Medlive Technology Co., Ltd. — AGM Information 2006

Oct 18, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED , you should at once hand this circular to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0921)

PROPOSED ELECTION AND REMOVAL OF SUPERVISORS AND

AMENDMENTS TO THE RULES OF PROCEDURES FOR THE MEETING OF THE SUPERVISORY COMMITTEE AND

AMENDMENTS TO THE RULES OF PROCEDURES FOR THE MEETING OF THE BOARD OF DIRECTORS AND AMENDMENTS TO THE RULES OF PROCEDURES FOR THE GENERAL MEETING AND

AMENDMENTS TO THE ARTICLES OF ASSOCIATION

A notice convening the annual general meeting of Guangdong Kelon Electrical Holdings Company Limited to be held at the conference room of the Company’s head office, Shunde District, Foshan City, Guangdong Province, the People’s Republic (the “PRC”) on 5 December 2006 at 9:30 a.m. is set out on pages 16 to 29 of this circular. If you are not able to attend the meeting in person, you are requested to complete and return the enclosed proxy form in accordance with the instructions printed thereon and lodge the same with the Company’s Branch Share Registrar in Hong Kong, Hong Kong Registrars Limited of Rooms 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong. not less than 24 hours before the time fixed for holding the meeting or any adjournment thereof.

Completion and delivery of the form of proxy will not preclude you from attending and voting at the meeting or any adjournment thereof if you so wish.

16 October 2006

Page

CONTENTS

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
–	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
–	Removal and Election of Supervisors. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
–	Amendments to the Rules of Procedures for the Meeting of
	the Supervisory Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
–	Amendments to the Rules of Procedures for the Meeting of
	the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
–	Amendments to the Rules of Procedures for the General Meeting . . . . . . .	6
–	Amendments to the Articles of Association . . . . . . . . . . . . . . . . . . . . . . . .	13
−	Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
–	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
−	Procedure to Demand a Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
–	Board Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
**Appendix **	I – Details of the Candidates of Supervisors . . . . . . . . . . . . . . . . . . . . .	15
**Notice of **	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16

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DEFINITIONS

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

“AGM”	the annual general meeting of the Company to be held at
	the Company’s head office, Shunde District, Foshan City,
	Guangdong Province, the People’s Republic of China (the
	“PRC”) on 5 December 2006 at 9:30 a.m., notice of
	which is set out on pages 16 to 29 of this circular
“Articles of Association”	the articles of association of the Company
“Board”	the board of directors of the Company
“Company”	Guangdong Kelon Electrical Holdings Company Limited,
	a company incorporated in the PRC with limited liability
	and listed on the main board of the Stock Exchange and
	Shenzhen Stock Exchange
“CSRC”	China Securities Regulatory Committee
“Director(s)”	the director(s) of the Company for the time being
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Shareholder(s)”	holder(s) of shares of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

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LETTER FROM THE BOARD

GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0921)

Executive Directors:

Mr. Tang Ye Guo Ms. Yu Shu Min Mr. Su Yu Tao

Mr. Xiao Jian Lin

• Mr. Lin Lan Mr. Zhang Ming

Registered office: No. 8 Ronggang Road Ronggui Street Shunde District Foshan City Guangdong Province China

Independent non-executive Directors:

Mr. Zhang Sheng Ping Mr. Lu Qing Mr. Cheung Yui Kai, Warren

Principal place of business in Hong Kong: Room 2502-2505, Harbour Centre 25 Harbour Road Wanchai Hong Kong

16 October 2006

To the Shareholders

Dear Sir or Madam,

PROPOSED ELECTION OF AND REMOVAL SUPERVISORS AND

AMENDMENTS TO THE RULES OF PROCEDURES FOR THE MEETING OF THE SUPERVISORY COMMITTEE AND AMENDMENTS TO THE RULES OF PROCEDURES FOR THE MEETING OF THE BOARD OF DIRECTORS AND

AMENDMENTS TO THE RULES OF PROCEDURES FOR THE GENERAL MEETING AND AMENDMENTS TO THE ARTICLES OF ASSOCIATION

INTRODUCTION

The purpose of this circular is to provide you with information regarding the resolutions to be proposed at the AGM which, upon approval, would enable the Company to:

• (a) elect the supervisors acting as representatives of the Shareholders;

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LETTER FROM THE BOARD

• (b) amend the “Rules of Procedures for the Meetings of the Supervisory Committee of the Company”;

• (c) amend the “Rules of Procedures for the Meetings of the Board of Directors of the Company”;

• (d) amend to the “Rules of Procedures for the General Meetings of the Company”; and

• (e) amend the Articles of Association.

REMOVAL AND ELECTION OF SUPERVISORS

As Mr. Zeng Jun Hong is unable to perform his duty as supervisor acting as representative of the Shareholders, the supervisory committee of the Company proposes the removal of Mr. Zeng acting as supervisor of the Company. However, since the Company is unable to contact Mr. Zeng, Mr. Zeng cannot confirm to the Board whether he has any disagreement with the Board. As far as the Board is aware, there is no other information that need to be brought to the attention to the Shareholders or the Stock Exchange regarding the proposed removal of Mr. Zeng as supervisor acting as representative of Shareholders.

As nominated by Guangdong Greencool Enterprise Development Company Limited, a Shareholder of the Company, Mr. Guo Qingcun is recommended to be one of the candidates for supervisor acting as representative of Shareholders in the sixth supervisory committee of the Company.

As nominated by Shunde Economic Consultancy Company, a shareholder of the Company, Mr. Zhou Zhaoli is recommended to be one of the candidates for supervisor acting as representative of Shareholders in the sixth supervisory committee of the Company.

Details of Mr. Guo and Mr. Zhou required to be disclosed by the Listing Rules are set out in the Appendix I of this circular.

AMENDMENTS TO THE RULES OF PROCEDURES FOR THE MEETING OF THE SUPERVISORY COMMITTEE

Pursuant to the requirements of the relevant notices of the CSRC and the Shenzhen Stock Exchange, the Board proposes the following amendments to be made to the Rules of Procedures for the Meetings of the Supervisory Committee of the Company:

1. Article 4 to be amended as:

Article 4

The supervisory committee shall comprise of two shareholders’ representatives and one staff’s representative. Shareholders’ representatives shall be elected and removed by shareholders in a general meeting, and the staff’s representative shall be democratically elected and removed by the Company’s staff at the staff representative assembly, general staff meetings or otherwise.

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LETTER FROM THE BOARD

The supervisory committee shall appoint a chairman and may appoint a vice chairman. The chairman and vice chairman of the supervisory committee are elected with approval of a majority of supervisors. The chairman of the supervisory committee shall convene and preside over meetings of the supervisory committee. In the event that the chairman of the supervisory committee is incapable of performing or does not perform his duties, the vice chairman of the supervisory committee shall convene and preside over meetings of the supervisory committee meetings. In the event that the vice chairman of the supervisory committee is incapable of performing or does not perform his duties, a supervisor elected by the majority of supervisors shall convene and preside over meetings of the supervisory committee meetings.

Directors and senior management executives shall not act concurrently as supervisors.

1. Article 23 to be amended as:

Article 23

For provisions not stipulated in the Rules of Procedures for the Meetings of the Supervisory Committee or in the event of any discrepancy with the provisions of the Company Law, the Rules Governing the Listing of Securities on the Shenzhen Stock Exchange, the Rules Governing the Listing of the Securities on the Stock Exchange of Hong Kong Limited and the Articles of Association, the abovementioned laws, regulations and rules and the Articles of Association shall prevail.

AMENDMENTS TO THE RULES OF PROCEDURES FOR THE MEETING OF THE BOARD OF DIRECTORS

Pursuant to the requirements of the relevant notices of the CSRC and Shenzhen Stock Exchange, the Board proposes the following amendments to be made to the Rules of Procedures for the Meetings of the Board of Directors of the Company:

1. Article 1 to be amended as:

Article 1

In order to standardize the procedures for the meetings of the board of directors of Guangdong Kelon Electrical Holdings Company Limited (the “Company”), increase work efficiency and safeguard the legitimate rights and interests of investors, the Company promulgates this Rules of Procedures in accordance with the relevant requirements of the Company Law and the Articles of Association.

1. Article 8 to be amended as:

Article 8

Written notice shall be given to all directors 14 days prior to the meeting of the board of directors of the Company. An extraordinary meeting of the board of directors may be convened if deemed necessary by the chairman of the board of directors.

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LETTER FROM THE BOARD

The chairman of the board of directors shall convene an extraordinary meeting of the board of directors within 10 days upon receiving the following proposed resolutions from:

• (1) more than one-third of the directors of the Company;

• (2) the supervisory committee;

• (3) the general manager;

• (4) shareholders with aggregate voting rights greater than 10%.

Written notice for an extraordinary meeting of the board of directors shall be given to all directors at least 10 days prior to the meeting.

In the event that the chairman of the board of directors is unable to convene an extraordinary meeting as required under this Article, the chairman shall designate another director of the Company to convene, on his/her behalf, the extraordinary meeting of the board of directors. Should the chairman of the board of directors, without reason, fail to convene an extraordinary meeting as required under this Article and fail to designate a person to convene such a meeting, the extraordinary meeting may be convened by a director elected by a majority of the directors.

1. The following content to be added after Article 24:

Such meeting of the board of directors may be held if a majority of the directors present are unconnected directors and resolutions shall be passed only with affirmative votes by a majority of such directors. If the number of unconnected directors present at the meeting is less than 3, the resolution shall be presented for consideration at a general meeting.

1. Article 28 to be amended as:

Minutes shall be made by the board of directors in respect of all resolutions passed at the meeting and signed by the directors present at the meeting. Directors present at the meeting have the right to require the minutes to include an explanatory note clarifying any statements they made at the meeting. Minutes of the meeting shall be kept by the securities department as Company record for a period of ten years.

5. Article 30(3) to be amended as:

(3) The number and names of directors present by proxy or absent from the meetings, reasons for their absence and names of directors entrusted;

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LETTER FROM THE BOARD

1. A new Article 34 to be added after the amended Article 33:

Article 34

For provisions not stipulated in the Rules of Procedures for the Meetings of the Board of Directors or in the event of discrepancy with the provisions in the Company Law, the Rules Governing the Listing of Securities on the Shenzhen Stock Exchange, the Rules Governing the Listing of the Securities on the Stock Exchange of Hong Kong Limited and the Articles of Association, the abovementioned laws, regulations and rules and the Articles of Association shall prevail.

Original Article 34 is renumbered as Article 35.

AMENDMENTS TO THE RULES OF PROCEDURES FOR THE GENERAL MEETING

Pursuant to the requirements of the relevant notices of the CSRC and Shenzhen Stock Exchange, the Company proposes the following amendments to the Rules of Procedures for the General Meeting of the Company:

1. The original Article 2 to be amended as follows:

Article 2

The general meeting is the highest authority of the Company, and it carries out its duties in accordance with the requirements of the Company Law and the Articles of Association.

The Company shall convene general meetings strictly in accordance with the relevant requirements of laws, regulations, these rules of procedures and the Articles of Association, so as to ensure that shareholders can exercise their rights according to law.

The board of directors of the Company shall thoroughly perform their duties in holding general meetings according to schedule. All the directors of the Company shall be diligent and conscientious to ensure that the general meetings are convened in order and in accordance with law.

1. The following content to be added after the original Article 3:

Where a general meeting cannot be convened within the prescribed period, the Company shall report to the local authorities appointed by the CSRC and the stock exchange on which the Company’s shares are listed (the “Stock Exchange”) with reasons thereof.

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LETTER FROM THE BOARD

1. The original Article 8(2) and (3) to be amended as follows:

2. (2) whether the attendees and convener of the meeting are legally qualified to participate;

3. (3) whether the qualifications of the shareholder who proposes new resolutions (if applicable) are in compliance with the relevant requirements;

4. Article 10 to be added after the amended Article 9:

Article 10

When the election of directors and supervisors shall be discussed at the general meeting, full disclosure of the particulars of these directors and supervisors shall be made in the notice of meeting, which shall at least include the following:

• (1) education background, work experience and any other offices concurrently held;

• (2) their relationship with the Company, controlling shareholder or person with controlling interest (if any);

• (3) the amount of shareholding in the Company;

• (4) any disciplinary action by CSRC and other authorities received (if any).

Directors and supervisors are nominated for election individually and separately by proposed resolutions, and nominated directors and supervisors are elected by majority vote.

1. The original Article 10 to be amended as follows:

Article 11

After the notice of meeting has been issued, the general meeting shall not be postponed or cancelled without valid reason. Once postponement or cancellation is required, such postponement or cancellation and reasons thereof shall be announced at least 2 working days prior to the original meeting date.

Notice of postponement shall state the date the meeting has been postponed to. However, the share ownership registration date stated in the original notice of meeting shall not be changed.

1. The original Article 11 to be changed to amended Article 18 of the same content.

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LETTER FROM THE BOARD

7. The original Article 12 to be amended as follows:

Article 12

General meetings are chaired by the chairman of the Company. If the chairman is unable to perform his duties for any reason, the vice chairman designated by the chairman shall chair the meeting. If the vice chairman is unable to perform his duties or has failed to perform his duties, a director elected by a majority of the directors shall chair the meeting.

Where the general meeting is convened by the supervisory committee, the meeting shall be chaired by the chairman of the supervisory committee. If the chairman is unable to perform his duties or has failed to perform his duties, the vice chairman shall chair the meeting. If the vice chairman is unable to perform his duties or has failed to perform his duties, a supervisor elected by a majority of the supervisors shall chair the meeting.

Where the general meeting is convened by shareholders, a representative elected by the convening shareholders shall chair the meeting.

If the chairman of the meeting violates the Rules of Procedures during the general meeting so that the meeting is unable to proceed, shareholders present at the meeting may by majority vote elect a person as chairman to proceed with the meeting.

1. The original Article 13 to be amended as follows:

Article 13

Any proposed resolution at the general meeting shall be one that falls within the meeting’s authority, shall be clear and specific and shall comply with the laws, regulations and the Articles of Association.

1. Article 15 to be deleted;

2. Article 16 to be amended as follows:

Article 15

Shareholders individually or in aggregate holding more than 3% of the voting rights of the Company are entitled to propose a resolution in writing to the convener 10 days prior to the date of the general meeting. The convener shall, within the prescribed period after the receipt of the proposed resolution, issue a supplementary notice of meeting stating the content of the proposed resolution.

Save and except for the abovementioned circumstances, the convener shall make no changes to the proposed resolutions stated in the notice of meeting or add any new proposed resolution after the notice of meeting has been issued.

Any proposed resolution not provided for under Article 13 herein shall not be considered at the general meeting.

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LETTER FROM THE BOARD

1. The original Article 17 to be changed to Article 16;

2. Article 17 to be added after the amended Article 16 as follows:

Article 17

The board shall convene general meetings within the period specified in Article 3 as set out herein.

1. The original Article 19 to be amended as follows:

Article 19

Independent non-executive directors are entitled to propose to convene an extraordinary general meeting to the board of directors. Within 10 days of receiving such proposal, the board of directors shall provide its decision in writing in accordance with the laws, regulations and the Articles of Association.

If the board of directors agrees to convene the extraordinary general meeting, it shall issue the notice of meeting within 5 days of its decision to convene the meeting. If the board of directors decides against convening the extraordinary general meeting, it shall provide reasons for the decision and make announcement in respect thereof.

1. The original Article 20 to be amended as follows:

Article 20

The supervisory committee is entitled to propose to convene the extraordinary general meeting in writing to the board of directors. Within 10 days of receiving such proposal, the board of directors shall provide its decision in writing in accordance with the laws, administrative regulations and the Articles of Association.

If the board of directors agrees to convene the meeting, it shall issue a notice of meeting within 5 days of its decision, and any changes to the original proposal shall be made only with the consent of the supervisory committee.

If the board of directors decides against convening the proposed extraordinary general meeting, or if it has failed to provide its written decision within 10 days of receipt of the proposal, the board shall be deemed to have been unable to or failed to perform its duty to convene a general meeting, and the supervisory committee may convene the meeting on their own.

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LETTER FROM THE BOARD

1. The original Article 21 to be amended as follows:

Article 21

Shareholders individually or in aggregate holding more than 10% of the shares of the Company are entitled to propose to convene the extraordinary general meeting in writing to the board of directors. Within 10 days of receiving such proposal, the board of directors shall provide its decision in writing in accordance with the laws, administrative regulations and the Articles of Association.

If the board of directors agrees to convene the meeting, it shall issue a notice of meeting within 5 days of its decision, and any changes to the proposal shall be made only with the consent of the proposing shareholders.

If the board of directors decides against convening the proposed extraordinary general meeting, or if it has failed to provide its written decision within 10 days of receipt of the proposal, shareholders individually or in aggregate holding more than 10% of the shares of the Company are entitled to propose to convene the extraordinary general meeting to the supervisory committee in writing.

If the supervisory committee agrees to convene the extraordinary meeting, it shall issue the notice of meeting within 5 days of its decision, and any changes to the original proposal shall be made only with the consent of the shareholders.

If the supervisory committee fails to issue a notice of meeting within the prescribed period, the supervisory committee shall be deemed not to convene and chair the meeting. Shareholders individually or in aggregate holding more than 10% of the shares of the Company for 90 consecutive days may convene and chair the meeting on their own.

1. The original Article 22 to be amended as follows:

Article 22

If the supervisory committee or shareholders decide to convene a general meeting, they should notify the board of directors in writing, and report to the CSRC and the stock exchange for their record.

The shareholding of convening shareholders shall not fall below 10% before the notice of resolutions passed at the general meeting has been issued.

The supervisory committee and the convening shareholders shall provide the local office of CSRC and the stock exchange with the relevant notice at the time they issue the notice of meeting and notice of resolutions respectively.

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LETTER FROM THE BOARD

1. The original Article 23 to be amended as follows:

Article 23

Where an extraordinary general meeting is to be convened by shareholders, the content of the notice of meeting shall comply, in addition to the requirements of the Articles of Association, with the following:

• (1) No new content shall be added to the proposal. Otherwise, the proposing shareholders shall, in accordance with the abovementioned procedures, make another request to the Board with respect to convening an extraordinary general meeting.

• (2) The venue for holding the meeting shall be the office of the Company.

• The original Article 24 to be amended as follows:

Article 24

If the supervisory committee or shareholders decide to convene an extraordinary meeting, the board of directors and its secretary shall coordinate accordingly. The board of directors shall provide the register of members as of the share ownership registration date. If the board of directors fails to provide the register of members, the convener may apply to the securities registrar with the notice of meeting to obtain the same. The register of members obtained by the convener may not be used for purposes other than that of convening the meeting.

Any cost incurred for convening general meetings shall be borne by the Company.

1. The original Article 25 to be deleted;

2. The original Article 26 to be amended as follows:

Article 25

All shareholders or their respective proxies in the register of members on the share ownership registration date as stated in the notice of meeting are entitled to attend the general meeting and shall not be prevented from attending the meeting by either the Company or the convener for any reason.

The original Articles 27 to 31 to be renumbered as Article 26 to 30 accordingly;

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LETTER FROM THE BOARD

1. The original Article 32 to be amended as follows:

Article 31

The board of directors and other conveners shall take all necessary measures to ensure that the general meeting is conducted in order. Save and except for the present shareholders, directors, supervisors, the secretary to the board, senior management executives, appointed lawyers and guests invited by the board, the Company is entitled to prevent any other person from attending the meeting and take measures to prevent any disturbance to the order of the meeting or acts that infringe the lawful interests of shareholders, including reporting to the relevant authorities.

The original Article 33 to 37 are to be renumbered as Article 32 to 36 accordingly;

1. The original Article 38 to be renumbered as Article 37, and the second paragraph thereof be amended as follows:

The approval power regarding other connected transactions shall be decided by the board of directors. Where the board of directors proposes resolutions with respect to such connected transactions, the board meeting shall be convened with a majority of unconnected directors, and the resolutions proposed by the board shall be passed only with affirmative votes of a majority of those unconnected directors. In the event that the number of unconnected directors present at the meeting is less than 3, the proposed resolution shall be considered at a general meeting.

The original Article 39 is renumbered as Article 38 accordingly;

1. The original Article 40 to be amended as follows:

Article 39

Proposed resolutions that are not specified in the notice of the extraordinary general meeting shall not be considered at the meeting. Any amendments to a proposed resolution shall be deemed a new proposed resolution which shall not be considered at the said extraordinary general meeting.

The original Article 41 to 51 are renumbered as Article 40 to 50 accordingly;

1. The original Article 52 to be renumbered as Article 51, and the last paragraph thereof be amended as follows:

The minutes of the general meeting shall be signed by the directors present at the meeting and the person who took the minutes. The minutes shall be kept on Company file by the secretary to the board of directors for a period of 10 years.

The original Articles 53 to 55 are to be renumbered as Article 52 to 54 accordingly;

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LETTER FROM THE BOARD

1. The original Article 56 to be renumbered as Article 55, and (2) and (4) thereof be amended as follows:

2. (2) the number of shareholders (or their proxies) present at the meeting, the number of shares held by them (or their proxies), the percentage of such shares with voting rights, their percentage shareholding in the Company, and the number of domestic shareholders, foreign shareholders, holders of listed shares and holders of unlisted shares (if applicable) present at the meeting;

3. (4) the poll results of each resolution and the number and type of votes casted on each resolution by domestic shareholders, foreign shareholders, holders of listed shares and holders of unlisted shares (if applicable). For resolutions proposed by shareholders, the proposing shareholder’s name, shareholding and content of such resolutions shall be stated. In respect of resolutions in relation to connected transactions, the details of connected shareholders abstaining from voting shall be stated. Special explanation shall be given if the resolutions need to be considered and approved separately by holders of listed shares;

The original Article 57 to 58 are renumbered as Article 56 to 57 accordingly;

1. The original Article 59 to be amended as follows:

Article 58

For provisions not stipulated in the Rules of Procedures for the General Meeting or in the event of discrepancy with the provisions of the Company Law, the Rules Governing the Listing of Securities on the Shenzhen Stock Exchange, the Rules Governing the Listing of the Securities on the Stock Exchange of Hong Kong Limited, the Rules of General Meetings of Listed Companies and the Articles of Association, the requirements of the abovementioned laws, regulations and the Articles of Association shall prevail.

The original Article 60 to 61 are to be renumbered as Article 59 to 60 accordingly.

AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Pursuant to the requirements of the relevant notices of the CSRC and Shenzhen Stock Exchange, the Directors wish to propose a special resolution at the AGM to amend the Articles of Association as set out in the Notice of AGM.

OTHER MATTERS

In the announcement dated 18 September 2006 made by the Company regarding the continuing connected transactions of the Company, it is announced by the Company that an AGM will be held to consider and, if thought fit, to ratify the continuing connected transactions relating to the purchase of compressors with Huayi Compressor Company Limited, Huayi Compressor (Jingzhou) Co., Ltd and Jiaxi Beila Compressor Company Limited since 2000.

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LETTER FROM THE BOARD

The Board would like to clarify that, under the requirement of the Rules Governing the Listing of Securities of the Shenzhen Stock Exchange, the AGM will be held to consider and, if thought fit, to ratify the above-mentioned continuing connected transactions since January 2005 up to the date of the AGM instead.

ANNUAL GENERAL MEETING

A notice of the AGM is set out on pages 16 to 29 of this circular. A form of proxy for use at the AGM is enclosed with this circular. To be valid, the form of proxy must be completed in accordance with the instructions printed thereon and deposited, together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of attorney or other authority, must be lodged with in accordance with the instructions printed thereon and lodge the same with the Company’s Branch Share Registrar in Hong Kong, Hong Kong Registrars Limited of Rooms 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 24 hours before the time fixed for holding the meeting or any adjournment thereof. Completion and delivery of the form of proxy will not preclude Shareholders from attending and voting at the AGM or any adjournment thereof if they so wish.

PROCEDURE TO DEMAND A POLL

In accordance with article 8.27 of the articles of association of the Company, a poll may be demanded in any general meeting of the Company by:

• (A) the chairman of the meeting; or

• (B) at least two Shareholders with voting rights or their representative; or

• (C) individual or a group of Shareholders (including their representatives) holding 10% or more of the voting rights present in that general meeting.

BOARD APPROVAL

The Board has convened a meeting by way of written resolutions on 13 October 2006 and approved the resolutions in relation to, among others, the amendments to the Articles of Association, the Rules of Procedures for the Meetings of the Supervisory Committee, Rules of Procedures for the Meetings of the Board of Directors and the Rules of Procedure for the General Meetings.

Yours faithfully,

By Order of the Board of Guangdong Kelon Electrical Holdings Company Limited Tang Ye Guo Chairman

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APPENDIX I DETAILS OF THE CANDIDATES OF SUPERVISORS

Details of the candidates of supervisors to be elected are as follows:

Mr. Guo Qingcun , male, aged 49, university graduate. Mr. Guo was a lecturer, assistant professor and professor of Shandong University from 1987 to 2002. Mr. Guo was a visiting scholar of the faculty of law in Peking University in 1995. After attaining the qualification of practicing lawyer in the national examination in 1986, he acted as part-time lawyer in the legal advisory office in Shandon and Wenhan Law Firm ( ). From 2002 to 2006, he served as an assistant to the president and vice president at Hisense Group Company. Mr. Guo is connected with the substantial or controlling shareholder of the Company as he is one of the chief executives of Hisense Group Company. Save as disclosed above, Mr. Guo is not connected with any directors or senior management or substantial or controlling shareholder of the Company. Mr. Guo has not held any directorships in any public listed companies in the past three years. Mr. Guo, if elected as the supervisor acting as representative of the Shareholders, will not be entitled to receive any remuneration from the Company. As at the date of this circular, Mr. Guo does not hold any interest in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. Mr. Guo has never been subject to any disciplinary action a by the China Securities Regulatory Commission, other relevant authorities and stock exchanges. Mr. Guo confirmed that there is no other information which need to be disclosed pursuant to Rule 13.51(2) of the Listing Rules and there are no matters that need to be brought to the attention of the Shareholders.

Mr. Zhou Zhaoli , male, aged 37, graduated from Jinan University with a master’s degree in business administration in June 2000. Mr. Zhou is an economist. He had been working in the Foshan Branch of China Construction Bank and the Foshan business department of Everbright Securities Company Limited. Mr. Zhou has been working in the Guangzhou office of China Finance Asset Management Company since March 2002. He currently serves as the manager of the business development department of the Guangzhou office of China Finance Asset Management Company, a director of Guangzhou Wenchong Shipyard Limited Liability Company, a supervisor of Guangzhou Weidagao Company Limited ( ) and a supervisor of Guangdong Shaoguan Foundryand Forging Group Co., Ltd ( ). Mr. Zhou is not connected with any directors, senior management or substantial or controlling shareholder of the Company. Mr. Zhou has not held any directorships in any public listed companies in the past three years. Mr. Zhou, if elected as the supervisor acting as representative of the Shareholders, will not be entitled to receive any remuneration from the Company. As at the date of this circular, Mr. Zhou does not hold any interest in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. Mr. Zhou has never been subject to any disciplinary action a by the China Securities Regulatory Commission, other relevant authorities and stock exchanges. Mr. Zhou confirmed that there is no other information which need to be disclosed pursuant to Rule 13.51(2) of the Listing Rules and there are no matters that need to be brought to the attention of the Shareholders.

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NOTICE OF ANNUAL GENERAL MEETING

GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0921)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that an annual general meeting of Guangdong Kelon Electrical Holdings Company Limited (the “Company”) will be held at the conference room on the Company’s head office, Shunde District, Foshan City, Guangdong Province, the People’s Republic of China (the “PRC”) on 5 December 2006 at 9:30 a.m. to review and, if thought fit, pass the following resolutions:

ORDINARY RESOLUTIONS

• (1) To consider and approve the report of the directors of the Company for the year ended 2005;

• (2) To consider and approve the report of the supervisory committee of the Company for the year ended 2005;

• (3) To consider and approve the annual report of the Company for the year ended 2005;

• (4) To consider and approve the profit distribution budget of the Company for the year ended 2005;

• (5) To reappoint Shenzhen Dahua Tiancheng Certified Public Accountants and BDO McCable Lo Limited as the local and foreign auditors respectively for the ensuing year and authorize the board of directors of the Company (the “Board”) to fix their remuneration;

• (6) To consider and approve the proposal relating to the retrospective adjustment to the figures at the beginning of the year and provisions for impairment of inventories, fixed assets, construction in progress, intangible assets, impairment of long-term investment and provisions for bad debts;

• (7) Regarding the continuing connected transactions entered between the relevant subsidiaries of the Company and Huayi Compressor, Jiaxi Beila or Huayi Jingzhou, including (capitalised terms used in this resolution have the same meanings as those defined in the announcement of the Company dated 18 September 2006):

• (i) To consider and approve Compressors Purchase and Supply Framework Agreement I dated 15 September 2006 entered into between Kelon Freezer and Huayi Compressor and the continuing connected transactions contemplated thereunder;

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NOTICE OF ANNUAL GENERAL MEETING

• (ii) To consider and approve Compressors Purchase and Supply Framework Agreement II dated 15 September 2006 entered into between Kelon Freezer and Jiaxi Beila and the continuing connected transactions contemplated thereunder;

• (iii) To consider and approve Compressors Purchase and Supply Framework Agreement III dated 15 September 2006 entered into between Kelon Freezer and Huayi Jingzhou and the continuing connected transactions contemplated thereunder;

• (iv) To consider and approve Compressors Purchase and Supply Framework Agreement IV dated 15 September 2006 entered into between Yingkou Kelon and Jiaxi Beila and the continuing connected transactions contemplated thereunder;

• (v) To consider and approve Compressors Purchase and Supply Framework Agreement V dated 15 September 2006 entered into between Jilin Kelon and Jiaxi Beila and the continuing connected transactions contemplated thereunder;

• (vi) To consider and approve Compressors Purchase and Supply Framework Agreement VI dated 15 September 2006 entered into between Hangzhou Kelon and Huayi Compressor and the continuing connected transactions contemplated thereunder;

• (vii) To consider and approve Compressors Purchase and Supply Framework Agreement VII dated 15 September 2006 entered into between Hangzhou Kelon and Jiaxi Beila and the continuing connected transactions contemplated thereunder;

• (viii)To consider and approve Compressors Purchase and Supply Framework Agreement VIII dated 15 September 2006 entered into between Chengdu Kelon and Jiaxi Beila and the continuing connected transactions contemplated thereunder;

• (ix) To consider and approve Compressors Purchase and Supply Framework Agreement IX dated 15 September 2006 entered into between Chengdu Kelon and Huayi Compressor and the continuing connected transactions contemplated thereunder;

• (x) To consider and approve Compressors Purchase and Supply Framework Agreement X dated 15 September 2006 entered into between Kelon Refrigerator and Huayi Compressor and the continuing connected transactions contemplated thereunder;

• (xi) To consider and approve Compressors Purchase and Supply Framework Agreement XI dated 15 September 2006 entered into between Jilin Kelon and Huayi Compressor and the continuing connected transactions contemplated thereunder;

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NOTICE OF ANNUAL GENERAL MEETING

• (xii) To consider and approve Compressors Purchase and Supply Framework Agreement XII dated 15 September 2006 entered into between Yingkou Kelon and Huayi Compressor and the continuing connected transactions contemplated thereunder;

• (xiii)To consider and ratify the continuing connected transactions in relation to the purchase of compressors entered into between the relevant subsidiaries of the Company and Huayi Compressor, Jiaxi Beila or Huayi Jingzhou since January 2005 up to the date of the annual general meeting (capitalised terms used in this resolution have the same meanings as those defined in the announcement of the Company dated 18 September 2006);

• (8) Regarding the continuing connected transactions entered between the relevant subsidiaries of the Company and subsidiaries of Hisense Group, including (capitalised terms used in this resolution have the same meanings as those defined in the announcement of the Company dated 18 September 2006):

• (i) To consider and approve Mould Purchase Framework Agreement dated 15 September 2006 entered into between Kelon Mould and Hisense AirConditioning and the continuing connected transactions contemplated thereunder;

• (ii) To consider and approve Raw Materials Purchase and Supply Framework Agreement dated 15 September 2006 entered into between Kelon AirConditioner and Hisense Zhejiang and the continuing connected transactions contemplated thereunder;

• (iii) To consider and approve Air-Conditioners Production and Purchase Framework Agreement dated 15 September 2006 entered into between Kelon Air-Conditioner and Hisense Zhejiang and the continuing connected transactions contemplated thereunder;

• (iv) To consider and approve Air-Conditioners Production and Supply Framework Agreement dated 15 September 2006 entered into between Kelon AirConditioner and Hisense Marketing and the continuing connected transactions contemplated thereunder;

• (v) To consider and ratify the continuing connected transactions in relation to the purchase of electrical appliances, the purchase of compressors, the supply of moulds, the purchase and supply of air-conditioners and the supply of raw-materials entered into between the subsidiaries of the Company and the subsidiaries of Hisense Group since October 2005 up to the date of the annual general meeting (capitalised terms used in this resolution have the same meanings as those defined in the announcement of the Company dated 18 September 2006);

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NOTICE OF ANNUAL GENERAL MEETING

• (9) To consider and approve the emoluments to be received by Mr. Tang Ye Guo as chairman of the Board;

• (10) To consider and approve the removal and appointment of supervisors representing the shareholders of the Company, including:

• (i) To consider and approve the removal of Mr. Zeng Jun Hong as the supervisor representing the shareholders of the Company;

• (ii) To consider and approve the appointment of Mr. Guo Qingcun as the supervisor representing the shareholders of the Company;

• (iii) To consider and approve the appointment of Mr. Zhou Zhaoli as the supervisor representing the shareholders of the Company;

• (11) To consider and approve the proposed amendments to the “Rules of Procedures for the Meetings of the Supervisory Committee of the Company”;

• (12) To consider and approve the proposed amendments to the “Rules of Procedures for the Meetings of the Board of Directors of the Company”;

• (13) To consider and approve the proposed amendments to the “Rules of Procedures for the General Meetings of the Company”;

• (14) To consider and approve the grant of guarantees in the total sum of RMB1.512 billion to the subsidiaries of the Company for the year 2006;

SPECIAL RESOLUTIONS

• (15) To consider and approve the proposed amendments to the articles of associations of the Company set out in the appendix.

SUSPENSION OF TRADING IN THE H SHARES

At the request of the Company, trading in the H shares was suspended with effect from 10:00 a.m. on 16 June 2005 pending the release of an announcement in relation to price sensitive information. Subject to the further announcements in relation to, amongst others,

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NOTICE OF ANNUAL GENERAL MEETING

the financial, production and trading position of the Group, and the satisfaction by the Stock Exchange of Hong Kong Limited of the adequacy of the internal control measures of the Company, trading in the H Shares will remain suspended until further notice.

By Order of the Board of Guangdong Kelon Electrical Holdings Company Limited Tang Ye Guo Chairman

Foshan City, Guangdong, the PRC, 16 October 2006

As at the date of this circular, the Company’s executive directors are Mr. Tang Ye Guo, Ms. Yu Shu Min, Mr. Su Yu Tao, Mr. Xiao Jian Lin, Mr. Lin Lan and Mr. Zhang Ming; and the Company’s independent non-executive directors are Mr. Zhang Sheng Ping, Mr. Lu Qing and Mr. Cheung Yui Kai, Warren.

Notes:

• (1) For details of resolutions numbered (1) to (6), please refer to the announcements of the Company published in “China Securities Journal”, “Securities Times”, “Hong Kong Commercial Daily” and “China Daily” on 14 August 2006. For details of resolutions numbered (7) to (9), please refer to the announcements of the Company published in “China Securities Journal”, “Securities Times”, “Hong Kong Commercial Daily” and “China Daily” on 19 September 2006. For details of resolutions numbered (10) to (15), please refer to the announcements of the Company published in “China Securities Journal”, “Securities Times”, “Hong Kong Commercial Daily” and “China Daily” on 16 October 2006 and the accompanying circular dated 16 October 2006.

• (2) H shares shareholders intending to attend the annual general meeting shall give written reply slip, as attached, to the Company, which shall be lodged at the registered office of the Company on or before 15 November 2006. To qualify for attendance at the annual general meeting, all H shares shareholders transfers accompanied by the relevant share certificates must be lodged with the Company’s Branch Share Registrar in Hong Kong, Hong Kong Registrars Limited of Rooms 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 4:00 p.m. on 3 November 2006 for registration.

• (3) Shareholders entitled to attend and vote at the annual general meeting are entitled to appoint one or more persons (whether or not a shareholder of the Company) as their proxy to attend and vote on behalf of themselves.

• (4) In order to be valid, the form of proxy, together with a duly notarised power of attorney or other document of authority, if any, under which the form is signed must be deposited at the Company’s Branch Share Registrar in Hong Kong, Hong Kong Registrars Limited of Rooms 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 24 hours before the time for holding the annual general meeting.

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NOTICE OF ANNUAL GENERAL MEETING

APPENDIX −AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The proposed amendments to the articles of association of the Company are set out as follows:

1. Article 3.9 to be amended as:

Article 3.9

The Company may increase its capital according to its operating and development needs in accordance with the relevant laws and regulations and upon the passing of resolutions by shareholders at a general meeting. Such increase in capital may be by way of:

• (1) a public offering of shares;

• (2) a non-public offering of shares;

• (3) offering bonus shares to existing shareholders;

• (4) conversion of statutory surplus reserve into share capital;

• (5) such other means permitted by the relevant laws and regulations and the CSRC.

Subject to approval in accordance with the provisions of the Articles of Association, increase of capital and issuance of new shares by the Company shall be conducted in accordance with the procedures provided for in the relevant laws and administrative regulations of the country.

1. Article 3.12 to be amended as:

Article 3.12

Shares in the Company held by the promoters shall not be transferred within 1 year of the Company’s establishment. Shares which were issued prior to the public offering shall not be transferred within 1 year of the date the shares were first listed on the stock exchange.

Directors, supervisors, managers and other senior management executives shall regularly notify the Company of their shareholdings in the Company and any changes thereof during their term of office, and they shall not transfer an aggregate of more than 25% of their shareholdings in any one year during their term of office.

After termination of employment with the Company, they shall not transfer any of their shares in the Company within 6 months following such termination.

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NOTICE OF ANNUAL GENERAL MEETING

1. Article 4.4 to be amended as:

Article 4.4

The Company may acquire the outstanding shares in the Company in accordance with the provisions of the relevant laws, administrative regulations and the Articles of Association in the following circumstances:

• (1) cancellation of shares for the purpose of reduction of the Company’s registered capital;

• (2) mergers with other companies holding the share certificates of the Company;

• (3) granting of shares to the employees of the Company as reward;

• (4) shareholders dissenting to the resolutions passed in a general meeting approving the Company’s merger or demerger and demanding the Company to acquire their shares;

• (5) other circumstances as permitted by the relevant laws and administrative regulations.

• Article 4.5 to be amended as:

Article 4.5

The Company may repurchase shares in the Company in any one of the following ways:

• (1) by offer;

• (2) trading by centralized bidding on the stock exchange;

• (3) by agreement;

• (4) such other means as permitted by regulators.

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NOTICE OF ANNUAL GENERAL MEETING

1. Article 6.6 to be amended as:

Article 6.6

The Company shall enter into share safekeeping agreements with the securities registrar to regularly monitor the information and changes in shareholdings (including capital contribution) of substantial shareholders, in order to ascertain the shareholding structure of the Company in a timely manner. Shareholders are subject to the rights and obligations of the class of shares held by them. Shareholders holding the same class of shares are subject to the same rights and obligations.

1. Article 7.5 to be amended to include the following:

If shareholders holding more than 5% of the voting rights of the Company pledge their shares, they should notify the Company in writing on the day such pledge is given.

1. Article 8.2 (2) to be amended as:

(2) to elect and remove directors and supervisors who are shareholders’ representatives and decide on matters relating to the remuneration of directors and supervisors;

Article 8.2 (13) of the Articles of Association be amended as:

(13) to consider the proposed resolutions by shareholders holding 3% or more of the total number of voting rights of the Company;

1. Article 8.3 to be added to the amended Article 8.2

Article 8.3

The external guarantees proposed to be provided by the Company shall be considered and approved by shareholders in a general meeting if:

• (1) the total amount of guarantees to be provided by the Company and its controlling subsidiaries to external parties equals to or exceeds 50% of the net assets value of the Company in its latest audited financial statement;

• (2) the total amount of guarantees to be provided by the Company equals to or exceeds 30% of the total assets value of the Company in its latest audited financial statements;

• (3) the external party’s assets to debt ratio exceeds 70%;

• (4) a single guarantee which amount exceeds 10% of the net assets value of the Company in its latest audited financial statements;

• (5) the guarantee is to be provided to shareholders, persons with controlling interest or their related parties.

Original Article 8.3 is renumbered as Article 8.4 accordingly.

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NOTICE OF ANNUAL GENERAL MEETING

1. The first paragraph of Article 8.4 to be amended as:

Article 8.5

Shareholders’ meetings are categorised into annual general meetings and extraordinary general meetings. Annual general meetings are held once a year, and shall be convened within 6 months of the end of the previous financial year.

1. Article 8.5 to be amended as:

Article 8.6

Shareholders individually or in aggregate holding over 3% of the total number of voting rights of the Company are entitled to propose new resolutions to the Company.

Original Article 8.6 is renumbered as Article 8.7 accordingly.

1. Article 8.7 to be amended as:

2. Article 8.8

The board of directors shall act in the best interests of the Company and its shareholders and comply with Article 8.7 herein in considering proposed resolutions at general meetings.

Original Articles 8.8 to 8.9 are renumbered as Articles 8.9 to 8.10 accordingly.

1. Article 8.10 to be amended as:

Article 8.11

The board of directors, the supervisory committee and shareholders individually or in aggregate holding over 3% of the total number of voting rights of the Company are entitled to propose new resolutions to the Company.

Shareholders either individually or in aggregate holding over 3% of the total number of voting rights may submit their proposed resolutions in writing to the convener 10 days prior to the general meeting. The convener shall issue a supplementary notice of meeting to announce the contents of the proposed resolutions within the prescribed time.

Save and except for the abovementioned circumstances, the convener shall make no changes to the proposed resolutions stated in the notice of meeting or add any new proposed resolution after the notice of meeting has been issued.

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NOTICE OF ANNUAL GENERAL MEETING

Where the substantial shareholder proposes a new resolution on profit distribution, the proposed resolution shall be submitted to the board of directors at least 10 days prior to the date of the annual general meeting for announcement by the board. If the proposed resolution is submitted less than 10 days prior to the annual general meeting, the substantial shareholder shall not propose such resolution at the said annual general meeting.

Where the annual general meeting permits online voting, any proposed resolution shall be submitted to the board at least 10 days prior to the annual general meeting for announcement by the board. Resolutions proposed at the meeting or other proposed resolutions which have not been announced shall not be considered at the meeting.

Where amendments are made to proposed resolutions prior to the general meeting or new proposed resolutions are added prior to the general meeting, the Company shall give supplemental notice of the meeting within the prescribed time to disclose the contents of the amendments to the proposed resolutions, and in the case where new proposed resolutions are added, the name, shareholding of the shareholder and the contents of the new proposed resolutions.

Where proposed resolutions are cancelled prior to the general meeting, the Company shall give notice of such cancellation at least 5 trading days prior to the general meeting to disclose the specific reasons for such cancellation.

Original Article 8.12 is renumbered as Article 8.13 accordingly.

1. Article 8.13 to be amended as:

Article 8.14

Notice of general meetings shall be sent to foreign shareholders, regardless of whether the shareholder is entitled to vote at the meeting, by hand or by pre-paid post. The address for service shall be the shareholder’s address on the register of members. For domestic shareholders, notice of general meetings may also be given in the form of a public notice.

Original Articles 8.14 to 8.24 are renumbered as Articles 8.15 to 8.25 accordingly.

1. The first paragraph of Article 8.25 to be amended:

Article 8.26

Save and except for voting by attending the general meeting, the board has the discretion to provide shareholders with an alternative means of voting using an online voting platform. However, where matters set out in Article 8.36 herein are considered in the general meeting, an online voting platform shall be provided to shareholders.

Original Articles 8.26 to 8.31 are renumbered as Articles 8.27 to 8.32 accordingly.

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NOTICE OF ANNUAL GENERAL MEETING

1. Article 8.32 to be renumbered as Article 8.33, and the second paragraph thereof to be amended as:

Where a general meeting is held to consider the matters set out in

Article 8.37 herein and the approval of public shareholders by separate voting is required, the total number of voting rights and the poll results of the public shareholders shall be calculated separately.

1. New Article 8.34 tobe added after the amended Article 8.33:

Article 8.34

Shareholders at the general meeting shall cast their votes in favour of or against proposed resolutions, or abstain from voting.

Voting forms which are uncompleted, wrongly completed, completed with illegible writing or not casted are deemed as void and the shareholders to whom such vote forms belong shall be deemed to have abstained from voting.

Original Articles 8.33 to 8.36 are renumbered as Articles 8.35 to 8.38 accordingly.

1. Article 8.37 to be amended as:

Article 8.39

General meetings shall be convened by the chairman of the board of directors, who shall preside as chairman of the meeting. If the chairman of the board is unable to attend the meeting for any reason, the chairman may designate a director of the Company to convene and preside at the meeting as chairman on his behalf. If a chairman has not been designated, shareholders present at the meeting may elect a person to act as chairman. If for any reason the shareholders are unable to elect a chairman, the shareholder with the greatest number of voting rights present at the meeting whether in person or by proxy shall act as chairman.

Original Articles 8.38 to 8.42 are renumbered as Articles 8.40 to 8.44 accordingly.

1. Article 8.43 to be renumbered as Article 8.45, and the last paragraph thereof be amended as:

Where the Company convenes a general meeting to consider matters stated in Article 8.37 herein, the announcement of the resolution shall set out the number of public shareholders who voted, the total number of shares held by such public shareholders, their percentage of shareholding in proportion to the total number of shares held by public shareholders, their poll results, and the shareholdings of the 10 public shareholders with the most voting rights and their poll results.

Original Articles 8.44 to 8.45 are renumbered as Articles 8.46 to 8.47 accordingly.

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NOTICE OF ANNUAL GENERAL MEETING

1. The following to be added to the first paragraph of Article 10.9:

Save and except for the above circumstances, resignation of a director shall take effect at the time the resignation notice is served on the board of directors.

1. Article 10.19 to be amended as:

Article 10.19

The chairman of the board of directors shall convene a meeting of the board of directors at least four times per year. Written notice of the meeting shall be given to all directors 14 days prior to the date of the meeting. An extraordinary board meeting may be convened if the chairman of the board considers necessary.

1. Article 10.20 to be amended as:

Article 10.20

The chairman of the board of directors shall convene an extraordinary meeting of the board of directors within 10 days of receiving the following proposed resolutions from:

• (1) more than one-third of the directors of the Company;

• (2) the supervisory committee;

• (3) the general manager;

• (4) shareholders with aggregate voting rights greater than 10%.

Written notice for an extraordinary meeting of the board of directors shall be given to all directors at least 10 days prior to the meeting.

In the event the chairman of the board of directors is unable to convene an extraordinary meeting as required under this Article, the chairman shall designate another director of the Company to convene the meeting on his behalf. Should the chairman, without reason, fail to convene an extraordinary meeting as required under this Article and fail to designate a person to convene such a meeting, the extraordinary meeting may be convened by a director elected by a majority of the directors.

1. Article 12.2 to be amended as:

Article 12.2

The Company shall not appoint a person as general manager of the Company if any of the circumstances specified in sections 147 and 149 of the Company Law apply to that person, or if the person is designated by the CSRC as a person who may not enter into the market (and such designation has not been discharged).

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NOTICE OF ANNUAL GENERAL MEETING

1. Article 13.2 to be amended as:

Article 13.2

The supervisory committee shall comprise of at least 3 supervisors. The exact number of the supervisory committee shall be determined by shareholders at a general meeting. One of the supervisors shall act as the chairman of the supervisory committee. In the event that the chairman is unable to perform his duties or does not perform his duties, another supervisor may be elected by a majority of supervisors as chairman to convene a meeting of the supervisory committee. The appointment and removal of the chairman of the supervisory committee shall be made by a resolution passed by two-thirds or more supervisors. The term of office for supervisors shall be three years and the supervisors shall be eligible for re-election.

If supervisors are not re-elected before the expiry of their terms or resignations of supervisors lead to the number of supervisors to fall below that of the required minimum, the current supervisors shall continue to perform their duties according to the law, administrative regulations and the Articles of Association until re-election or until new supervisors are elected.

1. Article 13.5 to be amended as:

Article 13.5

Directors, managers and other senior management executives of the Company shall not be appointed as supervisors.

1. Article 14.1 (10) to be amended as:

(10) a person under any of the circumstances specified in sections 147 and 149 of the Company Law, or designated by the Securities Regulatory Commission as a person who may not enter into the market (and such designation has not been discharged), or has within the past 2 years been announced as an unsuitable person by the stock exchange on which the Company’s shares are listed.

1. Article 15.8 to be amended as:

Article 15.8

The Company shall issue its financial reports 4 times each financial year. The Company shall issue its interim financial report within 2 months of the end of the first six-month period of each financial year and its annual financial report within 4 months after the end of each financial year. The Company shall dispatch its quarterly financial reports to the local authority appointed by the CSRC and stock exchange within 1 month of the end of the first three-month period and nine-month period of each financial year.

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NOTICE OF ANNUAL GENERAL MEETING

1. The following content to be added to Article 25.3

2. “Independent Non-executive “Independent Non-executive Director” as defined Director” under the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited shall have the same meaning as “Independent Director” as defined under the Company Law of the PRC.

“Executive Director” means Directors other than Independent Nonexecutive Directors.

The definition of Secretary to the Board be amended as:

“Secretary to the Board” The company secretary and secretary to the Board appointed by the Board.

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