Appendix I to this prospectus, and is adjusted as described below.

The unaudited pro forma adjusted consolidated net tangible assets of our Company have been prepared for illustrative purposes only and, because of their nature, they may not give a true picture of the financial position of the Company.

The following unaudited pro forma adjusted consolidated net tangible assets of our Company have been prepared to show the effect on the consolidated net tangible assets of our Company as at December 31, 2009 as if the Global Offering had occurred on December 31, 2009.

UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS

The following is an illustrative statement of our unaudited pro forma adjusted consolidated net tangible assets attributable to owners of our Company which has been prepared for the purpose of illustrating the effect of the Global Offering as if it had been taken place on December 31, 2009 and based on our audited consolidated net assets attributable to the owners of our Company as at December 31, 2009 as shown in the Accountants’ Report set forth in Appendix I to this prospectus and is adjusted as follows:

Based on Offer Price of HK$19.80 per Offer Share . . . Based on Offer Price of HK$23.00 per Offer Share . . .	Audited consolidated net tangible assets attributable to owners of our Company as at December 31, 2009 RMB in million(1) 4,621.1 4,621.1	Estimated net proceeds from the Global Offering RMB in million(2) 6,556.7 7,616.4	Unaudited pro forma adjusted consolidated net tangible assets attributable to owners of our Company RMB in million 11,177.8 12,237.5	Unaudited pro forma adjusted consolidated net tangible assets per Share
				RMB(4) HK$(6) 4.24 4.83 4.64 5.29

– III-1 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION

Notes:

• (1) The consolidated net tangible assets attributable to owners of the Company as of December 31, 2009, was determined as follows:

Audited consolidated net assets of our Company as set out in Appendix I . . . . . . . . . . . . . . . . . . . . . . Less: Minority interests as set out in Appendix I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Goodwill as set out in Appendix I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Other intangible assets as set out in Appendix I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add: Other intangible assets attributable to minority interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated net tangible assets attributable to owners of the Company . . . . . . . . . . . . . . . . . . . . . . .	RMB in million	RMB in million
		5,527.3 326.2 249.9 346.6 16.5 4,621.1

• (2) The estimated net proceeds from the Global Offering are based on the offer price of HK$19.80 per share and HK$23.00 per share after deduction of the underwriting fees and other related expenses payable by the Company, and do not take into account of any shares which may be issued upon the exercise of the Over-allotment Option. The estimated net proceeds from the Global Offering are converted at the PBOC Rate from Hong Kong dollars into Renminbi at an exchange rate of HK$1.00 to RMB0.8772 prevailing on the Latest Practicable Date.

• (3) On March 25, 2010, our Company’s 2009 annual general meeting approved the distribution our Company’s consolidated actual distributable profits of RMB1,767.8 million, which includes:

• (i) cash dividend of RMB140.0 million declared for payment to our A Shareholders which was settled on April 6, 2010; and

• (ii) cash dividend of RMB784.0 million approved by our Board of Directors, subject to approval of our Shareholders in a general meeting to be held on June 12, 2010, which is expected to be settled after Listing.

The Directors consider that the payment of cash dividends as set out in (i) and (ii) above will have an impact on the expected net tangible assets of the Group attributable to owners of the Company after the Listing.

In addition to the cash dividends above, pursuant to the resolution passed in the 2009 annual general meeting of the Company held on March 25, 2010, share dividends amounting to RMB840.0 million were allotted and issued to the Shareholders of the Company. Please see the section entitled “Financial Information — Dividend Policy” in this prospectus for further details. The Directors consider that the share dividends will not have any impact on the expected net tangible assets of the Group attributable to owners of the Company after the Listing. The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the Company has not taken into account the aforesaid cash and share dividends.

• (4) The unaudited pro forma adjusted consolidated net tangible assets per Share are determined after the adjustments as described in note 2 above and on the basis that 2,635,294,000 Shares (being the number of shares expected to be in issue immediately after completion of the Global Offering, without taking into account of any shares which may be issued upon the exercise of the Over-allotment Option) are issued and outstanding during the entire year ended December 31, 2009. If the Over-allotment Option is exercised in full, the adjusted net tangible assets per Share will increase.

• (5) Details of the valuations of our Company’s properties as at March 31, 2010 are set out in “Appendix V — Property Valuation” in this prospectus. The revaluation surplus or deficit of properties included in buildings held for own use, assets under construction, land use rights and investment properties will not be incorporated in our Company’s financial statements for the year ending December 31, 2010. If such revaluation surplus is incorporated in our Company’s financial statements for the year ending December 31, 2010, the annual depreciation charges would increase by approximately RMB4.6 million.

• (6) The translation of Renminbi into Hong Kong dollars has been made at the rate of RMB0.8772 to HK$1.00, the PBOC Rate prevailing on the Latest Practicable Date. No representation is made that the Hong Kong dollar amounts have been, could have been or could be converted to Renminbi, or vice versa, at that rate or at any other rates or at all.

– III-2 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION

(B) UNAUDITED PRO FORMA FORECAST EARNINGS PER SHARE FOR THE YEAR ENDING DECEMBER 31, 2010

The following unaudited pro forma forecast earnings per Share for the year ending December 31, 2010 have been prepared in accordance with Rule 4.29 of the Listing Rules on the basis set out in the notes below for the purpose of illustrating the effect of the Global Offering, as if it had taken place on January 1, 2010. The unaudited pro forma forecast earnings per Share has been prepared for illustrative purposes only and, because of its nature, it may not give a true picture of the financial results of the Group following the Global Offering.

Forecast for the year ending December 31,2010 Forecast consolidated profit attributable to owners of the Company (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . not less than RMB2,235 million Unaudited pro forma forecast earnings per Share (Note 2) . . . . . . . . . . . not less than RMB0.85 (HK$0.97)

Notes:

(1) The forecast consolidated profit attributable to owners of the Company for the year ending December 31, 2010 is extracted from the profit forecast as set out in “Financial Information — Profit Forecast for the year Ending December 31, 2010”. The bases and assumptions on which the above profit forecast for the year ending December 31, 2010 has been prepared are summarized in “Appendix II — Profit Forecast” to this prospectus.

(2) The unaudited pro forma forecast earnings per Share is calculated by dividing the forecast consolidated profit attributable to owners of the Company for the year ending December 31, 2010 by 2,635,294,000 Shares assumed to be issued and outstanding during the entire year ending December 31, 2010, adjusted, as if the Global Offering had occurred on January 1, 2010, but without taking into account any share which may be issued upon exercise of the Over-allotment Option.

• (3) The unaudited pro forma forecast earnings per Share for the year ending December 31, 2010 is converted at the PBOC Rate from Renminbi into Hong Kong dollars at an exchange rate of RMB0.8772 to HK$1.00 prevailing on the Latest Practicable Date.

– III-3 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX III

(C) COMFORT LETTER ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report received from the reporting accountants, Ernst & Young, Certified Public Accountants, Hong Kong in respect of the unaudited pro forma financial information.

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The Directors

Ernst & Young 18th Floor Two International Finance Centre 8 Finance Street, Central Hong Kong Tel: +852 2846 9888 Fax: +852 2868 4432 www.ey.com 7 June 2010

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Xinjiang Goldwind Science & Technology Co., Ltd.

Dear Sirs,

We report on the unaudited pro forma financial information (the “Unaudited Pro Forma Financial Information”) of Xinjiang Goldwind Science & Technology Co., Ltd. (the “Company”) and its subsidiaries (collectively the “Group”), which has been prepared by the directors of the Company (the “Directors”) for illustrative purposes only, to provide information about how the global offering of the Company’s shares might have affected the financial information presented, for inclusion in Appendix III to the prospectus of the Company dated 7 June 2010 (the “Prospectus”). The basis of preparation of the Unaudited Pro Forma Financial Information is set out in Parts A and B of Appendix III to the Prospectus.

Respective Responsibilities of the Directors and Reporting Accountants

It is the responsibility solely of the Directors to prepare the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

It is our responsibility to form an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

Basis of opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagement 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments, and discussing the Unaudited Pro Forma Financial Information with the Directors. This engagement did not involve independent examination of any of the underlying financial information.

– III-4 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION

Our work did not constitute an audit or a review made in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the HKICPA, and accordingly, we do not express any such audit or review assurance on the Unaudited Pro Forma Financial Information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Unaudited Pro Forma Financial Information has been properly compiled by the Directors on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Our work has not been carried out in accordance with the auditing standards or other standards and practices generally accepted in the United States of America or auditing standards of the Public Company Accounting Oversight Board (United States) and accordingly should not be relied upon as if it has been carried out in accordance with those standards.

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgements and assumptions of the Directors, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be indicative of:

• k the financial position of the Group as at 31 December 2009 or any future dates; or

• k the forecasted earnings per share of the Group for the year ending 31 December 2010 or any future periods.

Opinion

In our opinion:

• (a) the Unaudited Pro Forma Financial Information has been properly compiled by the Directors on the basis stated;

• (b) such basis is consistent with the accounting policies of the Group; and

• (c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Yours faithfully, Ernst & Young Certified Public Accountants Hong Kong

– III-5 –

APPENDIX IV

UNAUDITED INTERIM FINANCIAL REPORT

Under the rules of The Shenzhen Stock Exchange on which our A shares are listed, we are required to publish interim financial report containing unaudited financial statements prepared in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance (the “MOF”) of the PRC in 2006, and other relevant rules and regulations issued by the MOF. Because we released financial statements for the three-month period ended 31 March 2010 (including financial statements for the same period in 2009) prior to the date of this prospectus, we have prepared interim financial report in accordance with International Accounting Standard 34 “Interim Financial Reporting” and have incorporated such report in this prospectus. The following is the text of a report, prepared for the purpose of incorporation in this prospectus, received from our reporting accountants, Ernst & Young, Certified Public Accountants, Hong Kong.

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Ernst & Young

18th Floor Two International Finance Centre 8 Finance Street, Central Hong Kong Tel: +852 2846 9888 Fax: +852 2868 4432 www.ey.com

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REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION TO THE BOARD OF DIRECTORS OF XINJIANG GOLDWIND SCIENCE & TECHNOLOGY CO., LTD. (incorporated in the People’s Republic of China with limited liability)

Introduction

We have reviewed the accompanying interim financial information of Xinjiang Goldwind Science & Technology Co., Ltd. (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”) set out on pages IV-3 to IV-30 which comprises the Group’s interim condensed consolidated statement of financial position as at 31 March 2010 and the related interim condensed consolidated statements of comprehensive income, changes in equity and cash flows for the three-month period then ended, and explanatory notes.

The directors of the Company (the “Directors”) are responsible for the preparation and fair presentation of this interim condensed consolidated financial information in accordance with International Accounting Standard IAS 34 Interim Financial Reporting (“IAS 34”). Our responsibility is to express a conclusion on this interim condensed consolidated financial information based on our review. Our report is made solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing. Consequently, it does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

– IV-1 –

APPENDIX IV

UNAUDITED INTERIM FINANCIAL REPORT

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34.

Ernst & Young

Certified Public Accountants Hong Kong 7 June 2010

– IV-2 –

UNAUDITED INTERIM FINANCIAL REPORT

APPENDIX IV

I. FINANCIAL INFORMATION

(A) UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Notes REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other income and gains, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Selling and distribution costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Share of profits and losses of: Jointly-controlled entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PROFIT BEFORE TAX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 PROFIT FOR THE PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income: Exchange differences on translation of foreign operations . . . . . . . . . TOTAL COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit attributable to: Owners of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total comprehensive income attributable to: Owners of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings per share attributable to ordinary equity holders of the Company : Basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

2009 2010 Three-month period ended 31 March (unaudited) RMB’000 (unaudited) RMB’000 1,080,279 1,838,650 (832,269) (1,326,478) 248,010 512,172 101,009 35,555 (40,864) (123,405) (38,550) (62,604) 19,461 (29,400) (14,507) (13,142) — (21) 798 (1,033) 275,357 318,122 (72,169) (60,530) 203,188 257,592 (9,716) (18,779) 193,472 238,813 195,052 248,401 8,136 9,191 203,188 257,592 185,336 229,622 8,136 9,191 193,472 238,813 RMB0.09 RMB0.11

2009 (unaudited) RMB’000 1,080,279 (832,269) 248,010 101,009 (40,864) (38,550) 19,461 (14,507) — 798 275,357 (72,169) 203,188 (9,716) 193,472 195,052 8,136 203,188 185,336 8,136 193,472 RMB0.09

– IV-3 –

UNAUDITED INTERIM FINANCIAL REPORT

APPENDIX IV

I. FINANCIAL INFORMATION — continued

(B) UNAUIDTED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Notes NON-CURRENT ASSETS Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepaid land lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interests in jointly-controlled entities . . . . . . . . . . . . . . . . . . . . . . . . Interests in associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Available-for-sale investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CURRENT ASSETS Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and bills receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Prepayments, deposits and other receivables. . . . . . . . . . . . . . . . . . . 12 Derivative financial instruments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Pledged deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CURRENT LIABILITIES Trade and bills payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Derivative financial instruments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Interest-bearing bank and other borrowings . . . . . . . . . . . . . . . . . . . 17 Tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NET CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TOTAL ASSETS LESS CURRENT LIABILITIES. . . . . . . . . . . . . . NON-CURRENT LIABILITIES Interest-bearing bank and other borrowings . . . . . . . . . . . . . . . . . . . 17 Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Government grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity attributable to owners of the Company Issued share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Proposed dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 2,440,655 80,954 160,637 249,882 346,550 69,741 47,370 9,000 190,504 1,935 3,597,228 2,853,546 2,919,607 830,409 4,667 218,538 4,458,950 11,285,717 3,760,207 2,055,786 10,746 601,892 212,335 — 241,297 6,882,263 4,403,454 8,000,682 2,022,121 90,937 195,795 140,588 23,984 2,473,425 5,527,257 1,400,000 3,661,057 140,000 5,201,057 326,200 5,527,257	As at 31 March 2010	As at 31 March 2010
			(unaudited) RMB’000 2,651,707 80,375 170,655 234,010 333,827 49,526 46,337 9,000 181,702 2,271 3,759,410 4,006,046 2,912,846 1,292,238 — 323,165 2,388,037 10,922,332 3,545,451 1,436,099 18,064 924,245 110,167 140,000 280,822 6,454,848 4,467,484 8,226,894 2,145,292 82,101 209,961 141,049 22,421 2,600,824 5,626,070 1,400,000 3,106,679 784,000 5,290,679 335,391 5,626,070

– IV-4 –

UNAUDITED INTERIM FINANCIAL REPORT

APPENDIX IV

I. FINANCIAL INFORMATION — continued

(C) UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the three-month periods ended 31 March 2009 and 2010

As at 1 January 2009 . . Profit for the period . . . Other comprehensive income . . . . . . . . . Share of reserves of an associate . . . . . . . . Capital contribution from minority shareholders . . . . . . Disposal of a subsidiary . . . . . . . . As at 31 March 2009 . . As at 31 December 2009 and 1 January 2010 . . . . . . . . . . . Profit for the period . . . Other comprehensive income . . . . . . . . . Final 2009 dividend declared . . . . . . . . . Proposed dividend . . . . As at 31 March 2010 . .			**Attributable **	to owners of t	he Company		Total (unaudited) RMB’000 3,722,484 195,052 (9,716) 5,101 — — 3,912,921 5,201,057 248,401 (18,779) (140,000) — 5,290,679	Minority interests (unaudited) RMB’000 415,181 8,136 — — 927 (53,900) 370,344 326,200 9,191 — — — 335,391	Total equity
	Issued share capital (note 19) (unaudited) RMB’000 1,000,000 — — — — — 1,000,000 1,400,000 — — — — 1,400,000	Capital reserve (unaudited) RMB’000 1,669,546 — — 569 — — 1,670,115 1,670,115 — — — — 1,670,115*	Statutory surplus reserve (unaudited) RMB’000 157,300 — — 453 — — 157,753 267,416 — — — — 267,416*	Retained profits (unaudited) RMB’000 630,989 195,052 — 4,079 — — 830,120 1,730,985 248,401 — — (784,000) 1,195,386*	Exchange fluctuation reserve (unaudited) RMB’000 (15,351) — (9,716) — — — (25,067) (7,459) — (18,779) — — (26,238)*	Proposed final dividend (unaudited) RMB’000 280,000 — — — — — 280,000 140,000 — — (140,000) 784,000 784,000
									(unaudited) RMB’000 4,137,665 203,188 (9,716) 5,101 927 (53,900)
									4,283,265
									5,527,257 257,592 (18,779) (140,000) —
									5,626,070

• As at 31 March 2010, these reserve accounts comprise the consolidated reserves of RMB3,106,679,000 in the interim condensed consolidated statement of financial position.

– IV-5 –

UNAUDITED INTERIM FINANCIAL REPORT

APPENDIX IV

I. FINANCIAL INFORMATION — continued

(D) UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(D) **UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF **	CASH FLOWS
Notes CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments for: Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Foreign exchange differences, net . . . . . . . . . . . . . . . . . . . . . . 5,6 Bank interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Share of profits and losses of jointly-controlled entities . . . . . . Share of profits and losses of associates . . . . . . . . . . . . . . . . . Unrealised profit arising from transactions with a jointly controlled entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Amortisation of prepaid land lease payments . . . . . . . . . . . . . . 6 Amortisation of other intangible assets . . . . . . . . . . . . . . . . . . 6 (Gain)/loss on disposals of items of property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Gain on disposals of a subsidiary . . . . . . . . . . . . . . . . . . . . . . 5 Fair value (gain)/loss, net, on derivative financial instruments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 (Reversal of impairment)/impairment of trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Write-down of inventories to net realisable value. . . . . . . . . . . 6 Government grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Excess over the cost of investment to associates . . . . . . . . . . . Increase in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Decrease/(increase) in trade and bills receivables. . . . . . . . . . . . . Increase in prepayments, deposits and other receivables. . . . . . . . Decrease in trade and bills payables . . . . . . . . . . . . . . . . . . . . . . Decrease in other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Decrease)/increase in provision . . . . . . . . . . . . . . . . . . . . . . . . . Cash used in operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash flows used in operating activities . . . . . . . . . . . . . . . . .	2009 2010 Three-month period ended 31 March (unaudited) (unaudited) RMB’000 RMB’000 275,357 318,122 14,507 13,142 (2,180) (14,205) (6,495) (10,239) — 21 (798) 1,033 — 20,194 15,519 19,233 453 891 4,770 11,231 (3) 38 (82,323) — (885) 11,985 (29,048) 7,688 — 2,092 (350) (1,036) (1,342) — 187,182 380,190 (891,759) (1,165,382) 547,028 (4,820) (276,383) (458,492) (434,659) (179,816) (865,942) (604,896) ( 23,943) 53,691 (1,758,476) (1,979,525) (85,933) (157,009) (1,844,409) (2,136,534) continued/...
	2009 (unaudited) RMB’000 275,357 14,507 (2,180) (6,495) — (798) — 15,519 453 4,770 (3) (82,323) (885) (29,048) — (350) (1,342) 187,182 (891,759) 547,028 (276,383) (434,659) (865,942) ( 23,943) (1,758,476) (85,933) (1,844,409)

– IV-6 –

APPENDIX IV

UNAUDITED INTERIM FINANCIAL REPORT

I. FINANCIAL INFORMATION — continued

I. FINANCIAL INFORMATION — continued
CASH FLOWS FROM INVESTING ACTIVITIES Purchases of items of property, plant and equipment . . . . . . . . . . . . . . . . . . Additions of prepaid land lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . Additions of other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase of shareholding in associates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from disposals of items of property, plant and equipment. . . . . . . . Proceeds from disposals of other intangible assets . . . . . . . . . . . . . . . . . . . . Disposal of a subsidiary, net of cash disposed of . . . . . . . . . . . . . . . . . . . . . Increase in pledged deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase in non-pledged time deposits with original maturity of three months or more when acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government grants received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash flows from/(used in) investing activities. . . . . . . . . . . . . . . . . . . . . CASH FLOWS FROM FINANCING ACTIVITIES New bank and other borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repayment of bank and other borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital contribution from a minority shareholder . . . . . . . . . . . . . . . . . . . . . Net cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . NET DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . Cash and cash equivalents at beginning of the period . . . . . . . . . . . . . . . . . . Effect of foreign exchange rate changes, net . . . . . . . . . . . . . . . . . . . . . . . . CASH AND CASH EQUIVALENTS AT END OF THE PERIOD . . . . . . . .	2009 2010 Three-month period ended 31 March (unaudited) (unaudited) RMB’000 RMB’000 (52,588) (255,488) (732) (10,909) (1,808) (17,387) (31,608) — — 257 6 — 172,844 — — (104,627) (25,473) (2,947) 350 1,497 6,495 8,779 67,486 (380,825) 300,000 486,603 (50,593) — (29,018) (34,013) 927 — 221,316 452,590 (1,555,607) (2,064,769) 3,286,400 4,378,950 (3,055) (9,091) 1,727,738 2,305,090
	2009 (unaudited) RMB’000 (52,588) (732) (1,808) (31,608) — 6 172,844 — (25,473) 350 6,495 67,486 300,000 (50,593) (29,018) 927 221,316 (1,555,607) 3,286,400 (3,055) 1,727,738

– IV-7 –

UNAUDITED INTERIM FINANCIAL REPORT

APPENDIX IV

II. NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

1. CORPORATE INFORMATION

The Company was established as a joint stock company with limited liability on 26 March 2001 in the PRC. The Company’s A shares have been listed on The Shenzhen Stock Exchange from 26 December 2007 onwards. The registered office of the Company is located at 107 Shanghai Road, Economic & Technology Development District, Urumqi, Xinjiang, the PRC.

In the opinion of the Directors, the Company has no controlling shareholder.

The Group is principally engaged in the development, manufacture and sale of wind turbine generators and wind power components; development of wind farms; and the provision of wind power related consultancy, wind farm construction, maintenance and transportation services.

2.1 BASIS OF PRESENTATION AND PREPARATION

The unaudited interim condensed consolidated financial information for the three-month period ended 31 March 2010 has been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” issued by the International Accounting Standards Board, and should be read in conjunction with the consolidated financial information of the Group as at and for the year ended 31 December 2009 included in the Accountants’ Report dated 7 June 2010 (the “Accountants’ Report”), the text of which is set out in Appendix I to the prospectus of the Company dated 7 June 2010 (the “Prospectus”) in connection with the initial listing of shares of the Company on the Main Board of The Stock Exchange of Hong Kong Limited.

The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial information are consistent with those followed in the preparation of the Group’s consolidated financial information as at and for the year ended 31 December 2009 included in the Accountants’ Report.

2.2 CHANGES IN ACCOUNTING POLICY AND DISCLOSURES

The Group has adopted the following revised International Financial Reporting Standards (“IFRSs”) for the	The Group has adopted the following revised International Financial Reporting Standards (“IFRSs”) for the	The Group has adopted the following revised International Financial Reporting Standards (“IFRSs”) for the
first time for the financial statements	for the three-month period ended 31 March 2010.
IFRS 1 (Revised) . . . . . . . . . . . . .	First-time Adoption of International Financial Reporting Standards
IFRS 1 Amendments. . . . . . . . . . .	Amendments to IFRS 1 First-time Adoption of International Financial
	Report Standards — Additional Exemptions for First-time Adopters
IFRS 2 Amendments. . . . . . . . . . .	Amendments to IFRS 2 Share-based Payment — Group Cash-settled
	Share-based Payment Transactions
IFRS 3 (Revised) . . . . . . . . . . . . .	Business Combinations
IAS 27 (Revised) . . . . . . . . . . . . .	Consolidated and Separate Financial Statements
IAS 39 Amendment . . . . . . . . . . .	Amendment to IAS 39 Financial Instruments: Recognition	and
	Measurement — Eligible Hedged Items
IFRIC 17 . . . . . . . . . . . . . . . . . . .	Distributions of Non-cash Assets to Owners
Amendments to IFRS 5 included
in Improvements to IFRSs
issued in May 2009. . . . . . . . . .	Amendments to IFRS 5_Non-current Assets Held for Sale and Discontinued_
	Operations — Plan to Sell the Controlling Interest in a Subsidiary

Apart from the above, the IASB has issued Improvements to IFRSs 2009 which sets out amendments to a number of IFRSs primarily with a view to removing inconsistencies and clarifying wording. The amendments to IFRS 2, IAS 38, IFRIC 9 and IFRIC 16 are effective for annual periods beginning on or after 1 July 2009 while the

– IV-8 –

UNAUDITED INTERIM FINANCIAL REPORT

APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

2.2 CHANGES IN ACCOUNTING POLICY AND DISCLOSURES — continued

amendments to IFRS 5, IFRS 8, IAS 1, IAS 7, IAS 17, IAS 36 and IAS 39 are effective for annual periods beginning on or after 1 January 2010 although there are separate transitional provisions for each standard or interpretation.

The adoption of these revised IFRSs has had no financial effect on this interim condensed consolidated financial information.

3. SUMMARY OF SIGNIFICANT JUDGEMENTS AND ESTIMATES

Judgements

In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which has the most significant effect on the amounts recognised in the financial statements:

Operating lease commitments — Group as lessor

The Group has entered into commercial property leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of these properties which are leased out on operating leases.

Classification between investment properties and owner-occupied properties

The Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets held by the Group. Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately, the Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgment is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.

Estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

Useful lives and residual values of items of property, plant and equipment

In determining the useful lives and residual values of items of property, plant and equipment, the Group periodically reviews the changes in market conditions, expected physical wear and tear, and the maintenance of the asset. The estimation of the useful life of the asset is based on historical experience of the Group with similar assets that are used in a similar way. Depreciation amount will be adjusted if the estimated useful lives and/or the residual values of items of property, plant and equipment are different from previous estimation. Useful lives and residual values are reviewed, at each date of the statement of financial position, based on changes in circumstances.

– IV-9 –

UNAUDITED INTERIM FINANCIAL REPORT

APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

3. SUMMARY OF SIGNIFICANT JUDGEMENTS AND ESTIMATES — continued

Estimation uncertainty — continued

Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating units and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

Current income tax

The Group is subject to income taxes in numerous jurisdictions in the PRC. Judgement is required in determining the provision for taxation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts originally recorded, the differences will impact on the current income tax and deferred income tax in the periods in which the differences arise.

Deferred income tax

Deferred tax assets relating to certain temporary differences and tax losses are recognised as management considers it is probable that future taxable profit will be available against which the temporary differences or tax losses can be utilised. The realisation of the deferred tax assets mainly depends on whether sufficient future profits or taxable temporary differences will be available in the future. In cases where the actual future profits generated are less than expected, a material reversal of deferred tax assets may arise, which will be recognised in profit or loss in the period in which such a reversal takes place.

Impairment of trade and bills receivables

The Group maintains an allowance for estimated loss arising from the inability of its customers to make the required payments. The Group makes its estimates based on the ageing of its trade and bills receivable balances, customers’ creditworthiness, and historical write-off experience. If the financial condition of its customers will deteriorate such that the actual impairment loss might be higher than expected, the Group would be required to revise the basis for making the allowance and its future results would be affected.

Warranty provision

Provision for product warranties granted by the Group to certain products are recognised based on sales volume and past experience of the level of repairs, discounted to their present values as appropriate.

4. SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and services and has three reportable operating segments as follows:

• (a) The manufacturing segment engages in the research and development, manufacture and sale of wind turbine generators and wind power components;

• (b) The wind power services segment provides wind power related consultancy, wind farm construction, maintenance and transportation services; and

– IV-10 –

UNAUDITED INTERIM FINANCIAL REPORT

APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

4. SEGMENT INFORMATION — continued

• (c) The wind farm development segment engages in development of wind farms, consisting of wind power generation service provided by the Group’s wind farms as well as sale of wind farms, if appropriate.

Management monitors the operating results of its operating segments separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment profit or loss, which is a measure of adjusted profit or loss before tax from continuing operations. The adjusted profit or loss before tax from continuing operations is measured consistently with the Group’s profit or loss before tax from continuing operations.

Intersegment revenues are eliminated on consolidation. Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the then prevailing market prices.

– IV-11 –

UNAUDITED INTERIM FINANCIAL REPORT

APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

4. SEGMENT INFORMATION — continued

The following tables present revenue, profit and certain asset, liability and expenditure information for the Group’s operating segments for the three-month periods ended 31 March 2009 and 2010.

For the three-month period ended 31 March 2009

Segment revenue: Sales to external customers . . . . . . . . . . Intersegment sales . . . . . . . . . . . . . . . . . Total revenue . . . . . . . . . . . . . . . . . . . . Segment results . . . . . . . . . . . . . . . . . . . Interest income . . . . . . . . . . . . . . . . . . . Finance cost . . . . . . . . . . . . . . . . . . . . . Profit/(loss) before tax . . . . . . . . . . . . . . Segment assets . . . . . . . . . . . . . . . . . . . Segment liabilities . . . . . . . . . . . . . . . . . Other segment information: Share of profits and losses of: Associates . . . . . . . . . . . . . . . . . . . . . Depreciation and amortisation . . . . . . . . Reversal of impairment of trade and other receivables . . . . . . . . . . . . . . . . Product warranty provision . . . . . . . . . . Interest in a jointly-controlled entity . . . Interests in associates . . . . . . . . . . . . . . Capital expenditure(1) . . . . . . . . . . . . . .	Wind turbine generator manufacturing and sales (unaudited) RMB’000 1,046,468 — 1,046,468 176,045 6,283 (7,737) 174,591 9,094,861 5,207,228 798 14,027 (13,840) 26,498 — 46,012 61,161	Wind power services (unaudited) RMB’000 4,464 5,445 9,909 (2,157) 11 (146) (2,292) 239,088 156,393 — 389 (3,970) — — — 106	Wind farm development (unaudited) RMB’000 29,347 — 29,347 43,333 201 (6,624) 36,910 1,751,989 1,040,499 — 6,668 (1,685) — 3,300 — 31,760	Eliminations (unaudited) RMB’000 — (5,445) (5,445) 66,148 — — 66,148 (1,260,695) (862,143) — (342) (9,553) (679) — — —	Total (unaudited) RMB’000 1,080,279 — 1,080,279 283,369 6,495 (14,507) 275,357 9,825,243 5,541,977 798 20,742 (29,048) 25,819 3,300 46,012 93,027

(1) Capital expenditure mainly consists of additions of property, plant and equipment, other intangible assets, prepaid land lease payments and interests in associates.

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II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

4. SEGMENT INFORMATION — continued

For the three-month period ended 31 March 2010

Segment revenue: Sales to external customers . . . . . . . . . Intersegment sales . . . . . . . . . . . . . . . . Total revenue. . . . . . . . . . . . . . . . . . . . Segment results . . . . . . . . . . . . . . . . . . Interest income . . . . . . . . . . . . . . . . . . Finance cost . . . . . . . . . . . . . . . . . . . . Profit before tax . . . . . . . . . . . . . . . . . Segment assets . . . . . . . . . . . . . . . . . . Segment liabilities . . . . . . . . . . . . . . . . Other segment information: Share of profits and losses of: Jointly-controlled entities . . . . . . . . . Associates . . . . . . . . . . . . . . . . . . . . Depreciation and amortisation . . . . . . . Write-down of inventories to net realisable value . . . . . . . . . . . . . . . . Impairment of trade and other receivables. . . . . . . . . . . . . . . . . . . . Product warranty provision . . . . . . . . . Interests in jointly-controlled entities . . Interests in associates. . . . . . . . . . . . . . Capital expenditure(1). . . . . . . . . . . . . .	Wind turbine generator manufacturing and sales (unaudited) RMB’000 1,781,420 139,662 1,921,082 334,199 9,343 (5,370) 338,172 12,128,162 6,641,024 — (1,033) 23,690 2,092 4,986 93,560 17,500 46,337 75,564	Wind power services (unaudited) RMB’000 26,447 14,163 40,610 4,592 483 — 5,075 453,375 305,481 — — 538 — 1,624 — — — 521	Wind farm development (unaudited) RMB’000 30,783 — 30,783 7,499 413 (7,772) 140 3,602,078 2,934,749 (21) — 8,247 — 2,417 — 32,026 — 218,359	Eliminations (unaudited) RMB’000 — (153,825) (153,825) (25,265) — — (25,265) (1,501,873) (825,582) — — (1,120) — (1,339) (4,223) — — (29,070)	Total (unaudited) RMB’000 1,838,650 — 1,838,650 321,025 10,239 (13,142) 318,122 14,681,742 9,055,672 (21) (1,033) 31,355 2,092 7,688 89,337 49,526 46,337 265,374

(1) Capital expenditure mainly consists of additions of property, plant and equipment, other intangible assets and prepaid land lease payments.

Information about a major customer

For the three-month period ended 31 March 2009, revenue generated from only one of the Group’s customers amounting to RMB191,923,000 had individually accounted for over 10% of the Group’s total revenue. Similarly, for the three-month period ended 31 March 2010, revenue generated from only one of the Group’s customers amounting to RMB549,824,000 had individually accounted for over 10% of the Group’s total revenue.

Geographical information

No further geographical segment information is presented as over 95% of the Group’s revenue is derived from customers based in Mainland China, and most of the Group’s assets are located in Mainland China.

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II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

5. REVENUE, OTHER INCOME AND GAINS

Revenue, which is also the Group’s turnover, represents the net invoiced value of goods sold, after allowances for returns and trade discounts; and the values of services rendered.

An analysis of the Group’s revenue, other income and gains is as follows:

Note Revenue Sale of wind turbine generators and wind power components . . . . . . . . . . . . . Wind power services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wind power generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other income Bank interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Value-added tax refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance compensation on product warranty expenditures . . . . . . . . . . . . . . . Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gains Gain on disposal of a wind farm project subsidiary . . . . . . . . . . . . . . . . . . . . Gain on disposals of items of property, plant and equipment . . . . . . . . . . . . . Fair value gain, net, on derivative financial instruments . . . . . . . . . . . . . . . . . Realised gain on derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . Foreign exchange difference, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Three-month period ended 31 March	Three-month period ended 31 March
	2009 (unaudited) RMB’000 1,046,468 4,464 29,347 1,080,279 6,495 4,636 350 362 — 2,335 14,178 82,323 3 885 — 2,180 1,440 86,831 101,009	2010
		(unaudited) RMB’000 1,781,420 26,447 30,783
		1,838,650
		10,239 3,525 1,036 2,012 3,678 100
		20,590
		— — — 60 14,205 700
		14,965
		35,555

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6. PROFIT BEFORE TAX

The Group’s profit before tax is arrived at after charging/(crediting):

Note Cost of inventories sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Write-down of inventories to net realisable value . . . . . . . . . . . . . . . . . . . . . . Depreciation (note(a)) provided for: Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation of prepaid land lease payments . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation of other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Reversal of impairment)/impairment of trade and bills receivables. . . . . . . . . (Reversal of impairment)/impairment of prepayments, deposits and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Gain)/loss on disposals of items of property, plant and equipment, net. . . . . . Minimum lease payments under operating leases of land and buildings. . . . . . Auditors’ remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee benefit expenses (including directors’ and supervisors’ remuneration): Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension scheme contributions (defined contribution scheme) (note(b)) . . . . Welfare and other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign exchange differences, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Research and development costs: Staff costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation and depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Materials expenditure and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Product warranty provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2009 2010 Three-month period ended 31 March (unaudited) (unaudited) RMB’000 RMB’000 818,002 1,295,375 — 2,092 14,973 18,654 546 579 15,519 19,233 453 891 4,770 11,231 5,223 12,122 (20,271) 6,307 (8,777) 1,381 (29,048) 7,688 (3) 38 561 1,490 59 114 27,350 35,371 3,096 5,344 5,154 5,842 35,600 46,557 (2,180) (14,205) 5,012 3,450 933 892 3,720 3,236 9,665 7,578 25,819 89,337

2009 (unaudited) RMB’000 818,002 — 14,973 546 15,519 453 4,770 5,223 (20,271) (8,777) (29,048) (3) 561 59 27,350 3,096 5,154 35,600 (2,180) 5,012 933 3,720 9,665 25,819

Notes:

(a) Depreciation of approximately RMB10,582,000 and RMB12,556,000 is included in the cost of sales on the face of the unaudited condensed consolidated statement of comprehensive income for the three-month periods ended 31 March 2009 and 2010, respectively.

(b) As at 31 March 2009 and 2010, the Group’s forfeited contributions available to reduce its contributions to the pension schemes in future years amounted to RMB7,000 and RMB7,000, respectively.

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II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

7. FINANCE COSTS

7. FINANCE COSTS
Interest on bank loans wholly repayable within five years . . . . . . . . . . . . . . . . . . . . . Interest on other borrowings wholly repayable within five years . . . . . . . . . . . . . . . . Less: Interest capitalised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Three-month period ended 31 March
	2009 (unaudited) RMB’000 24,302 633 24,935 (10,428) 14,507	2010
		(unaudited) RMB’000 33,816 596
		34,412 (21,270)
		13,142

8. INCOME TAX

8. INCOME TAX
Current — Mainland China. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax charge for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Three-month period ended 31 March
	2009 (unaudited) RMB’000 39,085 7,242 46,327 25,842 72,169	2010
		(unaudited) RMB’000 41,464 13,306
		54,770 5,760
		60,530

A reconciliation of the income tax expense applicable to profit before tax using the statutory income tax rate applicable to the Company to the income tax expense at the Group’s effective income tax rate for the three-month periods ended 31 March 2009 and 2010:

Profit before tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax charge at the statutory income tax rate of 25% . . . . . . . . . . . . . . . . . . . . Effect of different income tax rates for overseas entities . . . . . . . . . . . . . . . . . . . . . . Tax exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses not deductible for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax losses not recognised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional tax deduction on research and development expenditure . . . . . . . . . . . . . . Profits and losses attributable to jointly-controlled entities . . . . . . . . . . . . . . . . . . . . . Profits and losses attributable to associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax charge for the period at the effective rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Three-month period ended 31 March	Three-month period ended 31 March
	2009 (unaudited) RMB’000 275,357 68,839 296 (6,496) 2,889 1,226 (736) — (200) 6,351 72,169	2010
		(unaudited) RMB’000 318,122 79,531 1,599 (24,948) 375 3,586 (771) 5 258 895
		60,530

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II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

9. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE COMPANY

The calculation of basic earnings per share amounts for the three-month periods ended 31 March 2009 and 2010 is based on the profit attributable to ordinary equity holders of the Company and the weighted average number of ordinary shares in issue during the three-month periods ended 31 March 2009 and 2010.

Earnings Profit attributable to ordinary equity holders of the Company, used in the basic earnings per share calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shares Weighted average number of ordinary shares in issue during the three-month periods ended 31 March 2009 and 2010 used in the basic earnings per share calculation, after taking into consideration of the issuance of bonus shares in April 2010 (note 26) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2009 2010 Three-month period ended 31 March (unaudited) RMB’000 (unaudited) RMB’000 . . . . . 195,052 248,401 Three-month period ended 31 March	Three-month period ended 31 March	Three-month period ended 31 March	Three-month period ended 31 March
				2010
				(unaudited) RMB’000 248,401
	2009 (unaudited) 2,240,000,000		2010
			(unaudited) 2,240,000,000

The Company did not have any dilutive potential ordinary shares during the three-month periods ended 31 March 2009 and 2010.

10. DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES

The movements in deferred tax assets and deferred tax liabilities during the year ended 31 December 2009 and the three-month period ended 31 March 2010 are as follows:

At beginning of the year/period, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposals of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax credited/(charged) to profit or loss during the year/period . . . . . Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year/period, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2009 (audited) RMB’000 16,332 (419) 88,974 (5,320) 99,567	Three-month period ended 31 March 2010
		(unaudited) RMB’000 99,567 — (5,760) 5,794
		99,601

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II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

10. DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES — continued

The deferred tax assets and deferred tax liabilities are attributed to the following items, which are reflected in the condensed consolidated statement of financial position:

Deferred tax assets: Provision for impairment of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Difference in amortisation for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . Provisions and accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government grants received not yet recognised as income . . . . . . . . . . . . . Unrealised gains arising from intra-group sales. . . . . . . . . . . . . . . . . . . . . . Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax liabilities: Excess of fair values of identifiable assets and liabilities over carrying values in acquisition of a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 29,649 999 92,226 3,297 63,511 822 190,504 73,760 17,177 90,937 99,567	As at 31 March 2010
		(unaudited) RMB’000 30,415 1,196 83,834 3,297 56,301 6,659
		181,702
		66,423 15,678
		82,101
		99,601

There are no income tax consequences attaching to the payment of dividends by the Company to its shareholders.

11. TRADE AND BILLS RECEIVABLES

11. TRADE AND BILLS RECEIVABLES
Trade receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bills receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retention money receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 2,624,662 209,799 272,182 (187,036) 2,919,607	As at 31 March 2010
		(unaudited) RMB’000 2,808,591 16,085 281,413 (193,243)
		2,912,846

The Group normally allows a credit period of not more than three months to its customers. The Group seeks to maintain strict control over its outstanding receivables. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and the fact that the Group’s trade and bills receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. Trade and bills receivables are unsecured and non-interest-bearing.

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APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

11. TRADE AND BILLS RECEIVABLES — continued

An aging analysis of trade and bills receivables, based on the invoice date and net of provisions, as at the respective reporting dates is as follows:

Within 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 6 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 months to 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 to 2 years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 1,453,034 398,581 484,080 455,656 107,439 20,817 2,919,607	As at 31 March 2010
		(unaudited) RMB’000 1,033,451 698,732 708,943 314,796 109,187 47,737
		2,912,846

The Group has no trade and bills receivables that are neither individually nor collectively considered to be impaired.

Movements in the provision for impairment of trade and bills receivables are as follows:

At beginning of the year/period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses recognised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses reversed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposal of a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year/period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2009 (audited) RMB’000 148,843 126,583 (85,847) (2,594) 51 187,036	Three-month period ended 31 March 2010
		(unaudited) RMB’000 187,036 65,860 (59,553) — (100)
		193,243

The amount due from Xinjiang Wind Power Company Limited (“Xinjiang Wind Power”) ( ), the 18%-owned shareholder of the Company, included in the trade and bills receivables is as follows:

18%-owned shareholder of the Company . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 68,175	As at 31 March 2010
		(unaudited) RMB’000 24,537

The above amount is unsecured, non-interest-bearing and repayable on similar credit terms to those offered to other independent customers of the Group.

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II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

12. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

12. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES
Advance to suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deductible input VAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deposits and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Portion classified as non-current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 736,593 8,503 — 92,547 (5,299) 832,344 (1,935) 830,409	As at 31 March 2010
		(unaudited) RMB’000 739,888 8,425 449,816 102,751 (6,371)
		1,294,509 (2,271)
		1,292,238

The Group has no deposits and other receivables that are neither individually nor collectively considered to be impaired.

Movements in the provision for impairment of prepayments, deposits and other receivables are as follows:

At beginning of the year/period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses recognised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment losses reversed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposals of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year/period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2009 (audited) RMB’000 14,894 20,444 (30,135) (33) 129 5,299	Three-month period ended 31 March 2010
		(unaudited) RMB’000 5,299 11,585 (10,204) — (309)
		6,371

The amount due from Xinjiang Wind Power included in the prepayments, deposits and other receivables is as follows:

18%-owned shareholder of the Company . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 1,560	As at 31 March 2010
		(unaudited) RMB’000 —

The above amount is unsecured, non-interest-bearing and repayable on similar credit terms to those offered to independent third parties.

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APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

13. CASH AND CASH EQUIVALENTS AND PLEDGED DEPOSITS

Cash and bank balances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Pledged time deposits for bank loans. . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents in the consolidated statements of financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Non-pledged time deposits with original maturity of three months or more when acquired. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents in the consolidated statements of cash flows. . . . Cash and cash equivalents and pledged deposits denominated in: — RMB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — other currencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 2,576,460 2,101,028 4,677,488 (218,538) 4,458,950 (80,000) 4,378,950 4,469,305 208,183 4,677,488	As at 31 March 2010
		(unaudited) RMB’000 1,981,711 729,491
		2,711,202 (323,165)
		2,388,037 (82,947)
		2,305,090
		2,442,793 268,409
		2,711,202

The RMB is not freely convertible into other currencies. However, under Mainland China’s prevailing rules and regulations over foreign exchange, the Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange business.

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term time deposits are made for varying periods of between seven days and three months depending on the immediate cash requirements of the Group, and earn interest at the respective short term time deposit rates. The bank balances and pledged deposits are deposited with creditworthy banks with no recent history of default.

14. TRADE AND BILLS PAYABLES

Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bills payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 1,997,643 1,762,564 3,760,207	As at 31 March 2010
		(unaudited) RMB’000 2,833,467 711,984
		3,545,451

Trade and bills payables are non-interest-bearing and are normally settled within 90 days.

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APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

14. TRADE AND BILLS PAYABLES — continued

An aging analysis of the Group’s trade and bills payables as at 31 December 2009 and 31 March 2010 is as follows:

Within 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 6 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 months to 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 to 2 years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 3 years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 3,142,625 478,464 66,212 70,852 893 1,161 3,760,207	As at 31 March 2010
		(unaudited) RMB’000 2,682,947 624,031 133,559 102,740 1,008 1,166
		3,545,451

The amounts due to Xinjiang Wind Power and one of the Group’s associates included in the trade and bills payables are as follows:

18%-owned shareholder of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . Associate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 — 16,473 16,473	As at 31 March 2010
		(unaudited) RMB’000 328 4,568
		4,896

15. OTHER PAYABLES

15. OTHER PAYABLES
Advances from customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued salaries, wages and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 1,814,295 129,142 16,600 95,749 2,055,786	As at 31 March 2010
		(unaudited) RMB’000 1,166,435 34,866 112,388 122,410
		1,436,099

The amount due to one of the Group’s jointly-controlled entities included in advances from customers is as follow:

Jointly-controlled entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 190,003	As at 31 March 2010
		(unaudited) RMB’000 26,911

Other payables are non-interest-bearing and have no fixed terms of repayment.

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APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

16. DERIVATIVE FINANCIAL INSTRUMENTS

16. DERIVATIVE FINANCIAL INSTRUMENTS
Forward currency contracts Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 4,667 10,746	As at 31 March 2010
		(unaudited) RMB’000 —
		18,064

The carrying amounts of the forward currency contracts are the same as their fair values. The above transactions involving derivative financial instruments are with Bank of China.

The Company entered into forward currency contracts to manage its exchange rate exposures which did not meet the criteria for hedge accounting. Changes in the fair value of non-hedging currency derivatives amounting to RMB885,000 and RMB11,985,000 were credited and charged to the profit or loss for the three-month periods ended 31 March 2009 and 2010, respectively.

17. INTEREST-BEARING BANK AND OTHER BORROWINGS

The maturity profile of the interest-bearing bank and other borrowings as at 31 December 2009 and 31 March 2010 is as follows:

Analysed into: Bank loans repayable: Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the second year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the third to fifth years, inclusive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Above five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other borrowings repayable: Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the second year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the third to fifth years, inclusive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Above five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 598,990 454,527 408,000 1,127,300 2,588,817 2,902 3,110 10,946 18,238 35,196 2,624,013	As at 31 March 2010
		(unaudited) RMB’000 921,485 288,310 415,000 1,412,500
		3,037,295
		2,760 2,959 10,441 16,082
		32,242
		3,069,537

18. PROVISION

The Group generally provides two-year warranties to its customers on the wind turbine generators sold by the Group, under which faulty components are repaired or replaced. The amount of the provision for the warranties is estimated based on sales volumes and past experience of the level of repairs. The estimation basis is reviewed on an ongoing basis and revised where appropriate.

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APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

18. PROVISION — continued

18. PROVISION — continued
At beginning of the year/period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts utilised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At end of the year/period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Portion classified as current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2009 (audited) RMB’000 131,312 458,775 (153,447) 452 437,092 (241,297) 195,795	Three-month period ended 31 March 2010
		(unaudited) RMB’000 437,092 89,337 (35,646) —
		490,783 (280,822)
		209,961

The carrying amounts of the Group’s provisions approximate to their fair values.

19. ISSUED SHARE CAPITAL

19. ISSUED SHARE CAPITAL
Shares Registered, issued and fully paid: Domestic shares of RMB1.00 each . . . . . . . . . . . . A shares of RMB1.00 each . . . . . . . . . . . . . . . . . .	Number of shares Nominal value (audited) ’000 RMB’000 As at 31 December 2009 — — 1,400,000 1,400,000 1,400,000 1,400,000	As at 31 March 2010
		Number of shares Nominal value (unaudited) ’000 RMB’000 — — 1,400,000 1,400,000 1,400,000 1,400,000	Nominal value
			1,400,000

Movements in the share capital during the year ended 31 December 2009 and the three-month period ended 31 March 2010 were as follows:

At beginning of the year/period . . . . . . . . . . . . . . . . Issue of bonus shares . . . . . . . . . . . . . . . . . . . . . . . . At end of the year/period . . . . . . . . . . . . . . . . . . . . .	Number of shares Nominal value Year ended 31 December 2009 (audited) ’000 RMB’000 1,000,000 1,000,000 (a)400,000 (a)400,000 1,400,000 1,400,000	Three-month period ended 31 March 2010	Three-month period ended 31 March 2010
		Number of shares Nominal value (unaudited) ’000 RMB’000 1,400,000 1,400,000 — — 1,400,000 1,400,000	Nominal value
			1,400,000

Note:

(a) Pursuant to the resolution of the annual general meeting on 14 April 2009, bonus shares amounting to RMB400,000,000 were allotted and issued to the shareholders of the Company on the basis of 4 bonus shares for every 10 shares held by the shareholders on the record date. The registered capital of the Company increased from RMB1,000,000,000 to RMB1,400,000,000, accordingly, upon completion of the issue of bonus shares.

20. RESERVES

The amounts of the Group’s reserves and the movements therein are presented in the condensed consolidated statement of changes in equity in Section I (C) above.

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APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

20. RESERVES — continued

Statutory surplus reserve is presented as part of the reserve funds in the consolidated statement of changes in equity. According to the relevant PRC regulations and the articles of association of the Company and its subsidiaries in the PRC, these subsidiaries are required to transfer 10% of their profit after income tax, as determined under the Chinese Accounting Standards, to the statutory surplus reserve until the reserve balance reaches 50% of their respective registered capital. The transfer to this reserve must be made before the distribution of dividends to equity owners. Statutory surplus reserve can be used to make good previous years’ losses, if any, and may be converted into paid-in capital in proportion to the existing interests of equity owners, provided that the balance after such conversion is not less than 25% of the registered capital. This reserve fund can be utilised in setting off accumulated losses or increasing capital of the Company and its subsidiaries and is non-distributable other than in liquidation.

21. CONTINGENT LIABILITIES

As at 31 December 2009 and 31 March 2010, contingent liabilities not provided for in this report were as follows:

Letters of credit issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Letters of guarantee issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Guarantee given to a bank in connection with bank loan granted to a third party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 176,507 3,645,669 21,000 3,843,176	As at 31 March 2010
		(unaudited) RMB’000 334,167 4,137,197 21,000
		4,492,364

The fair value of the guarantees is not significant and therefore the Directors are of the view that no provision for financial guarantees should be made.

22. OPERATING LEASE ARRANGEMENTS

(a) As lessor

The Group leases its investment properties under operating lease arrangements, with leases negotiated for terms ranging from one to five years. As at 31 December 2009 and 31 March 2010, the Group had total future minimum lease receivables under non-cancellable operating leases with its tenants falling due as follows:

Within one year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the second to fifth years, inclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 14,522 30,726 45,248	As at 31 March 2010
		(unaudited) RMB’000 14,522 27,130
		41,652

– IV-25 –

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APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

22. OPERATING LEASE ARRANGEMENTS — continued

(b) As lessee

As at 31 December 2009 and 31 March 2010, the Group had the following total future minimum lease payments under non-cancellable operating leases in respect of land and office building:

Within one year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In the second to fifth years, inclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Beyond five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 5,990 5,862 — 11,852	As at 31 March 2010
		(unaudited) RMB’000 9,052 9,372 57
		18,481

23. COMMITMENTS

In addition to the operating lease commitments detailed in note 22(b) above, the Group had the following capital commitments as at 31 December 2009 and 31 March 2010:

Contracted, but not provided for: Property, plant and equipment and land use rights. . . . . . . . . . . . . . . . . . Authorised, but not contracted for: Property, plant and equipment and land use rights. . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 609,041 397,833 1,006,874	As at 31 March 2010
		(unaudited) RMB’000 822,976 697,122
		1,520,098

24. RELATED PARTY TRANSACTIONS

• (a) The Group had the following significant transactions with related parties during the three-month period ended 31 March 2010 whereas the Group had no significant transaction with related parties during the three-month period ended 31 March 2009:

Continuing transactions:

• (i) The Group purchased spare parts and processing services from one of its associates, Hebei Goldwind Electric Equipment Co., Ltd., amounting to approximately RMB4,422,000.

• (ii) The Group sold wind turbine generators to one of its jointly-controlled entities, Jilin Tongli Wind Power Co., Ltd., amounting to approximately RMB189,749,000.

Non-continuing transaction:

The Group purchased engineering technology services from Xinjiang Wind Power, amounting to RMB1,950,000.

In the opinion of the Directors, the transactions between the Group and the related parties were based on prices mutually agreed between the parties after taking into account the market prices.

– IV-26 –

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APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

24. RELATED PARTY TRANSACTIONS — continued

In the opinion of the Directors, the above related party transactions were conducted in the ordinary course of business.

(b) Outstanding balances with related parties

Details of the outstanding balances with related parties are set out in notes 11, 12, 14 and 15 of Section II above.

(c) Compensation of key management personnel of the Group

(c) Compensation of key management personnel of the Group
Short term employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension scheme contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Three-month period ended 31 March
	2009 (unaudited) RMB’000 2,441 106 2,547	2010
		(unaudited) RMB’000 2,596 104
		2,700

25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s principal financial instruments, other than derivatives, comprise interest-bearing bank loans, cash and cash equivalents and pledged deposits. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other financial assets and liabilities such as trade and bills receivables and trade and bills payables, which arise directly from its operations.

The main risks arising from the Group’s financial instruments are fair value and cash flow interest rate risks, foreign currency risk, credit risk and liquidity risk. Generally, the senior management of the Company meets regularly to analyse and formulate measures to manage the Group’s exposure to these risks. In addition, the board of directors of the Company holds meetings regularly to analyse and approve the proposals made by the senior management of the Company. Generally, the Group introduces conservative strategies on its risk management.

(a) Fair value and cash flow interest rate risks

Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate because of changes in market interest rates. Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. With its borrowings issued at fixed and floating interest rates, the Group is exposed to both fair value and cash flow interest rate risks.

The Group regularly reviews and monitors the mix of fixed and floating interest rate borrowings in order to manage its interest rate risk. The Group’s interest-bearing bank loans and short term deposits are stated at amortised cost and not revalued on a periodic basis. Floating rate interest income and expenses are credited/charged to profit or loss as earned/incurred.

(b) Foreign currency risk

The Group is exposed to foreign currency risk on cash and cash equivalents, receivables, payables and bank loans that are denominated in a currency other than the respective functional currencies of the Group’s entities. The currencies giving rise to this risk are primarily the Euro and United States dollar.

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APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES — continued

(c) Credit risk

The Group trades only with recognised and creditworthy parties. The Group has a credit policy in place which requires credit evaluations on all customers who wish to trade on credit terms. Receivable balances are monitored on an ongoing basis. In most instances, advance payments are required for customers of wind turbine generators. Otherwise, the credit quality of customers is assessed after taking into account the Group’s financial position and past experience with the customers.

The Group establishes an allowance for impairment that represents its estimate of losses to be incurred in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures.

The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible. At that point, the impaired financial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired financial asset.

Management evaluates the creditworthiness of the Group’s existing and prospective customers and ensures that the customers have adequate financing for the projects as well as the source of the financing.

The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statements of financial position.

Cash and bank balances are placed with banks and financial institutions which are regulated.

(d) Liquidity risk

The liquidity of the Group is primarily dependent on its ability to maintain adequate cash inflows from operations to meet its debt obligations as they fall due, and its ability to obtain external financing to meet its committed future capital expenditure. With regard to its future capital commitments and other financing requirements, the Group has already obtained banking facilities with several banks of up to an amount of RMB14,572,000,000 as at 31 March 2010, of which an amount of approximately RMB7,241,000,000 has been utilised.

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APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES — continued

(d) Liquidity risk — continued

The maturity profile of the Group’s financial liabilities as at 31 December 2009 and 31 March 2010, based on the contractual undiscounted payments, is as follows:

• 31 December 2009

Interest-bearing bank and other borrowings . . . Interest payments on bank and other borrowings . . . . . . . . . . . . . . . . . . . . . . . . . Trade and bills payables . . . . . . . . . . . . . . . . . Derivative financial instruments. . . . . . . . . . . . Financial liabilities included in other payables . Other long-term liabilities . . . . . . . . . . . . . . . . 31 March 2010 Interest-bearing bank and other borrowings . . Interest payments on bank and other borrowings . . . . . . . . . . . . . . . . . . . . . . . . Trade and bills payables . . . . . . . . . . . . . . . . Derivative financial instruments . . . . . . . . . . Financial liabilities included in other payables. . . . . . . . . . . . . . . . . . . . . . . . . . Other long-term liabilities . . . . . . . . . . . . . .	Within 1 year 1 to 2 years (audited) RMB’000 (audited) RMB’000 . 601,892 457,637 . 115,748 96,554 . 3,760,207 — . 10,746 — . 95,749 — . — — 4,584,342 554,191 Within 1 year 1 to 2 years (unaudited) RMB’000 (unaudited) RMB’000 924,245 291,269 128,721 105,481 3,545,451 — 18,064 — 122,410 — — — 4,738,891 396,750

(e) Capital management

The Group’s primary objective for managing capital is to safeguard the Group’s ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits to other stakeholders, by pricing services and products commensurately with the level of risk.

The Group sets the amount of capital in proportion to risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debts.

The Group monitors capital using a gearing ratio, which is net debt divided by the capital plus net debt. Net debt includes trade and bills payables, other payables, interest-bearing bank and other borrowings and other long-

– IV-29 –

UNAUDITED INTERIM FINANCIAL REPORT

APPENDIX IV

II. TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION — continued

25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES — continued

(e) Capital management — continued

term liabilities, less cash and cash equivalents and pledged deposits. Capital includes the equity attributable to owners of the Company stated in the consolidated statements of financial position.

The Group’s strategy is to maintain the gearing ratio at a healthy capital level in order to support its businesses. The principal strategies adopted by the Group include, but are not limited to, reviewing future cash flow requirements and the ability to meet debt repayment schedules when they fall due, maintaining a reasonable level of available banking facilities and adjusting investment plans and financing plans, if necessary, to ensure that the Group has a reasonable level of capital to support its businesses. The gearing ratios at the end of each reporting period are as follows:

Trade and bills payables (note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other payables (note 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest-bearing bank and other borrowings (note 17) . . . . . . . . . . . . . . . . . Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Cash and cash equivalents (note 13) . . . . . . . . . . . . . . . . . . . . . . . . . Pledged deposits (note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity attributable to owners of the Company . . . . . . . . . . . . . . . . . . . . . . Capital and net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gearing ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	As at 31 December 2009 (audited) RMB’000 3,760,207 2,055,786 2,624,013 23,984 (4,458,950) (218,538) 3,786,502 5,201,057 8,987,559 42.13%	As at 31 March 2010 (unaudited) RMB’000 3,545,451 1,436,099 3,069,537 22,421 (2,388,037) (323,165) 5,362,306 5,290,679 10,652,985 50.34%

26. SUBSEQUENT EVENTS

Pursuant to the resolution of the 2009 annual general meeting of the Company held on 25 March 2010, bonus shares amounting to RMB840,000,000 were allotted and issued to the shareholders of the Company on the basis of 6 bonus shares for every 10 shares held by the shareholders on the record date, 2 April 2010. The issued capital of the Company increased from RMB1,400,000,000 to RMB2,240,000,000, accordingly, upon completion of the issue of bonus shares.

In addition to the dividend mentioned above, pursuant to the resolution of the 2009 annual general meeting of the Company held on 25 March 2010, a plan to make further cash dividend of RMB787,766,000 was approved. On 26 May 2010, the Board of Directors of the Company approved the distribution of RMB784.0 million in the form of a cash dividend, subject to approval of the shareholders of the Company in a general meeting to be held on 12 June 2010, which is expected to be settled after the listing of the Company’s H Shares on The Stock Exchange of Hong Kong Limited.

– IV-30 –

APPENDIX V

PROPERTY VALUATION

The following is the text of a letter, summary of values and valuation certificates, prepared for the purpose of incorporation in this prospectus received from Jones Lang LaSalle Sallmanns Limited, an independent valuer, in connection with its valuation as at 31 March 2010 of the property interests of the Group.

==> picture [130 x 42] intentionally omitted <==

7 June 2010

The Board of Directors

Xinjiang Goldwind Science & Technology Co., Ltd.

107 Shanghai Road Economic & Technological Development Zone Urumqi City Xinjiang Uygur Autonomous Region The PRC

Dear Sirs,

In accordance with your instructions to value the properties in which Xinjiang Goldwind Science & Technology Co., Ltd. (the “Company”) and its subsidiaries (hereinafter together referred to as the “Group”) have interests in the People’s Republic of China (the “PRC”), Germany and the United States of America, we confirm that we have carried out inspections, made relevant enquiries and searches and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the capital values of the property interests as at 31 March 2010 (the “date of valuation”).

Our valuation of the property interests represents the market value which we would define as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion”.

We have valued the property interests of property nos. 3, 5, 6 and 12 in Group I, Group IV, property no. 26 in Group V by the direct comparison approach assuming sale of the property interests in their existing state with the benefit of immediate vacant possession and by making reference to comparable sales transactions as available in the relevant market.

Where, due to the nature of the buildings and structures of the properties in Group I (excluding property nos. 3, 5, 6 and 12), Group II and property no. 25 in Group Vand the particular locations in which they are situated, there are unlikely to be relevant market comparable sales readily available, the property interests have therefore been valued on the basis of their depreciated replacement cost.

Depreciated replacement cost is defined as “the current cost of replacing an asset with its modern equivalent asset less deductions for physical deterioration and all relevant forms of obsolescence and optimization.” It is based on an estimate of the market value for the existing use of the land, plus the current cost of replacement of the improvements, less deductions for physical deterioration and all relevant forms of obsolescence and optimization. The depreciated replacement cost of the property interest is subject to adequate potential profitability of the concerned business.

In valuing the property interests in Group III which are currently under development, we have assumed that they will be developed and completed in accordance with the latest development proposals provided to us by the Group. In arriving at our opinion of values, we have taken into account the construction costs and professional fees

– V-1 –

APPENDIX V

PROPERTY VALUATION

relevant to the stage of construction as at the date of valuation and the remainder of the costs and fees to be expended to complete the developments.

We have attributed no commercial value to the property interests in Group VI, Group VII and Group VIII, which are leased by the Group, due either to the short-term nature of the lease or the prohibition against assignment or sub-letting or otherwise due to the lack of substantial profit rentals.

Our valuation has been made on the assumption that the seller sells the property interests in the market without the benefit of a deferred term contract, leaseback, joint venture, management agreement or any similar arrangement, which could serve to affect the values of the property interests.

No allowance has been made in our report for any charge, mortgage or amount owing on any of the property interests valued nor for any expense or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and outgoings of an onerous nature, which could affect their values.

In valuing the property interests, we have complied with all the requirements contained in Chapter 5 and Practice Note 12 to the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited; the RICS Valuation Standards (6th Edition) published by the Royal Institution of Chartered Surveyors; and the HKIS Valuation Standards on Properties (1st Edition 2005) published by the Hong Kong Institute of Surveyors.

We have relied to a very considerable extent on the information given by the Group and have accepted advice given to us on such matters as tenure, planning approvals, statutory notices, easements, particulars of occupancy, lettings, and all other relevant matters.

We have been shown copies of various title documents including State-owned Land Use Rights Certificates (“LURCs”), Building Ownership Certificates (“BOCs”), and official plans relating to the property interests in the PRC and have caused searches to be made at the relevant title registries in respect of overseas properties. Where possible, we have examined the original documents to verify the existing title to the property interests in the PRC and any material encumbrance that might be attached to the property interests or any tenancy amendment. We have relied considerably on the advice given by the Company’s PRC legal advisers — Xinjiang Tianyang Law Firm, concerning the validity of the property interests in the PRC.

We have not carried out detailed measurements to verify the correctness of the areas in respect of the properties but have assumed that the areas shown on the title documents and official site plans handed to us are correct. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations. No on-site measurement has been taken.

We have inspected the exterior and, where possible, the interior of the properties. However, we have not carried out investigation to determine the suitability of the ground conditions and services for any development thereon. Our valuation has been prepared on the assumption that these aspects are satisfactory and that no unexpected cost and delay will be incurred during construction. Moreover, no structural survey has been made, but in the course of our inspection, we did not note any serious defect. We are not, however, able to report whether the properties are free of rot, infestation or any other structural defect. No tests were carried out on any of the services.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Group. We have also sought confirmation from the Group that no material factors have been omitted from the information supplied. We consider that we have been provided with sufficient information to arrive an informed view, and we have no reason to suspect that any material information has been withheld.

– V-2 –

APPENDIX V

PROPERTY VALUATION

Unless otherwise stated, all monetary figures stated in this report are in Renminbi (RMB). The exchange rates adopted in our valuations are approximately EUR1 = RMB9.1588 and USD1 = RMB6.8263 which were approximately the prevailing exchange rate as at the date of valuation.

Our valuation is summarized below and the valuation certificates are attached.

Yours faithfully, for and on behalf of Jones Lang LaSalle Sallmanns Limited Paul L. Brown B.Sc. FRICS FHKIS Director

Note: Paul L. Brown is a Chartered Surveyor who has 27 years’ experience in the valuation of properties in the PRC and extensive property valuation experience in Hong Kong and the United Kingdom, as well as relevant valuation experience in the Asia-Pacific region, Germany and the United States of America.

– V-3 –

APPENDIX V

PROPERTY VALUATION

SUMMARY OF VALUES

Group I — Property interests held and occupied by the Group in the PRC

No. 1. 2. 3.	Property 3 parcels of land, 4 buildings and various structures No. 109 Shanghai Road Economic & Technological Development Zone Urumqi City Xinjiang Uygur Autonomous Region The PRC 2 parcels of land, 2 buildings and various structures No. 151 Huangshan Street Economic & Technological Development Zone Phase II Urumqi City Xinjiang Uygur Autonomous Region The PRC A 2-storey building No. 2 Shang Er Qu No. 1 Shanghai Road Economic & Technological Development Zone Urumqi City Xinjiang Uygur Autonomous Region The PRC	Capital value in existing state as at 31 March 2010 RMB 79,402,000 92,186,000 No commercial value	Interest attributable to the Group 100% 100% 100%	Capital value attributable to the Group as at 31 March 2010
				RMB 79,402,000 92,186,000 No commercial value

– V-4 –

APPENDIX V

PROPERTY VALUATION

No. 4. 5. 6. 7. 8.	Property A parcel of land, 4 buildings and various structures No. 19 Kangding Street Beijing Economic & Technological Development Area Beijing The PRC 60 residential units of Guorong International Plaza No. 7 Ronghuazhong Road Beijing Economic & Technological Development Area Beijing The PRC 20 units of Zhujiang Yijing Residential Community Majuqiao National Environmental Protection Industrial Park Tongzhou District Beijing The PRC A parcel of land, an industrial building and various structures No. 83 Xingfu South Road Rare-Earth Hi-Tech Industrial Development Zone Baotou City Inner Mongolia Autonomous Region The PRC A parcel of land, an industrial building and various structures located at Jingsan Road Xiyuan Jiuquan Industrial Park West Park Jiuquan City Gansu Province The PRC	Capital value in existing state as at 31 March 2010 RMB 104,933,000 49,539,000 No commercial value 55,987,000 23,146,000	Interest attributable to the Group 100% 100% 100% 100% 100%	Capital value attributable to the Group as at 31 March 2010
				RMB 104,933,000 49,539,000 No commercial value 55,987,000 23,146,000

– V-5 –

APPENDIX V

PROPERTY VALUATION

No. 9. 10. 11. 12.	Property 2 parcels of land, 4 buildings and various structures located at Ming’an Town Damao Qi Baotou City Inner Mongolia Autonomous Region The PRC A parcel of land, 3 buildings and various structures located at Halajar Grassland Yegezituobie Xiang Buerjin County Altay City Xinjiang Uygur Autonomous Region The PRC A parcel of land, 2 buildings and various structures located at Hexinggong Village Tunkendui Town Shangdu County Ulanqab City Inner Mongolia Autonomous Region The PRC Units 1302, 1303 and 1304 on Level 13 Fortune International Centre No. 17 Daliushu Road Haidian District Beijing The PRC	Capital value in existing state as at 31 March 2010 RMB 12,438,000 6,090,000 8,750,000 18,924,000	Interest attributable to the Group 100% 100% 51% 83.33%	Capital value attributable to the Group as at 31 March 2010
				RMB 12,438,000 6,090,000 4,463,000 15,769,000

– V-6 –

APPENDIX V

PROPERTY VALUATION

No. Property Capital value in existing state as at 31 March 2010 Interest attributable to the Group RMB 13. 72 parcels of land, 2 buildings and various structures located at Shangwopu Village Dafuyingzi Xiang Songshan District Chifeng City Inner Mongolia Autonomous Region The PRC 4,596,000 51% Sub-total: 455,991,000 Group II — Property interests owned and occupied by the Group in Germany No. Property Capital value in existing state as at 31 March 2010 Interest attributable to the Group RMB 14. Factory complex located at Im Lagental 6 D-66539 Neunkirchen Saarland Germany 66,401,000 100% 15. Factory complex located at Dieselstraße 12 59356 Diepholz Germany 19,233,000 63% Sub-total: 85,634,000	Capital value attributable to the Group as at 31 March 2010
	RMB 2,344,000 446,297,000
	Capital value attributable to the Group as at 31 March 2010
	RMB 66,401,000 12,117,000 78,518,000

– V-7 –

APPENDIX V

PROPERTY VALUATION

Group III — Property interests held under development by the Group in the PRC

No. 16. 17. 18. 19.	Property A parcel of land, a building and various structures under construction located at the western side of Shanqi Road Jingwei Industrial Park Xi’an Economic & Technological Development Zone Xi’an City Shaanxi Province The PRC A parcel of land, a building and various structures under construction located at Wangfuzhan Town Qianguo County Songyuan City Jilin Province The PRC 3 parcels of land, a building and various structures under construction located at Laobaishan Mountain Xinqing District Yinchun City Heilongjiang Province The PRC A parcel of land located at Mayitasi Village Lamazhao Xiang Emin County Xinjiang Uygur Autonomous Region The PRC	Capital value in existing state as at 31 March 2010 RMB No commercial value No commercial value No commercial value No commercial value	Interest attributable to the Group 100% 51% 66% 100%	Capital value attributable to the Group as at 31 March 2010
				RMB No commercial value No commercial value No commercial value No commercial value

– V-8 –

APPENDIX V

PROPERTY VALUATION

No. 20. 21.	Property A parcel of land, a building and various structures under construction located at Guazhou County Jiuquan City Gansu Province The PRC A parcel of land, 2 buildings and various structures under construction located at the northern side of XintuanheVillage Development Zone Dafeng City Jiangsu Province The PRC Sub-total:	Capital value in existing state as at 31 March 2010 RMB 3,694,000 13,521,000 17,215,000	Interest attributable to the Group 100% 100%	Capital value attributable to the Group as at 31 March 2010
				RMB 3,694,000 13,521,000 17,215,000

Group IV — Property interests held for future development by the Group in the PRC

No. 22.	Property A parcel of land located at No. X21 land plot of the south of New District Beijing Economic & Technological Development Area Beijing The PRC	Capital value in existing state as at 31 March 2010 RMB 43,591,000	Interest attributable to the Group 100%	Capital value attributable to the Group as at 31 March 2010
				RMB 43,591,000

– V-9 –

APPENDIX V

PROPERTY VALUATION

No. Property Capital value in existing state as at 31 March 2010 Interest attributable to the Group RMB 23. A parcel of land located at the extension of Phase II Economic & Technological Development Zone Urumqi City Xinjiang Uygur Autonomous Region The PRC No commercial value 100% 24. A parcel of land No. 118 Tianyuan Road Jiangning Science Park Jiangning District Nanjing City Jiangsu Province The PRC 26,006,000 100% Sub-total: 69,597,000 Group V — Property interests held for investment by the Group in the PRC No. Property Capital value in existing state as at 31 March 2010 Interest attributable to the Group RMB 25. 2 parcels of land, 11 buildings and various structures No. 501 Lushan Street Economic & Technological Development Zone Urumqi City Xinjiang Uygur Autonomous Region The PRC 143,692,000 100% 26. Unit 1201 on Level 12 Fortune Building No. 17 Daliushu Road Haidian District Beijing The PRC 6,192,000 83.33% Sub-total: 149,884,000	Capital value attributable to the Group as at 31 March 2010
	RMB No commercial value 26,006,000 69,597,000
	Capital value attributable to the Group as at 31 March 2010
	RMB 143,692,000 5,160,000 148,852,000

– V-10 –

APPENDIX V

PROPERTY VALUATION

Group VI — Property interests leased and occupied by the Group in the PRC

		Capital value	Capital value		Capital value
		in existing state		Interest	attributable to the Group
			as at	attributable	as at
No.	Property	**31 **	March 2010	to the Group	31 March 2010
			RMB		RMB
27.	2 buildings	No commercial value		75%	No commercial value
	located at
	Parts A, B and C of
	Dichang Industrial Park
	Beijing Economic &
	Technological
	Development Area
	Beijing
	The PRC
28.	A unit of Block 3	No commercial value		100%	No commercial value
	Qinyinyuan
	Laiyin Dongjun Garden
	Jiangning District
	Nanjing City
	Jiangsu Province
	The PRC
	Sub-total:		Nil		Nil
**Group VII — Property interests leased and occupied by the **				Group in Germany
		Capital value			Capital value
		in existing state		Interest	attributable to the Group
			as at	attributable	as at
No.	Property	**31 **	March 2010	to the Group	31 March 2010
			RMB		RMB
29.	Wohnung Nr.	No commercial value		100%	No commercial value
	002.0.0018.07 im Hause
	Pestalozzistr. 5, 66539
	Neunkirchen, Saarland
	Germany
30.	Wohnung Nr.	No commercial value		100%	No commercial value
	002.0.0018.07 im Hause
	Pestalozzistr. 9, 66539
	Neunkirchen, Saarland
	Germany
31.	An industrial building	No commercial value		63%	No commercial value
	D 49356 Diepholz
	Germany
32.	3 Geschoss Rechts	No commercial value		100%	No commercial value
	Rombachstrass 2
	Neunkirchen, Saarland
	Germany

– V-11 –

APPENDIX V

PROPERTY VALUATION

		Capital value		**Capital **	value
		in existing state	Interest	attributable to the Group
		as at	attributable		as at
No.	Property	31 March 2010	to the Group	31 March 2010
		RMB			RMB
33.	3 Geschoss Links	No commercial value	100%	No commercial	value
	Rombachstrass 2
	Neunkirchen, Saarland
	Germany
	Sub-total:	Nil			Nil
**Group VIII — Property interest leased and occupied by the **			Group in the United States of America
		Capital value		**Capital **	value
		in existing state	Interest	attributable to the Group
		as at	attributable		as at
No.	Property	31 March 2010	to the Group	31 March 2010
		RMB			RMB
34.	2 parcels of land located	No commercial value	72.75%	No commercial	value
	at the west half and the
	east half of the southwest
	quarter, Section 18
	Township 106
	Range 46
	Pipestone County
	Minnesota
	The United States of
	America
	Sub-total:	Nil			Nil
	Grand total:	778,321,000		760,479,000

– V-12 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Group I — Property interests held and occupied by the Group in the PRC

No. 1.	Property 3 parcels of land, 4 buildings and various structures No. 109 Shanghai Road Economic & Technological Development Zone Urumqi City Xinjiang Uygur Autonomous Region The PRC	Description and tenure The property comprises 3 parcels of land with a total site area of approximately 38,828.46 sq.m. and 4 buildings and various structures erected thereon which were completed in various stages between 2002 and 2008. The buildings have a total gross floor area of approximately 19,410.07 sq.m. The buildings include 2 industrial buildings and 2 office buildings. The structures mainly include ancillary cabins. The land use rights of the property have been granted for various terms with the expiry dates on 10 March 2048, 7 August 2050 and 18 October 2057 for industrial and commercial uses respectively.	Particulars of occupancy The property is currently occupied by the Group for production, office and ancillary purposes.	Capital value in existing state as at 31 March 2010
				RMB 79,402,000 100% interest attributable to the Group: RMB79,402,000

Notes:

1. Pursuant to 2 State-owned Land Use Rights Grant Contracts and 2 Supplementary Contracts dated 15 November 2007 and 21 July 2008 entered into between the State-owned Land and Resources Sub-bureau of Urumqi Economic & Technological Development Zone and the Company, the land use rights of 2 parcels of land with a total site area of approximately 20,770.12 sq.m. were contracted to be granted to the Company for various terms for industrial and commercial uses respectively. The total land premium was RMB11,910,000.

2. Pursuant to 3 LURCs — Wu Guo Yong (2008) Di No. 0023470, Wu Guo Yong (2004) Zi Di No. 0007953 and Wu Guo Yong (2008) Di No. 0024486, the land use rights of the property with a total site area of approximately 38,828.46 sq.m. have been granted to the Company for various terms with the expiry dates on 10 March 2048, 7 August 2050 and 18 October 2057 for industrial and commercial uses respectively.

– V-13 –

APPENDIX V PROPERTY VALUATION

1. Pursuant to 11 BOCs — Wu Fang Quan Zheng Jing Ji Ji Shu Kai Fa Qu Zi Di Nos. 2009344880 to 2009344886 and 2009344736, Wu Fang Quan Zheng Wu Shi Jing Ji Kai Fa Qu Zi Di Nos. 2006066645 and 2006066652, Wu Fang Quan Zheng Jing Ji Kai Fa Qu Zi Di No. 00426030, 4 buildings of the property with a total gross floor area of approximately 19,410.07 sq.m. are owned by the Company.

2. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

3. a. All land premiums have been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURCs; and

4. b. The Group has legally obtained the BOCs of the buildings and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the buildings of the property.

– V-14 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Description and tenure

No. Property

1. 2 parcels of land, The property comprises 2 2 buildings and parcels of land with a total various structures site area of approximately No. 151 Huangshan Street 123,897.32 sq.m. and 2 Economic & buildings and various Technological structures erected thereon Development Zone which were completed in Phase II 2008. Urumqi City The buildings have a total

Xinjiang Uygur Autonomous Region gross floor area of The PRC approximately 12,646.5

The buildings have a total gross floor area of approximately 12,646.5 sq.m.

Capital value in existing state Particulars of as at occupancy 31 March 2010 RMB The property is 92,186,000 currently occupied by the Group for 100% interest production, office attributable to and ancillary the Group: purposes. RMB92,186,000

The buildings include an industrial building and an ancillary building.

The structures mainly include boundary fences, roads and gates.

The land use rights of the property have been granted for terms expiring on 14 April 2056 for industrial use.

Notes:

1. Pursuant to a State-owned Land Use Rights Grant Contract and a Supplementary Contract dated 10 July 2006 and 18 July 2006 respectively entered into between the State-owned Land and Resources Sub-bureau of Urumqi Economic & Technological Development Zone, the Company and Xinjiang Xinfeng Installation Engineering Co., Ltd. (“Xinjiang Xinfeng”, an independent third party), the land use rights of a parcel of land with a site area of approximately 153,879.34 sq.m. were contracted to be granted to the Company and Xinjiang Xinfeng for a term of 50 years for industrial use. The land premium was RMB11,542,300.5.

2. Pursuant to an Agreement entered into between the Company and Xinjiang Xinfeng, Xinjiang Xinfeng was contracted to pay the Company a consideration of RMB2,317,500 for obtaining the land use rights of a portion of the land mentioned in note 1 with a site area of approximately 30,000 sq.m. which have been excluded from our valuation.

3. Pursuant to 2 LURCs — Wu Guo Yong (2007) Di Nos. 0021947 and 0021948, the land use rights of the property with a total site area of approximately 123,897.32 sq.m. have been granted to the Company for terms expiring on 14 April 2056 for industrial use.

4. Pursuant to 2 BOCs — Wu Fang Quan Zheng Jing Ji Ji Shu Kai Fa Qu Zi Di Nos. 2009359101 and 2009359099, 2 buildings of the property with a total gross floor area of approximately 12,646.5 sq.m. are owned by the Company.

5. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

6. a. All land premiums have been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURCs; and

7. b. The Group has legally obtained the BOCs of the buildings and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the buildings of the property.

– V-15 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 3.	Property A 2-storey building No. 2 Shang Er Qu No. 1 Shanghai Road Economic & Technological Development Zone Urumqi City Xinjiang Uygur Autonomous Region The PRC	Description and tenure The property comprises a 2-storey building which was completed in 1993. The building has a gross floor area of approximately 160 sq.m.	Particulars of occupancy The property is currently occupied by the Group for staff quarters purpose.	Capital value in existing state as at 31 March 2010
				RMB No commercial value

Notes:

1. Pursuant to a BOC — Wu Fang Quan Zheng Jing Ji Kai Fa Qu Zi Di No. 00252883, a building with a gross floor area of approximately 160 sq.m. is owned by the Company.

2. Pursuant to a LURC — Wu Guo Yong (2006) Di No. 0019385, the land use rights of a parcel of land, on which the property is located, with a site area of approximately 10,191.35 sq.m. have been granted to Urumqi Economic & Technological Development Zone Construction and Development Co., Ltd. (“Construction and Development Co., Ltd.”) for a term expiring on 13 July 2043 for commercial and industrial use.

3. Pursuant to an Undertaking Letter dated 24 February 2010 entered into between Construction and Development Co., Ltd. and the Company, the land use rights of apportioned land area of the building mentioned in note 1 will be transferred to the Company.

4. We have not been provided with the LURC of the property which is under the name of the Company.

5. In the valuation of the property, we have attributed no commercial value to the building with a gross floor area of approximately 160 sq.m. of which the Group has not obtained the LURC under the name of the Company. However, for reference purpose, we are of the opinion that the capital value of the building as at the date of valuation would be RMB448,000 assuming all relevant title certificates under the name of the Company have been obtained and it could be freely transferred.

6. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

7. a. After signing the State-owned Land Use Rights Transfer Contract with Construction and Development Co., Ltd., there will be no material legal impediment for the Group to obtain relevant LURC of the property; and

8. b. After obtaining the LURC of the building, the Group will have the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the building.

– V-16 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 4.	Property A parcel of land, 4 buildings and various structures No. 19 Kangding Street Beijing Economic & Technological Development Area Beijing The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 40,865.90 sq.m. and 4 buildings and various structures erected thereon which were completed in 2007 and 2008. The buildings have a total gross floor area of approximately 24,539.66 sq.m. The buildings include an industrial building, 2 ancillary buildings and an office building. The structures mainly include playground, parking lots, roads and gates.	Particulars of occupancy The property is currently occupied by the Group for production, office and ancillary purposes.	Capital value in existing state as at 31 March 2010
				RMB 104,933,000 100% interest attributable to the Group: RMB104,933,000

The land use rights of the property have been granted for a term of 50 years expiring on 13 April 2056 for industrial use.

Notes:

1. Beijing Goldwind Science & Creation Wind Power Equipment Co., Ltd. (“Beijing Goldwind”) is a wholly-owned subsidiary of the Company.

2. Pursuant to a State-owned Land Use Rights Grant Contract dated 14 April 2006 entered into between the State-owned Land Resources and Housing Administrative Bureau of Beijing Economic & Technological Development Area and Beijing Goldwind, the land use rights of the property were contracted to be granted to Beijing Goldwind for a term of 50 years for industrial use. The land consideration was RMB19,411,302.5.

1. Pursuant to a LURC — Kai You Xian Guo Yong (2006) Di No. 10, the land use rights of the property with a site area of approximately 40,865.90 sq.m. have been granted to Beijing Goldwind for a term of 50 years expiring on 13 April 2056 for industrial use.

1. Pursuant to a BOC — X Jing Fang Quan Zheng Kai Zi Di No. 002679, 4 buildings of the property with a total gross floor area of approximately 24,539.66 sq.m. are owned by Beijing Goldwind.

– V-17 –

APPENDIX V PROPERTY VALUATION

1. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

2. a. The land premium has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURC; and

3. b. The Group has legally obtained the BOC of the buildings and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the buildings of the property.

– V-18 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state Description and Particulars of as at No. Property tenure occupancy 31 March 2010 RMB 5. 60 residential units of The property comprises The property is 49,539,000 Guorong International 20 units on Level 17 of currently occupied by Plaza a 23-storey building the Group for staff 100% interest No. 7 Ronghuazhong known as Guorong quarters purpose. attributable to Road International Plaza the Group: Beijing Economic & Block A and 40 units RMB49,539,000 Technological on Levels 12 and 13 of Development Area a 17-storey building Beijing known as Guorong The PRC International Plaza Block C which were completed in 2008. The units have a total gross floor area of approximately 2,514.68 sq.m.

Notes:

1. Beijing Goldwind Science & Creation Wind Power Equipment Co., Ltd. (“Beijing Goldwind”) is a wholly-owned subsidiary of the Company.

2. Pursuant to 60 Commodity Property Pre-Sale Contracts dated between 24 August 2007 and 27 September 2007 entered into between Beijing Zhujiang Realty Development Co., Ltd. and Beijing Goldwind, 60 units of the property with a total gross floor area of approximately 2,520.48 sq.m. were contracted to be sold to Beijing Goldwind at a total consideration of RMB20,432,864.

3. Pursuant to 60 BOCs — X Jing Fang Quan Zheng Kai Zi Di Nos. 003695 to 003703, 003705, 003707 to 003710, 003712, 003748 to 003771, 003790, 003791, 003793 to 003808 and 004000 to 004002, 60 units of the property with a total gross floor area of approximately 2,514.68 sq.m. are owned by Beijing Goldwind.

4. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

5. a. After the relevant regulations regarding the land use rights certificates of residential properties have been constituted by Beijing Municipal State-owned Land and Resource Bureau, there will be no material legal impediment for the Group to obtain the relevant LURCs of the property; and

6. b. The Group has legally obtained the BOCs of the units and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the units of the property.

– V-19 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

• Capital value

• in existing state

• Particulars of as at

• No. Property Description and tenure occupancy 31 March 2010 RMB

• 1. 20 units of Zhujiang The property comprises The property is No commercial value Yijing Residential 20 units of 4 residential currently occupied by Community buildings known as the Group for staff Majuqiao National Zhujiang Yijing quarters purpose. Environmental Blocks 203, 206, 209 Protection Industrial and 212 which were Park completed in 2009. Tongzhou District Beijing The units have a total The PRC gross floor area of approximately 1,867.73 sq.m.

Notes:

1. Beijing Goldwind Science & Creation Wind Power Equipment Co., Ltd. (“Beijing Goldwind”) is a wholly-owned subsidiary of the Company.

2. Pursuant to 20 Commodity Property Pre-Sale Contracts dated 15 February 2008 entered into between Beijing Guorong Real Estate Co., Ltd. and Beijing Goldwind, 20 units with a total gross floor area of approximately 1,867.73 sq.m. were contracted to be sold to Beijing Goldwind at a total consideration of RMB14,250,007.

3. We have not been provided with any title certificates of the property.

4. In the valuation of the property, we have attributed no commercial value to the property of which the Group has not obtained any title certificates. However, for reference purpose, we are of the opinion that the capital value of the property as at the date of valuation would be RMB27,269,000 assuming all relevant title certificates have been obtained and it could be freely transferred.

5. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

6. a. After the relevant regulations regarding the land use rights of residential properties have been constituted by Beijing Municipal Stateowned Land and Resource Bureau, there will be no material legal impediment for the Group to obtain the relevant LURCs of the property;

7. b. As the Group has signed the Commodity Property Pre-Sale Contracts with Beijing Guorong Real Estate Co., Ltd. and the consideration has been fully paid, there is no material legal impediment for the Group to obtain the relevant BOCs of the property;

8. c. The Group is not in breach of the relevant laws and regulations and not subject to any risk of penalties or sanctions although the Group has not obtained the BOCs of these units; and

9. d. After obtaining the BOCs of these units, the Group will have the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of them.

– V-20 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 7.	Property A parcel of land, an industrial building and various structures No. 83 Xingfu South Road Rare-Earth Hi-Tech Industrial Development Zone Baotou City Inner Mongolia Autonomous Region The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 62,750 sq.m. and an industrial building and various structures erected thereon which were completed in 2008 and 2009. The industrial building has a gross floor area of approximately 12,370.46 sq.m. The structures mainly include roads and boundary fences. The land use rights of the property have been granted for a term expiring on 20 June 2057 for industrial use.	Particulars of occupancy The property is currently occupied by the Group for production purpose.	Capital value in existing state as at 31 March 2010
				RMB 55,987,000 100% interest attributable to the Group: RMB55,987,000

Notes:

1. Inner Mongolia Goldwind Science & Technology Co., Ltd. (“Inner Mongolia Goldwind”) is a wholly-owned subsidiary of the Company.

2. Pursuant to a State-owned Land Use Rights Grant Contract dated 20 June 2007 entered into between Baotou Rare-Earth Hi-Tech Industrial Development Zone Branch of Inner Mongolia Autonomous Region State-owned Land and Resource and Inner Mongolia Goldwind, the land use rights of the property were contracted to be granted to Inner Mongolian Goldwind for a term of 50 years for industrial use. The land premium was RMB21,084,000.

3. Pursuant to a LURC — Bao Gao Xin Guo Yong (2007) Di No. 039, the land use rights of the property with a site area of approximately 62,750 sq.m. have been granted to Inner Mongolia Goldwind for a term expiring on 20 June 2057 for industrial use.

4. Pursuant to a BOC — Bao Fang Quan Zheng Kai Zi Di No. 474999, a building of the property with a gross floor area of approximately 12,370.46 sq.m. is owned by Inner Mongolia Goldwind.

5. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

6. a. The land premium has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURC; and

7. b. The Group has legally obtained the BOC of the building and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the building of the property.

– V-21 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 8.	Property A parcel of land, an industrial building and various structures located at Jingsan Road Xiyuan Jiuquan Industrial Park West Park Jiuquan City Gansu Province The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 67,093 sq.m. and an industrial building and various structures erected thereon which were completed in 2009. The industrial building has a gross floor area of approximately 6,058.91 sq.m. The structures mainly include boundary fences, roads and gates. The land use rights of the property have been granted for a term expiring on 23 October 2055 for industrial use.	Particulars of occupancy The property is currently occupied by the Group for production purpose.	Capital value in existing state as at 31 March 2010
				RMB 23,146,000 100% interest attributable to the Group: RMB23,146,000

Notes:

1. Gansu Goldwind Wind Power Equipment Manufacture Co., Ltd. (“Gansu Goldwind”) is a wholly-owned subsidiary of the Company.

2. Pursuant to a State-owned Land Use Rights Transfer Contract dated 28 June 2008 entered into between Jiuquan Industrial Park Development & Investment Co., Ltd. and Gansu Goldwind, the land use rights of of the property with a site area of approximately 67,093 sq.m. were contracted to be transferred to Gansu Goldwind. The land consideration was RMB1,341,860.

3. Pursuant to a LURC — Jiu Guo Yong (2008) Di No. 13017, the land use rights of the property with a site area of approximately 67,093 sq.m. have been granted to Gansu Goldwind for a term expiring on 23 October 2055 for industrial use.

4. Pursuant to a BOC — Fang Quan Zheng Jiu (Gu) Zi Di No. 72-1-1--0, a building of the property with a gross floor area of approximately 6,058.91 sq.m. is owned by Gansu Goldwind.

5. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, in ter alia, the following:

6. a. The land premium has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURC; and

7. b. The Group has legally obtained the BOC of the building and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the building of the property.

– V-22 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 9.	Property 2 parcels of land, 4 buildings and various structures located at Ming’an Town Damao Qi Baotou City Inner Mongolia Autonomous Region The PRC	Description and tenure The property comprises 2 parcels of land with a total site area of approximately 40,907 sq.m. and 4 buildings and various structures erected thereon which were completed in 2009. The buildings have a total gross floor area of approximately 3,300.13 sq.m. The buildings include 2 industrial buildings and 2 ancillary buildings. The structures mainly include boundary fences, roads and water pools. The land use rights of a parcel of land of the property with a site area of approximately 18,036 sq.m. have been granted for a term without definite expiry date for wind power generation use.	Particulars of occupancy The property is currently occupied by the Group for production and ancillary purposes.	Capital value in existing state as at 31 March 2010
				RMB 12,438,000 100% interest attributable to the Group: RMB12,438,000

Notes:

1. Damao Qi Tianrun Wind Power Co., Ltd. (“Damao Qi Tianrun”) is an indirectly wholly-owned subsidiary of the Company.

2. Pursuant to a State-owned Land Use Rights Grant Contract dated 9 August 2007 entered into between the State-owned Land and Resource Bureau of Baotou Damao Qi and Damao Qi Tianrun, the land use rights of a parcel of land of the property with a site area of approximately 18,036 sq.m. were contracted to be granted to Damao Qi Tianrun for a term for industrial use. The land premium was RMB1,082,160.

3. Pursuant to a State-owned Land Use Rights Grant Contract entered into between Baotou Damao Qi State-owned Land and Resource Bureau and Damao Qi Tianrun, the land use rights of a parcel of land of the property with a site area of approximately 22,871 sq.m. were contracted to be granted to Damao Qi Tianrun for a term of 50 years for industrial use. The land consideration was RMB2,378,600.

4. As confirmed by the Group, foundation works of wind turbines were being constructed on the land mentioned in note 3 as at the date of valuation. We have excluded the constructed wind turbines from our valuation as they are production facilities without any property interests.

– V-23 –

APPENDIX V

PROPERTY VALUATION

1. Pursuant to a LURC — Da Guo Yong (2008) Di No. 10553, the land use rights of the parcel of land mentioned in note 2 with a site area of approximately 18,036 sq.m. have been granted to Damao Qi Tianrun for a term without definite expiry date for wind power generation use.

2. We have not been provided with the LURC for the parcel of land mentioned in note 3 of the property.

3. Pursuant to a BOC — Fang Quan Zheng Meng Zi Di No. 188011000129, 4 buildings of the property with a total gross floor area of approximately 3,300.13 sq.m. are owned by Damao Qi Tianrun.

4. In the valuation of the property, we have attributed no commercial value to the parcel of land with a site area of approximately 22,871 sq.m. of which the Group has not obtained the LURC. However, for reference purpose, we are of the opinion that the capital value of the land as at the date of valuation would be RMB2,379,000 assuming all relevant title certificates have been obtained and it could be freely transferred.

5. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

6. a. The land premium mentioned in note 2 has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the parcel of land mentioned in note 5 in accordance with the valid term stipulated in the LURC;

7. b. As the Group has signed the State-owned Land Use Rights Grant Contract with relevant Land and Resources Bureau, there is no material legal impediment for the Group to obtain the LURC of the parcel of land mentioned in note 6. The Group is not in breach of any relevant laws and regulations for the absence of the LURC. However, the Group’s rights in respect of this parcel of land are not fully protected under the PRC laws before obtaining the LURC; and

8. c. The Group has legally obtained the BOC of the buildings and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the buildings of the property.

– V-24 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 10.	Property A parcel of land, 3 buildings and various structures located at Halajar Grassland Yegezituobie Xiang Buerjin County Altay City Xinjiang Uygur Autonomous Region The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 26,051 sq.m. and 3 buildings and various structures erected thereon which were completed in 2008. The buildings have a total gross floor area of approximately 1,472.69 sq.m. The buildings mainly include a composite building and 2 ancillary buildings. The structures mainly include boundary fences, roads and gates. The land use rights of the property have been granted for a term expiring on 10 December 2059 for industrial use.	Particulars of occupancy The property is currently occupied by the Group for production purpose.	Capital value in existing state as at 31 March 2010
				RMB 6,090,000 100% interest attributable to the Group: RMB6,090,000

Notes:

1. Buerjin Tianrun Wind Power Co., Ltd. (“Buerjin Tianrun”) is an indirectly wholly-owned subsidiary of the Company.

2. Pursuant to a State-owned Land Use Rights Grant Contract dated 1 December 2009 entered into between Land and Resource Bureau of Yili Kazak Autonomous Prefecture Buerjin County and Buerjin Tianrun, the land use rights of the property with a site area of approximately 26,051 sq.m. were contracted to be granted to Buerjin Tianrun for a term of 50 years for industrial use. The land consideration was RMB1,094,142.

3. Pursuant to a LURC — Bu Guo Yong (2009) Di No. 0227, the land use rights of the property with a site area of approximately 26,051 sq.m. have been granted to Buerjin Tianrun for a term expiring on 10 December 2059 for industrial use.

4. Pursuant to a BOC — Fang Quan Zheng Bu Fang Zi Di No. 00005201, 3 buildings of the property with a total gross floor area of approximately 1,472.69 sq.m. are owned by Buerjin Tianrun.

5. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

6. a. The land premium has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURC; and

7. b. The Group has legally obtained the BOCs of the buildings and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the buildings of the property.

– V-25 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 11.	Property A parcel of land, 2 buildings and various structures located at Hexinggong Village Tunkendui Town Shangdu County Ulanqab City Inner Mongolia Autonomous Region The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 19,504 sq.m. and 2 buildings and various structures erected thereon which were completed in 2009. The buildings have a total gross floor area of approximately 1,834.81 sq.m. The buildings include a composite building and an ancillary building. The structures mainly include boundary fences, roads and retaining boundary fence. The land use rights of the property have been granted for a term of 50 years expiring in 2059 for industrial use.	Particulars of occupancy The property is currently occupied by the Group for production and ancillary purposes.	Capital value in existing state as at 31 March 2010
				RMB 8,750,000 51% interest attributable to the Group: RMB4,463,000

Notes:

1. Shangdu Tianrun Wind Power Co., Ltd. (“Shangdu Tianrun”) is an indirectly 51% interest owned subsidiary of the Company.

2. Pursuant to an Agreement entered into between the People’s Government of Inner Mongolia Autonomous Region Shangdu County and Shangdu Tianrun, the land use rights of the property with a site area of approximately 19,504 sq.m. were contracted to be granted to Shangdu Tianrun. The land premium was RMB702,144.

3. Pursuant to a LURC — Shang Guo Yong (Tu) Di No. 2009-56, the land use rights of the property with a site area of approximately 19,504 sq.m. have been granted to Shangdu Tianrun for a term of 50 years expiring in 2059 for industrial use.

4. Pursuant to a BOC — Fang Quan Zheng Shang Zi Di No. 091545, 2 buildings of the property with a total gross floor area of approximately 1,834.81 sq.m. are owned by Shangdu Tianrun.

5. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

6. a. The land premium has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURC; and

7. b. The Group has legally obtained the BOC of the buildings and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the buildings of the property.

– V-26 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 12.	Property Units 1302, 1303 and 1304 on Level 13 Fortune International Centre No. 17 Daliushu Road Haidian District Beijing The PRC	Description and tenure The property comprises 3 units on Level 13 of a 20 - storey office building which was completed in 2004. The units have a total gross floor area of approximately 980.52 sq.m. The land use rights of the property have been granted for a term expiring on 25 June 2071 for residential use.	Particulars of occupancy The property is currently occupied by the Group for office purpose.	Capital value in existing state as at 31 March 2010
				RMB 18,924,000 83.33% interest attributable to the Group: RMB15,769,000

Notes:

1. Beijing Tianyuan Science & Creation Wind Power Technology Co., Ltd. (“Beijing Tianyuan”) is an 83.33% interest owned subsidiary of the Company.

2. Pursuant to 3 Beijing Commodity Property Sale & Purchase Contracts dated 18 September 2006 entered into between Beijing City Construction Investment & Development Stock Company Limited and Beijing Tianyuan, the property with a total gross floor area of approximately 980.52 sq.m. was contracted to be sold to Beijing Tianyuan at a total consideration of RMB11,430,088.

3. Pursuant to a LURC — Jing Hai Guo Yong (2007 Zhuan) No. 4092, the land use rights of the property and Unit 1201 of Fortune Building which is disclosed in property no. 26 in Group V with a total apportioned land area of approximately 275.26 sq.m. have been granted to Beijing Tianyuan for a term expiring on 25 June 2071 for residential use.

4. Pursuant to 3 BOCs — X Jing Fang Quan Zheng Hai Qi Zi Di Nos. 002454, 002428 and 002429, 3 units of the property with a total gross floor area of approximately 980.52 sq.m. are owned by Beijing Tianyuan.

5. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

6. a. The Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURC; and

7. b. The Group has legally obtained the BOCs of the units and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the units of the property.

– V-27 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 13.	Property 72 parcels of land, 2 buildings and various structures located at Shangwopu Village Dafuyingzi Xiang Songshan District Chifeng City Inner Mongolia Autonomous Region The PRC	Description and tenure The property comprises 72 parcels of land with a total site area of approximately 7,679 sq.m. and 2 buildings and various structures which were completed in 2010. The buildings have a total gross floor area of approximately 814.41 sq.m. The buildings include 2 composite buildings. The structures mainly include boundary fences and roads. The land use rights of the property have been granted for various terms with the expiry dates on 13 August 2059 and in January 2060 for industrial and wind power generation uses respectively.	Particulars of occupancy The property is currently occupied by the Group for production purpose.	Capital value in existing state as at 31 March 2010
				RMB 4,596,000 51% interest attributable to the Group: RMB2,344,000

Notes:

1. Chifeng Huifeng New Energy Co., Ltd. (“Chifeng Huifeng”) is an indirectly 51% interest owned subsidiary of the Company.

2. Pursuant to 72 LURCs — Chi Song Guo Yong (2010) Zi Di Nos. 046 to 101 and Weng Guo Yong (2010) Zi Di Nos. 075 to 090, the land use rights of the property with a total site area of approximately 7,679 sq.m. have been granted to Chifeng Huifeng for various terms with the expiry dates on 13 August 2059 and in January 2060 for industrial and wind power generation uses respectively.

3. Pursuant to 2 BOCs — Meng Cun Fang Zheng Zi Di Nos. DC-01G3494 and DC-01G3492, 2 buildings of the property with a total gross floor area of approximately 814.41 sq.m. are owned by Chifeng Huifeng.

4. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

5. a. The land premium has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURCs; and

6. b. The Group has legally obtained the BOCs of the buildings and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the buildings of the property.

– V-28 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Group II — Property interests owned and occupied by the Group in Germany

Capital value in existing state Description and Particulars of as at No. Property tenure occupancy 31 March 2010 RMB 14. Factory complex The property comprises The property is 66,401,000 located at 2 parcels of land with currently occupied by (equivalent to Im Lagental 6 D-66539 a total site area of the Group for EUR7,250,000) Neunkirchen Saarland approximately 22,028 production, office, Germany sq.m. and 3 buildings storage and ancillary 100% interest erected thereon which purposes. attributable to (Land Plot nos.: Flur 3 were completed in the Group: Nr. 46/108 and Flur 3 about 2002. RMB66,401,000 Nr. 27/2) (equivalent to The buildings have a EUR7,250,000) total gross floor area of approximately 9,069 sq.m. The buildings include an industrial building, an office building and a factory extension building for ancillary use.

Notes:

1. Pursuant to the recordation on the Ground Book, the owner of the property is Goldwind Windenergy GmbH (“Goldwind Windenergy”), a wholly-owned subsidiary of the Company.

2. Pursuant to a Purchase Contract dated 15 May 2008, the property was purchased by Goldwind Windenergy at a consideration of EUR6,000,000.

3. Pursuant to a Tenancy Agreement, the property was leased to Vensys Energy AG, an indirectly 70% interest owned subsidiary of the Company, for a term of 5 years commencing from 1 January 2009 and expiring on 31 December 2013 at a monthly rental of EUR25,000 with option to renew for a further term of 5 years.

4. The exchange rate adopted in our valuation for the property is EUR1 = RMB9.1588 which was approximately the prevailing exchange rate as at the date of valuation.

– V-29 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Description and No. Property tenure 15. Factory complex The property located at 4 parcels of land Dieselstraße 12 a total site area 59356 Diepholz approximately Germany sq.m. and 3 erected thereon (Land Plot nos.: Flur 5 were completed Flurstu¨ck 17/1, 17/7, 1983 and 2008. 17/8 and 17/9)

The property comprises 4 parcels of land with a total site area of approximately 15,270 sq.m. and 3 buildings erected thereon which were completed in 1983 and 2008.

The buildings have a total gross floor area of approximately 1,805.1 sq.m. The buildings include 2 industrial buildings and an office building. The property also comprises an industrial building (the “CIP”) with a planned gross floor area of approximately 1,600 sq.m., which is being constructed on the land of the property and is scheduled to be completed in June 2010. As advised by the Group, the total construction cost of the CIP is estimated to be approximately EUR1,400,000, of which approximately EUR600,000 had been paid up to the date of valuation.

Capital value in existing state Particulars of as at occupancy 31 March 2010 RMB The property is 19,233,000 currently occupied by (equivalent to the Group for EUR2,100,000) production, office, storage and ancillary 63% interest purposes except for an attributable to industrial building the Group: which is currently RMB12,117,000 under construction. (equivalent to EUR1,323,000)

Notes:

1. Pursuant to the recordation on the Ground Book, the owner of the property is Vensys Elektrotechnik GmbH, an indirectly 63% interest owned subsidiary of the Company.

2. Pursuant to a Purchase Contract dated 14 November 2007, the property was purchased by Vensys Elektrotechnik GmbH at a consideration of EUR397,000.

3. The exchange rate adopted in our valuation for the property is EUR1 = RMB9.1588 which was approximately the prevailing exchange rate as at the date of valuation.

– V-30 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Group III — Property interests held under development by the Group in the PRC

No. 16.	Property A parcel of land, a building and various structures under construction located at the western side of Shanqi Road Jingwei Industrial Park Xi’an Economic & Technological Development Zone Xi’an City Shaanxi Province The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 30,000 sq.m. and a building and various structures which were being constructed thereon as at the date of valuation (the “CIP”). As advised by the Group, the property is scheduled to be completed in June 2010. Upon completion, the building of the property will have a gross floor area of approximately 17,369 sq.m. As advised by the Group, the total construction cost is estimated to be approximately RMB62,918,000, of which RMB41,352,000 had been paid up to the date of valuation.	Particulars of occupancy The property is currently under construction.	Capital value in existing state as at 31 March 2010
				RMB No commercial value

Notes:

1. Xi’an Goldwind Science & Technology Co., Ltd. (“Xi’an Goldwind”) is a wholly-owned subsidiary of the Company.

2. Pursuant to a Construction Land Planning Permit — {2008} No. 22 in favour of Xi’an Goldwind, permission towards the planning of the subject land with a site area of approximately 30,000 sq.m. has been granted to Xi’an Goldwind.

3. Pursuant to a Construction Work Planning Permit — (2009) No. 001 in favour of Xi’an Goldwind, a building with a gross floor area of approximately 17,369 sq.m. has been approved for construction.

4. Pursuant to a Construction Work Commencement Permit — Xi Jing Kai (2009) No. 022 in favour of Xi’an Goldwind, permission by the relevant local authority was given to commence the construction work of the building mentioned in note 3.

5. We have not been provided with the LURC of the property.

6. In the valuation of the property, we have attributed no commercial value to the property of which the Group has not obtained the LURC. However, for reference purpose, we are of the opinion that the capital value of the CIP (excluding the land element) as at the date of valuation would be RMB57,529,000 assuming all relevant title certificates have been obtained and it could be freely transferred.

– V-31 –

APPENDIX V PROPERTY VALUATION

1. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia , the following:

2. a. After the Group has signed the State-owned Land Use Rights Grant Contract with relevant Land and Resource Bureau and fully paid the land premium, there will be no material legal impediment for the Group to obtain relevant LURC of the property. However, the Group’s rights in respect of this parcel of land are not fully protected under the PRC laws before obtaining the LURC; and

3. b. After the Group has consummated relevant land use procedures and obtained the LURC and the property has passed the completion and acceptance inspection, there will be no material legal impediment for the Group to obtain the BOC of the CIP.

– V-32 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 17.	Property A parcel of land, a building and various structures under construction located at Wangfuzhan Town Qianguo County Songyuan City Jilin Province The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 88,522 sq.m. and a building and various structures which were being constructed thereon as at the date of valuation (the “CIP”). As advised by the Group, the property is scheduled to be completed at the end of May 2010. Upon completion, the building of the property will have a gross floor area of approximately 1,362.24 sq.m. As advised by the Group, the total construction cost is estimated to be approximately RMB5,302,800, of which RMB4,654,600 had been paid up to the date of valuation.	Particulars of occupancy The property is currently under construction.	Capital value in existing state as at 31 March 2010
				RMB No commercial value

Notes:

1. Qianguo Fuhui Wind Energy Co., Ltd. (“Qianguo Fuhui”) is an indirectly 51% interest owned subsidiary of the Company.

2. Pursuant to a Construction Work Planning Permit — Xiang Zi Di No. 20091262 in favour of Qianguo Fuhui, a building with a gross floor area of approximately 1,362.24 sq.m. has been approved for construction.

3. Pursuant to a Construction Work Commencement Permit — Qian Guo Xian (Ha Ma Er) Cun Jian Xu Zi No. 200901, in favour of Qianguo Fuhui, permission by the relevant local authority was given to commence the construction work.

4. We have not been provided with the LURC and Construction Land Planning Permit of the property.

5. In the valuation of this property, we have attributed no commercial value to the property of which the Group has not obtained the LURC and Construction Land Planning Permit. However, for reference purpose, we are of the opinion that the capital value of the CIP (excluding the land element) as at the date of valuation would be RMB4,821,000 assuming all relevant title certificates have been obtained and it could be freely transferred.

– V-33 –

APPENDIX V PROPERTY VALUATION

1. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia , the following:

2. a. After the Group has signed the State-owned Land Use Rights Grant Contract with relevant Land and Resource Bureau and fully paid the land premium, there will be no material legal impediment for the Group to obtain relevant LURC of the property. However, the Group’s rights in respect of this parcel of land are not fully protected under the PRC laws before obtaining the LURC;

3. b. After the Group has consummated relevant land use procedures and obtained the LURC, and the property has passed the completion and acceptance inspection, there will be no material legal impediment for the Group to obtain the BOC of the CIP; and

4. c. There is no material legal impediment for the Group to obtain the Construction Land Planning Permit and there is no material adverse effect on the Group’s operations for the absence of the Construction Land Planning Permit. However, the Group may be subject to the risk of penalties or sanctions.

– V-34 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state Description and Particulars of as at No. Property tenure occupancy 31 March 2010 RMB 18. 3 parcels of land, a The property comprises The property is No commercial value building and various 3 parcels of land with currently under structures under a total site area of construction. construction located at approximately Laobaishan Mountain 129,891 sq.m. and a Xinqing District building and various Yinchun City structures which were Heilongjiang Province being constructed The PRC thereon as at the date of valuation (the “CIP”). As advised by the Group, the property is scheduled to be completed in August 2010. Upon completion, the building of the property will have a gross floor area of approximately 1,424.38 sq.m. As advised by the Group, the total construction cost is estimated to be approximately RMB5,730,000, of which RMB5,300,000 had been paid up to the date of valuation. The land use rights of the property have been allocated for wind power generation use.

Notes:

1. Yichun Taiyangfeng New Energy Co., Ltd. (“Yichun Taiyangfeng”) is an indirectly 66% interest owned subsidiary of the Company.

1. Pursuant to 3 LURCs — Yi Chun Guo Yong (2010) Di Nos. 370 to 372, the land use rights of 3 parcels of land with a total site area of approximately 129,891 sq.m. have been allocated to Yichun Taiyangfeng for wind power generation use.

2. Pursuant to a Construction Work Planning Permit — Jian Zi Di No. 230700200800185 in favour of Yichun Taiyangfeng, a building with a gross floor area of approximately 1,424.38 sq.m. has been approved for construction.

3. Pursuant to a Construction Work Commencement Permit — No. 23070220812100100101 in favour of Yichun Taiyangfeng, permission by the relevant local authority was given to commence the construction work of the building mentioned in note 3.

– V-35 –

APPENDIX V PROPERTY VALUATION

1. In the valuation of the property, we have attributed no commercial value to the property due to the nature of the allocated land. However, for reference purposes, we are of the opinion that the capital value of the CIP (excluding the land element) as at the date of valuation would be RMB5,421,000 assuming all relevant title certificates have been obtained and it could be freely transferred.

2. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia , the following:

3. a. The Group has the rights to transfer, lease or mortgage the land use rights of the property after obtaining the consent from the relevant land administrative authority; and

4. b. After the the property has passed the completion and acceptance inspection, there will be no material legal impediment for the Group to obtain the BOC of the CIP.

– V-36 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 19.	Property A parcel of land located at Mayitasi Village Lamazhao Xiang Emin County Xinjiang Uygur Autonomous Region The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 23,003 sq.m. Foundation works of wind turbines are currently under construction on the property. As advised by the Group, a building and various structures (the “Improvements”) will be constructed on the land of property. The construction work of the Improvements is scheduled to be commenced in June 2010 and completed at the end of October 2010. Upon completion, the building will have a gross floor area of approximately 1,300 sq.m. As advised by the Group, the construction cost of the Improvements is estimated to be RMB3,600,000. No cost in relation to the Improvements had been paid up as at the date of valuation.	Particulars of occupancy The property is currently under construction.	Capital value in existing state as at 31 March 2010
				RMB No commercial value

Notes:

1. Tacheng Tianrun New Energy Co., Ltd. (“Tacheng Tianrun”) is an indirectly wholly-owned subsidiary of the Company.

2. Pursuant to a State-owned Land Use Rights Grant Contract dated 16 October 2009 entered into between the State-owned Land and Resource Bureau of Emin County and Tacheng Tianrun, the land use rights of the property with a site area of approximately 23,003 sq.m. were contracted to be granted to Tacheng Tianrun for industrial use. The land premium was RMB1,955,255.

– V-37 –

APPENDIX V

PROPERTY VALUATION

1. We have not been provided with the LURC of the property.

2. In the valuation of the property, we have attributed no commercial value to the property of which the Group has not obtained the LURC. However, for reference purpose, we are of the opinion that the capital value of the property as at the date of valuation would be RMB2,047,000 assuming all relevant title certificates have been obtained and it could be freely transferred.

3. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

4. a. As the Group has signed the State-owned Land Use Rights Grant Contract with relevant Land and Resources Bureau, there is no material legal impediment for the Group to obtain the LURC of the property. The Group is not in breach of any relevant laws and regulations for the absence of the LURC. However, the Group’s rights in respect of this parcel of land are not fully protected under the PRC laws before obtaining the LURC.

– V-38 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 20.	Property A parcel of land, a building and various structures under construction located at Guazhou County Jiuquan City Gansu Province The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 122,312.28 sq.m. and a building and various structures which were being constructed thereon as at the date of valuation (the “CIP”). As advised by the Group, the property is scheduled to be completed at the end of May 2010. Upon completion, the building of the property will have a total gross floor area of approximately 1,365.68 sq.m. As advised by the Group, the total construction cost is estimated to be approximately RMB3,120,000, of which RMB1,569,000 had been paid up to the date of valuation. The land use rights of the property have been granted for a term expiring on 19 October 2059 for industrial use.	Particulars of occupancy The property is currently under construction.	Capital value in existing state as at 31 March 2010
				RMB 3,694,000 100% interest attributable to the Group: RMB3,694,000

Notes:

1. Guazhou Tianrun Wind Power Co., Ltd. (“Guazhou Tianrun”) is an indirectly wholly-owned subsidiary of the Company.

1. Pursuant to a State-owned Land Use Rights Grant Contract dated 22 October 2009 entered into between the Land and Resource Bureau of Guazhou County and Guazhou Tianrun, the land use rights of the property with a site area of approximately 122,312.28 sq.m. were contracted to be granted to Guazhou Tianrun for industrial use. The land consideration was RMB3,118,963.

2. Pursuant to a LURC — Gua Guo Yong (2009) Di No. 0388, the land use rights of the property with a site area of approximately 122,312.28 sq.m. have been granted to Guazhou Tianrun for a term expiring on 19 October 2059 for industrial use.

– V-39 –

APPENDIX V

PROPERTY VALUATION

1. Pursuant to a Construction Work Planning Permit — Jian Zi Di No. (2010) 33 in favour of Guazhou Tianrun, a building with a gross floor area of approximately 1,365.68 sq.m. has been approved for construction.

2. In the valuation of the property, we have attributed no commercial value to the CIP of the property of which the Group has not obtained Construction Work Commencement Permit. However, for reference purposes, we are of the opinion that the capital value of the CIP (excluding the land element) as at the date of valuation would be RMB2,808,000 assuming all relevant title certificates have been obtained and it could be freely transferred.

3. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia , the following:

4. a. The land premium has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURC;

5. b. After the Group has consummated the relevant approval procedures of construction and the CIP has passed the completion and acceptance inspection, there will be no material legal impediment for the Group to obtain the BOCs of the CIP; and

6. c. There is no material legal impediment for the Group to obtain the Construction Work Commencement Permit and there is no material adverse effect on the Group’s operations for the absence of the Construction Work Commencement Permit. However, the Group may be subject to the risk of penalties or sanctions, including an order to cease construction from the relevant PRC authorities.

– V-40 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 21.	Property A parcel of land, 2 buildings and various structures under construction located at the northern side of Xintuanhe Village Development Zone Dafeng City Jiangsu Province The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 66,630 sq.m. and 2 buildings and various structures which were being constructed thereon as at the date of valuation (the “CIP”). As advised by the Group, the property is scheduled to be completed in July 2010. Upon completion, the buildings of the property will have a gross floor area of approximately 11,603 sq.m. As advised by the Group, the total construction cost is estimated to be approximately RMB51,350,000, of which RMB1,900,000 had been paid up to the date of valuation. The land use rights of the property have been granted for a term expiring on 26 January 2060 for industrial use.	Particulars of occupancy The property is currently under construction.	Capital value in existing state as at 31 March 2010
				RMB 13,521,000 100% interest attributable to the Group: RMB13,521,000

Notes:

1. Jiangsu Goldwind Wind Power Equipment Manufacture Co., Ltd. (“Jiangsu Goldwind”) is a wholly-owned subsidiary of the Company.

1. Pursuant to a State-owned Land Use Rights Grant Contract dated 23 November 2009 entered into between the State-owned Land and Resources Bureau of Dafeng City and Jiangsu Goldwind, the land use rights of the property were contracted to be granted to Jiangsu Goldwind for industrial use. The land premium was RMB9,994,500.

2. Pursuant to a LURC — Da Tu (Kai) Guo Yong (2001) Di No. 14, the land use rights of the property with a site area of approximately 66,630 sq.m. have been granted to Jiangsu Goldwind for a term expiring on 26 January 2060 for industrial use.

– V-41 –

APPENDIX V PROPERTY VALUATION

1. Pursuant to a Construction Work Planning Permit — Jian Zi Di No. 320982201030006 in favour of Jiangsu Goldwind, 2 buildings with a gross floor area of approximately 11,603 sq.m. have been approved for construction.

2. Pursuant to a Construction Work Commencement Permit — No. 3209822010051300001A in favour of Jiangsu Goldwind, permission by the relevant local authority was given to commence the construction work of the building mentioned in note 4.

3. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

4. a. The land premium has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURC; and

5. b. After the property has passed the completion and acceptance inspection, there will be no material legal impediment for the Group to obtain the BOCs of the CIP.

– V-42 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Group IV — Property interests held for future development by the Group in the PRC

No. 22.	Property A parcel of land located at No. X21 land plot of the south of New District Beijing Economic & Technological Development Area Beijing The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 90,813.7 sq.m. The land use rights of the property have been granted for a term expiring on 20 October 2059 for industrial use.	Particulars of occupancy The property is currently vacant.	Capital value in existing state as at 31 March 2010
				RMB 43,591,000 100% interest attributable to the Group: RMB43,591,000

Notes:

1. Beijing Goldwind Science & Creation Wind Power Equipment Co., Ltd. (“Beijing Goldwind”) is a wholly-owned subsidiary of the Company.

2. Pursuant to a State-owned Land Use Rights Grant Contract dated 21 October 2009 entered into between the State-owned Land Resources and Housing Administrative Bureau of Beijing Economic & Technological Development Area and Beijing Goldwind, the land use rights of the property with a site area of approximately 90,813.7 sq.m. were contracted to be granted to Beijing Goldwind for a term of 50 years for industrial use. The land consideration was RMB40,866,165.

3. Pursuant to a LURC — Kai You Xian Guo Yong 2009 Di No. 64, the land use rights of the property with a site area of approximately 90,813.7 sq.m. have been granted to Beijing Goldwind for a term expiring on 20 October 2059 for industrial use.

4. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

5. a. The land premium has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURC.

– V-43 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 23.	Property A parcel of land located at the extension of Phase II Economic & Technological Development Zone Urumqi City Xinjiang Uygur Autonomous Region The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 53,033.94 sq.m.	Particulars of occupancy The property is currently vacant.	Capital value in existing state as at 31 March 2010
				RMB No commercial value

Notes:

1. Pursuant to a State-owned Land Use Rights Grant Contract dated 27 November 2009 entered into between the State-owned Land and Resources Sub-bureau of Urumqi Economic & Technological Development Zone and the Company, the land use rights of the property with a site area of approximately 53,033.94 sq.m. were contracted to be granted to the Company for a term of 50 years for residential use. The land consideration was RMB20,150,000, of which approximately RMB9,900,000 had been paid by the Group up to the date of valuation.

2. We have not been provided with the LURC of the property.

3. In the valuation of the property, we have attributed no commercial value to the property of which the Group has not obtained the LURC. However, for reference purpose, we are of the opinion that the capital value of the property as at the date of valuation would be RMB44,018,000, assuming all relevant title certificates have been obtained and it could be freely transferred.

4. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

5. a. As the Group has signed the State-owned Land Use Rights Grant Contract with relevant Land and Resources Bureau, there is no material legal impediment for the Group to obtain the LURC of the property. The Group is not in breach of any relevant laws and regulations for the absence of the LURC. However, the Group’s rights in respect of this parcel of land are not fully protected under the PRC laws before obtaining the LURC.

– V-44 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 24.	Property A parcel of land No. 118 Tianyuan Road Jiangning Science Park Jiangning District Nanjing City Jiangsu Province The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 60,761.2 sq.m. The land use rights of the property have been granted for a term expiring on 28 September 2059 for industrial use.	Particulars of occupancy The property is currently vacant.	Capital value in existing state as at 31 March 2010
				RMB 26,006,000 100% interest attributable to the Group: RMB26,006,000

Notes:

1. Nanjing Goldwind Science & Technology Co., Ltd. (“Nanjing Goldwind”) is a wholly-owned subsidiary of the Company.

2. Pursuant to a State-owned Land Use Rights Grant Contract dated 21 April 2009 entered into between the Land and Resources Bureau of Jiangning Branch of Nanjing and Nanjing Goldwind, the land use rights of the property with a site area of approximately 60,761.2 sq.m. were contracted to be granted to Nanjing Goldwind for a term of 50 years for industrial use. The land consideration was RMB23, 700,000.

3. Pursuant to a LURC — Ning Jiang Guo Yong (2010) Di No. 03419, the land use rights of a parcel of land of the property with a site area of approximately 60,761.2 sq.m. have been granted to Nanjing Goldwind for a term expiring on 28 September 2059 for industrial use.

4. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

5. a. The land premium has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURC.

– V-45 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Group V — Property interests held for investment by the Group in the PRC

No. 25.	Property 2 parcels of land, 11 buildings and various structures No. 501 Lushan Street Economic & Technological Development Zone Urumqi City Xinjiang Uygur Autonomous Region The PRC	Description and tenure The property comprises a parcel of land with a site area of approximately 115,485.25 sq.m. and 11 buildings and various structures erected thereon which were completed in 2007 and 2008. The buildings have a total gross floor area of approximately 19,822.90 sq.m. The buildings mainly include 2 industrial buildings and various ancillary buildings. The structures mainly include boundary fences and roads. The property also includes a parcel of land with a site area of approximately 84,219.71 sq.m. which is vacant. The land use rights of the property have been granted for a term expiring on 18 November 2056 for industrial use.	Particulars of occupancy The property (excluding the parcel of vacant land) is currently leased to an independent third party for production purpose.	Capital value in existing state as at 31 March 2010
				RMB 143,692,000 100% interest attributable to the Group: RMB143,692,000

Notes:

1. Pursuant to a State-owned Land Use Rights Grant Contract and 2 Supplementary Contracts dated 25 December 2006 and 27 June 2007 respectively entered into between the State-owned Land and Resources Bureau of Urumqi Economic & Technological Development Zone Sub-Branch and the Company, the land use rights of 2 parcels of land of the property with a total site area of approximately 199,677.83 sq.m. were contracted to be granted to the Company for a term of 50 years for industrial use. The total land premium were RMB14,975,837.25.

2. Pursuant to 2 LURCs — Wu Guo Yong (2007) Di Nos. 0021938 and 0021946, the land use rights of 2 parcels of land with a total site area of approximately 199,704.96 sq.m. have been granted to the Company for a term expiring on 18 November 2056 for industrial use.

3. Pursuant to 7 BOCs — Wu Fang Quan Zheng Jing Ji Ji Shu Kai Fa Qu Zi Di Nos. 2008318035, 2008318036, 2008318038, 2008318040, 2008318042, 2008318043 and 2008318045, 7 buildings of the property with a total gross floor area of approximately 10,055.34 sq.m. (“Part A”) are owned by the Company.

– V-46 –

APPENDIX V

PROPERTY VALUATION

1. Pursuant to 4 BOCs — Wu Fang Quan Zheng Jing Ji Ji Shu Kai Fa Qu Zi Di, Nos. 2009343121 to 2009343124, 4 buildings of the property with a total gross floor area of approximately 9,767.56 sq.m. (“Part B”) are owned by the Company.

2. Pursuant to a Tenancy Cooperation Agreement (the “Tenancy”) entered into between LM Glasfiber (Tianjin) Co., Ltd. and the Company and a lessor’s confirmation letter, the land with a site area of approximately 200,000 sq.m., the buildings with a total gross floor area no less than 5,370 sq.m. and the corresponding structures are lease to LM Glassfiber (Tianjin) Co., Ltd. for a term of 5 years with the commencement date of 1 August 2007, at a total annual rental of RMB7,500,000. As advised by the Company, the lessee of the Tenancy has been changed to LM Glassfiber (Xinjiang) Co., Ltd., which is an independent third party. The leased land area stipulated in the Tenancy has been changed to approximately 199,704.96 sq.m., the leased area of the buildings stipulated in the Tenancy has been changed to approximately 10,055.34 sq.m. and the total annual rental stipulated in the Tenancy have been changed to RMB7,050,000.

3. Pursuant to a Tenancy Cooperation Agreement (the “Tenancy”) entered into between LM Glasfiber (Tianjin) Co., Ltd. and the Company and a lessor’s confirmation letter, the buildings with a total gross floor area of no less than 9,000 sq.m., the corresponding structures and facilities are leased to LM Glassfiber (Tianjin) Co., Ltd. for a term of 5 years with the commencement date of 1 October 2008, at a total annual rental of RMB7,500,000. As advised by the Company, the lessee of the Tenancy has been changed to LM Glassfiber (Xinjiang) Co., Ltd. which is an independent third party. The leased area of the buildings stipulated in the Tenancy has been changed to approximately 9,767.56 sq.m. and the total annual rental stipulated in the Tenancy has been changed to RMB7,050,000.

4. Pursuant to a Mortgage Agreement entered into between Urumqi Zhongshan Road Branch of China Construction Bank Company Limited and the Company, Part A and the land use rights of a parcel of land with a site area of approximately 115,485.25 sq.m. were subject to a mortgage for financial guarantee with the loan amount of EUR23,500,000.

5. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

6. a. The land premium of a parcel of land of the property with a site area of approximately 84,219.71 sq.m. has been fully paid and the Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the parcel of land in accordance with the valid term stipulated in the relevant LURC;

7. b. The land use rights of a parcel of land of the property with a site area of approximately 115,485.25 sq.m are subject to a mortgage for a financial guarantee, the Group has the rights to occupy, use and profit from the parcel of land. However, the Group has no rights to transfer, mortgage or otherwise legally dispose the parcel of land during the period of mortgage without the consent of the mortgagee;

8. c. For Part A which is subject to a mortgage for financial guarantee, the Group has the rights to occupy, use and profit from Part A. However, the Group has no rights to transfer, mortgage or otherwise legally dispose of Part A during the period of mortgage without the consent of the mortgagee;

9. d. For Part B which is erected on the mortgaged parcel of land mentioned in note 7, the Group has the rights to occupy, use and profit from Part B. However, the Group has no rights to transfer, mortgage or otherwise legally dispose of Part B during the period of mortgage without the consent of the mortgagee; and

10. e. As the Group has obtained the BOCs of the property, the Tenancy Agreements are legal, binding and consistent with the PRC laws and regulations.

– V-47 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 26.	Property Unit 1201 on Level 12 Fortune Building No. 17 Daliushu Road Haidian District Beijing The PRC	Description and tenure The property comprises a unit on Level 12 of a 20-storey office building completed in 2004. The unit has a gross floor area of approximately 320.85 sq.m. The land use rights of the property have been granted for a term expiring on 25 June 2071 for residential use.	Particulars of occupancy The property is currently leased to an independent third party for office purpose.	Capital value in existing state as at 31 March 2010
				RMB 6,192,000 83.33% interest attributable to the Group: RMB5,160,000

Notes:

1. Beijing Tianyuan Science & Creation Wind Power Technology Co., Ltd. (“Beijing Tianyuan”) is an 83.33% interest owned subsidiary of the Company.

2. Pursuant to a Beijing Commodity Property Sale & Purchase Contract dated 15 November 2005 entered into between Beijing City Construction Investment & Development Company Limited and Beijing Tianyuan, the property with a gross floor area of approximately 320.85 sq.m. was contracted to be sold to Beijing Tianyuan at a consideration of RMB3,506,088.

3. Pursuant to a LURC — Jing Hai Guo Yong (2007 Zhuan) No. 4092, the land use rights of the property and units 1302, 1303 and 1304 of Fortune International Centre which are disclosed in property no. 12 in Group I with a total apportioned land area of approximately 275.26 sq.m., have been granted to Beijing Tianyuan for a term expiring on 25 June 2071 for residential use.

4. Pursuant to a BOC — Jing Fang Quan Zheng Hai Qi Yi Zi Di No. 0070131, a unit of the property with a gross floor area of approximately 320.85 sq.m. is owned by Beijing Tianyuan.

5. Pursuant to a Tenancy Agreement, the property with a gross floor area of approximately 320.85 sq.m. is leased to Wuxi Yaliankaiyuan Software Technology Co., Ltd., an independent third party, for a term expiring on 7 June 2011 at an annual rental of RMB421,596, exclusive of management fees, water and electricity charges.

6. We have been provided with a legal opinion regarding the property interest by the Company’s PRC legal advisers, which contains, inter alia, the following:

7. a. The Group has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the land use rights of the property in accordance with the valid term stipulated in the LURC;

8. b. The Group has legally obtained the BOC of the unit and has the rights to occupy, use, transfer, lease, mortgage or otherwise legally dispose of the unit of the property; and

9. c. As the Group has obtained the BOC of the property, the Tenancy Agreement is legal, binding and consistent with the PRC laws and regulations.

– V-48 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Group VI — Property interests leased and occupied by the Group in the PRC

• Description and

• No. Property tenure 27. 2 buildings The property comprises two 3- located at storey industrial buildings which Parts A, B and C were completed in 2006 and 2008 of Dichang respectively. Industrial Park Beijing The buildings have a total gross Economic & floor area of approximately Technological 17,501.75 sq.m. Development Area The property is leased to Beijing Beijing Techwin Electric Co., Ltd, a 75% The PRC interest owned subsidiary of the Company, from Beijing Dichang Industrial & Trading Co., Ltd. and Beijing Weishilande Technology Development Co., Ltd. for various terms with the expiry date on 30 June 2011 and 31 December 2011 respectively, at a total annual rental of RMB5,862,214.57.

Capital value in existing state Particulars of as at occupancy 31 March 2010 RMB The property is No commercial value currently occupied by the Group for production purpose.

Notes:

1. Beijing Techwin Electric Co., Ltd. (“Beijing Techwin”) is a 75% interest owned subsidiary of the Company.

2. Pursuant to 2 Tenancy Agreements, the property with a total gross floor area of approximately 17,501.75 sq.m. is leased to Beijing Techwin from 2 independent third parties for various terms with the expiry dates on 30 June 2011 and 31 December 2011 respectively, at a total annual rental of RMB5,862,214.57.

3. We have been provided with a legal opinion on the legality of the Tenancy Agreements to the property issued by the Company’s PRC legal advisers, which contains, inter alia, the following:

4. a. The lessors have obtained the BOCs and the Tenancy Agreements are legal, binding and consistent with the PRC laws and regulations; and

5. b. The Tenancy Agreements have been registered with the relevant local authority.

– V-49 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state Description and Particulars of as at No. Property tenure occupancy 31 March 2010 RMB 28. A unit of Block 3 The property comprises The property is No commercial value Qinyinyuan a unit on Level 5 of a occupied by the Group Laiyin Dongjun 6-storey residential for office purpose. Garden building in Laiyin Jiangning District Dongjun Garden Nanjing City completed in about Jiangsu Province 2007. The PRC The property has a gross floor area of approximately 114.66 sq.m. The property is leased to Nanjing Goldwind Technology Co., Ltd. from Pang Cairong, for a term expiring on 9 July 2010 at an annual rental of RMB25,200.

Notes:

1. Nanjing Goldwind Science & Technology Co., Ltd. (“Nanjing Goldwind”) is a wholly-owned subsidiary of the Company.

2. Pursuant to a Tenancy Agreement, the property with a gross floor area of approximately 114.66 sq.m. is leased to Nanjing Goldwind from Pang Cairong, an independent third party, for a term expiring on 9 July 2010 at an annual rental of RMB25,200.

3. We have been provided with a legal opinion on the legality of the Tenancy Agreement to the property issued by the Company’s PRC legal advisers, which contains, inter alia, the following:

4. a. The lessor has obtained the BOC and the Tenancy Agreement is legal, binding and consistent with the PRC laws and regulations; and

5. b. The Tenancy Agreement has been registered with the relevant local authority.

– V-50 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Group VII — Property interests leased and occupied by the Group in Germany

No. 29.	Property Wohnung Nr. 002.0.0018.07 im Hause Pestalozzistr. 5 66539 Neunkirchen Saarland Germany	Description and tenure The property comprises a residential unit on Level 3 of a 3-storey residential building completed in 1983. The property has a lettable area of approximately 96 sq.m. The property is leased to Goldwind Windenergy GmbH from an independent third party for a term commencing from 1 December 2008 on monthly basis at a current monthly rental of EUR619.95, subject to a 3 month’s termination notice served to the lessor if the lessee would like to terminate the tenancy agreement.	Particulars of occupancy The property is currently occupied by the Group for staff quarters purpose.	Capital value in existing state as at 31 March 2010
				RMB No commercial value

Notes:

1. Goldwind Windenergy GmbH is a wholly-owned subsidiary of the Company.

– V-51 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state Description and Particulars of as at No. Property tenure occupancy 31 March 2010 RMB 30. Wohnung Nr. The property comprises The property is No commercial value 002.0.0018.07 im a residential unit on currently occupied by Hause Pestalozzistr. 9 Level 3 of a 3-storey the Group for staff 66539 Neunkirchen residential building quarters purpose. Saarland completed in 1983. Germany The property has a lettable area of approximately 96 sq.m. The property is leased to Goldwind Windenergy GmbH from an independent third party for a term commencing from 1 December 2008 on monthly basis at a current monthly rental of EUR619.95, subject to a 3 month’s termination notice served to the lessor if the lessee would like to terminate the tenancy agreement.

Notes:

1. Goldwind Windenergy GmbH is a wholly-owned subsidiary of the Company.

– V-52 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

No. 31.	Property An industrial building D 49356 Diepholz Germany	Description and tenure The property comprises a single storey industrial building completed in about 1990’s. The property has a lettable area of approximately 1,000 sq.m. The property is leased to Vensys Elektrotechnik GmbH from an independent third party on monthly basis, and the current monthly rental is EUR3,000.	Particulars of occupancy The property is currently occupied by the Group for production purpose.	Capital value in existing state as at 31 March 2010
				RMB No commercial value

Notes:

1. Vensys Elektrotechnik GmbH is an indirectly 63% interest owned subsidiary of the Company.

– V-53 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state Description and Particulars of as at No. Property tenure occupancy 31 March 2010 RMB 32. 3 Geschoss Rechts The property comprises The property is No commercial value Rombachstrass 2 a residential unit on currently occupied by Neunkirchen Level 3 of a 3-storey the Group for staff Saarland residential building quarters purpose. Germany completed in about 1986. The property has a lettable area of approximately 80 sq.m. The property is leased to Goldwind Windenergy GmbH from an independent third party for a term commencing from 1 December 2009 on monthly basis at a current monthly rental of EUR350, subject to a 3 month’s termination notice served to the lessor if the lessee would like to terminate the tenancy agreement.

Notes:

1. Goldwind Windenergy GmbH is a wholly-owned subsidiary of the Company.

– V-54 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state Description and Particulars of as at No. Property tenure occupancy 31 March 2010 RMB 33. 3 Geschoss Links The property comprises The property is No commercial value Rombachstrass 2 a residential unit on currently occupied by Neunkirchen Level 3 of a 3-storey the Group for staff Saarland residential building quarters purpose. Germany completed in about 1986. The property has a lettable area of approximately 100 sq.m. The property is leased to Goldwind Windenergy GmbH from an independent third party for a term commencing from 1 December 2009 on monthly basis at a current monthly rental of EUR350, subject to a 3 month’s termination notice served to the lessor if the lessee would like to terminate the tenancy agreement.

Notes:

1. Goldwind Windenergy GmbH is a wholly-owned subsidiary of the Company.

– V-55 –

APPENDIX V

PROPERTY VALUATION

VALUATION CERTIFICATE

Group VIII — Property interest leased and occupied by the Group in the United States of America

No. 34.	Property 2 parcels of land located at the west half and the east half of the southwest quarter Section 18 Township 106 Range 46 Pipestone County Minnesota The United States of America	Description and tenure The property comprises 2 parcels of land with a total site area of approximately 647,497.03 sq.m. The property and relevant wind easements are leased to Uilk Wind Farm LLC from 4 independent third parties for a term of 7 years commencing from 4 November 2008 at a total annual rental of USD14,400.	Particulars of occupancy The property is currently occupied by the Group for production purpose.	Capital value in existing state as at 31 March 2010
				RMB No commercial value

Notes:

1. Uilk Wind Farm LLC is an indirectly 72.75% interest owned subsidiary of the Company.

– V-56 –

APPENDIX VI

TAXATION AND FOREIGN EXCHANGE

TAXATION OF SECURITY HOLDERS

The following is a summary of certain PRC and Hong Kong tax consequences of the ownership of H Shares by an investor that purchases such H Shares in connection with the Global Offering and holds the H Shares as capital assets. This summary does not purport to address all material tax consequences of the ownership of H Shares, and does not take into account the specific circumstances of any particular investors, some of which may be subject to special rules. This summary is based on the tax laws of the PRC and Hong Kong as in effect on the date hereof, as well as on the Agreement Between the U.S. and the PRC for the Avoidance of Double Taxation (the “ Treaty ”), all of which are subject to change (or changes in interpretation), possibly with retroactive effect.

For purposes of this section of the prospectus, an “Eligible U.S. Holder” is any beneficial owner of H Shares that (i) is a resident of the United States for purposes of the Treaty, (ii) does not maintain a permanent establishment or fixed base in the PRC to which H Shares are attributable and through which the beneficial owner carries on or has carried on business (or, in the case of an individual, performs or has performed independent personal services) and (iii) who is not otherwise ineligible for benefits under the Treaty with respect to income and gain derived in connection with the H Shares.

This section of the prospectus does not address any aspects of Hong Kong or PRC taxation other than income taxation, capital taxation, stamp taxation and estate taxation. Prospective investors are urged to consult their tax advisors regarding the PRC, Hong Kong and other tax consequences of owning and disposing of H Shares.

PRC

Taxation of Dividends

Individual Investors. According to the Individual Income Tax Law of China ( ) (the “ Individual Income Tax Law ”), as amended on December 29, 2007 and effective on March 1, 2008, and the Provisional Regulations of China Concerning Questions of Taxation on Enterprises Experimenting with the Share System (

) (the “ Provisional Regulations ”), dividends paid by PRC companies are ordinarily subject to a PRC withholding tax levied at a flat rate of 20%. For a foreign individual who is not a resident of the PRC, the receipt of dividends from a company in the PRC is normally subject to a withholding tax of 20% unless specifically exempted by the tax authority of the State Council or reduced by an applicable tax treaty. However, the State Administration of Taxation, the PRC central government tax authority which succeeded the State Tax Bureau, issued, on July 21, 1993, a Notice of the State Administration of Taxation Concerning the Taxation of Gains on Transfer and Dividends from Shares (Equities) Received by Foreign Investment Enterprises, Foreign Enterprises and Foreign Individuals ( ) (the “ Tax Notice ”), which states that dividends paid by a PRC company to foreign individuals with respect to shares listed on an overseas stock exchange (“ Overseas Shares ”), such as H Shares, are temporarily not subject to PRC withholding tax.

In a letter dated July 26, 1994 to the former State Commission for Restructuring the Economic System, the State Council Securities Commission and the CSRC, the State Administration of Taxation reiterated the temporary tax exemption stated in the Tax Notice for dividends received from a PRC company listed overseas. In the event that this exemption is withdrawn, a 20% tax may be withheld on dividends in accordance with the Provisional Regulations, and the Individual Income Tax Law. Such withholding tax may be reduced pursuant to an applicable double taxation treaty. To date, the relevant tax authorities have not collected withholding tax from dividend payments on such shares exempted under the Tax Notice.

Enterprise. According to the Arrangement between the mainland China and Hong Kong for the Avoidance of Double Taxation on Income ( )

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APPENDIX VI

TAXATION AND FOREIGN EXCHANGE

signed on August 21, 2006, the PRC Government may impose tax on dividends payable by a PRC company to a Hong Kong resident, but such tax shall not exceed 10% of the gross amount of dividends payable, and in the case where a Hong Kong resident holds 25% equity interest or more in a PRC company, such tax shall not exceed 5% of the gross amount of dividends payable by the PRC company.

According to the New EIT Law and the Provision for Implementation of Enterprise Income Tax Law of the PRC ( ) , which both became effective on 1 January 2008, the nonresident enterprises shall be subject to 10% enterprise tax for the income originated from the PRC provided that the non-resident enterprises do not establish offices or premises in the PRC, or where there are offices and premises established, there is no connection between the dividends and bonuses received and the offices or premises established by the non-resident enterprises. Such withholding tax may be reduced pursuant to an applicable double taxation treaty.

According to the Notice Regarding Questions on Withholding Enterprise Income tax When PRC Resident Enterprises Distribute Dividends to Non-resident Enterprise Shareholders of H Shares (Guoshuihan [2008]NO. 897) ( ) issued by the State Administration of Taxation ,which became effective on November 6, 2008, PRC enterprises should withhold enterprise income tax at a rate of 10% when they distribute dividends to non-resident enterprise shareholders of H shares from the year of 2008. Such withholding tax may be reduced pursuant to an applicable double taxation treaty.

Tax Treaties. Investors who do not reside in the PRC and reside in countries that have entered into double taxation treaties with the PRC may be entitled to a reduction of the withholding tax imposed on the payment of dividends to investors of our Company who do not reside in the PRC. The PRC currently has double-taxation treaties with many nations in the world, which include but not limited to:

• k Australia;

• k Canada;

• k France;

• k Germany;

• k Japan;

• k Malaysia;

• k the Netherlands;

• k Singapore;

• k the United Kingdom; and

• k the United States.

Under the Treaty, the PRC Government may tax a dividend paid by our Company to an Eligible U.S. Holder up to a maximum of 10% of the gross amount of such dividend.

Taxation of Capital Gains

The Tax Notice provides that gains realized by foreign enterprises that are holders of Overseas Shares and that these shares are not held by their offices and premises set up in the PRC would, temporarily, not be subject to capital gains taxes. With respect to individual holders of H shares, the Provision for Implementation of Individual Income Tax Law of the PRC ( ) (the “ Provisions ”) as amended on February 18, 2008, generally stipulate that gains derived from assignment of property shall be subject to income tax at a rate of

– VI-2 –

APPENDIX VI

TAXATION AND FOREIGN EXCHANGE

20%. In addition, the Provisions stipulate that measures for the levying of individual income tax on gains derived from the sale of equity securities shall be formulated separately by the Ministry of Finance and shall be implemented following approval of the State Council. However, no income tax on gains realized on the sale of equity shares has been collected. Gains on the sale of shares by individuals were temporarily exempted from individual income tax pursuant to notices issued jointly by the Ministry of Finance and State Administration of Taxation dated June 20, 1994, February 9, 1996 and March 30, 1998. In the event this temporary exemption is withdrawn or ceases to be effective, individual holders of H Shares may be subject to capital gains tax at the rate of 20% unless such tax is reduced or eliminated by an applicable double taxation treaty. If taxation on capital gains from the sale of H Shares becomes applicable, the Treaty may be interpreted such that the PRC may begin to charge tax on capital gains from the sale or disposition of H Shares by any Eligible U.S. Holder of 25% or more interest in our Company.

On November 18, 2000, the State Council issued a notice entitled State Council Notice on the Income Tax Reduction for Interest and Other Income that Foreign Enterprises Derive in the PRC ( ) (the “ Tax Reduction Notice ”). Under the Tax Reduction Notice, beginning January 1, 2000, enterprise income tax at a reduced 10% rate will apply to interest, rental, license fees and other income obtained in the PRC by foreign enterprises without agencies or establishment in the PRC, or by foreign enterprises without any substantive relationship with their agency or establishment in the PRC.

According to the New EIT Law and the Provision for Implementation of Enterprise Income Tax Law of the PRC ( ) , the non- resident enterprises shall be subject to 10% enterprise tax for the income originated from the PRC provided that the non-resident enterprises do not establish offices or premises in the PRC, or where there are offices and premises established, there is no connection between the gains received and the offices or premises established by the non-resident enterprises. Such withholding tax may be reduced pursuant to an applicable double taxation treaty.

Additional Chinese Tax Considerations

PRC Stamp Duty. PRC stamp duty imposed on the transfer of shares of PRC publicly traded companies under the Provisional Regulations should not apply to the acquisition and disposal by non-PRC investors of H Shares outside of the PRC by virtue of the Provisional Regulations of China Concerning Stamp Duty ( ) , which became effective on October 1, 1988 and which provide that PRC stamp duty is imposed only on documents, executed or received within the PRC that are legally binding in the PRC and are protected under PRC law.

Estate Tax. No liability for estate tax under PRC law will arise from non-PRC national’s holding of H shares.

HONG KONG

Tax on Dividends

Under the current practice of the Hong Kong Inland Revenue Department, no tax is payable in Hong Kong in respect of dividends paid by us.

Capital gains and profit tax

No tax is imposed in Hong Kong in respect of capital gains from the sale of the H shares. Trading gains from the sale of H shares by persons carrying on a trade, profession or business in Hong Kong, where such gains are derived from or arise in Hong Kong from such trade, profession or business, will be chargeable to Hong Kong profits

– VI-3 –

APPENDIX VI

TAXATION AND FOREIGN EXCHANGE

tax. Currently, profits tax is imposed on corporations at the rate of 16.5% and on unincorporated businesses at a maximum rate of 15.0%. Gains from sales of the H shares effected on the Hong Kong Stock Exchange will be considered to be derived from or arise in Hong Kong. Liability for Hong Kong profits tax would thus arise in respect of trading gains from sales of H shares effected on the Hong Kong Stock Exchange realized by persons carrying on a business of trading or dealing in securities in Hong Kong.

Stamp Duty

Hong Kong stamp duty will be payable by the purchaser on every purchase, and by the seller on every sale, of the H shares. The duty is charged at the ad valorem rate of 0.1% of the consideration for, or (if greater) the value of, the H shares transferred on each of the seller and purchaser. In other words, a total of 0.2% is currently payable on a typical sale and purchase transaction of H shares. In addition, a fixed duty of HK$5 is charged on each instrument of transfer (if required). Where a sale or purchase of H shares is effected by a person who is not a resident of Hong Kong and any stamp duty payable on the instrument of transfer is not paid, the relevant instrument of transfer (if any) shall be chargeable with such duty, together with the duty otherwise chargeable thereon, and the transferee shall be liable to pay such duty.

Estate Duty

The Revenue (Abolition of Estate Duty) Ordinance 2005 came into effect on February 11, 2006 in Hong Kong. No Hong Kong estate duty is payable and no estate duty clearance papers are needed for an application for a grant of representation in respect of holders of H shares whose deaths occur on or after February 11, 2006.

TAXATION OF THE COMPANY BY THE PRC

Income Tax

From January 1, 1994, income tax payable by PRC enterprises, including state-owned enterprises and share system enterprises, was governed by the PRC Enterprise Income Tax Provisional Regulations (the “ EIT Regulations ”) which took effect from 1 January 1994, and which provided for an income tax rate of 33% unless a lower rate is provided by law, administrative regulations or State Council regulations. Our Company was generally subject to tax at a rate of 33% pursuant to the EIT Regulations.

On 16 March 2007, the 10th NPC adopted the resolution to revise the EIT Regulations. The New EIT Law came into effect on 1 January 2008, according to which the enterprise income tax rate in the PRC was reduced from 33% to 25% and is in line with the rate applicable to foreign investment enterprises and foreign enterprises. At the same time, the Income Tax Law of the PRC Concerning Foreign Investment Enterprises and Foreign Enterprises and the EIT Regulations have ceased to be effective.

Sino-foreign joint ventures will be entitled to certain tax benefits during a term of transition under the relevant laws and regulations in the PRC. Following the completion of the Global Offering, our Company will remain ineligible to apply for the status of a sino-foreign investment joint stock limited liability company and does not intend to apply for such status. Nonetheless, pursuant to the applicable laws, rules and regulations in the PRC, no tax benefits would accrue to our Company upon acquiring such status.

Value-added Tax

Pursuant to the Provisional Regulations of the PRC Concerning Value Added Tax ( ) effective from January 1, 1994 which was amended in November 2008 and their implementing rules, the sale of products within the PRC, the importation of products and the provision of

– VI-4 –

APPENDIX VI

TAXATION AND FOREIGN EXCHANGE

processing and/or repair services within the PRC by our Company are subject to value-added tax (“ VAT ”). VAT payable is calculated as “output VAT” minus “input VAT”.

Business Tax

Pursuant to the Provisional Regulations of the PRC Concerning Business Tax ( ) effective from January 1, 1994 which was amended in November 2008 and the relevant implementing rules, a business tax is imposed on enterprises which provide taxable services, transfer intangible property or sell real estate in the PRC. The business tax is levied at a rate from 3% to 20% on the provision of taxable services, transfer of intangible property or sale of real estate in the PRC.

FOREIGN EXCHANGE CONTROL

The lawful currency of the PRC is the Renminbi, which is subject to foreign exchange controls and is not freely convertible into foreign exchange at this time. SAFE, under the authority of the PBOC, is empowered with the functions of administering all matters relating to foreign exchange, including the enforcement of foreign exchange control regulations.

On January 29, 1996, the State Council promulgated new Regulation of Foreign Exchange ( ) (the “ Foreign Exchange Regulations ”) which was effective from April 1, 1996. The Foreign Exchange Regulations classifies all international payments and transfers into current account items and capital account items. Most of the current account items are no longer subject to the approval from the SAFE while capital account items still are. The Foreign Exchange Regulations was subsequently amended on January 14, 1997 and on August 1, 2008. This latest amendment affirmatively states that the State shall not restrict international current account payments and transfers.

On June 20, 1996, the PBOC promulgated the Regulations for Administration of Settlement, Sale and Payment of Foreign Exchange ( ) (the “ Settlement Regulations ”) which took effect on July 1, 1996. The Settlement Regulations superseded the Provisional Regulations for the Administration of Settlement, Sale and Payment of Foreign Exchange and abolished the remaining restrictions on convertibility of foreign exchange in respect of current account items while retaining the existing restrictions on foreign exchange transactions in respect of capital account items.

On the basis of the Settlement Regulations, the PBOC also published the Announcement on the Implementation of Foreign Exchange Settlement and Sale at Banks by Foreign-invested Enterprises ( ) . The announcement permits foreign-invested enterprises to open, on the basis of their needs, foreign exchange settlement accounts for current account receipts and payments of foreign exchange along with specialized accounts for capital account receipts and payments at designated foreign exchange banks.

On October 25, 1998, PBOC and SAFE promulgated the Notice Concerning Closure of the Foreign Exchange Swap Business Activities ( ) pursuant to which and with effect from December 1, 1998, all foreign exchange swapping business in the PRC for foreign-invested enterprises shall be discontinued, while the trading of foreign exchange by foreign-invested enterprise shall come under the banking system for the settlement and sale of foreign exchange.

On July 21, 2005, the PBOC announced that from the same date, the PRC would implement a managed floating exchange rate system based on market supply and demand and with reference to a basket of currencies. Therefore, the Renminbi exchange rate was no longer pegged to the U.S. dollar only. The PBOC would announce the closing price of a foreign currency such as the U.S. dollar against the Renminbi in the inter-bank foreign

– VI-5 –

APPENDIX VI

TAXATION AND FOREIGN EXCHANGE

exchange market after the closing of the market on each working day. This closing price will be used as the middle price for quoting the Renminbi exchange rate on the following working day.

Since January 4, 2006, the PBOC improved the method of generating the middle price for quoting the Renminbi exchange rate by introducing an enquiry system while keeping the match-making system in the interbank spot foreign exchange market. In addition, the PBOC provided liquidity in the foreign exchange market by introducing the market-making system in the inter-bank foreign exchange market. After the introduction of the enquiry system, the generation of the middle price for quoting the Renminbi was transformed to a mechanism under which the PBOC authorized the China Foreign Exchange Trading System to determine and announce the middle price for quoting the Renminbi against the U.S. dollar, based on the enquiry system, at 9:15 am on each business day.

Save for foreign-invested enterprises or other enterprises which are specially exempted by relevant regulations, all entities in the PRC must sell their foreign exchange recurrent income to designated foreign exchange banks. Foreign exchange income from loans issued by organizations outside the territory or from the issuance of bonds and shares (for example foreign exchange income received by our Company from the sale of shares overseas) is not required to be sold to designated foreign exchange banks, but may be deposited in foreign exchange accounts at the designated foreign exchange banks.

PRC enterprises (including foreign-invested enterprises) which require foreign exchange for transactions relating to current account items, may, without the approval of SAFE, effect payment from their foreign exchange account or convert and pay at the designated foreign exchange banks, on the strength of valid receipts and proof of transactions. Foreign-invested enterprises which need foreign exchange for the distribution of profits to their shareholders, and PRC enterprises which in accordance with regulations are required to pay dividends to shareholders in foreign exchange, may on the strength of general meeting resolutions of such PRC enterprises or board resolutions on the distribution of profits, effect payment from their foreign exchange account or convert and pay at the designated foreign exchange banks.

Convertibility of foreign exchange in respect of capital account items, like direct investment and capital contribution, is still subject to restriction, and prior approval from SAFE and the relevant branch must be sought.

Dividends to holders of H Shares are fixed in Renminbi but must be paid in Hong Kong dollars.

We prepare our consolidated financial statements in Renminbi.

The PBOC sets and publishes daily a base exchange rate with reference primarily to the supply and demand of Renminbi against the U.S. dollar in the market during the prior day. The PBOC also takes into account other factors such as the general conditions existing in the international foreign exchange markets. Although the PRC Government introduced policies in 1996 to reduce restrictions on the convertibility of Renminbi into foreign currency for current account items, conversion of Renminbi into foreign exchange for capital items, such as foreign direct investment, loans or security, still requires the approval of SAFE and other relevant authorities.

– VI-6 –

APPENDIX VII

SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

PRC JUDICIAL SYSTEM

Under the PRC Constitutional Law ( ) and the Law of Organization of the People’s Courts ( ) , the judicial system in PRC is made up of the Supreme People’s Court, the local people’s courts, military courts and other special people’s courts. The local people’s courts are comprised of the basic people’s courts, the intermediate people’s courts and the higher people’s courts. The basic people’s courts are organized into civil, criminal, and administrative divisions. The intermediate people’s courts are organized into divisions similar to those of the basic people’s courts, and are further organized into other special divisions, such as the intellectual property division. The higher level people’s courts supervise the basic and intermediate people’s courts. The people’s procuratorates also have the right to exercise legal supervision over the civil proceedings of people’s courts of the same level and lower levels. The Supreme People’s Court is the highest judicial body in the PRC. It supervises the administration of justice by all of the people’s courts.

The people’s courts employ a “second instance as final” appellate system. A party may appeal against a judgment or order of the people’s court of first instance to the people’s court at the next higher level. Second judgments or orders given at the next higher level are final. First judgments or orders of the Supreme People’s Court are also final. If, however, the Supreme People’s Court or a people’s court at a higher level finds an error in a judgment or order which has been given in any people’s court at a lower level, or the president of the people’s court finds an error in a judgment or order, the case may then be retried according to the judicial supervision procedures.

The Civil Procedure Law of the PRC ( ) (the “ PRC Civil Procedure Law ”), which was adopted on April 9, 1991 and amended on October 28, 2007, sets forth the criteria for instituting a civil action, the jurisdiction of the people’s courts, the procedures to be followed for conducting a civil action and the procedures for enforcement of a civil judgment or order. All parties to a civil action conducted within the PRC must comply with the PRC Civil Procedure Law. Generally, a civil case is initially heard by a local court of the municipality or province in which the defendant resides. The parties to a contract may, by an express agreement, select a jurisdiction where civil actions may be brought, provided that the jurisdiction is either the plaintiff’s or the defendant’s place of residence, the place of execution or implementation of the contract or the object of the action. However, such selection cannot violate the stipulations of grade jurisdiction and exclusive jurisdiction in any case.

A foreign individual or enterprise generally has the same litigation rights and obligations as a citizen or legal person of the PRC. If a foreign country’s judicial system limits the litigation rights of PRC citizens and enterprises, the PRC courts may apply the same limitations to the citizens and enterprises of that foreign country within the PRC. If any party to a civil action refuses to comply with a judgment or order made by a people’s court or an award granted by an arbitration panel in the PRC, the aggrieved party may apply to the people’s court to request for enforcement of the judgment, order or award. There are time limits imposed on the right to apply for such enforcement and the time limit is two year. If a person fails to satisfy a judgment made by the court within the stipulated time, the court will, upon application by either party, mandatorily enforce the judgment.

A party seeking to enforce a judgment or order of a people’s court against a party who is not located within the PRC and does not own any property in the PRC, may apply to a foreign court with proper jurisdiction for recognition and enforcement of the judgment or order. A foreign judgment or ruling may also be recognized and enforced by the people’s court according to the PRC enforcement procedures if the PRC has entered into, or acceded to, an international treaty with the relevant foreign country, which provides for such recognition and enforcement, or if the judgment or ruling satisfies the court’s examination according to the principle of reciprocity, unless the people’s court finds that the recognition or enforcement of such judgment or ruling will result in a violation of the basic legal principles of the PRC, its sovereignty or security, or for reasons of social and public interests.

– VII-1 –

APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

THE PRC COMPANY LAW, SPECIAL REGULATIONS AND MANDATORY PROVISIONS

On December 29, 1993, the Standing Committee of the Eighth NPC adopted the PRC Company Law which came into effect on July 1, 1994 and was amended for the first time on December 25, 1999, the second time on August 28, 2004 and the third time on October 27, 2005. The newly amended PRC Company Law has been promulgated and became effective from January 1, 2006.

On July 4, 1994, the Special Regulations were passed at the Twenty-Second Standing Committee Meeting of the State Council, and they were promulgated and implemented on August 4, 1994. The Special Regulations are formulated according to the provisions of Sections 85 and 155 of the PRC Company Law (1993) in respect of the overseas share subscription and listing of joint stock limited companies. The Mandatory Provisions were issued jointly by the Securities Commission and the State Economic Restructuring Commission on August 27, 1994, prescribing provisions which must be incorporated into the articles of association of joint stock limited companies to be listed overseas. Accordingly, the Mandatory Provisions have been incorporated in the Articles of Association (which are summarized in the appendix entitled “Appendix VIII — Summary of the Articles of Association” to this prospectus). References to a “company” are to a joint stock limited liability company established under the PRC Company Law with overseas listed foreign invested shares.

Copies of the Chinese text of the PRC Company Law, Special Regulations and the Mandatory Provisions together with copies of their unofficial English translations thereof are available for inspection as mentioned in the appendix entitled “Appendix X — Documents Delivered to the Registrar of Companies and Available for Inspection” to this prospectus.

General

A “joint stock limited liability company” (hereinafter referred to as “ company ”) is a corporate legal person incorporated under the PRC Company Law, whose registered capital is divided into shares of equal par value. The liability of its shareholders is limited to the extent of the shares held by them, and the liability of the company is limited to the full amount of all the assets owned by it.

A state-owned enterprise that is restructured into a company must comply with the conditions and requirements specified by law and administrative regulation, for the modification of its operation mechanisms, the systematic handling and evaluation of the company’s assets and liabilities and the establishment of internal management organs.

A company must conduct its business in accordance with law and professional ethics.

Incorporation

A company may be incorporated by promotion or subscription.

A company may be incorporated by two to 200 promoters, but at least half of the promoters must reside in the PRC.

Companies incorporated by promotion are companies with the registered capital entirely subscribed for by the promoters. Where companies are incorporated by subscription, the promoters are required to subscribe for not less than 35% of the total number of shares of a company, and the remaining shares can be offered to the public or specific persons, unless otherwise required by law.

The PRC Company Law has provided that the registered capital of a joint stock limited liability company is a minimum of RMB5 million. For companies incorporated by way of promotion, the registered capital has to be the total capital subscribed for by all promoters as registered with the relevant administration bureau for industry and

– VII-2 –

APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

commerce; for companies established by way of public subscription, the registered capital is the amount of total paid-up capital as registered with the relevant administration bureau for industry and commerce.

Pursuant to the Securities Law, the total capital of a company which proposes to apply for its shares to be listed on a stock exchange must not be less than RMB30 million.

The promoters shall convene an inaugural meeting within 30 days after the issued shares have been fully paid up, and shall give notice to all subscribers or make a public announcement of the date of the inaugural meeting 15 days before the meeting. The inaugural meeting may be convened only with the presence of shareholders holding shares representing more than 50% of the total issued shares of the company. At the inaugural meeting, matters including the adoption of draft articles of association proposed by the promoter(s) and the election of the board of directors and the supervisory committee of the company will be dealt with. All resolutions of the meeting require the approval of subscribers with more than half of the voting rights present at the meeting.

Within 30 days after the conclusion of the inaugural meeting, the board of directors shall apply to the registration authority for registration of the establishment of the company.

A company is formally established and has the status of a legal person after the approval for registration has been given by the relevant administration bureau for industry and commerce and a business license has been issued.

A company’s promoters shall individually and collectively be liable for: (i) the payment of all expenses and liabilities incurred in the incorporation process if the company cannot be incorporated; (ii) the repayment of subscription monies to the subscribers together with interest at bank rates for a deposit of the same term if the company cannot be incorporated; and (iii) damages suffered by the company as a result of the default of the promoters in the course of incorporation of the company.

Share Capital

The promoters of a company can make capital contributions in cash, or in kind, that can be valued in currency and transferable according to law such as intellectual property rights or land use rights based on their appraised value provided that the amount of capital contribution in cash by all shareholders must not be less than 30% of a company’s registered capital.

If capital contribution is made other than in cash, valuation and verification of the property contributed must be carried out and converted into shares.

A company may issue registered or bearer share. However, shares issued to promoter(s) or legal person(s) shall be in the form of registered share and shall be registered under the name(s) of such promoter(s) or legal person(s) and shall not be registered under a different name or the name of a representative.

The Special Regulations and the Mandatory Provisions provide that shares issued to foreign investors and listed overseas shall be issued in registered form and shall be denominated in Renminbi and subscribed for in foreign currency.

Under the Special Regulations and the Mandatory Provisions, shares issued to foreign investors and investors from the territories of Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan and listed overseas are known as overseas listed foreign invested shares, and those shares issued to investors within the PRC other than the territories specified above are known as domestic shares.

A company may offer its shares to the public overseas with approval by the securities administration department of the State Council. Specific measures shall be specifically formulated by the State Council. Under the Special Regulations, upon approval of CSRC, a company may agree, in the underwriting agreement in respect of an

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issue of overseas listed foreign invested shares, to retain not more than 15% of the aggregate number of overseas listed foreign invested shares proposed to be issued after accounting for the number of underwritten shares.

The share offering price may be equal to or greater than par value, but shall not be less than par value.

The transfer of shares by shareholders should be conducted via the legally established stock exchange or in accordance with other methods as stipulated by the State Council. Transfer of registered shares by a shareholder must be made by means of an endorsement or by other means stipulated by laws or by administrative regulations. Bearer shares are transferred by delivery of the share certificates to the transferee.

Shares held by a promoter of a company shall not be transferred within one year after the date of the company’s incorporation. Shares issued by a company prior to the public offer of its shares shall not be transferred within one year from the date of listing of the shares of the company on a stock exchange. Directors, supervisors and senior management of a company shall not transfer over 25% of the total shares held by each of them in the company each year during their term of office, and shall not transfer any share of the company held by each of them within one year after the listing date. There is no restriction under the PRC Company Law as to the percentage of shareholding a single shareholder may hold in a company.

Transfers of shares may not be entered in the register of shareholders within 20 days before the date of a shareholders’ meeting or within five days before the record date set for the purpose of distribution of dividends.

Increase in Capital

Under the PRC Company Law, an increase in the capital of a company by means of an issue of new shares must be approved by shareholders in general meeting.

Save for the abovementioned condition of obtaining approval at the general meetings required by the PRC Company Law, for the public offering of new shares, the Securities Law provides that the company shall: (i) have a sound organizational structure with satisfactory operating record; (ii) have the capability of continuing profitability and a healthy financial position; (iii) have no false statements and other material breaches in the financial and accounting documents of the last three years; (iv) fulfill other conditions required by the securities administration department of the State Council as approved by the State Council.

Public offer requires the approval of the securities administration department of the State Council.

After payment in full for the new shares issued, a company must change its registration with the relevant state bureau for the administration for industry and commerce and issue a public notice accordingly.

Reduction of Share Capital

Subject to the minimum registered capital requirements, a company may reduce its registered capital in accordance with the following procedures prescribed by the PRC Company Law:

• (i) the company shall prepare a balance sheet and an inventory of the assets;

• (ii) the reduction of registered capital must be approved by shareholders in general meeting;

• (iii) the company shall inform its creditors of the reduction in capital within ten days and publish an announcement of the reduction in the newspaper within 30 days after the resolution approving the reduction has been passed;

• (iv) the creditors of the company may within the statutory prescribed time limit require the company to pay its debts or provide guarantees covering the debts; and

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• (v) the company must apply to the relevant administration bureau for industry and commerce for registration of the reduction in registered capital.

Repurchase of Shares

A company may not purchase its own shares other than for the purpose of:

• (i) reducing its capital by canceling its shares or merging with another company holding its shares;

• (ii) granting shares as a reward to the staff of the company; or

• (iii) purchasing the company’s own shares upon request of its shareholders who vote against the resolution regarding the merger or division of the company in a general meeting.

The shares of the company to be repurchased by itself as a reward to its staff shall not exceed 5% of the total number of its issued shares. Any funds for such purpose shall be paid out of after-tax profits of the company, and the shares so purchased shall be transferred to the company’s staff within a year. The Mandatory Provisions provide that upon obtaining approvals in accordance with the articles of association of the company and from the relevant supervisory authorities, a company may repurchase its issued shares for the foregoing purposes by way of a general offer to its shareholders or purchase on a stock exchange or an off-market contract.

Transfer of Shares

Shares may be transferred in accordance with the relevant laws and regulations.

Shareholders

Shareholders have such rights and obligations as set forth in the articles of association of the company. The articles of association of a company are binding on each shareholder.

Under the PRC Company Law and the Mandatory Provisions, the rights of a shareholder include:

• (i) to attend in person or appoint a proxy to attend shareholders’ general meetings, and to vote in respect of the number of shares held;

• (ii) to transfer his shares in accordance with applicable laws and regulations and the articles of association of the company;

• (iii) to inspect the company’s articles of association, shareholders’ registers, records of debentures, minutes of shareholders’ general meetings, board resolutions, supervisors resolutions, financial and accounting reports and put forward proposals or raise questions about the business operations of the company;

• (iv) if a resolution adopted by a shareholders’ general meeting or the board of directors violates any law or administrative regulations or infringes the lawful rights and interests of shareholders, to institute an action in the people’s court demanding that the illegal infringing action be stopped;

• (v) to receive dividends in respect of the number of shares held;

• (vi) to obtain surplus assets of the company upon its termination in proportion to his or her shareholding; to claim against other shareholders who abuse their shareholders’ rights for the damages; and

• (vii) any other shareholders’ rights specified in the company’s articles of association.

The obligations of a shareholder include the obligation to abide by the company’s articles of association, to pay the subscription monies in respect of the shares subscribed for, to be liable for the company’s debts and liabilities to the extent of the amount of subscription monies agreed to be paid in respect of the shares taken up by

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him/her, not to abuse shareholders’ right to damage the interests of the company or other shareholders of the company; not to abuse the independent status of the company as a legal person and the limited liability to damage the interests of the creditors of the company and any other shareholders’ obligation specified in the company’s articles of association.

Shareholders’ General Meetings

The shareholders’ general meeting is the organ of authority of the company, which exercises its powers in accordance with the PRC Company Law.

• The shareholders’ general meeting exercises the following principal powers:

• (i) to decide on the company’s operational policies and investment plans;

• (ii) to elect or remove the directors and supervisors who are not representatives of the employees and decide on matters relating to the remuneration of directors and supervisors;

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

• (iv) to consider and approve reports of the supervisory committee or the supervisors;

• (v) to consider and approve the company’s proposed annual financial budget and financial accounts;

• (vi) to consider and approve the company’s proposals for profit distribution and for recovery of losses;

• (vii) to decide on any increase or reduction in the company’s registered capital;

• (viii) to decide on the issue of bonds by the company;

• (ix) to decide on issues such as merger, division, dissolution and liquidation of the company and other matters;

• (x) to amend the articles of association of the company; and

• (xi) other powers specified in the articles of association of the company.

Shareholders’ general meeting is required to be held once every year. An extraordinary shareholders’ general meeting is required to be held within two months after the occurrence of any of the following circumstances:

• (i) the number of directors is less than the number provided for in the PRC Company Law or less than two-thirds of the number specified in the company’s articles of association;

• (ii) the losses of the company which are not made up reach one-third of the company’s total paid up share capital;

• (iii) a request by a shareholder that holds, or by shareholders that hold in aggregate, 10% or more of the company’s shares;

• (iv) when deemed necessary by the board of directors;

• (v) when the supervisory committee proposes convening it; or

• (vi) other matters required by the company’s articles of association.

Shareholders’ general meetings shall be convened by the board of directors, and presided over by the chairman of the board of directors.

Notice of the Shareholders’ general meeting shall be given to all shareholders 20 days before the meeting under the PRC Company Law and 45 days under the Special Regulations and the Mandatory Provisions, stating the matters to be considered at the meeting. Under the Special Regulations and the Mandatory Provisions, shareholders

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wishing to attend are required to give to the company written confirmation of their attendance 20 days prior to the meeting. Under the Special Regulations, at an annual general meeting of a company, shareholders holding 5% or more of the voting rights in the company are entitled to propose to the company in writing new resolutions to be considered at that meeting, which if within the powers of a shareholders’ general meeting, are required to be added to the agenda of that meeting.

Shareholders present at a shareholders’ general meeting have one vote for each share they hold, but the company shall have no vote for any of its own shares the company holds.

Resolutions proposed at the shareholders’ general meeting shall be adopted by more than half of the votes voting rights by shareholders present in person (including those represented by proxies) at the meeting, with the exception of matters relating to merger, division, dissolution, increase or reduction in registered capital, change in the form of the company or amendments to the articles of association which shall be adopted by shareholders with two-thirds or more of the voting rights cast by shareholders present (including those represented by proxies) at the meeting.

Shareholders may entrust a proxy to attend shareholders’ general meetings on his or her behalf by a power of attorney which sets out the scope of exercising the voting rights.

There is no specific provision in the PRC Company Law regarding the number of shareholders constituting a quorum in a shareholders’ meeting. However, the Special Regulations and the Mandatory Provisions provide that a company’s annual general meeting may be convened when replies to the notice of that meeting from shareholders holding shares representing 50% or more of the voting rights in the company have been received 20 days before the proposed date, or if that 50% level is not achieved, the company shall within five days of the last day for receipt of the replies notify shareholders by public announcement of the matters to be considered at the meeting and the date and place of the meeting and the annual general meeting may be held thereafter. The Mandatory Provisions require class meetings to be held in the event of a variation or derogation of the class rights of a class. Holders of domestic invested shares and holders of overseas listed foreign invested shares are deemed to be different classes of shareholders for this purpose.

Directors

A company shall have a board of directors, which shall consist of five to 19 members and there can be staff representatives of our Company. Under the PRC Company Law, each term of office of a director shall not exceed three years. A director may serve consecutive terms if re-elected.

Meetings of the board of directors shall be convened at least twice a year. Notice of meeting shall be given to all directors and supervisors at least ten days before the meeting. The board of directors may provide for a different method of giving notice and notice period for convening an extraordinary meeting of the board of directors.

Under the PRC Company Law, the board of directors exercises the following powers:

• (i) to convene the shareholders’ general meeting and report on its work to the shareholders;

• (ii) to implement the resolution of the shareholders’ general meeting;

• (iii) to decide on the company’s business plans and investment plans;

• (iv) to formulate the company’s proposed annual financial budget and final accounts;

• (v) to formulate the company’s proposals for profit distribution and for recovery of losses;

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• (vi) to formulate proposals for the increase or reduction of the company’s registered capital and the issue of corporate bonds;

• (vii) to prepare plans for the merger, division or dissolution of the company;

• (viii) to decide on the company’s internal management structure;

• (ix) to appoint or dismiss the company’s general manager, and based on the general manager’s recommendation, to appoint or dismiss deputy general managers and financial officers of the company and to decide on their remuneration;

• (x) to formulate the company’s basic management system; and

• (xi) any other power given under the articles of association of the company.

In addition, the Mandatory Provisions provide that the board of directors is also responsible for formulating the proposals for amendment of the articles of association of a company.

Meetings of the board of directors shall be held only if more than half of the directors are present. Resolutions of the board of directors require the approval of more than half of all directors.

If a director is unable to attend a board meeting, he may appoint another director by a written power of attorney specifying the scope of the authorization to attend the meeting on his behalf.

If a resolution of the board of directors violates the laws, administrative regulations or the company’s articles of association as a result of which the company sustains serious losses, the directors participating in the resolution are liable to compensate the company. However, if it can be proven that a director expressly objected to the resolution when the resolution was voted on, and that such objections were recorded in the minutes of the meeting, such director may be relieved of that liability.

Under the PRC Company Law, the following persons may not serve as a director of a company:

• (i) persons without civil capacity or with restricted civil capacity;

• (ii) persons who have committed the offence of corruption, bribery, taking of property, misappropriation of property or destruction of the social economic order, and have been sentenced to criminal punishment, where less than five years have elapsed since the date of completion of the sentence; or persons who have been deprived of their political rights due to criminal offense, where less than five years have elapsed since the date of the completion of implementation of this deprivation;

• (iii) persons who are former directors, factory managers or managers of a company or enterprise which has become bankrupt and been liquidated due to mismanagement and who are personally liable for the bankruptcy of such company or enterprise, where less than three years have elapsed since the date of the completion of the bankruptcy and liquidation of the company or enterprise;

• (iv) persons who were legal representatives of a company or enterprise which had its business license revoked due to violation of the law and who are personally liable, where less than three years have elapsed since the date of the revocation of the business license; or

• (v) persons who have a relatively large amount of debt due and outstanding.

• (vi) Other circumstances under which a person is disqualified from acting as a director of a company are set out in the Mandatory Provisions (which have been incorporated in the Articles of Association, a summary of which is set out in the appendix entitled “Appendix VIII — Summary of the Articles of Association” to this prospectus).

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SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

The board of directors shall appoint a chairman, who is elected with approval of more than half of all the directors. The chairman of the board of directors exercises, among others, the following powers:

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

• (ii) to check on the implementation of the resolutions of the board of directors.

The legal representative of a company, in accordance with the company’s articles of association, may be the chairman, any executive director or the manager.

The Special Regulations provide that a company’s directors, supervisors, managers and other officers bear fiduciary duties and the duty to act diligently. They are required to faithfully perform their duties, protect the interests of the company and not to use their positions for their own benefit. The Mandatory Provisions (which have been incorporated into the Articles of Association, a summary of which is set out in the appendix entitled “Appendix VIII— Summary of the Articles of Association” to this prospectus) contain further elaborations of such duties.

Supervisors

A company shall have a supervisory committee composed of not less than three members. Each term of office of a supervisor is three years and he may serve consecutive terms if re-elected.

The supervisory committee is made up of shareholders representatives and an appropriate proportion of the company’s staff representatives; and the percentage of the number of the company’s staff representatives shall not be less than one-third. Directors and senior management shall not act as supervisors.

Requirements in relation to the power of the supervisory committee under the PRC Company Law are as follows:

• (i) to examine the company’s financial affairs;

• (ii) to supervise the directors and senior management in their performance of their duties and to propose the removal of any director or senior management who violates the laws, regulations, articles of association or shareholders’ resolution;

• (iii) to require any director or senior management whose act is detrimental to the company’s interests to rectify such act;

• (iv) to propose the convening of extraordinary shareholders’ general meetings and, in the event that the board of directors fails to perform the duties of convening and presiding shareholders’ meetings to convene and preside over shareholders’ meetings;

• (v) to propose any bills to shareholders’ general meetings;

• (vi) to commence any action against any directors or senior management; and

• (vii) other powers specified in the company’s articles of association.

The circumstances under which a person is disqualified from being a director of a company described above apply mutates mutandis to supervisors of a company.

The Special Regulations provide that a company’s directors and supervisors shall have fiduciary duties. They are required to faithfully perform their duties, protect the interest of the company and not to use their positions for their own benefit.

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SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

Managers and Senior Officers

A company shall have a manager who shall be appointed or removed by the board of directors. The manager is accountable to the board of directors and may exercise the following powers:

• (i) in charge of the production, operation and management of the company and arrange for the implementation of resolutions of the board of directors;

• (ii) arrange for the implementation of the company’s annual business and investment plans;

• (iii) formulate plans for the establishment of the company’s internal management structure;

• (iv) formulate the basic administration system of the company;

• (v) formulate the company’s internal rules;

• (vi) recommend the appointment and dismissal of deputy managers and any financial officer and appoint or dismiss other administration officers (other than those required to be appointed or dismissed by the board of directors);

• (vii) attend board meetings as a non-voting attendant; and

• (viii) other powers conferred by the board of directors or the company’s articles of association.

The Special Regulations and the Mandatory Provisions provide that the other senior management of a company includes the financial officer, secretary of the board of directors and other executives as specified in the articles of association of the company.

The circumstances under which a person is disqualified from being a director of a company described above apply mutatis mutandis to managers and officers of the company.

The articles of association of a company shall have binding effect on the shareholders, directors, supervisors, managers and other senior management of the company. Such persons shall be entitled to exercise their rights, apply for arbitration and issue legal proceedings according to the articles of association of the company. The provisions of the Mandatory Provisions regarding the senior management of a company have been incorporated in the Articles of Association, a summary of which is set out in the appendix entitled “Appendix VIII — Summary of the Articles of Association” to this prospectus.

Duties of Directors, Supervisors, Managers and Senior Officers

A director, supervisor, manager and other senior officer of a company are required under the PRC Company Law to comply with the relevant laws, regulations and the company’s articles of association, carry out their duties honestly and protect the interests of the company. A director, supervisor, manager and other senior officer of a company is also under a duty of confidentiality to the company and is prohibited from divulging secret information of the company save as permitted by the relevant laws and regulations or by the shareholders.

A director, supervisor, manager and other senior officer who contravenes any law, regulation or the company’s articles of association in the performance of his duties which results in any loss to the company shall be personally liable to the company.

The Special Regulations and the Mandatory Provisions provide that a director, supervisor, manager and other senior officer of a company owe fiduciary duties to the company and are required to perform their duties faithfully and to protect the interests of the company and not to make use of their positions in the company for their own benefit.

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SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

Finance and Accounting

A company shall establish its financial and accounting systems according to laws, administrative regulations and the regulations of the responsible financial department of the State Council and at the end of each financial year, prepare a financial report which shall be audited and verified as provided by law.

A company shall deposit its financial statements at the company for inspection by the shareholders at least 20 days before the convening of the annual general meeting of shareholders. A company established by the public subscription method must publish its financial statements.

The common reserve of a company comprises the statutory surplus reserve, the discretionary common reserve and the capital common reserve.

When distributing each year’s after-tax profits, the company shall set aside 10% of its after-tax profits for the company’s statutory surplus reserve (except where the reserve has reached 50% of the company’s registered capital). After a company has made an allocation to its statutory common reserve from its after-tax profit, subject to a resolution of the shareholders’ general meeting, the company may make an allocation to a discretionary common reserve.

When the company’s statutory surplus reserve is not sufficient to make up for the company’s losses of the previous year, current year profits shall be used to make good the losses before allocations are set aside for the statutory surplus reserve.

After the company has made good its losses and make allocations to its statutory surplus reserve the remaining profits could be available for distribution to shareholder in proportion to the number of shares held by the shareholders except as otherwise provided in the articles of association of such company limited by shares.

The capital common reserve of a company is made up of the premium over the nominal value of the shares of the company on issue and other amounts required by the relevant governmental authority to be treated as the capital common reserve.

The common reserve of a company shall be applied for the following purposes:

• (i) to make up the company’s losses other than the capital common reserve;

• (ii) to expand the business operations of the company; and

• (iii) to increase the registered capital of the company by the issue of new shares to shareholders in proportion to their existing shareholdings in the company or by increasing the par value of the shares currently held by the shareholders provided that if the statutory surplus reserve is converted into registered capital, the balance of the statutory surplus reserve after such conversion shall not be less than 25% of the registered capital on the company.

Appointment and Retirement of Auditors

The Special Regulations require a company to employ an independent PRC qualified accounting firm to audit the company’s annual report and review and check other financial reports.

The auditors are to be appointed for a term commencing from the close of an annual general meeting and ending at the close of the next following annual general meeting.

If a company removes or ceases to continue to appoint the auditors, it is required by the Special Regulations to give prior notice to the auditors and the auditors are entitled to make representations before the shareholders in

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APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

general meeting. The appointment, removal or non re-appointment of auditors shall be decided by the shareholders at shareholders’ general meetings and shall be filed with the CSRC for record.

Distribution of Profits

The PRC Company law provides that a company is restricted from distributing profits before accumulated losses have been made up and statutory common reserve have been drawn. The Special Regulations provide that the dividends and other distributions to be paid to holders of overseas listed foreign invested shares shall be declared and calculated in Renminbi and paid in foreign currency. Under the Mandatory Provisions, the payment of foreign currency to shareholders shall be made through a receiving agent.

Amendments to Articles of Association

Any amendments to the company’s articles of association must be made in accordance with the procedures set forth in the company’s articles of association. Any amendment of provisions incorporated in the articles of association in connection with the Mandatory Provisions will only be effective after approval by the companies approval department authorized by the State Council and the CSRC. In relation to matters involving the company’s registration, its registration with the companies registration authority must also be changed.

Dissolution and Liquidation

A company may apply for the declaration of insolvency by reason of its inability to pay debts as they fall due. After the people’s court has made a declaration of the company’s insolvency, the shareholders, the relevant authorities and the relevant professionals shall form a liquidation committee to conduct the liquidation of the company.

Under the PRC Company Law, a company shall be dissolved in any of the following events:

• (i) the term of its operations set down in the company’s articles of association has expired or events of dissolution specified in the company’s articles of association have occurred;

• (ii) the shareholders in general meeting have resolved to dissolve the company;

• (iii) the company is dissolved by reason of its merger or demerger;

• (iv) the company is subject to the revocation of business license, a closure order or dismissal in accordance with laws; or

• (v) in the event that the company encounters substantial difficulties in its operation and management and its continuance shall cause a significant loss, in the interest of shareholders, and where this cannot be resolved through other means, shareholders who hold more than 10% of the total shareholders’ voting rights of the company may present a petition to the people’s court for the dissolution of the company.

Where the company is dissolved in the circumstances described in (i), (ii), (iv) and (v) above, a liquidation committee must be formed within 15 days after the occurrence of the cause of dissolution so as to carry out liquidation. Members of the liquidation committee shall be composed of the directors or any other people as determined by the shareholders’ meeting.

If a liquidation committee is not established within the stipulated period, the company’s creditors can apply to the people’s court for its establishment.

The liquidation committee shall notify the company’s creditors within ten days after its establishment, and issue a public notice in the newspapers within 60 days. A creditor shall lodge his claim with the liquidation

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APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

committee within 30 days after receiving notification, or within 45 days of the public notice if he did not receive any notification. The liquidation committee shall exercise the following powers during the liquidation period:

• (i) to handle the company’s assets and to prepare a balance sheet and an inventory of the assets;

• (ii) to notify creditors or issue public notices;

• (iii) to deal with and settle any outstanding business of the company;

• (iv) to pay any tax overdue;

• (v) to settle the company’s financial claims and liabilities;

• (vi) to handle the surplus assets of the company after its debts have been paid off; and

• (vii) to represent the company in civil lawsuits.

If the company’s assets are sufficient to meet its liabilities, they shall be applied towards the payment of the liquidation expenses, wages owed to the employees and labor insurance expenses, tax overdue and debts of the company. Any surplus assets shall be distributed to the shareholders of the company in proportion to the number of shares held by them.

During the liquidation period, a company shall not engage in operating activities unrelated to the liquidation.

If the liquidation committee becomes aware that the company does not have sufficient assets to meet its liabilities, it must immediately apply to the people’s court for a declaration for bankruptcy. Following such declaration, the liquidation committee shall hand over all affairs of the liquidation to the people’s court.

Upon completion of the liquidation, the liquidation committee shall submit a liquidation report to the shareholders’ general meeting or the relevant supervisory department for verification. Thereafter, the report shall be submitted to the companies registration authority in order to cancel the company’s registration, and a public notice of its termination shall be issued.

Members of the liquidation committee are required to discharge their duties honestly and in compliance with relevant laws. A member of liquidation committee is liable to indemnify the company and its creditors in respect of any loss arising from his willful or material default.

Overseas Listing

The shares of a company shall only be listed overseas after obtaining approval from the securities regulatory authority of the State Council and the listing must be arranged in accordance with procedures specified by the State Council.

According to the Special Regulations, a company’s plan to issue overseas listed foreign invested shares and domestic invested shares which has been approved by the Securities Commission may be implemented by the board of directors of a company by way of separate issues, within 15 months after approval is obtained from the CSRC.

Loss of Share Certificates

A shareholder may apply, in accordance with the relevant provision set out in the PRC Civil Procedure Law, to a people’s court in the event that share certificates in registered form are either stolen or lost, for a declaration that such certificates will no longer be valid. After such a declaration has been obtained, the shareholder may apply to the company for the issue of replacement certificates.

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APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

The Mandatory Provisions provide for a separate procedure regarding loss of H share certificates (which has been incorporated in the Articles of Association, a summary of which is set out in “Appendix VIII — Summary of the Articles of Association”).

Suspension and Termination of Listing

The PRC Company Law has deleted provisions governing suspension and termination of listing. The new Securities Law has been amended as follows:

The trading of shares of a company on a stock exchange may be suspended if so decided by the securities administration department of the State Council (the new Securities Law has renamed this as the Securities Exchange) under one of the following circumstances:

• (i) the registered capital or shareholding distribution no longer comply with the necessary requirements for a listed company;

• (ii) the company failed to make public its financial position in accordance with the requirements or there is false information in the company’s financial report with the possibility of misleading investors;

• (iii) the company has committed a major breach of the law;

• (iv) the company has incurred losses for three consecutive years; or

• (v) other circumstances as required by the listing rules of the relevant stock exchange(s).

Under the Securities Law, in the event that the conditions for listing are not satisfied within the period stipulated by the relevant stock exchange in the case described in (i) above, or the company has refused to rectify the situation in the case described in (ii) above, or the company fails to become profitable in the next subsequent year in the case described in (iv) above, the relevant stock exchange shall have the right to terminate the listing of the shares of the company.

Merger and Demerger

Companies may merge through merger by absorption or through the establishment of a newly merged entity. If it merges by absorption, the company which is absorbed shall be dissolved. If it merges by forming a new corporation, both companies will be dissolved.

SECURITIES LAW AND REGULATIONS

The PRC has promulgated a number of regulations that relate to the issue and trading of the Shares and disclosure of information by us. In October 1992, the State Council established the Securities Committee and the CSRC. The Securities Committee was responsible for co-ordinating the drafting of securities regulations, formulating securities-related policies, planning the development of securities markets, directing, coordinating and supervising all securities-related institutions in the PRC and administering the CSRC. The CSRC was the regulatory body of the Securities Committee and responsible for the drafting of regulatory provisions of securities markets, supervising securities companies, regulating public offers of securities by PRC companies in the PRC or overseas, regulating the trading of securities, compiling securities-related statistics and undertaking research and analysis. In 1998, the State Council dissolved the Securities Committee and assigned its function to the CSRC. The CSRC is also responsible for the regulation and supervision of the national stocks and futures market according to laws, regulations and authorizations.

The Securities Law took effect on July 1, 1999 and was revised for the first time on August 28, 2004 and the second time on October 27, 2005. This is the first national securities law in the PRC, and it is divided into

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APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

12 chapters and 240 articles regulating, among other things, the issue and trading of securities, takeovers by listed companies, securities exchanges, securities companies and the duties and responsibilities of the State Council’s securities regulatory authorities. The Securities Law comprehensively regulates activities in the PRC securities market. Article 238 of the Securities Law provides that a PRC company must obtain prior approval from the State Council’s regulatory authorities to list its shares outside the PRC. Article 239 of the Securities Law provides that specific measures in respect of shares of companies in the PRC which are to be subscribed and traded in foreign currencies shall be separately formulated by the State Council. Currently, the issue and trading of foreign issued shares (including H Shares) are still mainly governed by the rules and regulations promulgated by the State Council and the CSRC.

ARBITRATION AND ENFORCEMENT OF ARBITRAL AWARDS

The Arbitration Law of the PRC ( ) (the “ Arbitration Law ”) was passed by the Standing Committee of the NPC on August 31, 1994 and became effective on September 1, 1995. It is applicable to contract disputes and other property disputes between natural person, legal person and other organizations where the parties have entered into a written agreement to refer the matter to arbitration before an arbitration committee constituted in accordance with the Arbitration Law. Under the Arbitration Law, an arbitration committee may, before the promulgation by the PRC Arbitration Association of arbitration regulations, formulate interim arbitration rules in accordance with the Arbitration Law and the PRC Civil Procedure Law. Where the parties have by agreement provided arbitration as the method for dispute resolution, the people’s court will refuse to handle the case.

The Listing Rules and the Mandatory Provisions require an arbitration clause to be included in the Articles of Association and, in the case of the Listing Rules, also in contracts with each of the Directors and Supervisors, to the effect that whenever any disputes or claims arise between holders of the H Shares and us; holders of the H Shares and the Directors, Supervisors, manager or other senior officers; or holders of the H Shares and holders of domestic Shares, in respect of any disputes or claims in relation to our affairs or as a result of any rights or obligations arising under the Articles of Association, the PRC Company Law or other relevant laws and administrative regulations, such disputes or claims shall be referred to arbitration.

Where a dispute or claim of rights referred to in the preceding paragraph is referred to arbitration, the entire claim or dispute must be referred to arbitration, and all persons who have a cause of action based on the same facts giving rise to the dispute or claim or whose participation is necessary for the resolution of such dispute or claim, shall comply with the arbitration. Disputes in respect of the definition of shareholders and disputes in relation to our register of shareholders need not be resolved by arbitration.

A claimant may elect for arbitration to be carried out at either the China International Economic and Trade Arbitration Commission (“ CIETAC ”) in accordance with its rules or the Hong Kong International Arbitration Center (“ HKIAC ”) in accordance with its securities arbitration rules. Once a claimant refers a dispute or claim to arbitration, the other party must submit to the arbitral body elected by the claimant. If the claimant elects for arbitration to be carried out at the HKIAC, any party to the dispute or claim may apply for a hearing to take place in Shenzhen in accordance with the securities arbitration rules of the HKIAC.

Under the Arbitration Law and the PRC Civil Procedure Law, an arbitral award is final and binding on the parties. If a party fails to comply with an award, the other party to the award may apply to the people’s court for enforcement. A people’s court may refuse to enforce an arbitral award made by an arbitration commission if there is any procedural or membership irregularity specified by law or the award exceeds the scope of the arbitration agreement or is outside the jurisdiction of the arbitration commission.

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APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

A party seeking to enforce an arbitral award of PRC arbitration panel against a party who, or whose property, is not within the PRC, may apply to a foreign court with jurisdiction over the case for enforcement. Similarly, an arbitral award made by a foreign arbitration body may be recognized and enforced by the PRC courts in accordance with the principles of reciprocity or any international treaty concluded or acceded to by the PRC. The PRC acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ( ) (the “ New York Convention ”) adopted on June 10, 1958 pursuant to a resolution of the Standing Committee of the NPC passed on December 2, 1986. The New York Convention provides that all arbitral awards made in a state which is a party to the New York Convention shall be recognized and enforced by other parties to the New York Convention, subject to their right to refuse enforcement under certain circumstances, including where the enforcement of the arbitral award is against the public policy of the State to which the application for enforcement is made. It was declared by the Standing Committee of the NPC simultaneously with the accession of the PRC that (i) the PRC will only recognize and enforce foreign arbitral awards on the principle of reciprocity and (ii) the PRC will only apply the New York Convention in disputes considered under PRC laws to arise from contractual and non-contractual mercantile legal relations.

In June 1999, an arrangement was made between Hong Kong and the Supreme People’s Court for the mutual enforcement of arbitral awards. This new arrangement was approved by the Supreme People’s Court and the Hong Kong Legislative Council, and became effective on February 1, 2000. The arrangement is made in accordance with the spirit of the New York Convention. Under the arrangement, awards made by PRC arbitral authorities pursuant to the Arbitration Law can be enforced in Hong Kong. Hong Kong arbitration awards made under the Arbitration Ordinance of Hong Kong are also enforceable in the PRC.

ESTABLISHMENT OF OVERSEAS OPERATIONS RULES AND REGULATIONS

According to the Foreign Exchange Control Regulations for Overseas Investments ( ) , which was formulated by SAFE and approved by the State Council, upon obtaining approval from the MOFCOM to establish enterprises overseas, PRC enterprises shall apply for foreign exchange registration for overseas investments. According to the Verification and Approval of Overseas Investment Projects Tentative Administrative ( ) , promulgated by the NDRC, investment projects involving the use of a large amount of foreign exchange would require the verification and approval by the NDRC or the State Council. If there is any change with respect to the investor or equity holding of a project that has been verified and approved, an application for amendment shall be made to the NDRC.

HONG KONG LAWS AND REGULATIONS

Company Law

The Hong Kong law applicable to a company having share capital incorporated in Hong Kong is based on the Companies Ordinance and is supplemented by common law. Our Company, which is a joint stock limited liability company established in the PRC, is governed by the PRC Company Law and all other rules and regulations promulgated pursuant to the PRC Company Law applicable to a joint stock limited liability company established in the PRC issuing overseas listed foreign shares to be listed on the Hong Kong Stock Exchange.

Set out below is a summary of the material differences between the Companies Ordinance applicable to a company incorporated in Hong Kong and the PRC Company Law applicable to a joint stock limited liability

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APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

company incorporated and existing under the PRC Company Law. This summary is, however, not intended to be an exhaustive comparison:

(i) Corporate existence

Under Companies Ordinance, a company having share capital is incorporated by the Registrar of Companies in Hong Kong issuing a certificate of incorporation and upon its incorporation, a company will acquire an independent corporate existence. A company may be incorporated as a public company or a private company.

Under the PRC Company Law, a joint stock limited liability company may be incorporated by either the promotion method or the subscription method. A joint stock limited liability company must have a minimum registered capital of RMB5 million, or higher as may otherwise be required by the laws and regulations. Hong Kong law does not prescribe any minimum capital requirements for a Hong Kong company. Under the PRC Company Law, the monetary contributions by all the shareholders must not be less than 30% of the registered capital. There is no such restriction on a Hong Kong company under Hong Kong law.

(ii) Share capital

Under Hong Kong law, the authorized share capital of a Hong Kong company is the amount of share capital which the company is authorized to issue and a company is not bound to issue the entire amount of its authorized share capital. For a Hong Kong company, the authorized share capital may be larger than the issued share capital. Hence, the directors of a Hong Kong company may, with the prior approval of the shareholders, if required, cause the company to issue new shares. The PRC Company Law does not recognize the concept of authorized share capital. The registered capital of a joint stock limited liability company is the amount of the issued share capital. Any increase in registered capital must be approved by the shareholders in general meeting and by the relevant governmental and regulatory authorities in the PRC.

Under the PRC Company Law, a company which is authorized by the relevant securities administration authority to list its shares on a stock exchange must have a registered capital of not less than RMB30 million. Hong Kong law does not prescribe any minimum capital requirements for companies incorporated in Hong Kong.

Under the PRC Company Law, the shares may be subscribed for in the form of money or non-monetary assets (other than assets not entitled to be used as capital contributions under relevant laws and administrative regulations). For non-monetary assets to be used as capital contributions, appraisals and verification must be carried out to ensure no overvaluation or under-valuation of the assets. The monetary contribution shall not be less than 30% of a joint stock limited liability company’s registered capital. There is no such restriction on a Hong Kong company under Hong Kong law.

(iii) Restrictions on shareholding and transfer of shares

Under PRC law, the domestic shares in the share capital of a joint stock limited liability company which are denominated and subscribed for in Renminbi may only be subscribed or traded by the State, PRC legal and natural persons. The overseas listed foreign shares issued by a joint stock limited liability company which are denominated in Renminbi and subscribed for in a currency other than Renminbi may only be subscribed and traded by investors from Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan or any country and territory outside the PRC.

Under the PRC Company Law, shares in a joint stock limited liability company held by its promoters cannot be transferred within one year after the date of establishment of the company. Shares in issue prior to the company’s public offering cannot be transferred within one year from the listing date of the shares on the Hong Kong Stock

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APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

Exchange. Shares in a joint stock limited liability company held by its directors, supervisors and managers and transferred each year during their term of office shall not exceed 25% of the total shares they held in the company, and the shares they held in the company cannot be transferred within one year from the listing date of the shares, and also cannot be transferred within half a year after the said personnel has left office. The articles of association may set other restrictive requirements on the transfer of the company’s shares held by its directors, supervisors and officers. There are no such restrictions on shareholdings and transfers of shares under Hong Kong law apart from the six-month lock up on our Company’s issue of shares and the 12-month lock up on controlling shareholders’ disposal of shares, as illustrated by the undertakings given by our Company to the Hong Kong Stock Exchange as described in the section entitled “Underwriting” in this prospectus.

(iv) Financial assistance for acquisition of shares

The PRC Company Law does not contain any provision prohibiting or restricting a joint stock limited liability company or its subsidiaries from providing financial assistance for the purpose of an acquisition of its own or its holding company’s shares. The Mandatory Provisions contain certain restrictions on a company and its subsidiaries providing such financial assistance similar to those under Companies Ordinance.

(v) Variation of class rights

The PRC Company Law makes no specific provision relating to variation of class rights. However, the PRC Company Law states that the State Council can promulgate regulations relating to other kinds of shares. The Mandatory Provisions contain elaborate provisions relating to the circumstances which are deemed to be variation of class rights and the approval procedures required to be followed in respect thereof. These provisions have been incorporated in the Articles of Association, which are summarized in the appendix entitled “Appendix VIII — Summary of the Articles of Association” to this prospectus. Under Companies Ordinance, no rights attached to any class of shares can be varied except (i) with the approval of a special resolution of the holders of the relevant class at a separate meeting, (ii) with the consent in writing of the holders of three-fourths in nominal value of the issued shares of the class in question, (iii) by agreement of all the members of the company or (iv) if there are provisions in the articles of association relating to the variation of those rights, then in accordance with those provisions.

Our Company (as required by the Listing Rules and the Mandatory Provisions) have adopted in the Articles of Association provisions protecting class rights in a similar manner to those found in Hong Kong law. Holders of overseas listed shares and domestic listed shares are defined in the Articles of Association as different classes, except in the case of (i) where our Company issues, upon the approval by special resolution of the Shareholders in general meeting, either separately or concurrently once every 12 months, not more than 20% of each of our existing issued domestic Shares or overseas-listed foreign-invested Shares; (ii) where our Company completes, with 15 months from the date on which approval is given by the securities regulatory authorities of the State Council, our plan (made at the time of our establishment) to issue domestic Shares and overseas-listed foreign-invested Shares; and (iii) where the Shares registered on our domestic Share register may be transferred to overseas investors, and such transferred Shares may be listed or traded on an overseas stock exchange, subject to the approval of the securities regulatory authorities of the State Council.

(vi) Directors

The PRC Company Law, unlike Companies Ordinance, does not contain any requirements relating to the declaration of interests in material contracts, restrictions on interested directors being counted towards the quorum of and voting at a meeting of the board of directors at which a transaction in which a director is interested is being considered, restrictions on directors’ authority in making major dispositions, restrictions on companies providing

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APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

certain benefits such as loans to directors and guarantees in respect of directors’ liability and prohibition against compensation for loss of office without shareholders’ approval. The Mandatory Provisions, however, contain requirements and restrictions in relation to the foregoing matters similar to those applicable under Hong Kong law.

(vii) Supervisory committee

Under the PRC Company Law, the board of directors and managers of a joint stock limited liability company is subject to the supervision and inspection of a supervisory committee but there is no mandatory requirement for the establishment of a supervisory committee for a company incorporated in Hong Kong. The Mandatory Provisions provide that each supervisor owes a duty, in the exercise of his powers, to act in good faith and honestly in what he considers to be in the best interests of the company and to exercise the care, diligence and skill that a reasonably prudent person would exercise under comparable circumstances.

(viii) Derivative action by minority shareholders

Hong Kong law permits minority shareholders to start a derivative action on behalf of a company against directors who have been guilty of a breach of their fiduciary duties to the company, if such directors control a majority of votes at a general meeting thereby effectively preventing a company from suing the directors in breach of their duties in its own name. The PRC Company Law gives shareholders of a joint stock limited liability company the right that in the event that the directors and senior managers violate their fiduciary obligations to a company, shareholders individually or jointly holding over 1% of the shares in the company for more than 180 days consecutively may request in writing the supervisory committee to initiate proceedings in the people’s court. In the event that the supervisory committee violates their fiduciary obligations to a company, the above said shareholders may request in writing the board of directors to initiate proceedings in the people’s court. Upon receipt of such request in writing from the shareholders, if the supervisory committee or the board of directors refuse to initiate such proceedings, or has not initiated proceedings within 30 days upon receipt of the request, or if under urgent situations, failure of initiating immediate proceeding may cause irremediable damages to the company, the above said shareholders shall for the benefit of the company’s interests, have the right to initiate proceedings directly to the court in its own name.

The Mandatory Provisions further provide remedies to the company against directors, supervisors and officers in breach of their duties to the company. In addition, every director and supervisor of a joint stock limited liability company applying for a listing of its foreign shares on the Hong Kong Stock Exchange is required to give an undertaking in favor of the company to comply with the company’s articles of association. This allows minority shareholders to act against directors and supervisors in default.

(ix) Protection of minorities

Under Hong Kong law, a shareholder who complains that the affairs of a company incorporated in Hong Kong are conducted in a manner unfairly prejudicial to his interests may petition to court to either wind up the company or make an appropriate order regulating the affairs of the company. In addition, on the application of a specified number of members, the Financial Secretary may appoint inspectors who are given extensive statutory powers to investigate the affairs of a company incorporated in Hong Kong. The PRC Company Law does not contain similar safeguards. The Mandatory Provisions, however, contain provisions to the effect that a controlling shareholder may not exercise its voting rights in a manner prejudicial to the interests of the shareholders generally or of some part of the shareholders of a company to relieve a director or supervisor of his duty to act honestly in the best interests of the company or to approve the expropriation by a director or supervisor of the company’s assets or the individual rights of other shareholders.

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SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

(x) Notice of shareholders’ meetings

Under the PRC Company Law, notice of a shareholders’ general meeting must be given 20 days before the meeting, while notice of an extraordinary meeting must be given 15 days before the meeting or, in the case of a company having bearer shares, a public announcement of a shareholders’ general meeting must be made 30 days prior to it being held. Under the Special Regulations and the Mandatory Provisions, 45 days’ written notice must be given to all shareholders and shareholders who wish to attend the meeting must reply in writing 20 days before the date of the meeting. For a company incorporated in Hong Kong, the minimum notice periods of a general meeting convened for passing an ordinary resolution and a special resolution are 14 days and 21 days, respectively; and the notice period for an annual general meeting is 21 days.

(xi) Quorum for shareholders’ meetings

Under Hong Kong law, the quorum for a general meeting is two members unless the articles of association of the company otherwise provide. For one member companies, one member will be a quorum. The PRC Company Law does not specify any quorum requirement for shareholders’ general meeting but the Special Regulations and the Mandatory Provisions provide that a company’s general meeting can be convened when replies to the notice of that meeting have been received from shareholders whose shares represent 50% of the voting rights in the company at least 20 days before the proposed date of the meeting. If that 50% level is not achieved, the company shall within five days notify shareholders by public announcement and the shareholders’ general meeting may be held thereafter.

(xii) Voting

Under Hong Kong law, an ordinary resolution is passed by a simple majority of votes cast by members present in person or by proxy at a general meeting and a special resolution is passed by a majority of not less than threefourths of votes cast by members present in person or by proxy at a general meeting. Under the PRC Company Law, the passing of any resolution requires more than one half of the votes cast by shareholders present in person or by proxy at a shareholders’ general meeting except in cases of proposed amendment to the articles of association, increase or reduction of share capital, and merger, demerger or dissolution of a joint stock limited liability company or changes to the company status, which require two-thirds or more of votes cast by shareholders present at a shareholders’ general meeting.

(xiii) Financial disclosure

A joint stock limited liability company is required under the PRC Company Law to make available at its office for inspection by shareholders its annual balance sheet, profit and loss account, changes in financial position and other relevant annexures 20 days before an annual general meeting. In addition, a company established by the public subscription method under the PRC Company Law must publish its financial situation. The annual balance sheet has to be verified by registered accountants. The Companies Ordinance requires a company to send to every shareholder a copy of its balance sheet, auditors’ report and directors’ report which are to be tabled before the company in its annual general meeting not less than 21 days before such meeting.

A joint stock limited liability company is required under the PRC law to prepare its financial statements in accordance with the PRC accounting standards. The Mandatory Provisions require that the company must, in addition to preparing accounts according to the PRC GAAP, have its accounts prepared and audited in accordance with IFRS or Hong Kong accounting standards and its financial statements must also contain a statement of the financial effect of the material differences (if any) from the financial statements prepared in accordance with the PRC GAAP.

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APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

The Special Regulations require that there should not be any inconsistency between the information disclosed within and outside the PRC and that, to the extent that there are differences in the information disclosed in accordance with the relevant PRC and overseas laws, regulations and requirements of the relevant stock exchanges, such differences should also be disclosed simultaneously.

(xiv) Information on directors and shareholders

The PRC Company Law gives shareholders the right to inspect the articles of association, minutes of the shareholders’ general meetings and financial and accounting reports. Under the Articles of Association, shareholders have the right to inspect and copy (at reasonable charges) certain information on shareholders and on directors similar to that available to shareholders of Hong Kong companies under Hong Kong law.

(xv) Receiving agent

Under both the PRC and Hong Kong law, dividends once declared become debts payable to shareholders. The limitation period for debt recovery action under Hong Kong law is six years while that under the PRC law is two years. The Mandatory Provisions require the appointment of a trust company registered under the Hong Kong Trustee Ordinance (Chapter 29 of the Laws of Hong Kong) as a receiving agent to receive on behalf of holders of foreign shares dividends declared and all other monies owed by a joint stock limited liability company in respect of such foreign shares.

(xvi) Corporate reorganization

Corporate reorganization involving a company incorporated in Hong Kong may be effected in a number of ways, such as a transfer of the whole or part of the business or property of the company in the course of being wound up voluntarily to another company pursuant to section 237 of the Companies Ordinance or a compromise or arrangement between the company and its creditors or between the company and its members pursuant to section 166 of the Companies Ordinance which requires the sanction of the court. Under PRC law, the merger, demerger, dissolution or change to the status of a joint stock limited liability company has to be approved by shareholders in general meeting.

(xvii) Arbitration of disputes

In Hong Kong, disputes between shareholders and a company incorporated in Hong Kong or its directors may be resolved through the courts. The Mandatory Provisions provide that such disputes should be submitted to arbitration at either the HKIAC or the CIETAC, at the claimant’s choice.

(xviii)Mandatory transfers

Under the PRC Company Law, a joint stock limited liability company is required to make transfers equivalent to certain prescribed percentages of its after tax profit to the statutory common reserve fund. There are no such requirements under Hong Kong law.

(xix) Remedies of a company

Under the PRC Company Law, if a director, supervisor or manager in carrying out his duties infringes any law, administrative regulation or the articles of association of a company, which results in damage to the company, that director, supervisor or manager should be responsible to the company for such damages. In addition, in compliance with the Mandatory Provisions, the Articles of Association set out remedies to our Company similar to those available under Hong Kong law (including recovery of profits made by a director, supervisor or officer).

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APPENDIX VII

SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

(xx) Dividends

The articles of association of a company empower the company to withhold, and pay to the relevant tax authorities, any tax payable under PRC law on any dividends or other distributions payable to a shareholder. Under Hong Kong law, the limitation period for an action to recover a debt (including the recovery of dividends) is six years, whereas under PRC laws, the relevant limitation period is two years. A company shall not exercise its powers to forfeit any unclaimed dividend in respect of its listed foreign shares until after the expiry of the applicable limitation period.

(xxi) Fiduciary duties

In Hong Kong, there is the common law concept of the fiduciary duty of directors. Under the PRC Company Law and the Special Regulations, directors, supervisors, officers, and managers owe a fiduciary duty towards a company and are not permitted to engage in any activities which compete with or damage the interests of the company.

(xxii) Closure of register of shareholders

The Companies Ordinance requires that the register of shareholders of a company must not generally be closed for the registration of transfers of shares for more than 30 days (extendable to 60 days in certain circumstances) in a year, whereas the articles of association of a company provide, as required by the PRC Company Law and the Mandatory Provisions, that share transfers may not be registered within 30 days before the date of a shareholders’ meeting or within five days before the record date set for the purpose of distribution of dividends.

Listing Rules

The Listing Rules provide additional requirements which apply to an issuer which is incorporated in the PRC as a joint stock limited liability company and seeks a primary listing or whose primary listing is on the Hong Kong Stock Exchange. Set out below is a summary of such principal additional requirements which apply to our Company:

(i) Compliance Advisor

A company seeking listing on the Hong Kong Stock Exchange is required to appoint a compliance advisor acceptable to the Hong Kong Stock Exchange for the period from its listing date up to the date of the publication of its first full year’s financial results, to provide the company with professional advice on continuous compliance with the Listing Rules and all other applicable laws, regulations, rules, codes and guidelines, and to act at all times, in addition to the company’s two authorized representatives, as the principal channel of communication with the Hong Kong Stock Exchange. The appointment of the compliance advisor may not be terminated until a replacement acceptable to the Hong Kong Stock Exchange has been appointed.

If the Hong Kong Stock Exchange is not satisfied that the compliance advisor is fulfilling its responsibilities adequately, it may require the company to terminate the compliance advisor’s appointment and appoint a replacement.

The compliance advisor must keep the company informed on a timely basis of changes in the Listing Rules and any new or amended law, regulation or code in Hong Kong applicable to the company. It must act as the company’s principal channel of communication with the Hong Kong Stock Exchange if the authorized representatives of the company are expected to be frequently outside Hong Kong.

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APPENDIX VII

SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

(ii) Accountants’ report

An accountants’ report for a PRC issuer will not normally be regarded as acceptable by the Hong Kong Stock Exchange unless the relevant accounts have been audited to a standard comparable to that required in Hong Kong. Such report will normally be required to conform to either Hong Kong or international accounting standards.

(iii) Process agent

Our Company is required to appoint and maintain a person authorized to accept service of process and notices on its behalf in Hong Kong throughout the period during which its securities are listed on the Hong Kong Stock Exchange and must notify the Hong Kong Stock Exchange of his appointment, the termination of his appointment and his contact particulars.

(iv) Public shareholdings

If at any time there are existing issued securities of a PRC issuer other than foreign shares which are listed on the Hong Kong Stock Exchange, the Listing Rules require that the aggregate amount of H shares and other securities held by the public must constitute not less than 25% of the PRC issuer’s issued share capital and that the class of securities for which listing is sought must not be less than 15% of the issuer’s total issued share capital, having an expected market capitalization at the time of listing of not less than HK$50 million.

The Hong Kong Stock Exchange may, at its discretion, accept a lower percentage of between 15% and 25% in the case of issuers with an expected market capitalization at the time of listing of over HK$10,000 million.

(v) Independent non-executive directors and supervisors

The independent non-executive directors of a PRC issuer are required to demonstrate an acceptable standard of competence and adequate commercial or professional expertise to ensure that the interests of the general body of shareholders will be adequately represented. The supervisors of a PRC issuer must have the character, expertise and integrity and be able to demonstrate a standard of competence commensurate with their position as supervisors.

(vi) Restrictions on purchase and subscription of its own securities

Subject to governmental approvals and the provisions of the Articles of Association, our Company may repurchase our own H shares on the Hong Kong Stock Exchange in accordance with the provisions of the Listing Rules. Approval by way of special resolution of the holders of domestic Shares and the holders of H Shares at separate class meetings conducted in accordance with the Articles of Association is required for share repurchases. In seeking approvals, our Company is required to provide information on any proposed or actual purchases of all or any of our equity securities, whether or not listed or traded on the Hong Kong Stock Exchange. The Directors must also state the consequences of any purchases which will arise under either or both of the Code on Takeovers and Mergers and any similar PRC law of which they are aware, if any. Any general mandate given to the Directors to repurchase H shares must not exceed 10% of the total amount of existing issued H Shares.

(vii) Mandatory Provisions

With a view to increasing the level of protection afforded to investors, the Hong Kong Stock Exchange requires the incorporation, in the articles of association of a PRC company whose primary listing is on the Hong Kong Stock Exchange, of the Mandatory Provisions and provisions relating to the change, removal and resignation of auditors, class meetings and the conduct of the supervisory committee of the company. Such provisions have been incorporated into the Articles of Association, a summary of which is set out in the appendix entitled “Appendix VIII — Summary of the Articles of Association” to this prospectus.

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APPENDIX VII

SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

(viii) Redeemable Shares

Our Company must not issue any redeemable Shares unless the Hong Kong Stock Exchange is satisfied that the relative rights of the holders of the H Shares are adequately protected.

(ix) Pre-emptive rights

Except in the circumstances mentioned below, the Directors are required to obtain the approval by a special resolution of Shareholders in general meeting, and the approvals by special resolutions of the holders of domestic Shares and H Shares (each being otherwise entitled to vote at general meetings) at separate class meetings conducted in accordance with the Articles of Association, prior to authorizing, allotting, issuing or granting shares or securities convertible into shares, or options, warrants or similar rights to subscribe for any shares or such convertible securities.

No such approval will be required under the Listing Rules, but only to the extent that, the existing Shareholders of our Company have by special resolution in general meeting given a mandate to the Directors, either unconditionally or subject to such terms and conditions as may be specified in the resolution, to authorize, allot or issue, either separately or concurrently once every 12 months, not more than 20% of the existing domestic Shares and H Shares as at the date of the passing of the relevant special resolution or of such Shares that are part of our plan at the time of our establishment to issue domestic Shares and H Shares and which plan is implemented within 15 months from the date of approval by the CSRC.

(x) Supervisors

Our Company is required to adopt rules governing dealings by the Supervisors in securities of our Company in terms no less exacting than those of the model code (set out in Appendix 10 to the Listing Rules) issued by the Hong Kong Stock Exchange.

Our Company is required to obtain the approval of the Shareholders in a general meeting (at which the relevant Supervisor and his associates shall not vote on the matter) prior to our Company or any of our subsidiaries entering into a service contract of the following nature with a Supervisor or proposed Supervisor of our Company or our subsidiaries: (i) the contract is for a duration that may exceed three years; or (ii) the contract expressly requires our Company to give more than one year’s notice or to pay compensation or make other payments equivalent to more than one year’s emoluments.

The remuneration committee of our Company or an independent board committee must form a view in respect of service contracts that require Shareholders’ approval and advise Shareholders (other than shareholders with a material interest in the service contracts and their associates) as to whether the terms are fair and reasonable, advise whether such contracts are in the interests of our Company and the Shareholders as a whole and advise Shareholders on how to vote.

(xi) Amendment to the Articles of Association

Our Company is required not to permit or cause any amendment to be made to the Articles of Association which would cause the same to cease to comply with the mandatory provisions of the Listing Rules relating to such Articles of Association.

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SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

(xii) Documents for inspection

Our Company is required to make available at a place in Hong Kong for inspection by the public and shareholders free of charge, and for copying by Shareholders at reasonable charges of the following:

• a complete duplicate register of Shareholders;

• a report showing the state of the issued share capital of our Company;

• our Company’s latest audited financial statements and the reports of the Directors, auditors and Supervisors (if any) thereon;

• special resolutions of our Company;

• reports showing the number and nominal value of securities repurchased by our Company since the end of the last financial year, the aggregate amount paid for such securities and the maximum and minimum prices paid in respect of each class of securities repurchased (with a breakdown between A Shares and H Shares);

• a copy of the latest annual return filed with the SAIC; and

• for Shareholders only, copies of minutes of meetings of Shareholders.

(xiii) Receiving agents

Our Company is required to appoint one or more receiving agents in Hong Kong and pay to such agent(s) dividends declared and other monies owing in respect of the H Shares to be held, pending payment, in trust for the holders of such H Shares.

(xiv) Statements in share certificates

Our Company is required to ensure that all of our listing documents and share certificates include the statements stipulated below and to instruct and cause each of our Share registrars not to register the subscription, purchase or transfer of any of our Shares in the name of any particular holder unless and until such holder delivers to such Share registrar a signed form in respect of such Shares bearing statements to the following effect that the acquirer of the Shares:

• agrees with our Company and each Shareholder of our Company, and our Company agrees with each Shareholder of our Company, to observe and comply with the PRC Company Law, the Special Regulations, the Articles of Association and other relevant laws and administrative regulations;

• agrees with our Company, each Shareholder, Director, Supervisor, manager and officer of our Company, and our Company acting for itself and for each Director, Supervisor, manager and officer of our Company agrees with each Shareholder, to refer all differences and claims arising from the Articles of Association or any rights or obligations conferred or imposed by the PRC Company Law or other relevant laws and administrative regulations concerning the affairs of our Company to arbitration in accordance with the Articles of Association, and any reference to arbitration shall be deemed to authorize the arbitration tribunal to conduct hearings in open session and to publish its award. Such arbitration shall be final and conclusive;

• agrees with our Company and each Shareholder of our Company that the H Shares are freely transferable by the holder thereof; and

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APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

• authorizes our Company to enter into a contract on his behalf with each Director and officer of our Company whereby each such Director and officer undertakes to observe and comply with his obligation to Shareholders as stipulated in the Articles of Association.

(xv) Compliance with the PRC Company Law, the Special Regulations and the Articles of Association

Our Company is required to observe and comply with the PRC Company Law, the Special Regulations and the Articles of Association.

(xvi) Contract between our Company and its Directors, officers and Supervisors

Our Company is required to enter into a contract in writing with every Director and officer containing at least the following provisions:

• an undertaking by the Director or officer to our Company to observe and comply with the PRC Company law, the Special Regulations, the Articles of Association, the Codes on Takeovers and Mergers and Share Repurchases and an agreement that our Company shall have the remedies provided in the Articles of Association and that neither the contract nor his office is capable of assignment:

• an undertaking by the Director or officer to our Company acting as agent for each Shareholder to observe and comply with his obligations to Shareholders as stipulated in the Articles of Association;

• an arbitration clause which provides that whenever any differences or claims arise from that contract, the Articles of Association or any rights or obligations conferred or imposed by the PRC Company Law or other relevant law and administrative regulations concerning the affairs of our Company between our Company and the Directors or officers and between a holder of H Shares and a Director or officer of our Company, such differences or claims will be referred to arbitration at either the CIETAC in accordance with its rules or the HKIAC in accordance with its securities arbitration rules, at the election of the claimant and that once a claimant refers a dispute or claim to arbitration, the other party must submit to the arbitral body elected by the claimant. Such arbitration will be final and conclusive;

• if the party seeking arbitration elects to arbitrate the dispute or claim at HKIAC, then either party may apply to have such arbitration conducted in Shenzhen according to the securities arbitration rules of HKIAC;

• PRC laws shall govern the arbitration of disputes or claims referred to above, unless otherwise provided by law or administrative regulations;

• the award of the arbitral body is final and shall be binding on the parties thereto;

• the agreement to arbitrate is made by the Director or officer with our Company on our own behalf and on behalf of each Shareholder; and

• any reference to arbitration shall be deemed to authorize the arbitral tribunal to conduct hearings in open session and to publish its award.

Our Company is also required to enter into a contract in writing with every Supervisor containing statements in substantially the same terms.

(xvii) Subsequent listing

Our Company must not apply for the listing of any of the H shares on a PRC stock exchange unless the Hong Kong Stock Exchange is satisfied that the relative rights of the holders of foreign Shares are adequately protected.

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APPENDIX VII SUMMARY OF PRINCIPAL LEGAL AND REGULATORY PROVISIONS

(xviii)English translation

All notices or other documents required under the Listing Rules to be sent by our Company to the Hong Kong Stock Exchange or to holders of the H Shares are required to be in the English language, or accompanied by a certified English translation.

(xix) General

If any change in the PRC law or market practices materially alters the validity or accuracy of any of the basis upon which the additional requirements have been prepared, then the Hong Kong Stock Exchange may impose additional requirements or make listing of the equity securities of a PRC issuer, including our Company, subject to special conditions as the Hong Kong Stock Exchange considers appropriate. Whether or not any such changes in the PRC law or market practices occur, the Hong Kong Stock Exchange retains its general power under the Listing Rules to impose additional requirements and make special conditions in respect of the Listing.

(c) Other Legal and Regulatory Provisions

Upon Listing, the provisions of the SFO, the Codes on Takeovers and Mergers and Share Repurchases and such other relevant ordinances and regulations as may be applicable to companies listed on the Hong Kong Stock Exchange will apply to our Company.

(d) Securities arbitration rules

The Articles of Association provide that certain claims arising from the Articles of Association or the PRC Company Law shall be arbitrated at either the CIETAC or the HKIAC in accordance with their respective rules. The securities arbitration rules of the HKIAC contain provisions allowing an arbitral tribunal to conduct a hearing in Shenzhen for cases involving the affairs of companies incorporated in the PRC and listed on the Hong Kong Stock Exchange so that PRC parties and witnesses may attend. Where any party applies for a hearing to take place in Shenzhen, the tribunal shall, where satisfied that such application is based on bona fide grounds, order the hearing to take place in Shenzhen conditional upon all parties including witnesses and the arbitrators being permitted to enter Shenzhen for the purpose of the hearing. Where a party (other than a PRC party) or any of its witnesses or any arbitrator is not permitted to enter Shenzhen, then the tribunal shall order that the hearing be conducted in any practicable manner, including the use of electronic media. For the purpose of the securities arbitration rules, a PRC party means a party domiciled in the PRC.

PRC LEGAL MATTERS

Our PRC legal advisor, Xinjiang Tianyang Law Firm, has sent to us a legal opinion dated June 7, 2010 which includes a statement to the effect that the description of PRC laws and regulations as contained in this prospectus is true and correct in all material respects. This legal opinion is available for inspection as referred to in the section entitled “Documents Available for Inspection” in Appendix X to this prospectus.

Any person wishing to have detailed advice on PRC law and the laws of any jurisdiction is recommended to seek independent legal advice.

– VII-27 –

APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

This Appendix set out summaries of the main clauses of our Articles of Association adopted on September 25, 2009, which shall become effective as of the date on which the H Shares are listed on the Hong Kong Stock Exchange. As the main purpose of this Appendix is to provide potential investors with an overview of the Articles of Association, it may not necessarily contain all information that is important for investors. As discussed in the appendix entitled “Appendix X — Documents Delivered to the Registrar of Companies and Available for Inspection” to this prospectus, the full document of the Articles of Association in Chinese is available for examination.

1 Directors and Board of Directors

(a) Power to allocate and issue shares

The Articles of Association does not contain clauses that authorize the Board of Directors to allocate or issue shares. The Board of Directors shall prepare suggestions for share allotment or issue, which are subject to approval by the Shareholders at the Shareholders’ general meeting in the form of a special resolution. Any such allotment or issue shall be in accordance with the procedures stipulated in appropriate laws and administrative regulations.

• (b) Power to dispose assets of our Company or our subsidiaries

If the sum of (i) the cost value of the assets to be disposed of, and (ii) the amount or value of the cost received from the fixed assets of our Company disposed of within the four months immediately preceding this suggestion for disposal exceeds 33% of the value of fixed assets of our Company indicated on the latest audited balance sheet submitted to the Shareholders at the Shareholders’ meeting, The Board of Directors shall not dispose of or agree to dispose of such fixed assets unless approved by the Shareholders at the meeting. The above disposal refers to the transfer of rights and interests in certain properties, but does not include the provision of guarantees with fixed assets.

The validity of the transactions with respect to the disposal of fixed assets of our Company shall not be affected by the violation of the above restrictions contained in the Articles of Association.

• (c) Indemnification or compensation for loss of office

Pursuant to the emoluments agreement entered into between our Company and the Directors or Supervisors, they are entitled to compensation or other payments for loss of office or resignation as a result of the acquisition of our Company, subject to the approval of the Shareholders at the Shareholders’ meeting. Acquisition of our Company refers to any of the following circumstances:

• (i) An offer made to the Shareholders; or

• (ii) An offer is made such that the offerer will become the Controlling Shareholder of our Company (as defined in the Articles of Association for this definition).

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

(d) Loans to Directors, Supervisors or other management personnel

Our Company shall neither provide the Directors, Supervisors, or senior management of our company or our parent company with loans or loan guarantees either directly or indirectly nor provide persons related to the above personnel with loans or loan guarantees.

In the event that our Company provides loans in violation of this restriction, the person who receives the loan(s) must pay off the loan(s) immediately, regardless of the terms and conditions. Any loan provided by our

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

Company in violation of the above requirements shall not be mandatorily enforced against us, unless under the following circumstances:

• (i) The loan provider unknowingly provides loans to personnel related to the Directors, Supervisors, president or other senior management of our Company or controlled company; or

• (ii) The collateral provided by our Company is sold by the lender to the buyer in good faith.

The following transactions are exempted from the above clauses:

• (i) Our Company provides our subsidiaries with loans or loan guarantees;

• (ii) Our Company provides any of the Directors, Supervisors, president or other senior management with loans, loan guarantees or any other fund pursuant to the employment contract/s approved at the Shareholders’ meeting to pay all expenses incurred for the purpose of our Company or performing our duties; and

• (iii) In case that the normal scope of business of our Company covers the provision of loans or guarantees, our Company may provide any of the Directors, Supervisors, president or other senior management or other related personnel with loans or guarantees for loans provided by other personnel to the above personnel, provided that the terms and conditions governing the above loans or loan guarantees shall be normal commercial terms and conditions.

For the purpose of the above provisions, “guarantee” includes the acts of the guarantor bearing the liabilities or providing properties to ensure that the obligor performs the obligations.

• (e) Provide financial aid for acquiring the Shares or shares of any of our subsidiaries

Pursuant to the Articles of Association:

• (i) Our Company or our subsidiaries shall not provide any financial assistance at any time or in any manner to personnel that acquires or plans to acquire the Shares. Such personnel include any who undertake liabilities, directly or indirectly, from acquiring the Shares, and

• (ii) Our Company or any of our subsidiaries shall not provide personnel mentioned in the preceding paragraph with financial aid at any time or in any manner to mitigate or exempt the liabilities of the above personnel.

The following transactions are not prohibited:

• (i) Related financial aid provided by our Company which is indeed in our interest and the main purpose of the aid is not to acquire the Shares or is part of a master plan of our Company;

• (ii) Distribution of our assets by way of dividend lawfully declared;

• (iii) Distribution of dividends in the form of bonus shares;

• (iv) Reducing the registered capital, redeeming the Shares or adjusting the equity structure pursuant to the Articles of Association;

• (v) Our Company grants loans within our normal scope of business, provided that such loans shall not result in reduction in the net assets of our Company or even if the net assets are reduced, this financial aid is paid from the profit available for distribution; and

• (vi) Our Company provides the employee stock ownership plan with loans, provided that such loans shall not result in reduction in the net assets of our Company or, even if the net assets are reduced, this financial aid is paid from the profit available for distribution.

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SUMMARY OF THE ARTICLES OF ASSOCIATION

APPENDIX VIII

For the purpose of the above provisions:

• (i) “Financial aid” includes, but is not limited to:

• (aa) Gifts;

• (bb) Guarantees (including acts of the guarantor assuming liabilities or providing property to ensure that the obligor performs the obligations), compensation (excluding compensation arising from mistakes of our Company), cancellation or waiver of rights;

• (cc) Provision of loans or signing of contracts whereby our Company performs some obligations before others, change of the parties to the loans/contracts as well as the assignment of the rights in the loans/contracts; or

• (dd) Financial aid provided by our Company in any other manner when it is insolvent, has no net assets, or will suffer significant decreases in net assets.

• (ii) “Assuming liabilities” includes undertaking liabilities by signing agreements or making arrangements (no matter whether the agreements or arrangements are enforceable on demand or bearing the liabilities for itself or any other person) or changing its financial status in any other manner.

(f) Disclose matters relating to the contract rights of our Company and voting on the contract/s.

When any of the Directors, Supervisors, president or other senior management own material rights and interest in the contracts, transactions or arrangements that our Company has entered into or plans to enter into in any manner directly or indirectly (except for employment contracts), the above personnel shall disclose the nature and degree of their rights and interests to the Board of Directors as soon as possible no matter whether the above contracts, transactions, arrangements or suggestions are subject to the approval of the Board of Directors in normal circumstances.

When a resolution adopted by the Board of Directors creates an interest for a Director or a related person, the Director shall withdraw and not participate in voting; and the Director shall not be included when determining whether the number of directors attending the meeting reaches a quorum.

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

Where related persons of the Directors, Supervisors and senior management have interests in certain contracts, transactions and arrangements, the related Directors, Supervisors and senior management shall be deemed to have interests.

(g) Remuneration

Our Company shall sign written agreements with the Directors and Supervisors regarding remuneration, which shall be subject to prior approval of the general Shareholders’ meeting, including:

• (i) Remuneration for providing services as the Directors, Supervisors or senior management;

• (ii) Remuneration for providing services as the Directors, Supervisors or senior management of our subsidiaries;

• (iii) Remuneration for providing other services as management of our Company or our subsidiaries; and

• (iv) Compensation received by the Directors or Supervisors as a result of loss of position or resignation.

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

No Director or Supervisor shall institute any litigation against our Company over any remuneration payable relative to the above unless provided for in a signed contract.

• (h) Resignation, Appointment and Dismissal

None of the following persons shall serve as our Director, Supervisor, president or other senior management:

• (i) Anyone who has no civil capacity or has only limited civil capacity;

• (ii) Anyone who has been convicted of corruption, bribery, embezzlement, larceny, or disrupting the social economic order and is within five years of the expiry date of punishment or has been deprived of political rights because of this conviction and is within five years of the expiry date of the sentence;

• (iii) Anyone who has served as director, factory manager or manager of a company or enterprise that is bankrupt and liquidated as a result of poor management, was personally liable for the bankruptcy of the company or enterprise, and is within three years of the date of completion of bankruptcy and liquidation of the company or enterprise;

• (iv) Anyone who has served as the legal representative of a company or enterprise whose business license was revoked due to violation of the law, was personally liable, and is within three years of the date on which the business license of our Company or enterprise was revoked;

• (v) Anyone who has a large sum of debt, which was not paid at maturity;

• (vi) Anyone who is investigated by the judicial agencies for violation of criminal law and whose case is pending;

• (vii) Anyone who may not serve as a head of the company pursuant to the provisions of the law and administrative regulations;

• (viii) Anyone who is not a natural person;

• (ix) Anyone penalized by the CSRC by being denied access to the securities market and the penalty remains in effect;

• (x) Anyone judged by the competent agencies to have violated the provisions of relevant securities laws, has been involved in deceptive or dishonest acts and is within five years of the date on which the judgment was made;

• (xi) No one shall serve as senior management of our Company if he or she holds any position other than directors in the Controlling Shareholder or actual controlling unit of our Company.

The validity of the acts of the Directors or senior management on behalf of our Company to bona fide third parties shall not be affected by any irregularities in their appointment, election or qualifications.

The Board of Directors consists of nine directors and these are elected at the general Shareholders meeting. The Directors need not hold any of the Shares.

The Directors may also serve as president or other senior management provided that the total number of Directors serving as president or other senior management is not more than one half and not less than one third of the total number of the Directors.

The chairman and vice chairman of the Board shall be elected and dismissed by a vote of more than two thirds of the Directors. Subject to compliance with related laws and administrative regulations, the general Shareholders’ meeting may dismiss any Director whose term has not expired by an ordinary resolution without affecting any claim for compensation that may be made pursuant to any contract.

– VIII-4 –

APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

The Directors serve three-year terms. Upon expiration of the term, the Director may be re-elected (an independent Director may not be elected for more than two terms consecutively).

Written notice concerning nomination of a director candidate and indication of the candidate’s intention to accept the nomination shall be sent to our Company seven days before the general Shareholders’ meeting is convened.

The cumulative voting system shall be adopted when the general shareholders meeting votes on the election of Directors and Supervisors.

With regard to the preceding paragraph, the “cumulative voting system” means that when the general Shareholders meeting elects the Directors and Supervisors, each Shareholder has voting rights equal to the number of Directors or Supervisors to be elected and the voting rights held by the Shareholders may be used together.

(i) Power to Obtain Loans

Subject to compliance with the laws and administrative regulations of the State, our Company has the right to raise funds and obtain loans, including (but not limited to) issuing bonds, mortgaging or pledging all or part of the properties of our Company, as well as exercising other rights approved by the laws and administrative regulations of the State, provided that such action shall not undermine or revoke the rights of any shareholder.

The Articles of Association does not include any special provision regarding the manner in which the Directors may exercise the right to obtain loans or the manner in which such a right is created except (a) the provision regarding the power of the Directors to develop schemes for our Company to issue bonds, and (b) the provision that the bond issue must be approved by the Shareholders through a special resolution at the general Shareholders’ meeting.

(j) Responsibilities

The Directors, Supervisors, president and other senior management shall bear the responsibility of good faith and diligence towards our Company. In the event of violation of obligations owed to our Company by the Directors, Supervisors, and other senior management, we shall have the right to take the following measures in addition to various rights and remedial measures stipulated in legal and administrative regulations:

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

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

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

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

• (v) Require the relevant Directors, Supervisors, president or other senior management to return the interest earned or that may be earned from funds that should have been paid to our Company.

When performing their responsibilities, the Directors, Supervisors and senior management must comply with the principle of integrity and shall not put themselves in situations where their own interests may conflict with the

– VIII-5 –

APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

obligations they have undertaken. This principle includes, but is not limited to, performing the following obligations:

• (i) Sincerely taking the best interests of our Company as the starting point of any action;

• (ii) Exercising one’s rights within but not exceeding the scope of authority;

• (iii) Exercising conferred discretionary powers personally without being manipulated by others; not transferring discretionary powers to other persons without lawful permission or the approval with their full knowledge of the Shareholders at the general Shareholders meeting;

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

• (v) Entering into any contract, transaction or arrangement with our Company is not allowed, unless in line with the Articles of Association or otherwise by the consent of the general Shareholders’ meeting with its full knowledge;

• (vi) Seeking private gain using the assets of our Company is not allowed, unless approved by the general Shareholders meeting with its full knowledge.

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

• (viii) Accepting commissions associated with transactions of our Company is not allowed unless approved by the general Shareholders’ meeting with its full knowledge;

• (ix) Compliance with the Articles of Association, discharging duties in a faithful manner, safeguarding the interests of our Company rather than seeking private gain by taking advantage of one’s position and authority in our Company;

• (x) Competing with our Company in any manner is not allowed, unless approved by the Shareholders at the general Shareholders’ meeting with our full knowledge;

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

• (xii) Disclosure of any confidential information relating to our Company obtained during employment without the approval of the general shareholders’ meeting with its full knowledge, or using this information, is not allowed, unless in the interest of our Company; however, under the following circumstances the information may be disclosed to a court or other competent government agencies as required by (1) the provisions of the law; (2) the public interest; (3) the interest of the Directors, Supervisors, president or other senior management.

All proceeds obtained by the Directors and senior management through the violation of the above regulations shall belong to our Company.

• The Directors, Supervisors and senior management may not direct the following personnel or institutions

• (“ related personnel ”) to do acts that the Directors, Supervisors and senior management may not do:

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

• (ii) Trustors of the Directors, Supervisors and senior management or the persons mentioned in (i);

• (iii) Partners of the Directors, Supervisors and senior management or persons mentioned in (i) and (ii);

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

• (iv) The company under de facto control by the Directors, Supervisors and senior management individually or jointly with the persons or other directors, supervisors and senior management of companies mentioned in (i),(ii) and (iii);

• (v) Directors, Supervisors, president or other senior management of the companies mentioned in (iv).

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

In the event that the Directors, Supervisors, president or other senior management violate the responsibilities of a certain duty, their relationships with our Company may be dissolved at the general Shareholders’ meeting with the Shareholders’ full knowledge, unless otherwise indicated in the Articles of Association.

Apart from the responsibilities set forth in related laws, administrative regulations or the listing rules of the securities exchange where the Shares are listed, the Directors, Supervisors, president or other senior management shall assume the following responsibilities for the Shareholders when exercising their rights and performing their responsibilities:

• (i) They may not cause our Company to operate beyond the scope of business indicated on our business license;

• (ii) They shall sincerely take the best interests of our Company as the starting point of any action;

• (iii) They may not deprive our Company of our assets in any manner, including, but not limited to, opportunities beneficial to our Company; and

• (iv) They may not deprive the Shareholders of personal rights and interests, including, but not limited to, the right to receive dividends and to vote, except for restructuring of our Company approved at the general Shareholders’ meeting pursuant to the provisions of the Articles of Association.

The Directors, Supervisors and senior management have the responsibility when exercising their rights or carrying out their obligations to act with the care, diligence and skill due from a reasonably prudent person under similar circumstances.

In the event of any loss caused to our Company as a result of violation of any laws, administrative rules and regulations, or Articles of Association by the Directors or senior management when performing their duties in our Company, Shareholders who have held 1% or more of the Shares separately or jointly for 180 consecutive days or longer have the right to request the Supervisory Committee in writing to initiate court litigation. In the event of any loss caused to our Company as a result of violation of any laws, administrative rules and regulations, or Articles of Association by the Supervisory Committee when performing its duties in our Company, the Shareholders may request the Board of Directors in writing to initiate court litigation.

In the event that the Supervisory Committee or Board of Directors refuses to initiate litigation after receiving a written request of the Shareholders as specified in the preceding paragraph, fails to institute litigation within 30 days of the receipt of the request, or if failure to institute litigation immediately may cause irreparable damage to the interest of our Company under urgent circumstances, the Shareholders as mentioned in the preceding paragraph shall have the right to initiate court litigation directly in their own name and in the interest of our Company.

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

In the event of infringement of our Company’s legal rights and interests by a third party resulting in losses to our Company, the Shareholders in the first paragraph of these Articles of Association may initiate court litigation in accordance with the preceding two paragraphs.

In the event that the Directors or senior management violate laws, administrative rules and regulations or the Articles of Association to the detriment of the interests of the Shareholders, the Shareholders may initiate court litigation.

2 Modification of the Articles of Association

We may amend the Articles of Association based on the provisions of the relevant laws, administrative rules and regulations and Articles of Association.

Any amendment to the Articles of Association that involves mandatory clauses shall be approved by the CSRC before taking effect. Where the amendment of the Articles of Association involves our registration, it shall be necessary to carry out the lawfully prescribed procedures for registration change.

3 Special Voting Procedures of Classified Shareholders

Any Shareholder who holds different types of Shares is a classified Shareholder.

Any plan of our Company to change or abolish the rights of a classified Shareholder is subject to the approval of the general Shareholders’ meeting in the form of a special resolution and the approval of the affected classified Shareholders at a separately convened Shareholders’ meeting in accordance with the Articles of Association before it can be implemented. The rights of classified Shareholders shall be viewed as changed or abolished under any of the following circumstances:

• (a) Increase/reduce the number of the classified Shares, or increase/reduce the number of classified Shares with equal or more voting rights, distribution rights and other privileges than this type of classified Shares;

• (b) Convert all or part of the classified Shares into other types or convert another type of Shares, partly or wholly, into this type of classified Shares or grant such conversion right;

• (c) Cancel/reduce the right of the classified Shares to obtain dividends generated or cumulative dividends;

• (d) Reduce/cancel the right of the classified Shares to receive dividends on a priority basis or the priority right to receive property distribution in the liquidation of our Company;

• (e) Increase/cancel or reduce the right of the classified Shares to convert Share rights, options rights, voting rights, transfer rights, and prior purchase rights, or the right to obtain the securities of our Company;

• (f) Cancel/reduce the right of the classified Shares to receive funds payable of our Company in specified currencies;

• (g) Create new classified Shares entitled to equal or more voting rights, distribution rights, or privileges other than the classified Shares;

• (h) Impose restrictions on the transfer or ownership of the classified Shares or increase such restrictions;

• (i) Issue subscription or conversion rights for this or other classified Shares;

• (j) Increase the rights and privileges of other types of Shares;

• (k) The restructuring plan of our Company may constitute different types of Shareholders to assume responsibilities disproportionately;

• (l) Amend or abolish clauses of Chapter 9 of the Articles of Association.

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

Whether or not the affected classified Shareholders have voting rights at the general Shareholders meeting, in the event of matters described above from (b) through (h), (k) and (l), they have voting rights at the classified Shareholders’ meeting, but the Shareholders that have interests at stake (see our Articles of Association for definition) shall have no voting rights at the classified Shareholders’ meeting.

The resolution of the classified Shareholders’ meeting shall be voted on by more than two thirds of Shareholders with voting rights attending the classified Shareholders’ meeting.

When convening a classified Shareholders’ meeting, 45 days (including the date of the meeting) before the meeting is convened, our Company shall send a written notice to inform all registered holders of the classified Shares on matters to be deliberated at the meeting, as well as the date and venue of the meeting. Shareholders planning to attend the meeting shall send our Company a written reply to that effect 20 days before the meeting.

In the event that the number of shares with voting power represented by Shareholders planning to attend the meeting accounts for more than one half of the total number of said classified Shares with voting power at the meeting, our Company may convene a classified Shareholders’ meeting. If this number is not reached, our Company shall again inform the Shareholders of the matters to be deliberated as well as the date and venue of the meeting within five days in the form of an announcement and our Company may convene a classified Shareholders’ meeting once the announcement is delivered.

The notice of the classified Shareholders’ meeting needs only to be sent to the Shareholders who have the right to vote at the meeting.

Insofar as possible, any classified Shareholders’ meeting shall be held in accordance with the same procedures as those of the general Shareholders’ meeting contained in the Articles of Association, and any clause that relates to the convening of any Shareholders’ meeting in the Articles of Association shall apply to any classified Shareholders’ meeting.

Both the holders of other classified Shares and the holders of domestic Shares and overseas listed foreign Shares are considered as different classified Shareholders.

The special procedures for voting by the classified Shareholders shall not apply under the following circumstances:

• (a) where our Company issues, upon the approval by a special resolution of general shareholders, meeting, either separately or concurrently once every 12 months, not more than 20% of each of its existing issued domestic shares and overseas-listed foreign shares;

• (b) The plan to issue domestic Shares and overseas listed foreign Shares upon the establishment of our Company is completed within 15 months of the date of approval by the CSRC.

4 Special Resolutions needed to be Adopted by Majority Vote

The resolutions of the Shareholders’ meeting are categorized as ordinary resolutions and special resolutions.

An ordinary resolution can be adopted by a simple majority of the votes held by the Shareholders (including proxies) attending the meeting.

A special resolution can be adopted by a two-thirds majority of the votes held by the Shareholders (including proxies) attending the meeting.

5 Voting Rights (Generally on a Poll and Right to Demand a Poll)

The ordinary Shareholders have the right to attend or appoint a proxy to attend and vote at the general shareholders’ meeting. When voting at the general shareholders’ meeting, the shareholder (or proxy) may exercise

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SUMMARY OF THE ARTICLES OF ASSOCIATION

his or her voting rights in accordance with the number of shares with voting power held with each share representing one vote.

Voting by ballot is required at all general shareholders’ meetings. When voting at a general meeting, shareholders (including their proxies) who are entitled to two or more votes are not required to vote against or in favor with their total number of votes.

When the number of dissenting votes equals the number of supporting votes, the chairman of the meeting is entitled to one additional vote.

Except for the cumulative voting system, the general shareholders’ meeting must vote on all proposals individually; in the event of different proposals for the same matter, the Shareholders’ meeting shall vote on them in the order in which they were submitted. Unless the general shareholders’ meeting is adjourned or fails to adopt any resolution as a result of force majeure or for other special reasons, the Shareholders shall not put aside or refuse to vote on the proposal/s at the general shareholders’ meeting.

The same vote can be cast in any of the following manners: on site, on line, or other voting methods. In case that the same vote is cast more than once, the result of the first vote cast shall prevail.

6 General Shareholders’ Meetings

The general shareholders’ meetings are divided into annual general shareholders’ meetings and extraordinary general meetings. General shareholders’ meetings are called by the Board of Directors. The annual general shareholders’ meeting shall be convened once a year and be held within six months of the end of the previous fiscal year.

7 Accounting and Audits

• (a) Financial and accounting policies

Our Company shall develop its financial and accounting policies and internal auditing policies pursuant to PRC laws, administrative rules and regulations, as well as accounting standards developed by the competent department in charge of finance under the State Council.

The Board of Directors shall submit the financial reports of our Company prepared in accordance with the laws, administrative rules and regulations or orders of local governments and regulatory agencies having jurisdiction over shareholders at the Shareholders’ meetings.

Apart from the Chinese accounting standards and regulations, the financial reports of our Company shall also conform to international accounting standards and the accounting standards of overseas areas where the Shares are listed. In the event of any major discrepancy between the financial reports prepared in accordance with the above accounting standards, explanations and notes, must be provided in the financial reports. As to the distribution of after-tax profits of our Company in a fiscal year, the after-tax profits indicated on the financial reports, whichever is lower shall prevail.

Our Company shall make its financial reports available for inspection by the Shareholders 20 days before the general Shareholders’ meeting is convened. Each Shareholder is entitled to obtain one copy of the financial report.

Our Company shall send the financial reports to the registered address of the holders of overseas listed foreign Shares by postage-paid mail at least 21 days before the general Shareholders’ meeting is convened.

Our Company’s interim results or financial information published or disclosed by our Company shall at the same time be prepared in accordance with PRC accounting standards, rules and regulations, international accounting standards as well as the accounting standards of the overseas area in which the Shares are listed.

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SUMMARY OF THE ARTICLES OF ASSOCIATION

Our Company shall submit the annual financial/accounting report, semi-annual financial/accounting report and quarterly financial/accounting report to the domestic and overseas regulatory agencies pursuant to their regulations. Our Company must publish the financial reports twice in each fiscal year. Interim financial reports shall be published within 60 days of the end of the first six months of a fiscal year, while the annual financial report shall be published within 120 days of the completion of each fiscal year. Our Company shall submit its quarterly financial/accounting reports to the local branch of the CSRC and the domestic/overseas stock exchanges within one month of the ending date of the first three months and first nine months of each fiscal year.

Our Company shall not keep any accounting books other than those specified by law.

(b) Appointment and Dismissal of Accountants

Our Company shall appoint an accounting firm with independent qualifications that meets appropriate requirements of the state to be responsible for auditing its annual report and reviewing its other financial reports.

The term of the accounting firm appointed by our Company shall start at the close of the general Shareholders’ meeting and continue until the close of the next Shareholders’ meeting.

Without prejudice to the right of the accounting firm to claim for compensation (if any) for being dismissed and replaced, the Shareholders may replace the accounting firm through an ordinary resolution at the general Shareholders’ meeting prior to the expiration of the term of any accounting firm notwithstanding the terms and conditions of the contract entered into between our Company and the accounting firm.

Remuneration of the accounting firm and the manner in which the remuneration is determined shall be decided on by the Shareholders at the general Shareholders meeting. The remuneration of the accounting firm appointed by the Board of Directors shall be confirmed by the Board of Directors.

Appointment, dismissal/replacement or termination of the contract of the accounting firm by our Company is subject to the resolution of the Shareholders at the general Shareholders’ meeting and shall be filed with the competent agency in charge of securities under the State Council.

Before dismissing, replacing or terminating the contract with the accounting firm, our Company shall send a notice to the accounting firm in advance notifying it of the matters relating to the dismissal, replacement or contract termination, and the accounting firm shall be entitled to attend the general Shareholders’ meeting and make a statement.

In the event that the accounting firm requests to resign, it shall declare to the general Shareholders’ meeting whether our Company is affected by any improprieties.

The accounting firm shall resign by sending a written resignation notice to our Company’s legal address. The notice shall take effect on the date of delivery to that address or on the date specified in the notice, whichever is later. The notice shall include the following statements:

• (i) Its resignation does not include any statement that should be disclosed to the Shareholders or creditors of our Company; or

• (ii) Any statement that should be disclosed.

Within 14 days of receipt of the notice mentioned above, our Company shall send the copy of the notice to related competent agencies. If the notice includes statements mentioned in (ii) of the preceding paragraph, our Company shall retain a copy thereof for perusal by the Shareholders. Our Company shall also send a copy of the above-mentioned statements to each holder of the overseas-listed foreign Shares in accordance with the addresses registered on the register of Shareholders by postage-prepaid mail.

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SUMMARY OF THE ARTICLES OF ASSOCIATION

In the event that the resignation notice of the accounting firm includes any statement that should be disclosed to the Shareholders or creditors, the accounting firm may request the Board of Directors to convene an extraordinary general meeting to hear its explanations regarding the resignation.

8 Notification and Agenda of General Shareholders’ Meetings

The general Shareholders’ meeting is the authorized organ of our Company that can perform duties and exercise powers in accordance with the law.

Apart from special circumstances such as where our Company is in crisis, without the approval of a special resolution of the general Shareholders’ meeting, our Company shall not enter into a contract with any person other than the Directors and senior management that would make a person responsible for the management of all or part of our important business.

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

• (a) The number of Directors is less than the number specified in the PRC Company Law or less than two thirds of the number required in the Articles of Association;

• (b) The uncovered losses of our Company reach one-third of its total share capital;

• (c) The Shareholders with 10% or more voting power separately or jointly request to convene an extraordinary general meeting in writing;

• (d) The Board of Directors considers it necessary or the Supervisory Committee proposes convening an extraordinary general meeting;

• (e) The independent Directors propose convening an extraordinary general meeting; and

• (f) Other circumstances specified in laws, administrative rules and regulations and the Articles of Association.

When convening a general Shareholders’ meeting, our Company shall send a written notice to inform all registered Shareholders of the matters to be deliberated at the meeting as well as the date and venue of the meeting 45 days (including the date of the meeting) before it is convened. Shareholders planning to attend shall send our Company a written reply to that effect 20 days before it is held.

At our Company’s general Shareholders’ meeting, the Shareholders holding 3% or more Shares with voting power are entitled to submit written proposals to our Company.

Our Company shall calculate the number of Shares with voting power represented by the Shareholders planning to attend the general Shareholders’ meeting in accordance with the written replies received 20 days before the meeting is convened. In the event that the number of Shares with voting power represented by the Shareholders planning to attend reaches more than one half of our total number of Shares with voting power, our Company may convene the general Shareholders’ meeting. If this number is not reached, our Company shall again inform the Shareholders of the matters to be deliberated and the date and venue within five days in the form of an announcement before the general Shareholders’ meeting may be convened.

The notice of the general Shareholders’ meeting shall be in writing and meet the following requirements:

• (a) Specified venue, date and time of the meeting;

• (b) Specified matters to be deliberated at the meeting;

• (c) Provision to the Shareholders of materials and explanations necessary for the Shareholders to make sound decisions about the matters to be deliberated. This principle includes, but is not limited to, the

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SUMMARY OF THE ARTICLES OF ASSOCIATION

provision of the detailed terms and contract(s), if any, of the proposed transaction(s) and proper explanations about related causes and effects when our Company proposes merger/s, redemption of shares, restructuring of stock capital or other restructuring;

• (d) In the event that any of the Directors, Supervisors or senior management has material interests at stake in matters to be deliberated, the nature and extent of the interests at stake shall be disclosed. If the matters to be deliberated affect any Director, Supervisor or senior management as a Shareholder in a manner different from how they affect other Shareholders of the same type, the difference shall be explained;

• (e) Inclusion of the full text of any special resolution to be proposed for adoption at the meeting;

• (f) A clear explanation that the Shareholder is entitled to attend and vote at the general Shareholders’ meeting, or to appoint one or more entrusted representatives to attend and vote at the meeting on his or her behalf and that such may not necessarily be Shareholders;

• (g) Specified delivery time and place of the power of attorney for proxy voting of the meeting;

• (h) Specified date of equity registration of Shareholders entitled to attend and vote at our general Shareholders’ meeting; and

• (i) Specified name and phone number of the permanent contact person for the meeting.

The notice of the general Shareholders’ meeting shall be sent in person or by postage-paid mail, to the holders of H Shares regardless whether such Shareholders have the right to vote at the general Shareholders’ meeting, and each recipient’s address shall be according to the address indicated on the register of Shareholders. For holders of domestic Shares, the notice of our general Shareholders’ meeting shall be given in the form of an announcement.

This announcement shall be published in the Securities Times within a period of 45 to 50 days before the meeting is convened. Once the announcement is made, all holders of domestic Shares shall be deemed to have received the notice of our general Shareholders’ meeting. In the event that the notice of the meeting is not sent to persons entitled to receive it due to accident or oversight, or such persons fail to receive notice of the meeting, the meeting and resolutions made at the meeting shall not be affected thereby.

Once the notice of the general Shareholders’ meeting is issued, the general Shareholders’ meeting shall not be postponed or cancelled without proper reasons and proposals listed in the notice of the general Shareholders’ meeting shall not be cancelled. Once postponement or cancellation becomes apparent, the convener shall publish an announcement and specify the reasons at least two working days prior to the scheduled meeting date.

Shareholders who hold more than 10% of the Shares separately or jointly have the right to request the Board of Directors to convene an extraordinary general meeting and the request shall be made in writing. The Board of Directors shall within ten days of receipt of the notice provide a written opinion, pursuant to legal and administrative rules and regulations and these Articles of Association, agreeing or not agreeing to convene the extraordinary general meeting.

In the event that the Board of Directors agrees to convene an extraordinary general meeting, it shall send a notice on convening the meeting within five days after the Board of Directors adopts the resolution, and any change to the original request shall be subject to the approval of the relevant Shareholders.

In the event that the Board of Directors does not agree to convene an extraordinary general meeting or fails to make a reply within ten days of receipt of the request, Shareholders holding more than 10% of the Shares separately or jointly have the right to request the Supervisory Committee to convene an extraordinary general meeting and the request shall be made in writing.

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SUMMARY OF THE ARTICLES OF ASSOCIATION

In the event that the Supervisory Committee agrees to convene an extraordinary general meeting, it shall send a notice on convening the meeting within five days of receipt of the notice, and any change to the original proposal in the notice shall be subject to the approval of the relevant shareholders. In the event that the Supervisory Committee fails to send the notice of our general Shareholders’ meeting within the specified time, the Board of Directors shall be deemed as not convening and presiding over the general Shareholders’ meeting, and Shareholders having held more than 10% of the Shares separately or jointly for more than 90 days consecutively may convene and preside over the general Shareholders’ meeting pursuant to the regulations of these Articles of Association.

The Supervisory Committee has the right to propose to the Board of Directors to convene an extraordinary general meeting and to submit other suggestions to the Board of Directors in writing.

In the event that the Supervisory Committee or Shareholders decide/s to convene the general Shareholders’ meeting, the Board of Directors must be notified in writing and file the notice with the local branch of the CSRC and the related stock exchange in the place where our Company is located.

Before the resolution concerning the general Shareholders’ meeting is announced, the proportion of the Shares held for more than 90 days consecutively by the Shareholders who convene the meeting separately or shall not be less than 10%.

When sending the notice of the general Shareholders’ meeting and announcing its resolutions, the Shareholders who convene the meeting shall submit the relevant certifying documents to the local branch of the CSRC and the related stock exchange in the place where our Company is located.

The following matters shall be approved by the general Shareholders’ meeting through ordinary resolutions:

• (a) Work report of the Board of Directors and Supervisory Committee;

• (b) Plans of profit distribution and loss make-up schemes drafted by the Board of Directors;

• (c) Appointment or dismissal of the members of the Board of Directors and Supervisory Committee, their remuneration and payment methods;

• (d) Annual budget/final account report, balance sheet, income and other financial statements of our Company;

• (e) Annual report of our Company;

• (f) Other matters in addition to those approved by special resolution stipulated in the laws, administrative rules and regulations or the Articles of Association.

• The following matters shall be approved by special resolution at the general Shareholders’ meeting:

• (a) Our Company’s capital stock increases/decreases and issues of any type of shares, warrants and other similar securities;

• (b) Our Company’s bond issues;

• (c) Division, merger, dissolution and liquidation of our Company;

• (d) Amendment of the Articles of Association;

• (e) Purchase/sale of assets after the major assets purchased/sold by our Company within one year reach or exceed 30% of the latest period’s audited total assets;

• (f) External guarantees after the total amount of external guarantees of our Company reaches or exceeds 30% of the latest period’s audited total assets;

• (g) Stock incentive plan;

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SUMMARY OF THE ARTICLES OF ASSOCIATION

• (h) The buyback of the Shares;

• (i) Other matters approved by ordinary resolution of the general Shareholders’ meeting pursuant to the laws, administrative rules and regulations or the Articles of Association which are believed could materially affect our Company and need to be approved by special resolution;

The following external guarantees of our Company (including controlled subsidiaries) must be deliberated and approved by the general Shareholders’ meeting:

• (a) Any guarantee provided after the total amount of external guarantees reaches or exceeds 50% of the latest period’s audited net assets;

• (b) Any guarantee provided after the total amount of external guarantees reaches or exceeds 30% of the latest period’s audited total assets;

• (c) Guarantees provided to any guaranteed party whose asset-liability ratio exceeds 70%;

• (d) Guarantees of which a single-amount guarantee amount exceeds 10% of the latest period’s audited net assets;

• (e) Guarantees provided to the Shareholders, actual controlling person and other related parties;

If the Listing Rules stipulate that any Shareholder must waive his or her voting rights in regard to a certain matter or restrict any Shareholder to a yes or no vote on a certain matter, the votes cast by the Shareholder or his or her representative may not be included in the event of any violation of related regulations or restrictions.

In the event that any resolution of the general Shareholders’ meeting or the Board of Directors violates any of the laws and administrative rules and regulations, the Shareholders have the right to request the court to judge the related resolution as invalid.

In the event that convening procedures or voting methods of the general Shareholders’ meeting or Board of Directors’ meeting violate any of the laws, administrative rules and regulations or these Articles of Association, or if the contents of the resolution violate the Articles of Association, the Shareholders may request the court to cancel the resolution within 60 days from the date on which the resolution is adopted.

9 Share Transfers

The Shares held by the promoters may not be transferred within one year of our incorporation. Shares issued by our Company prior to a listing may not be transferred within one year of the date on which the shares are listed and traded on the stock exchange.

The Directors, Supervisors and senior management shall report to our Company the number of Shares held by them as well as the subsequent changes in their Shareholdings. The number of Shares which a Director, Supervisor or senior management may transfer each year during his term of office may not exceed 25% of the total number of the Shares owned by them, and the Shares may not be transferred within one year of the date on which the Shares were listed and traded on the stock exchange. The above personnel may not transfer the Shares held by them within six months after resignation. For any sale of the Shares held by such personnel through listing and trading on a stock exchange within 12 months after six months from the date of resignation, the number of Shares sold may not exceed 50% of the total number of Shares held by them.

In the event that the Directors, Supervisors, senior management or shareholders holding 5% or more of the Shares sell their Shares within six months after purchasing them, or buy them back within six months after selling them, all proceeds obtained therefrom shall be vested in by our Company and the Board of Directors shall forfeit such proceeds from the above-mentioned personnel. In the event that the Board of Directors does not obey the stipulations of this paragraph, the responsible Directors shall be legally liable severally or jointly.

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SUMMARY OF THE ARTICLES OF ASSOCIATION

In the event that the Board of Directors fails to comply with the provisions of the preceding paragraph, the Shareholders have the right to request the Board of Directors to implement the related provisions within 30 days. If the Board of Directors fails to implement the requirements within the specified time, the Shareholders may initiate court litigation directly in their own names and in the interest of our Company.

All fully paid up overseas listed foreign shares listed in Hong Kong may be transferred freely pursuant to the Articles of Association. However, unless the overseas listed foreign Shares listed in Hong Kong meet the following conditions, the Board of Director may refuse to recognize any transfer document without giving any reason:

• (a) The payment to our Company of HK$2.50 per item of transfer document or other fees that may be required by the Board of Directors from time to time to register the share transfer documents and other documents that are related to or may affect the ownership of the Shares, provided that this fee does not exceed the higher fees stipulated from time to time in the Listing Rules;

• (b) The transfer documents only involve overseas listed foreign Shares listed in Hong Kong;

• (c) The stamp duty chargeable on the transfer documents has been paid and this has been registered in accordance with the regulations of the Hong Kong Stock Exchange;

• (d) The relevant Share certificate, and upon the reasonable request of the Board of Directors, any evidence in relation to the right of the transferor to transfer the Shares has been submitted;

• (e) If the Shares are to be transferred to joint holders, the number of the joint holders shall not exceed four;

• (f) Our Company does not have any lien on the relevant Shares.

No change may be made to the information in the register of Shareholders as a result of the share transfer within 30 days before the general Shareholders’ meeting is convened or within five days prior to the record date on which our Company has decided to distribute dividends.

10 Rights of our Company to Buy Back our Outstanding Issued Shares

Under any of the following circumstances, our Company may buy back our outstanding issued Shares pursuant to the requirements of the laws, administrative rules and regulations and the Articles of Association:

• (a) Cancellation of the shares to reduce our Company’s share capital;

• (b) Merger with another company which holds these Shares;

• (c) Granting Shares to the staff of our Company as incentives;

• (d) Buying back the Shares from Shareholders who vote against any resolutions adopted at the general Shareholders’ meeting concerning the merger and division of our Company; or

• (e) Other circumstances approved by the laws and administrative rules and regulations.

In the event our Company buys back the Shares for reasons stated in (a) through (c) of the preceding paragraph, related resolutions must be adopted at the general Shareholders’ meeting. If our Company buys back the Shares according to the provision of the preceding paragraph under the circumstances set forth in (i), the shares bought back must be cancelled within ten days of the date on which they are bought back. In the event of the circumstances set forth in (i); and (iv) the Shares bought back must be transferred or cancelled within six months.

In the event that our Company buys back the Shares pursuant to the provisions of (c) in the preceding paragraph, the Shares bought back may not exceed 15% of the total Shares issued. The fund used for such buy-back must be allocated from the after-tax net profit of our Company and the Shares bought back must be transferred to the staff within one year.

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

Our Company may buy back Shares in any of the following ways:

• (a) Making a comprehensive buyback offer on a pro-rata basis to all Shareholders;

• (b) Buying back Shares through public trading on the securities exchange;

• (c) Buying back Shares by an agreement outside a stock exchange;

• (d) In other ways approved by the CSRC and the regulatory agency where the Shares are listed.

Where our Company buys back the Shares by an agreement outside a stock exchange, it shall obtain prior approval at the general Shareholders’ meeting pursuant to the Articles of Association. Likewise, subject to the prior approval of the general Shareholders’ meeting, our Company may dissolve or change the contract signed in the aforesaid manner or waive any of its rights in the contract. As for the redeemable Shares that our Company is entitled to buy back, if they are not bought back in the market or by bidding, the price may not exceed a certain maximum limit. If the Shares are bought back by bidding, a proposal to bid must be made to all Shareholders on equal terms. The contract that buys back the Shares includes, but is not limited to, an agreement that consents to undertake the obligation to buy back the Shares and obtain the rights to buy them back.

Our Company shall not transfer any contract that buys back the Shares or any rights conferred under the contract.

Unless our Company has entered into the liquidation process, we must observe the following provisions for the buyback of issued Shares:

• (a) Where our Company buys back Shares at book value, the funds shall be deducted from the book balance of our distributable profit and the proceeds obtained from the issue of new Shares to buy back the old Shares;

• (b) Where our Company buys back the Shares at a premium to the book value, the portion of funds equivalent to book value shall be deducted from the book balance of our distributable profit and the proceeds obtained from the issue of new Shares made for the purpose of buying back of Shares, while the portion of funds higher than book value shall be dealt with in the following manner:

• (i) Where the Shares bought back were issued at book value, the funds shall be deducted from the book balance of our distributable profits;

• (ii) Where the Shares bought back were issued at a premium to the book value, the funds shall be deducted from the book balance of our distributable profits and the proceeds obtained from the issue of new Shares made for the purpose of buying back of Shares. However, the amount deducted from the proceeds obtained from the issue of new Shares shall not exceed the total premium amount obtained when the Shares bought back were issued or the amount (including the premium amount of the issue of new shares) in our premium account (or capital reserve account) when the Shares are bought back.

• (c) The funds paid by our Company for the following purposes shall be allocated from our distributable profits:

• (i) To obtain the right to buy back the Shares;

• (ii) To modify any contract to buy back the Shares;

• (iii) To release any responsibility of our Company under the share buyback contract.

• (d) After the total book value of the cancelled Shares is deducted from our registered capital pursuant to the relevant provisions, the amount deducted from the distributable profits for paying up the book value portion of the Shares bought back shall be credited to our premium account (or capital reserve account).

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SUMMARY OF THE ARTICLES OF ASSOCIATION

11 Right of Subsidiaries to Own Parent Company Shares

The Articles of Association have no provision prohibiting our subsidiaries from holding shares of our parent company.

12 Dividend and Distribution Methods

Our Company may distribute dividends by way of cash or shares.

When our Company pays cash dividends and other funds to the holders of domestic Shares, payment shall be made in RMB. When our Company pays cash dividends and other funds to holders of overseas listed foreign Shares, payment shall be denominated in RMB and paid in Hong Kong dollars. The foreign exchange required by our Company to pay cash dividends and other funds to holders of overseas listed foreign Shares shall be handled in accordance with the related regulations of SAFE.

The dividend from any Share paid prior to a capital call is entitled to interest, but the holder of the Shares is not entitled to the dividend declared after the call.

Our Company shall appoint, on behalf of holders of overseas listed foreign Shares, receiving agents to receive dividends and other payable funds that are distributed with respect to our overseas listed foreign Shares.

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

After our general Shareholders’ meeting adopts a resolution on the profit distribution plan, the Board of Directors must finish the distribution of dividends (or shares) within two months after our general Shareholders’ meeting is held.

13 Shareholder Proxies

Any shareholder who is entitled to attend and vote at our general Shareholders’ meeting has the right to appoint one or more persons (who may not necessarily be shareholders) as his or her shareholder proxy to attend and vote at the meeting in his or her place. Pursuant to the authorization of the Shareholder, the proxy may exercise the following rights:

• (a) Speak for the Shareholder at the general Shareholders’ meeting;

• (b) Demand a poll individually or with others;

• (c) Exercise the right to vote by a show of hands or a poll, but the shareholder proxy may only exercise the right to vote by a poll when more than one proxy is appointed.

The shareholder proxy appointment shall be in writing and shall be signed by the appointor or a person duly authorized in writing. Where the appointor is a legal person, the stamp of the legal person shall be affixed, or signed by the Director or a duly authorized agent. The power of attorney must be kept at the registered office or other location designated in the notice convening the meeting no later than 24 hours before the meeting at which the power of attorney is put to vote is convened or 24 hours before the designated time at which the resolution is adopted. If the power of attorney is signed by another person authorized by the appointor by means of power of attorney or other instrument of authorization, the power of attorney or other instrument must be verified by a notary. The power of attorney or other instrument verified by the notary must be kept together with the power of attorney appointing the entrusted representative at our registered office or other location designated at the notice convening the meeting.

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

Where the appointor is a legal person, a power of attorney may be signed by its duly authorized person to authorize its legal representative or any person authorized by resolutions of its board of directors or other governing body to attend our general Shareholders’ meeting as a representative.

Any form sent by the Directors to the Shareholder for appointing a shareholder proxy shall allow the Shareholder, according to his or her free will, to instruct the proxy to vote and provide instructions separately for matters to be put to vote on each item on the meeting agenda. The power of attorney shall specify that the shareholder proxy may vote at his or her own discretion if the Shareholder does not provide instructions.

The votes of the shareholder proxy given pursuant to the terms of an instrument of proxy shall remain valid notwithstanding the previous death, loss of capacity of the appointor or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Shares in respect of which the proxy is given, provided that our Company does not receive written notice concerning such matters before the related meeting is convened.

14 Capital Calls and Confiscation of Shares

The Articles of Association provides that the dividend of any Share paid prior to the call is entitled to interest, but the holder of the Shares is not entitled to participate in the dividend declared thereafter in respect of share payment made in advance of calls. The Articles of Association does not include other clauses concerning capital calls or confiscation of Shares.

15 Register of Shareholders and Other Rights of Shareholders

Pursuant to the understanding reached and agreement entered into between the competent agency in charge of securities under the State and the overseas securities regulatory agency, our Company may keep in overseas a register of the holders of the overseas listed foreign Shares and entrust an overseas entity to manage it. The original register of the holders of the overseas listed foreign Shares listed in Hong Kong shall be kept in Hong Kong.

Our Company shall keep a copy of the register of the holders of the overseas listed foreign Shares at our residential address. The overseas entrusted entity shall at all times maintain consistency between the original and copy of the register of the holders of the overseas listed foreign Shares.

In case of inconsistency between the original and copy of the register of the holders of the overseas listed foreign Shares, the original shall prevail.

Our Company must keep a complete register of Shareholders.

The register of Shareholders shall include the following:

• (a) Register of Shareholders kept at our residential address other than those specified in (b), (c) and (d).

• (b) Register of the domestic Shareholders kept at the domestic registration and settlement institution;

• (c) Register of the holders of our overseas listed foreign Shares kept at the location of the stock exchange where such Shares are listed;

• (d) Register of Shareholders kept in other locations according to the decision of the Board of Directors as required for the listing of the Shares.

Different parts of the Shareholders’ register shall not overlap. The transfer of Shares registered in a certain part of the register of Shareholders shall not be registered elsewhere in the register of Shareholders as long as the Shares are remained registered.

Any alteration or rectification to any part of the register of Shareholders shall be made in accordance with the laws in the place where such part of the register of Shareholders is maintained.

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

No change of the register of Shareholders as a result of share transfer shall be made within 30 days before the general Shareholders’ meeting is convened or within five days prior to the record date on which our Company decides to pay dividends.

When our Company convenes the general Shareholders’ meeting, pays dividends, goes into liquidation or is involved in other actions that require the confirmation of equities, the convener of the Board of Directors or general Shareholders’ meeting shall fix a date as the equity registration date, upon expiration of which the Shareholders whose names appear on the register of Shareholders shall be the Shareholders.

Any person who objects to the register of Shareholders and requests to register his or her name (title) in the register of Shareholders or to remove his or her name (title) from the register of Shareholders may apply to the court with jurisdiction to amend the register of Shareholders.

The Shareholders are entitled to obtain the following information, including but not limited to:

• (a) The Articles of Association after paying the cost;

• (b) The right to inspect and copy the following after paying a reasonable fee:

• (i) All parts of the register of Shareholders;

• (ii) Personal data of the Directors, Supervisors and senior management;

• (iii) Status of the share capital of our Company:

• (iv) Report on the total book value, quantity, maximum and minimum prices of each class of Shares bought back by our Company since the previous financial year and all expenses paid by our Company for this purpose;

• (v) Minutes of our general Shareholders’ meeting, resolutions of the Board of Directors’ meeting, resolutions of the Supervisory Committee meeting and financial/accounting reports.

Whenever a Shareholder proposes to inspect the relevant information as described in the preceding clause or requests materials, he or she shall provide our Company with written documents certifying the type and number of the Shares held and our Company shall provide the relevant information and materials in accordance with the requirements of the Shareholder after verifying his or her identity.

16 Quorum of General Shareholders’ Meetings

If the number of Shares carrying voting rights represented by the Shareholders intending to attend the meeting exceeds one half of the total number of Shares carrying voting rights, our Company may convene the general Shareholders’ meeting. If the number of a class of Shares carrying voting rights represented by the Shareholders intending to attend the meeting exceeds one half of the total number of such class of Shares, our Company may convene a classified Shareholders’ meeting.

17 Restrictions on Rights of the Controlling Shareholders

Apart from the obligations required in laws, administrative rules and regulations or the listing rules of the stock exchange on which the Shares are listed, the Controlling Shareholder shall not make any decision that is detrimental to the interest of all or part of the Shareholders on the following issues by exercising his or her Shareholder voting rights:

• (a) Releasing the Directors and Supervisors from the responsibility of acting honestly in the best interest of our Company;

• (b) Permitting the Directors and Supervisors (for their own or others’ interests) to deprive our Company of assets in any form, including, but not limited to, any opportunity that is beneficial to our Company;

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SUMMARY OF THE ARTICLES OF ASSOCIATION

• (c) Permitting the Directors and Supervisors (for their own or others’ interests) to deprive the Shareholders of their personal rights and interests, including, but not limited to, any dividend distribution or voting right, but excluding the restructuring of our Company approved at the general Shareholders’ meeting pursuant to the Articles of Association.

18 Company Liquidation

Under any of the following circumstances, our Company shall be lawfully dissolved and liquidated:

• (a) The general Shareholders’ meeting adopts a resolution to dissolve our Company;

• (b) Our Company needs to be dissolved for the purpose of merger or division;

• (c) Our Company is declared legally bankrupt as a result of failure to pay debts upon maturity;

• (d) Where our Company encounters significant difficulties in business and management, continuous survival may be significantly detrimental to the interests of the Shareholders, and the difficulties may not be overcome through other means, Shareholders who hold more than 10% of the Shares carrying voting rights may request the people’s court to dissolve our Company;

• (e) The business license of our Company is revoked, and our Company is ordered to close or terminate according to applicable laws.

Where our Company is dissolved due to the provisions set forth in (a), (d) and (e) above, the liquidation team shall be established within 15 days and the personnel of the liquidation team shall be determined by means of an ordinary resolution. In the event of failure to establish the liquidation team on time, the creditors may request the people’s court to designate the relevant persons to form the liquidation team to effect liquidation. In the event that our Company is dissolved in accordance with the provisions set forth in (c) above, the people’s court shall organize the Shareholders, related agencies and professionals to form the liquidation team to effect liquidation pursuant to the relevant provisions of the law.

If the Board of Directors decides to dissolve our Company (except where our Company is liquidated after declaring bankruptcy), the Board of Directors shall state in the notice of the general Shareholders’ meeting convened for this purpose that the Board of Directors has performed a comprehensive investigation of the status of our Company and believes that our Company is able to pay off all of our debts within 12 months of the start of liquidation.

After the resolution to dissolve our Company is adopted by the general Shareholders’ meeting, the powers and duties of the Board of Directors shall terminate immediately.

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

Within ten days of the establishment of the liquidation team, the creditors shall be notified and an announcement shall be published in any national economic or securities newspaper within 60 days. The creditors shall declare their claims to the liquidation team within 30 days of the date on which the notice is received or 45 days of the date of announcement if the notice is not received. The liquidation team shall carry out registration of the creditors’ claims.

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SUMMARY OF THE ARTICLES OF ASSOCIATION

APPENDIX VIII

The liquidation team shall exercise the following powers during the liquidation period:

• (a) Take stock of our Company’s assets and prepare a balance sheet and a list of assets respectively;

• (b) Notify or publish an announcement to all creditors;

• (c) Deal with and liquidate any pending business associated with our Company;

• (d) Pay off all outstanding taxes;

• (e) Settle claims and debts;

• (f) Dispose of the remaining assets of our Company after paying up all the debts; and

• (g) Represent our Company in any civil litigation action.

After taking stock of the assets of our Company and preparing the balance sheet and list of properties, the liquidation team shall draw up a liquidation scheme and submit it to the Shareholders’ meeting or related competent agencies for approval.

Following dissolution and liquidation of our Company, if the liquidation team finds that, after taking stock of our Company’s assets and preparing the balance sheet and list of assets, that the assets are insufficient to pay the debts, it shall immediately apply to the people’s court to declare bankruptcy.

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

Upon completion of liquidation of our Company, the liquidation team shall prepare a liquidation report, income and expenditure report and financial record during the liquidation period, which, after being verified by a China-registered accountant, shall be submitted to our general Shareholders meeting or related competent agencies for approval.

Within 30 days of the date of approval by the Shareholders’ meeting or related competent agencies, the liquidation team shall submit the above-mentioned documents to the company registration authority and apply for cancellation of our registration and publish an announcement on its termination.

19 Other Important Provisions for our Company or the Shareholders

• (a) General Provisions

Our Company is a permanently existing limited liability company.

Our Company may invest in other limited liability companies or limited companies, provided that the liabilities of our Company to be invested in are limited to the amount of its capital contribution.

The Articles of Association is binding on the Shareholders, Directors, Supervisors and senior management. These personnel may assert their rights in connection with the affairs of our Company based on the Articles of Association. Pursuant to this Articles of Association, Shareholders may sue Shareholders, Shareholders may sue the Directors, Supervisors and senior management, Shareholders may sue our Company, and our Company may sue Shareholders, Directors, Supervisors and senior management

• (b) Our Company may increase stock capital by the following means:

• (i) Issue new Shares to unspecified investors;

• (ii) Issue new Shares to specific investors;

• (iii) Place new Shares with existing Shareholders;

• (iv) Give new Shares to existing Shareholders;

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SUMMARY OF THE ARTICLES OF ASSOCIATION

APPENDIX VIII

• (v) Convert the reserve funds into share capital;

• (vi) Other means approved by law and administrative rules and regulations.

Upon approval to increase our Company’s stock capital according to the provisions of these Articles of Association, the matter shall be dealt with in accordance with the procedures of related laws and administrative rules and regulations of the State, as well as the securities regulatory agency where the Shares are listed.

Subject to compliance with related laws and administrative rules and regulations of the State, our Company may decrease our registered share capital in line with the provisions of the Articles of Association.

If our Company decreases our registered capital, we must prepare the balance sheet and list of assets.

After our Company’s reduction in capital, our registered capital may not be less than the statutory minimum amount.

(c) Shareholders

The Shareholders are persons lawfully holding the Shares and whose names (titles) are already listed in the register of Shareholders. Each Share of the same type has the same rights.

Shares issued by our Company to overseas investors and subscribed to in foreign currencies are known as foreign Shares. Foreign Shares that are listed overseas are known as overseas listed foreign Shares. Overseas investors refer to investors in other countries, Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan who subscribe to the Shares issued by our Company. Domestic Shareholders refer to investors within the territory of the PRC that subscribe to the Shares issued by our Company. Both domestic Shareholders and foreign Shareholders are ordinary Shareholders, entitled to the same rights and assuming the same obligations. The rights of our ordinary Shareholders are as follows:

• (i) To receive distribution of dividends and other forms of benefits according to the number of Shares held;

• (ii) To request, convene, preside over, participate in, or appoint a shareholder proxy by law to participate in and exercise corresponding rights at the Shareholders’ meeting;

• (iii) To supervise and manage our business and operational activities, provide suggestions or submit queries;

• (iv) To transfer, gift or pledge the shares held according to the provisions of the laws, administrative rules and regulations and the Articles of Association;

• (v) To obtain relevant information according to the provisions of the Articles of Association;

• (vi) To participate in the distribution of the remaining assets of our Company according to the number of shares held upon our termination or liquidation;

• (vii) To request our Company to purchase Shares of Shareholders objecting to a resolution adopted at the general Shareholders’ meeting concerning the merger or separation of our Company;

• (viii) Other rights conferred by laws, administrative rules and regulations and the Articles of Association.

Where any Shareholder holding more than 5% of the Shares with voting rights pledges the Shares he or she holds, the Shareholder shall make a written report to our Company on the date this occurred.

When any person who owns rights and interests directly or indirectly exercises any right without disclosing such rights and interests to our Company, our Company shall not infringe upon any right attached to these shares by freezing or through other means.

Our Company shall adopt the registered method for the Shares.

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

The Share certificates are signed by the president. Where the stock exchange on which the Shares are listed requires our other senior management to sign the Share certificates, they shall also be signed by other such personnel. The Share certificates shall become effective after being affixed with the stamp of our Company (including our securities stamp) or print-stamped. Affixing our Company stamp or our securities stamp to the Share certificates is subject to the authorization of the Board of Directors. The signature of the president or other related senior management may also be printed on the Share certificates. In the case of paperless transactions, the Share certificates shall be subject to separate requirements of the securities regulatory agency where the Shares are listed.

If any person whose name appears in the register of Shareholders or requests to register his or her name (title) in the register of Shareholders loses his or her Share certificates (that is, “ original Share certificates ”), he or she may apply to our Company to reissue new Share certificates for those Shares.

In case a holder of domestic Shares applies to our Company for a reissue after losing the Share certificates, the matter shall be dealt with pursuant to related provisions of the PRC Company Law.

In the event a holder of overseas listed foreign Shares applies for reissue after losing Share certificates, the matter shall be dealt with pursuant to the laws and listing rules of the stock exchange where the register of holders of the overseas listed foreign Shares is kept, or other related provisions. If a holder of H shares loses Share certificates and applies for a replacement issue, the Share certificates shall be issued in compliance with the following requirements:

• (i) The applicant shall submit the application in the standard format designated by our Company and attach a notary certificate or legal declaration. The contents of the notary certificate or legal declaration shall include the reason for the applicant’s request, circumstances and evidence of loss of Share certificates, as well as a statement that nobody else may request to be registered as a Shareholder with respect to the pertinent Shares.

• (ii) Before deciding to issue new Share certificates, our Company does not receive any statement in which any person other than the applicant requests to be registered as the Shareholder with respect to the Shares.

• (iii) If our Company decides to issue new Share certificates to the applicant, we shall publish an announcement in a newspaper designated by the Board of Directors indicating that we plan to reissue new Share certificates. The announcement period shall be 90 days and the announcement shall be published at least once every 30 days.

• (iv) Before publishing the announcement indicating that we plan to re-issue new Share certificates, our Company shall submit a copy of the announcement to be published to the securities exchange on which the Shares are listed and may publish the announcement after receiving a reply from the stock exchange confirming that the announcement has been displayed at the stock exchange. The period of displaying the announcement at the stock exchange is 90 days;

If the application for re-issue of new Share certificates is not approved by the registered Shareholders of the related Shares, our Company shall mail the copy of the announcement to be published to the Shareholders;

• (v) In the event that nobody raises any objection to the re- issue of new Share certificates to our Company, upon expiration of the 90-day display period of the announcement specified in (iii) and (iv) above, the new Share certificates may be re-issued according to the application.

• (vi) When re-issuing new Share certificates, our Company shall immediately cancel the original Share certificates and register the cancellation and replacement issue on the register of Shareholders;

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SUMMARY OF THE ARTICLES OF ASSOCIATION

APPENDIX VIII

• (vii) All expenses incurred by our Company from the cancellation of the original Share certificates and replacement issue of the new Share certificates shall be borne by the applicant. Before the applicant has provided reasonable security, our Company shall have the right to refuse to take any action.

• (d) Shareholders Failing to be Contacted

With regard to the dividend warrant sent by mail to the Shareholder by our Company, our Company has the right to stop mailing the dividend warrant to the Shareholder if the dividend has been mailed twice to the Shareholder without having been cashed. If, when the first time it is mailed, the dividend warrant fails to reach the recipient and is returned, our Company may exercise this right.

Our Company is entitled to reclaim without payment the Shares of a Shareholder failing to be contacted under the circumstances indicated below and sell them to any other persons:

• (i) Our Company has paid dividends at least three times on these Shares within 12 years, but no one has claimed the dividends during that period;

• (ii) Upon expiration of the 12-year period, our Company publishes an announcement in a newspaper, indicating our intention to sell the Shares and notifies the Hong Kong Stock Exchange.

• (e) Regulations on the Powers of the Board of Directors and Convening the Board of Directors’ Meetings

The Board of Directors is responsible to the general Shareholders’ meeting and exercises the following powers:

• (i) To convene the general Shareholders’ meeting and report on work to the general Shareholders’ meeting;

• (ii) Implement the resolutions of the general Shareholders’ meeting;

• (iii) Set our business and investment plans;

• (iv) Devise our annual financial budget and closing account plans;

• (v) Devise our profit distribution and loss offset plans;

• (vi) Set the plans for increasing or decreasing our registered capital, the issuance of corporate bonds or other securities, as well as the public listing program;

• (vii) Formulate plans for major purchase and buy-back of the Shares, merger, separation, dissolution and changing the form of our Company;

• (viii) Decide on the setup of our internal management organization;

• (ix) Determine such matters as the purchase/sale of major assets and providing external guarantees of our Company, within the scope authorized by the general Shareholders’ meeting;

• (x) Determine such matters as our external investment, asset collateralization, entrusting wealth management, apart from other regulations of the stock exchange where our Company is listed;

• (xi) Decide on related transactions pursuant to the regulations of the SZSE;

• (xii) Set plans for amending the Articles of Association;

• (xiii) Appoint or dismiss the president and secretary of the Board of Directors; based on the joint nomination of the chief executive officer and president, appoint or dismiss the chief financial officer, vice president, chief engineer and other senior management of our Company, and determine their remuneration, rewards and sanctions;

• (xiv) Set our basic management systems;

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

• (xv) Manage the disclosure of company information;

• (xvi) Decide on the appointment of promoters;

• (xvii) Formulate our stock option incentive plan;

• (xviii) Attend to the work report of our president and review the work of the president;

• (xix) Propose the appointment or replacement of the accounting firm that performs audits for our Company at the general Shareholders’ meeting unless otherwise stipulated in the Articles of Association;

• (xx) Determine our salary levels and welfare benefits plan;

• (xxi) Decide on the setup of special committees and the appointment and dismissal of related personnel;

• (xxii) Decide on other major matters and administrative issues not specified in the Articles of Association to be decided by the general Shareholders’ meeting;

• (xxiii) Other powers and duties authorized by the general Shareholders’ meeting and the Articles of Association.

All of the above resolutions adopted by the Board of Directors, except those in (vi), (vii) and (xii) and those that must be approved by more than a two-thirds vote of the Directors otherwise specified in laws, administrative rules and regulations and these Articles of Association, shall be approved by a simple majority of votes by the Directors.

Meetings of the Board of Directors shall be convened at least twice a year and be called by the chairman of the Board of Directors, and a notice shall be sent to all Directors and Supervisors ten days before the meeting is convened. In an emergency, as proposed by the chairman or more than one-third of the Directors or the president of our Company, a provisional Board of Directors’ meeting may be convened notwithstanding the restrictions of the Articles of Association on the meeting notice.

Shareholders representing more than one-tenth of voting power or more than one-third of the Directors or the Supervisory Committee may propose convening a provisional Board of Directors’ meeting. The president shall convene and preside over the Board of Directors meeting within ten days of receiving the proposal.

The Directors shall attend the Board of Directors meeting in person. In the event that Directors are unable to attend the meeting for some reason, the Directors may appoint in writing other directors to attend the Board of Directors meeting and a proxy of attorney shall specify the scope of authorization.

If a Director fails to attend the Board of Directors meeting in person twice consecutively and has not appoint another Director to attend the Board of Directors meeting, the Director shall be deemed to be unable to perform his or her duties, and the Board of Directors shall propose to the general Shareholders’ meeting to dismiss and replace the Director.

Meetings of the Board of Directors shall be attended by more than one-half of the Directors (including Directors that appoint in writing other Directors to attend the Board of Directors in their place pursuant to the provisions of the Articles of Association) before the Board of Directors meeting can be convened. Each Director has one vote. Resolutions made by the Board of Directors must be approved by more than one-half of the Directors’ votes. When the number of affirmative votes equals the number of dissenting votes, the chairman of the Board of Directors is entitled to one additional vote.

Where a Director is connected to a legal person or natural person involved in a resolution of the Board meeting, that Director may not exercise the right to vote on the resolution or exercise the right to vote on behalf of other Director(s). The Board meeting may be convened only if it is attended by more than one-half of unconnected Directors and the resolutions of the Board meeting shall be approved by more than one-half of the votes of the

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

unconnected Directors. In the event that the number of unconnected Directors attending the Board meeting is less than three, the matter shall be submitted to the general Shareholders’ meeting for deliberation.

(f) Independent Director

The Board of Directors includes three independent Directors. The independent Directors shall carry out responsibilities in accordance with appropriate requirements of the laws, administrative rules and regulations, as well as regulations of the departments.

(g) Secretary of the Board of Directors

The secretary of the Board of Directors must be a natural person with the requisite expertise and experience and be appointed by the Board of Directors.

(h) Supervisory Committee

Our Company shall set up a Supervisory Committee.

The Board of Directors consists of five Supervisors and includes one chairman. The Supervisors serve threeyear terms and may be re-elected. The chairman of the Supervisory Committee shall be appointed and dismissed by more than a two-thirds vote of the members of the Supervisory Committee.

The Supervisory Committee shall consist of three representatives of the Shareholders and two representatives of our Company staff. The representatives of the Shareholders shall be elected and dismissed by the general Shareholders’ meeting while the representatives of the staff shall be elected and dismissed by our Company staff.

The Directors, president, vice president, chief financial officer and other senior management shall not also serve as Supervisors.

Meetings of the Supervisory Committee shall be held at least once every six months and convening these is the responsibility of the chairman of the Supervisory Committee.

The Supervisory Committee is responsible for the general Shareholders’ meetings and lawfully exercises the following powers:

• (i) To review and provide written opinions on the regular reports prepared by the Board of Directors from time to time.

• (ii) Examine the financial standing of our Company;

• (iii) Supervise the performance of the Directors and senior management and put forward suggestions for dismissing any Directors or senior management who violate laws, administrative rules and regulations, the Articles of Association or resolution(s) of the general Shareholders’ meeting;

• (iv) Require the Directors and senior management to take corrective measures when their actions are detrimental to our interests;

• (v) Check financial reports, operating results and profit distribution scheme, as well as other financial data to be submitted at the general Shareholders’ meeting, and where anything doubtful is discovered, can on behalf of our Company appoint certified accountants and professional auditors to assist in reviewing this;

• (vi) Propose to convene an extraordinary general meeting, convene and preside over our general Shareholders’ meeting when the Board of Directors does not perform the responsibilities for convening and presiding over the Shareholders’ meeting as stipulated in the PRC Company Law;

• (vii) Submit proposals at the general Shareholders’ meeting;

• (viii) Initiate litigation against the Directors and senior management according to the provisions of Article 152 of the PRC Company Law;

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

• (ix) May carry out an investigation of any abnormality identified in the operations of our Company and, when necessary and at the expense of our Company, hire such professional organizations as accounting and law firms, etc, to assist in the investigation;

• (x) Other powers and duties stipulated in the Articles of Association.

The Supervisors shall attend the Board meeting as observers, query or provide suggestions on the resolutions of the Board meeting.

(i) Chief Executive Officer (CEO) and president

Our Company includes one CEO and one president, both of whom are nominated by the chairman of the Board of Directors, appointed or dismissed by the Board of Directors. The CEO and president serve three-year terms and may be re-appointed.

The CEO and chairman attend the Board meeting as observers. As the CEO and chairman are not Directors, they do not have the right to vote at a Board meeting(s).

The CEO is responsible to the Board of Directors and exercises the following powers:

• (i) To oversee and check the business and operational management work of our Company under the chairman’s direction.

• (ii) Oversee and check the chairman’s implementation of the resolutions of the Board of Directors and our annual plan;

• (iii) Be responsible for formulating and organizing the implementation of the annual investment scheme of our Company;

• (iv) Be responsible for managing the equity of our subsidiaries;

• (v) With the chairman to: (1) request the Board of Directors to appoint or dismiss the chief financial officer, vice president and chief engineer of our Company; (2) decide on the appointment or dismissal of midlevel management personnel related to the powers and duties of the CEO; and (3) decide on the salary, benefits, and reward and penalty schemes of our Company staff.

• (vi) Submit work reports to the Board of Directors.

The president is responsible to the Board of Directors and exercises the following powers:

• (i) To be responsible for business and operational management, and implement related resolutions of the Board of Directors and reports to the Board of Directors on work;

• (ii) Be responsible for formulating and implementing our annual business plan;

• (iii) Draft our basic management policies;

• (iv) Set our specific rules and regulations;

• (v) Decide on the appointment and dismissal of our Company staff;

• (vi) Implement the salary, benefits and reward schemes of our Company staff;

• (vii) With the president to: (1) decide on the appointment or dismissal of mid-level management personnel relating to the powers and duties of the chairman; and (2) draft the setup scheme of our internal management organization.

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

(j) Reserves

When the annual after-tax profits of our Company are distributed, our Company must allocate 10% of the profits to our statutory reserve. When the total amount of the statutory reserve reaches or exceeds 50% of our Company’s registered capital, no more allocations need to be provided.

If our statutory reserve is insufficient to offset our losses incurred during the previous year, the profits generated during the current year must be used to make up the losses before allocating the statutory reserve in accordance with the requirements set forth in the preceding paragraph.

After allocation to the statutory reserve from the after-tax profits of our Company, we may also allocate to the reserves at will from after-tax profits in line with the resolution(s) adopted at the general Shareholders’ meeting.

After offsetting the losses and allocating to the reserve, all remaining profits shall be distributed to the Shareholders based on the proportion of respective shareholdings unless the Articles of Association stipulates that the profits shall not be distributed in this manner.

If, in violation of the requirements of the preceding paragraph, the general Shareholders’ meeting distributes the profits to the Shareholders before offsetting the losses of our Company and allocating funds to the statutory reserve, the Shareholders must return all profits distributed in violation of our Company regulations.

The Shares held by our Company shall not participate in the distribution of the profits.

Our reserves must be used for offsetting our losses, expanding the scale of business and operations or for conversion into capital to increase our capital, but the capital reserve shall not be used to offset our losses.

When the statutory reserve is converted into registered capital, the balance of the reserve shall not be less than 25% of the amount before converting the statutory reserve to the increase of the registered capital.

(k) Settlement of Disputes

Our Company shall comply with the following rules governing the settlement of disputes:

• (i) Any dispute or claim arising out of the rights and obligations specified in the Articles of Association or related laws and administrative rules and regulations with respect to the affairs of our Company between the holders of the overseas listed foreign Shares and our Company, holders of the overseas listed foreign Shares and the Directors, Supervisors, president or other senior management of our Company, and holders of the overseas listed foreign Shares and the holders of domestic Shares shall be referred by the parties concerned to arbitration for resolution. Any dispute or claim arising out of the rights and obligations conferred on or imposed by the Articles of Association, the PRC Company Law or any other laws and regulations with respect to the affairs of our Company between the holders of the overseas listed foreign Shares and our Company, holders of the overseas listed foreign Shares and the Directors, Supervisors, president or other senior management of our Company, and holders of the overseas listed foreign Shares and the holders of domestic Shares shall be referred by the parties concerned to arbitration for resolution.

Where such a dispute or claim is referred to arbitration, it shall be for the entire claim or dispute. For any person who has cause for action for the same reason or whose participation is needed for settling the dispute or claim, if his or her or its identity is a company, a Shareholder, Director, Supervisor, president or other senior management of our Company, that person shall submit to the arbitration.

Disputes associated with the definition of Shareholders and the register of the Shareholders might not be resolved through arbitration.

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APPENDIX VIII

SUMMARY OF THE ARTICLES OF ASSOCIATION

• (ii) The arbitration applicant may choose the CIETAC for arbitration in accordance with its arbitration rules or the HKIAC for arbitration in accordance with its securities arbitration rules. Once the arbitration applicant refers the dispute or claim to arbitration, the opposite party must undergo the arbitration procedures at the arbitration institution chosen by the arbitration applicant.

• If the arbitration applicant chooses the HKIAC for arbitration, either party may request the arbitration to be done in Shenzhen pursuant to the requirements of the securities arbitration rules of the HKIAC.

• (iii) PRC laws shall apply in the event of settlement of any dispute or claim arising for the reasons stated in (i) above by means of arbitration, unless otherwise provided for in the laws and administrative rules and regulations.

• (iv) The decision reached by the arbitration institution shall be final and binding upon the parties concerned.

• (v) For disputes not involving (i), (ii), (iii) and (iv) above, the parties may choose to settle these by litigation or arbitration.

– VIII-30 –

STATUTORY AND GENERAL INFORMATION

APPENDIX IX

1. FURTHER INFORMATION ABOUT OUR COMPANY

A. Establishment

The predecessor of our Company was XJ New Wind, a limited liability company established on February 17, 1998. On December 31, 2000, XJ New Wind’s then shareholders approved the conversion of XJ New Wind from a limited liability company to a joint stock limited liability company and the conversion was then approved by the government of Xinjiang on March 1, 2001. On March 26, 2001, we obtained the approval from the Administration of Industry and Commerce of Xinjiang for our change of name to Xinjiang Goldwind Science & Technology Co., Ltd. ( ) upon conversion into a joint stock limited liability company.

Our Company has established a place of business in Hong Kong at 17th Floor, Edinburgh Tower, The Landmark, 15 Queen’s Road Central, Hong Kong, and obtained a Certificate of Incorporation of a non-Hong Kong Company under Part XI of the Companies Ordinance on June 1, 2010. DLA Piper Hong Kong, the authorized representative of our Company for the purposes of Part XI of the Companies Ordinance whose correspondence address is 17th Floor, Edinburgh Tower, The Landmark, 15 Queen’s Road Central, Hong Kong, has been appointed as our Company’s agent for the acceptance of service of process in Hong Kong. As our Company is established in the PRC, its corporate structure and the Articles of Association are subject to the relevant laws and regulations of the PRC. Summaries of the relevant laws and regulations of the PRC and the Articles of Association are set out in Appendices VII and VIII to this prospectus.

B. Change in share capital

Immediately upon our conversion to a joint stock limited liability company took effect on March 26, 2001, the registered capital of our Company was RMB32.30 million.

In 2004, the share capital of our Company was increased from RMB32.30 million to RMB70 million. In 2005, the share capital of our Company was further increased from RMB70 million to RMB100 million. On March 24, 2007, our 2006 annual general meeting approved an increase of the share capital of our Company from RMB 100 million to RMB450 million by way of capitalization of our 2006 undistributed profits, legal accumulation fund and surplus accumulation fund. On December 13 and 14, 2007, our Company issued 50,000,000 A Shares to the public in the PRC, including 40,000,000 A Shares by way of on-line offering that were listed on the SZSE on December 26, 2007, and the remaining 10,000,000 A Shares by way of off-line placing that were listed on the SZSE on March 26, 2008 after a three-month lock up period. Further, the share capital of our Company was increased from RMB450 million to RMB500 million.

Our 2007 annual general meeting approved an increase of the share capital of our Company by way of capitalization of our 2007 undistributed profits and legal accumulation fund. The share capital of our Company was increased from RMB500 million to RMB1,000 million. The increase in share capital was registered with the Administration of Industry and Commerce of Xinjiang on March 3, 2008.

The 2008 annual general meeting approved a distribution of the 2008 undistributed profits by way of issuing bonus shares. The share capital of our Company was increased from RMB1,000 million to RMB1,400 million. The increase in the share capital of our Company was registered with the Administration of Industry and Commerce of Xinjiang on May 11, 2009.

The 2009 annual general meeting approved a distribution of the 2009 undistributed profits by way of issuing bonus shares. The share capital of our Company was increased from RMB1,400 million to RMB2,240 million. The increase in the share capital of our Company was registered with the Administration of Industry and Commerce of Xinjiang on April 13, 2010.

– IX-1 –

APPENDIX IX

STATUTORY AND GENERAL INFORMATION

Immediately after completion of the Global Offering and the transfer of the state-owned A Shares (converted into H Shares) to the NSSF (assuming that the Over-allotment Option is not exercised), the registered capital of our Company will be RMB2,635,294,000, made up of 2,200,470,600 A Shares and 434,823,400 H Shares, fully paid up or credited as fully paid up, representing approximately 83.5% and 16.5% of the registered capital, respectively.

Save as aforesaid, there has been no alteration in the share capital of our Company since our conversion into a joint stock limited liability company.

C. Resolutions of the extraordinary Shareholders’ meeting in relation to the Global Offering

On September 25, 2009, the Shareholders approved, among other things, the following resolutions and matters:

• (a) the conversion of our Company into an “overseas subscription company limited by shares”;

• (b) the issue of H Shares with a par value of RMB1.00 each (the number of the H Shares so issued shall not exceed 15% of the total share capital of our Company after the Global Offering) and granting the Joint Bookrunners an Over-allotment Option in respect of no more than 15% of the number of H Shares issued as abovementioned;

• (c) the adoption of the Articles of Association and the authorization to the Board to amend such Articles of Association in accordance with the requirements of the relevant laws and regulations and the Listing Rules; and

• (d) authorizing the Board to handle all matters relating to, among other things, the conversion of our Company into an “overseas subscription company limited by shares”, the issue of H Shares and the listing on the Hong Kong Stock Exchange.

2. FURTHER INFORMATION ABOUT OUR SUBSIDIARIES

A. Principal subsidiaries

Our principal subsidiaries are listed in Note 1 to the Accountants’ Report, the text of which is set out in Appendix I to this prospectus.

B. Changes in the share capital of our subsidiaries

The following shows the changes in the share capital of our subsidiaries within the two years immediately preceding the date of this prospectus:

Beijing Goldwind

In October 2008, its registered share capital increased from RMB200 million to RMB350 million.

Beijing Tianyuan

In October 2009, its registered share capital increased from RMB25 million to RMB45 million.

Bayannur Fuhui

In June 2008, its registered share capital increased from RMB100 million to RMB160 million; on September 7, 2009, its registered share capital decreased from RMB160 million to RMB40 million.

Damao Qi Tianrun Wind Power Co., Ltd.

In June 2008, its registered share capital increased from RMB10 million to RMB100 million.

– IX-2 –

STATUTORY AND GENERAL INFORMATION

APPENDIX IX

Buerjin Tianrun Wind Power Co., Ltd.

In June 2008, its registered share capital increased from RMB1 million to RMB57.50 million.

Shangdu Tianrun Wind Power Co., Ltd.

In September 2009, its registered share capital increased from RMB1 million to RMB84 million.

3. FURTHER INFORMATION ABOUT THE BUSINESS

A. Summary of material contracts

The following contracts (not being contracts in the ordinary course of business) have been entered into by our Company or any of our subsidiaries within the two years preceding the date of this prospectus and are or may be material:

• (a) Guarantee Contract dated December 23, 2009 entered into between our Company and the Bank of Communications Co., Ltd. Fengtai Branch pursuant to which our Company provides guarantee in respect of and for securing the obligation of Beijing On-off to repay a loan of RMB21 million with interests and fees to the Bank of Communications Co., Ltd. Fengtai Branch;

• (b) Counter Guarantee Contract dated December 23, 2009 entered into among our Company, Beijing Onoff, Chen Hong Wei and Mu Xiao Na pursuant to which Beijing On-off, Chen Hong Wei and Mu Xiao Na mortgaged certain assets to our Company as a counter guarantee to the guarantee contract mentioned in (a) above;

• (c) Share Pledge Contract dated December 23, 2009 entered into between our Company and Beijing Onoff pursuant to which Beijing On-off pledged its 25% equity interest in Beijing Techwin to our Company as a counter guarantee to the guarantee contract mentioned in (a) above;

• (d) State-owned Land Use Right Mortgage Contract dated December 23, 2009 entered into between our Company and San He Yan Jiao On-off Electric Co., Ltd pursuant to which San He Yan Jiao On-off Electric Co., Ltd mortgaged its land use right for a parcel of state-owned land and all the fixtures thereon to our Company as a counter guarantee to the guarantee contract mentioned in (a) above; and

• (e) Cornerstone Placing Agreement dated May 31, 2010 entered into among our Company, the Joint Bookrunners and CTF regarding the subscription by CTF of H Shares under the Global Offering at the Offer Price for a consideration of US$40 million; and

• (f) the Hong Kong Underwriting Agreement dated June 4, 2010.

– IX-3 –

STATUTORY AND GENERAL INFORMATION

APPENDIX IX

B. Our Intellectual property rights

• (a) Trademarks

As of the Latest Practicable Date, we had registered the following trademarks:

Name of registrant Our Company. . . . . . . . . . . . . . . . . Our Company. . . . . . . . . . . . . . . . . Our Company. . . . . . . . . . . . . . . . . Our Company. . . . . . . . . . . . . . . . . Our Company. . . . . . . . . . . . . . . . . Our Company. . . . . . . . . . . . . . . . . Goldwind Windenergy . . . . . . . . . . Goldwind Windenergy . . . . . . . . . . Vensys AG . . . . . . . . . . . . . . . . . . . Vensys AG . . . . . . . . . . . . . . . . . . .	Trademark VENSYS	Date of Registration 2002.1.14 2002.1.14 2009.12.10 2009.12.10 2009.12.10 2009.12.10 2008.6.12 2008.6.12 2003.10.10 2003.10.24	Registration Number
			1697742 1697741 301495170 301495206 301495341 301495378 DE30781626 DE30781627 DE30339799 DE30339798

As of the Latest Practicable Date, we had applied for the registration of the following trademarks:

Name of applicant Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company	Trademark	Class 35 42 37 7 9 9 37 35 37 7 9 37 7 7 9 37	Application Number 6651807 6651808 6651809 6651810 6651811 6651812 6651813 6651814 6651815 6651816 6651817 6651818 6651819 6651820 6651821 6651822	Application Date
				2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11

– IX-4 –

APPENDIX IX

STATUTORY AND GENERAL INFORMATION

Name of applicant Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Beijing Techwin Beijing Tianyuan Beijing Tianyuan Beijing Tianyuan Beijing Tianyuan Beijing Tianyuan Beijing Tianyuan	Trademark	Class 9 41 42 35 37 35 42 41 41 42 7 41 42 41 35 41 35 42 9 7 35 37 35 37 7	Application Number 6651823 6651824 6651825 6651826 6651827 6651828 6651829 6651830 6651831 6651832 6651833 6651834 6651835 6651836 6651837 6668071 6668072 6668073 7309116 6482967 6633953 6633954 6633955 6633956 6633957	Application Date
				2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.11 2008.4.18 2008.4.18 2008.4.18 2009.4.7 2007.12.29 2008.4.2 2008.4.2 2008.4.2 2008.4.2 2008.4.2

(b) Patent

As of the Latest Practicable Date, we had been granted the following patents:

Patent Owner Our Company Our Company	Title	Type Invention Design	Patent No. ZL 02 1 29998.6 ZL 2007 3 0157557.7	Application Date 2002.9.10 2007.5.24	Publication Date 2007.5.23 2008.4.23	Certificate Number
						No. 325754 No. 770312

– IX-5 –

APPENDIX IX STATUTORY AND GENERAL INFORMATION

Patent Owner Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company, Xinjiang Wind Power, Xinjiang Xinfeng Installation Co., Ltd. Our Company Our Company Our Company Our Company Our Company			Title	Type Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model	Patent No. ZL 02 2 54019.9 ZL 2003 2 0127428.X ZL 03 2 43501.0 ZL 2004 2 0002630.4 ZL 2005 2 0007835.6 ZL 2005 2 0007834.1 ZL 2005 2 0016219.7 ZL 2006 2 0121460.0 ZL 2006 2 0166328.1 ZL 2006 2 0132783.X ZL 2007 2 0146691.1 ZL 2007 2 0127126.0 ZL 2007 2 0152833.5 ZL 2007 2 0193929.6	Application Date 2002.9.6 2003.11.27 2003.3.26 2004.1.12 2005.3.2 2005.3.2 2005.4.6 2006.6.30 2006.12.30 2006.9.5 2007.4.17 2007.7.26 2007.6.6 2007.10.25	Publication Date 2003.11.26 2005.2.9 2004.3.24 2005.10.26 2006.5.10 2006.5.10 2006.7.12 2007.9.19 2007.12.12 2007.12.12 2008.6.11 2008.6.11 2008.6.11 2008.9.10	Certificate Number
								No. 589268 No. 679024 No. 608091 No. 736809 No. 780026 No. 779837 No. 797128 No. 948881 No. 989762 No. 991368 No. 1060396 No. 1061397 No. 1059089 No. 1097221

– IX-6 –

APPENDIX IX

STATUTORY AND GENERAL INFORMATION

Patent Owner Our Company, China National Offshore Oil Corporation, CNOOC (Beijing) Energy Investment Co., Ltd. Our Company Our Company Our Company Beijing Tianyuan Beijing Tianyuan Vensys AG Vensys AG Vensys AG			Title	Type Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model	Patent No. ZL 2008 2 0079622.8 ZL 2008 2 0209675.7 ZL 2009 2 0139801.0 ZL 2008 2 0228862.X ZL 2008 2 0080718.6 ZL 2008 2 0123602.6 DE 4402184 C2 DE 19636591 C2 DE 4221783 C2	Application Date 2008.3.28 2008.11.4 2009.1.8 2008.12.18 2008.5.21 2008.11.6 1994.1.26 1996.9.10 1992.7.3	Publication Date 2009.4.1 2009.9.30 2009.10.21 2009.11.11 2009.3.4 2009.12.2 1995.11.23 1999.12.9 1994.1.10	Certificate Number
								No. 1195889 No. 1289458 No. 1298614 No. 1310932 No. 1182961 No. 1317028 DE 4402184 C2 DE 19636591 C2 DE 4221783 C2

According to PRC laws, a granted design has a validity period of ten years from the date of its application and a granted innovation has a validity period of 20 years from the date of its application.

As of the Latest Practicable Date, we had applied for the following patents:

Name of applicant Our Company Our Company Our Company			Title	Application Date 2004.1.19 2006.11.1 2006.12.19	Application Number 200410003089.3 200610143874.8 200610171331.7	Type
						Invention Invention Invention

– IX-7 –

APPENDIX IX STATUTORY AND GENERAL INFORMATION

Name of applicant Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company				Title	Application Date 2006.9.14 2007.2.28 2007.6.6 2008.1.2 2008.1.2 2008.1.2 2008.4.7 2008.12.7 2009.5.14 2007.5.15 2009.3.19 2009.3.4 2009.5.6 2009.6.10 2009.8.11 2009.8.24 2009.11.11	Application Number 200610153974.9 200710084287.0 200710111649.0 200810001719.1 200810002484.8 200810002485.2 200810090171.2 200810186913.1 200910113316.0 200730146974.1 200930174441.3 200920139917.4 200920140136.7 200920140237.4 200920140373.3 200920140398.3 200920164634.5	Type
							Invention Invention Invention Invention Invention Invention Invention Invention Invention Design Design Utility Model Utility Model Utility Model Utility Model Utility Model Utility Model

– IX-8 –

APPENDIX IX STATUTORY AND GENERAL INFORMATION

Name of applicant Our Company Our Company, China National Offshore Oil Corporation, CNOOC (Beijing) Energy Investment Co., Ltd. Our Company, Beijing Goldwind Our Company, Beijing Goldwind Our Company, Beijing Goldwind Beijing Tianyuan Beijing Tianyuan Beijing Tianyuan Beijing Tianyuan Beijing Tianyuan Beijing Tianyuan Beijing Tianyuan Beijing Tianyuan Beijing Tianyuan				Title	Title	Application Date 2009.11.25 2008.3.28 2009.1.8 2008.11.28 2009.9.27 2007.10.16 2008.8.25 2009.4.9 2009.4.9 2008.11.19 2008.12.15 2008.12.22 2009.4.9 2009.5.8	Application Number 200920164696.6 200810102934.0 200910113202.6 200830145971.0 200920164492.2 200710175921.1 200810118822.4 200910081712.X 200910081713.4 200820123827.1 200820124624.4 200820124507.8 200920106762.4 200920107942.4	Type
								Utility Model Invention Invention Design Utility Model Invention Invention Invention Invention Utility Model Utility Model Utility Model Utility Model Utility Model

– IX-9 –

APPENDIX IX STATUTORY AND GENERAL INFORMATION

Name of applicant Vensys AG Vensys AG Vensys AG Vensys AG Vensys AG				Title	Title	Application Date 2002.3.7 2004.4.16 2007.9.20 2006.9.20 2007.9.8 2008.3.5 2007.3.6 2008.2.28 2008.3.12 2009.3.10	Application Number DE10210164A1 EP1586769A2 DE102004018758 A1 CN101159339(A) DE102006044268A1 EP1903665A2 CN101299552(A) EP1968172A2 DE102007011261A1 DE102008013926A1 WO2009/112024A2	Type
								Invention Invention Invention Invention Invention

(b) Domain Name

As of the Latest Practicable Date, we were the registered proprietor of the following domain names:

No 1 2 3 4 5 6 7 8 9 10 11	Registered Owner Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company Our Company	Domain name goldwind.org goldwind.cn goldwind.biz 002202.mobi goldwind.cc goldwindgermany.com devicesend.cn devicesend.com devicesend.com.cn etechwin.cn etechwin.com	Registration Date 2004.3.2 2004.5.13 2008.1.14 2008.1.14 2008.1.15 2009.7.28 2009.7.28 2009.7.28 2009.7.28 2009.7.28 2009.7.28	Expiry Date 2014.3.2 2017.5.13 2018.1.14 2018.1.14 2018.1.15 2019.7.28 2019.7.28 2019.7.28 2019.7.28 2019.7.28 2019.7.28	Name of Certificate
					International Domain Registration Certificate Domestic Domain Registration Certificate International Domain Registration Certificate International Domain Registration Certificate International Domain Registration Certificate International Domain Registration Certificate China National Top Level Domain Registration Certificate International Domain Registration Certificate China National Top Level Domain Registration Certificate China National Top Level Domain Registration Certificate International Domain Registration Certificate

– IX-10 –

STATUTORY AND GENERAL INFORMATION

APPENDIX IX

4. FURTHER INFORMATION ABOUT THE DIRECTORS AND SUPERVISORS

A. Particulars of Directors’ and Supervisors’ service agreements

Each of the Directors and Supervisors has entered into a service agreement with our Company on May 26, 2010 in compliance with relevant laws and regulations, the Articles of Association and the relevant regulations of arbitration. Each service agreement is for an initial term of three years commencing on March 25, 2010. Save as disclosed in this prospectus, none of the Directors or Supervisors has entered into a service agreement with our Group other than a service agreement expiring or terminable by the employer within one year without payment of compensation (other than statutory compensation).

B. Directors’ and Supervisors’ remuneration

(a) Directors

The aggregate remuneration paid and benefits in kind granted to the Directors for the three years ended December 31, 2007, 2008 and 2009 were approximately RMB14.1 million, RMB11.3 million and RMB8.5 million, respectively.

Save as disclosed in this prospectus, no other emoluments have been paid or are payable, in respect of the three years ended December 31, 2007, 2008 and 2009 by us to the Directors.

Note: The aggregate remuneration paid and benefits in kind granted to Wu Gang and Guo Jian for the three years ended December 31, 2007, 2008 and 2009 were approximately RMB12.5 million, RMB9.3 million and RMB7.9 million, respectively.

Under the existing arrangements currently in force, the aggregate remuneration payable and benefits in kind granted to the Directors for the year ending December 31, 2010 is estimated to be approximately RMB22.6 million.

(b) Supervisors

The aggregate remuneration paid and benefits in kind granted to the Supervisors (representative of employees) for the three years ended December 31, 2007, 2008 and 2009 were approximately RMB1.0 million, RMB1.1 million and RMB1.7 million, respectively.

Save as disclosed in this prospectus, no other emoluments have been paid or are payable, in respect of the three years ended December 31, 2007, 2008 and 2009 by us to the Supervisors.

Under the existing arrangements currently in force, the aggregate remuneration payable and benefits in kind granted to the Supervisors (representative of employees) for the year ending December 31, 2010 is estimated to be approximately RMB1.1 million.

– IX-11 –

STATUTORY AND GENERAL INFORMATION

APPENDIX IX

5. DISCLOSURE OF INTERESTS

A. Substantial Shareholders

So far as the Directors, the Supervisors, the chief executive of the Company are aware, immediately following the completion of the Global Offering (assuming the Over-allotment Option is not exercised), the following persons, not being a Director, Supervisor or chief executive of our Company, had an interest or short position in the Shares or underlying Shares which would fall to be disclosed to us and the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XVof the SFO or who will be, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any of our subsidiaries:

• (a) Interest in the Shares of our Company

Name of Shareholder Xinjiang Wind Power(3) . . . . . . . . . . . China Water (1)(3) . . . . . . . . . . . . . . . . China Three Gorges (2)(3) . . . . . . . . . . CB Fund . . . . . . . . . . . . . . . . . . . . . .	Number of A Shares directly or indirectly held Approximate percentage of issued share capital (%) Immediately after the completion of the Global Offering (assuming the Over-allotment Option is not exercised) 389,833,854(L) 14.8 725,897,521(L) 27.5 725,897,521(L) 27.5 161,280,000(L) 6.1	Immediately after the completion of the Global Offering (assuming the Over-allotment Option is exercised in full)	Immediately after the completion of the Global Offering (assuming the Over-allotment Option is exercised in full)
	Number of A Shares directly or indirectly held 389,833,854(L) 725,897,521(L) 725,897,521(L) 161,280,000(L)	Number of A Shares directly or indirectly held 386,921,738(L) 720,474,959(L) 720,474,959(L) 161,280,000(L)	Approximate percentage of issued share capital (%)
			14.4 26.7 26.7 6.0

The letter “L” denotes long position in the Shares. Notes:

• (1) China Water (being a wholly owned subsidiary of China Three Gorges) directly holds 336,063,667 A Shares (assuming the Over-allotment Option is not exercised) or 333,553,221 A Shares (assuming the Over-allotment Option is exercised in full). Since China Water holds 33.9% of the issued share capital of Xinjiang Wind Power, under the SFO, besides directly holding interests in our Company, China Water is deemed to be interested in the 389,833,854 A Shares (assuming the Over-allotment Option is not exercised) or 386,921,738 A Shares (assuming the Over-allotment Option is exercised in full) held by Xinjiang Wind Power (38.9% of the interest in the share capital owned by the Xinjiang SASAC).

• (2) China Three Gorges (wholly owned by SASAC) is the holding company of China Water. Under the SFO, China Three Gorges is deemed to be interested in the 389,833,854 A Shares and 336,063,667 A Shares (assuming the Over-allotment Option is not exercised) or 386,921,738 A Shares and 333,553,221 A Shares (assuming the Over-allotment Option is exercised in full) held by Xinjiang Wind Power in which China Water is deemed to be interested and the A Shares directly held by China Water.

• (3) Pursuant to the Implementing Measures for the Transfer of Part of the State-owned Shares to the NSSF in Domestic Securities Market , jointly issued by the Ministry of Finance and four other ministries (Caiqi [2009] No. 94), state-owned Shareholder Xinjiang Wind Power after the A Shares offering shall transfer 11,001,352 A Shares held by it in our Company and China Water shall transfer 9,483,925 A Shares directly held by it in our Company to the NSSF. As of the Latest Practicable Date, the above mentioned transfer processes had not been undertaken.

(b) Interest in our subsidiaries

As of the Latest Practicable Date, so far as the Directors were aware, the following persons (who were independent of the Directors, Supervisors and Substantial Shareholders) were, directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of our subsidiaries:

Name of Shareholder Vensys AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wagenfeld Schippmann . . . . . . . . . . . . . . . . . . . .	Approx. % of shareholding	Name of subsidiary
	90 10	Vensys Elektrotechnik

– IX-12 –

APPENDIX IX

STATUTORY AND GENERAL INFORMATION

Name of Shareholder Saarwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Windpark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vensys/Innowind . . . . . . . . . . . . . . . . . . . . . . . . . Goldwind Windenergy . . . . . . . . . . . . . . . . . . . . . Our Company . . . . . . . . . . . . . . . . . . . . . . . . . . . Beijing On-off Electric Equipment Co., Ltd. . . . . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Shanghai Chengrui . . . . . . . . . . . . . . . . . . . . . . . Shanxi Ruijing Kemao Co., Ltd. . . . . . . . . . . . . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Shanghai Chengrui . . . . . . . . . . . . . . . . . . . . . . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Shanxi Wolong Investment Co., Ltd. . . . . . . . . . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Beijing Xinghe Mingxin Consultation Co., Ltd. . . Hubei Sanhuan Development Co., Ltd. . . . . . . . . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Shanghai Chengrui . . . . . . . . . . . . . . . . . . . . . . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Shanghai Chengrui . . . . . . . . . . . . . . . . . . . . . . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Shanghai Chengrui . . . . . . . . . . . . . . . . . . . . . . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Shenzhen Lianhe Huifeng Energy Co., Ltd. . . . . . TianRun USA . . . . . . . . . . . . . . . . . . . . . . . . . . . Horizon Uilk, LLC(1) . . . . . . . . . . . . . . . . . . . . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Li Yanjun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Zhao Shuyan. . . . . . . . . . . . . . . . . . . . . . . . . . . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Chifeng Zhongren Wind Power Co., Ltd. . . . . . . . Chifeng Zhongxin Lianyi New Energy Co., Ltd. . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Shanghai Chengrui . . . . . . . . . . . . . . . . . . . . . . . Beijing Tianrun . . . . . . . . . . . . . . . . . . . . . . . . . . Chifeng Jinneng New Energy Co., Ltd. . . . . . . . .	Approx. % of shareholding	Name of subsidiary
	7.3 2.1 20.6 70 75 25 51 44 5 51 49 51 49 56 24 20 51 49 51 49 51 49 66 34 83 17 51 25 24 51 43 6 51 49 90 10	Vensys AG Beijing Techwin Bayannur Fuhui Shangdu Tianrun Wind Power Co., Ltd. Sunite Youqi Tianrunlong Wind Power Co., Ltd. Beijing Xingqiyuan Energy Conservation Technology Co., Ltd. Qianguo Fuhui Wind Energy Co., Ltd. Gannan Fuhui Wind Energy Co., Ltd. Tongyu Fuhui Wind Energy Co., Ltd. Yichun Taiyangfeng New Energy Co., Ltd. TianRun Uilk, LLC Jilin Tongli Wind Power Co., Ltd. Chifeng Huifeng New Energy Co., Ltd. Shanghai Yicheng Electric Power Engineering Co., Ltd. Chifeng Tianrun Xinneng New Energy Co., Ltd.

Note:

(1) The shareholder of Horizon Uilk, LLC is also a shareholder of Vensys/Innowind, who holds a 20.6% shareholding interest in Vensys AG.

– IX-13 –

APPENDIX IX

STATUTORY AND GENERAL INFORMATION

Save as disclosed above, but without taking into account any H Shares that may be taken up under the Global Offering and any H Shares that may be issued and allotted pursuant to the exercise of the Over-allotment Option, the Directors are not aware of any person (not being a Director, Supervisor or chief executive of our Company) who will, immediately following the completion of the Global Offering, have an interest or short position in the Shares or the underlying Shares which would fall to be disclosed to us and the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XVof the SFO, or be directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of our subsidiaries.

B. Interests and short positions of the Directors in the share or debenture capital of our Company or associated corporations

Save as disclosed below, immediately following completion of the Global Offering (assuming that the Overallotment Option is not exercised), none of the Directors, Supervisors and chief executive of our Company will have an interest or short position in the shares, underlying shares or debentures of our Company or any of our associated corporations (within the meaning of Part XVof the SFO) which will have to be notified to us and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XVof the SFO (including interests and short positions which they have taken or deemed to have under such provisions of the SFO), or which will be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein or which will be required to be notified to us and the Hong Kong Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, in each case once the H Shares are listed on the Hong Kong Stock Exchange.

Name of Director Wu Gang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Guo Jian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Nature of Interest Beneficial Owner Beneficial Owner	Number of Shares 40,167,040 29,119,744	Approx. % of interest in our Company
			1.79 1.30

C. Disclaimers

Save as disclosed in this prospectus:

• (a) none of the Directors or Supervisors or any of the parties listed in paragraph 6E of this Appendix IX is interested in our Company, or in any assets which have, within the two years immediately preceding the date of this prospectus, been acquired or disposed of by or leased to our Company, or are proposed to be acquired or disposed of by or leased to our Company;

• (b) none of the Directors or Supervisors is materially interested in any contract of arrangement subsisting at the date of this prospectus which is significant in relation to our business;

• (c) save in connection with the Underwriting Agreements, none of the parties listed in paragraph 6E of this Appendix IX:

• (i) is interested legally or beneficially in the shares of any member of our Group; or

• (ii) has any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of our Group;

• (d) save as disclosed under the paragraph headed “4. Further Information About the Directors and Supervisors” above, there are no existing or proposed service agreements (excluding contracts expiring or terminable by the employer within one year without payment of compensation other than statutory compensations) between any member of our Group and any Director or Supervisor;

– IX-14 –

STATUTORY AND GENERAL INFORMATION

APPENDIX IX

• (e) none of the Directors or Supervisors or their respective associates or any of the Shareholders (who to the knowledge of the Directors owns more than 5% of our issued share capital) has any interest in any of our five largest suppliers and our five largest customers;

• (f) none of the Directors or Supervisors is a director or employee of a company which has an interest in our Shares and underlying Shares, which, once the H Shares are listed on the Hong Kong Stock Exchange, would have to be disclosed to us pursuant to Division 2 and 3 of Part XV of the SFO; and

• (g) apart from Wei Hongliang who is the vice president of our Company and Wang Jin who is the general manager of Beijing Goldwind, no amount or benefit has been paid or given within the two years preceding the date of this prospectus to the promoter nor is any such amount or benefit intended to be paid or given.

None of the Directors is interested in any business which competes or is likely to compete, either directly or indirectly, with our business.

6. OTHER INFORMATION

A. Estate Duty

The Directors have been advised that no material liability for estate duty under the PRC law is likely to fall on any member of our Group.

B. Litigation

Save as disclosed in the paragraph headed “Legal Proceedings and Regulations” in the section entitled “Business” in this prospectus, as of the Latest Practicable Date, we had not been involved in any litigation, arbitration or administrative proceedings of material importance, and no such other litigation, arbitration or administrative proceedings was known to the Directors to be pending or threatened against any member of our Group.

C. Application for listing

The Joint Sponsors have made an application on our behalf to the Listing Committee of the Hong Kong Stock Exchange for the listing of, and permission to deal in, the H Shares. All necessary arrangements have been made enabling the securities to be admitted into CCASS.

D. Preliminary expenses

The estimated preliminary expenses were approximately HK$1.7 million and were paid or payable by us.

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E. Qualifications of experts

The qualifications of the experts who have given opinions in this prospectus are as follows:

China International Capital Corporation Hong Licensed under the SFO for type 1 (dealing in Kong Securities Limited securities), type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities as defined under the SFO Citigroup Global Markets Asia Limited Licensed under the SFO for type 1 (dealing in securities), type 4 (advising on securities), type 6 (advising on corporate finance) and type 7 (providing automated trading services) regulated activities as defined under the SFO Hai Tong Capital (HK) Limited Licensed under the SFO for type 6 (advising on corporate finance) regulated activity as defined under the SFO Xinjiang Tianyang Law Firm PRC legal advisors Ernst & Young Certified Public Accountants Jones Lang LaSalle Sallmanns Limited Property valuers

F. No material adverse change

The Directors have confirmed that there has been no material adverse change in our financial or trading position since December 31, 2009.

G. Binding effect

This prospectus shall have the effect, if an application is made in pursuance hereof, of rendering all persons concerned bound by all the provisions (other than the penal provisions) of sections 44A and 44B of the Companies Ordinance so far as applicable.

H. Consents

Each of China International Capital Corporation Hong Kong Securities Limited, Citigroup Global Markets Asia Limited, Hai Tong Capital (HK) Limited, Xinjiang Tianyang Law Firm, Ernst & Young and Jones Lang LaSalle Sallmanns Limited has given and has not withdrawn their respective written consent to the issue of this prospectus with the inclusion of its reports and/or letters and/or valuation certificates and/or the references to their names included herein in the form and context in which they are respectively included.

I. Promoters

The promoters of our Company are Xinjiang Wind Power, China Water, Wind Power Research Centre, Solar Energy Co., Beijing Junhe Weiye Investment Consultation Co., Ltd., Tao Yi, Wu Gang, Wei Hongliang, Gu Baoyu, Wang Bin, Hu Nan, Ma Hui, Guo Jian and Wang Jin. Save as disclosed in this prospectus, within the two years immediately preceding the date of this prospectus, no cash, security or benefit has been paid, allotted or given, or is proposed to be paid, allotted or given to the promoters named above in connection with the Global Offering or the related transactions described in this prospectus.

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J. Financial Advisors

We have appointed China International Capital Corporation Hong Kong Securities Limited and CCB International Capital Limited as our global financial advisors, and Haitong Securities Co., Ltd. as our PRC financial advisor to provide financial advisory services in relation to the Global Offering. The appointment of China International Capital Corporation Hong Kong Securities Limited, CCB International Capital Limited and Haitong Securities Co., Ltd. is at our own initiative and not a requirement under the Listing Rules and is separate and distinct from the appointment of the Joint Sponsors. Under the terms of their engagement, principal functions performed by our financial advisors include advising us on:

• k selection of capital market;

• k deal structuring;

• k appointment of professional advisors;

• k preliminary issues relating to potential offering and listing; and

• k matters arising in connection with our existing listing of A Shares on the SZSE.

China International Capital Corporation Hong Kong Securities Limited, Citigroup Global Markets Asia Limited and Hai Tong Capital (HK) Limited are acting as the Joint Sponsors in our listing application and will take full responsibility in performing their duties in accordance with the Listing Rules. The roles of our global financial advisors and PRC financial advisor are different from the role of the Joint Sponsors who (i) are required by the Listing Rules to be appointed by us to assist with our initial application for the Listing; (ii) must be acceptable to the Stock Exchange; (iii) must perform their duties in accordance with the Listing Rules with impartiality; and (iv) must be independent from our Company. Each of the Joint Sponsors, China International Capital Corporation Hong Kong Securities Limited, CCB International Capital Limited and Haitong Securities Co., Ltd. in their capacity as financial advisors, has discharged their respective duties independently from different roles and perspectives and has not relied on the work done by each other as set out above in respect of the listing application.

K. Compliance Advisor

We will appoint Taifook Capital Limited as our compliance advisor upon the Listing in compliance with Rule 3A.19 of the Listing Rules.

L. Bilingual prospectus

The English language and Chinese language versions of this prospectus are being published separately, in reliance upon the exemption provided under section 4 of the Companies Ordinance (Exemption of Companies and prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws of Hong Kong).

M. Miscellaneous

• (a) Save as disclosed in this prospectus:

• (i) within the two years preceding the date of this prospectus, no share or loan capital of any member of our Group has been issued or agreed to be issued fully or partly paid either for cash or for a consideration other than cash;

• (ii) no share or loan capital of any member of our Group is under option or is agreed conditionally or unconditionally to be put under option;

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• (iii) no member of our Group has issued or agreed to issue any founder shares, management shares or deferred shares;

• (iv) within the two years preceding the date of this prospectus, no commissions, discounts, brokerage or other special terms have been granted in connection with the issue or sale of any of the shares or loan capital or any of our subsidiaries; and

• (v) none of our equity and debt securities is listed or dealt in on any other stock exchange nor is any listing or permission to deal in such securities being or proposed to be sought.

• (b) We have no outstanding convertible debt securities.

N. Taxation of holders of H Shares

Hong Kong stamp duty will be payable by the purchaser on every purchase and by the seller on every sale, purchase and transfer of the H Shares. The duty is charged at the current rate of HK$1.00 for every HK$1,000.00 of the consideration or, if higher, the fair value of the H Shares being sold or transferred.

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APPENDIX X

DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION

1. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES

The documents attached to the copy of this prospectus delivered to the Registrar of Companies in Hong Kong for registration were:

• (a) a copy of each of the Application Forms;

• (b) the written consents referred to in the appendix entitled “Appendix IX — Statutory and General Information — 6. Other Information — H. Consents” of this prospectus; and

• (c) a copy of each of the material contracts referred to in the appendix entitled “Appendix IX — Statutory and General Information — 3. Further Information about the Business — A. Summary of material contracts” of this prospectus.

2. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the office of DLA Piper Hong Kong at 17th Floor, Edinburgh Tower, The Landmark, 15 Queen’s Road, Central, Hong Kong during normal business hours up to and including the date which is 14 days from the date of this prospectus:

• k the Articles of Association;

• k the Accountants’ Report prepared by Ernst & Young, the text of which is set out in Appendix I to this prospectus;

• k the audited consolidated financial statements of our Company for the three years ended December 31, 2009;

• k the letter relating to the profit forecast, the texts of which are set out in Appendix II;

• k the letter relating to the unaudited pro forma financial information of our Group, the text of which are set out in Appendix III ;

• k the unaudited interim financial report reviewed by Ernst & Young, the text of which is set out in Appendix IV to this prospectus;

• k the letter, valuation certificate and report relating to our property interests prepared by Jones Lang LaSalle Sallmanns Limited, the texts of which are set out in Appendix V;

• k the material contracts referred to in the appendix entitled “Appendix IX — Statutory and General Information — 3. Further Information about the Business — A. Summary of material contracts” to this prospectus;

• k the written consents referred to in the appendix entitled “Appendix IX — Statutory and General Information — 6. Other Information — H. Consents” to this prospectus;

• k the service contracts referred to in the appendix entitled “Appendix IX — Statutory and General Information — 4. Further Information about the Directors and Supervisors — A. Particulars of Directors’ and Supervisors’ service agreements” to this prospectus;

• k the PRC legal opinion issued by Xinjiang Tianyang Law Firm, the PRC legal advisors of our Company; and

• k the PRC Company Law, the Special Regulations and the Mandatory Provisions together with unofficial English translation thereof.

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