Medlive Technology Co., Ltd. — Governance Information 2005

Apr 29, 2005

GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED 廣東科龍電器股份有限公司

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

(Stock Code: 0921)

PROPOSAL FOR AMENDING CERTAIN ITEMS OF THE “RULES AND REGULATIONS GOVERNING SHAREHOLDERS’ GENERAL MEETINGS”

Pursuant to the recent amendments to the requirements of the “Regulations on Enhancing Protection of Public Shareholders’ Interests” from the China Securities Regulatory Commission and “Stocks Listing Rules (as revised in 2004)” from Shenzhen Stock Exchange, “Notice on the Amendments to the Articles of Association (【2005】 No.61)” from Guangdong Securities Regulatory Commission and “Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited”, the “Rules and Regulations Governing Shareholders’ General Meetings” of Guangdong Kelon Electrical Holdings Company Limited (the “Company”) are proposed to be amended as follows:

1. A new article be added as Article 5:

2. Article 5 The Board of Directors, independent directors and shareholders who meet the relevant requirements may solicit from other shareholders their voting rights in Shareholders’ General Meetings. The solicitation shall be without consideration and information shall be fully disclosed to such shareholders.

3. Existing Article 5 and Article 6 be renumbered as Article 6 and Article 7 respectively

4. Existing Article 7 be amended and renumbered as Article 8:

The existing Article is as follows:

• Article 7 The Board of Directors of the Company shall retain a legal counsel with the relevant securities issue experience to attend the Shareholders’ General Meeting, who shall give advice and make an announcement on the following issues:

• (1) Whether or not the procedures for convening and holding the Shareholders’ General Meeting comply with the requirements of the laws and regulations and the “Articles of Association”;

• (2) Verification of the legal eligibility of persons attending the meeting;

• (3) Verification of the eligibility of the shareholders who propose a new motion at annual general meetings;

• (4) Whether or not the voting procedures for the Shareholders’ General Meeting are lawful and valid;

• (5) Issuance of legal opinion on other relevant issues at the request of the Company.

1

The Board of Directors of the Company may appoint a notary public to attend a Shareholders’ General Meeting.

The existing Article is hereby amended as follows:

• Article 8 The Board of Directors of the Company shall retain a legal counsel to attend the Shareholders’ General Meeting, who shall give advice and make an announcement on the following issues:

• (1) Whether or not the procedures for convening and holding the Shareholders’ General Meeting comply with the requirements of laws and regulations and the “Articles of Association”;

• (2) Verification of the legal eligibility of persons attending the meeting;

• (3) Verification of the eligibility of the shareholders who propose a new motion at annual general meetings;

• (4) Whether or not the voting procedures for the Shareholders’ General Meeting are lawful and valid;

• (5) Issuance of legal opinion on matters relating to online voting at Shareholders’ General Meetings (if adopted);

• (6) Issuance of legal opinion on matters relating to the proposed subject and voting procedures in case of addition, veto or changes to the proposed motions;

• (7) Issuance of legal opinion on other relevant issues at the request of the Company.

The Board of Directors of the Company may appoint a notary public to attend a Shareholders’ General Meeting.

1. The existing Article 8 be amended and renumbered as Article 9:

The existing Article is as follows:

Article 8 When the Company convenes a Shareholders’ General Meeting, notice of the meeting by way of announcement shall be given forty-five (45) days before the date of the meeting (exclusive) to notify all shareholders.

The contents covered by the notice of the meeting shall be in accordance with the provisions of the Articles of Association.

The existing Article is hereby amended as follows:

Article 9 When the Company convenes a Shareholders’ General Meeting, notice of the meeting by way of announcement shall be given forty-five (45) days before the date of the meeting (exclusive) to notify all shareholders.

In case of circumstances provided in Article 46 herein, the Company shall, after the issue of the notice of Shareholders’ General Meeting, re-issue the notice within three (3) days after the share registration date.”

2

The contents covered by the notice of the meeting shall be in accordance with the provisions of the Articles of Association.

1. Existing Articles 9 to 14 be renumbered as Articles 10 to 15

2. Existing Article 15 be amended and renumbered as Article 16:

The existing Article is as follows:

• Article 15 Shareholders individually or jointly holding 5% of the total shares of the Company carrying voting rights or the Supervisory Committee may put forward a motion at annual general meetings.

If the motion concerns matters not listed in the notice of Board Meeting but falls into the scope of matters listed below, the proposing party shall submit the motion to the Board not less than 10 days before the convening of the Shareholders’ General Meeting for announcement by the Board of Directors upon their approval:

• (1) The increase or decrease in registered capital of the Company;

• (2) The issue of bonds of the Company;

• (3) The division, amalgamation, dissolution and liquidation of the Company;

• (4) Any amendment to the Articles of Association;

• (5) Any proposal for profit distribution and making up of losses;

• (6) The appointment and removal of directors and supervisors;

• (7) Any change in use of proceeds from subscription;

• (8) Any connected transaction requiring approval of the Shareholders’ General Meeting;

• (9) Any acquisition or disposal of assets requiring approval of the Shareholders’ General Meeting;

• (10) Any replacement of accounting firm.

Where the principal shareholder proposes a new motion on profit distribution, the motion shall be proposed to the Board not less than 10 days before holding of the annual general meeting for announcement by the Board. If the motion is proposed less than ten days before the annual general meeting, the principal shareholder may not propose the new profit distribution motion at the current annual general meeting.

Apart from the above, other motions may be proposed to the Board for its announcement before the annual general meeting or may be proposed at the annual general meeting directly.

3

The existing Article is hereby amended as follows:

• Article 16 Shareholders individually or jointly holding 5% of the total shares of the Company carrying voting rights or the Supervisory Committee may put forward a motion at annual general meetings.

If the motion concerns matters not listed in the notice of meeting of the Board but falls into the scope of matters listed below, the proposing party shall submit the motion to the Board no less than 10 days before the convening of the Shareholders’ General Meeting.

• (1) The increase or decrease in registered capital of the Company;

• (2) The issue of bonds of the Company;

• (3) The division, amalgamation, dissolution and liquidation of the Company;

• (4) Any amendment to the Articles of Association;

• (5) Any proposal for profit distribution and making up of losses;

• (6) The appointment and removal of directors and supervisors;

• (7) Any change in use of proceeds from subscription;

• (8) Any connected transaction requiring approval of the Shareholders’ General Meeting;

• (9) Any acquisition or disposal of assets requiring approval of the Shareholders’ General Meeting;

• (10) Any replacement of accounting firm.

Where the principal shareholder proposes a new motion on profit distribution, the motion shall be submitted to the Board not less than 10 days before holding of the annual general meeting for announcement by the Board. If the motion is submitted less than ten days before the annual general meeting, the principal shareholder may not propose the new profit distribution motion at the current annual general meeting.

Apart from the above, other motions may be proposed to the Board for its announcement before the annual general meeting or may be proposed at the annual general meeting directly.

If online voting is adopted by the Company for the annual general meeting, the motion so proposed shall be announced by the Board of Directors at least ten (10) days in advance. Any motion proposed at the Shareholders’ General Meeting or other motions which have not been announced shall not be included in the agenda of the Shareholders’ General Meeting.

If amendments are made to the motion before holding the Shareholders’ General Meeting or motions are added at the annual general meeting, supplementary notice of Shareholders’ General Meeting shall be given within the given time limit, disclosing the amended motions or the name or designation, shareholding percentage of the shareholders requiring additions of motions and the descriptions in relation to the new motions.

4

If the motion is rescinded before holding the Shareholders’ General Meeting, notice on revoking the motions shall be given within five business days before the date on which the Shareholders’ General Meeting shall be held, explaining the concrete reasons for abolishment of the motion.

1. Existing Articles 16 to 22 be renumbered as Articles 17 to 23

2. Existing Article 23 be amended and renumbered as Article 24:

The existing Article is as follows:

• Article 23 The Board and secretary to the Board shall perform their duties diligently in connection with the Extraordinary General Meetings convened by the proposing shareholder(s) on their own. The Board shall ensure the proper order of the meeting and any reasonable expenses so arising shall be borne by the Company. The procedures of convening the meeting should comply with the following requirements:

• (1) The meeting shall be convened by the Board; the secretary to the Board, the directors and supervisors should attend the meeting;

• (2) The Board shall engage a lawyer with relevant securities issue experience to give his legal opinion according to the provisions of the Article 7 herein;

• (3) The procedures of convening the meeting shall comply with the relevant provisions of the “Opinions on Standards of Shareholders’ General Meetings of Listed Companies” and the provisions hereof.

The existing Article is hereby amended as follows:

• Article 24 The Board and secretary to the Board shall perform their duties diligently in connection with the Extraordinary General Meetings convened by the proposing shareholder(s) on their own. The Board shall ensure the proper order of the meeting and any reasonable expenses so arising shall be borne by the Company. The procedures of convening the meeting should comply with the following requirements:

• (1) The meeting shall be convened by the Board; the secretary to the Board, the directors and supervisors should attend the meeting;

• (2) The Board shall engage a lawyer to give his legal opinion according to the provisions of Article 7 hereof;

• (3) The procedures of convening the meeting shall comply with the relevant provisions of the “Opinions on Standards of Shareholders’ General Meetings of Listed Companies” and the provisions hereof.

.

5

1. Existing Article 9 be amended and renumbered as Article 25:

The existing Article is as follows:

• Article 24 If the Board of Directors cannot appoint a director to preside the Shareholders’ General Meeting, the proposing shareholder shall, after reporting to the local authority appointed by the CSRC, preside the meeting. The proposing shareholder shall engage a securities counsel to give his legal opinion according to the requirements of Articles 7 herein. The legal expenses shall be borne by the proposing shareholder himself. The Board shall perform its duties in good faith, and the other convening procedures shall comply with the relevant provisions of the “Opinions on Standards of Shareholders’ General Meetings of Listed Companies” and the provisions hereof.

.

The existing Article is hereby amended as follows:

• Article 25 If the Board of Directors cannot appoint a director to preside the Shareholders’ General Meeting, the proposing shareholder shall, after reporting to the local authority appointed by the CSRC, preside the meeting. The proposing shareholder shall engage a lawyer to give his legal opinion according to the requirements of Articles 7 herein. The legal expenses shall be borne by the proposing shareholder himself. The Board shall perform its duties in good faith, and the other convening procedures shall comply with the relevant provisions of the “Opinions on Standards of Shareholders’ General Meetings of Listed Companies” and the provisions hereof.

.

1. Existing Articles 25 to 36 be renumbered as Articles 26 to 37

2. Existing Article 34 be amended and renumbered as Article 38

The existing Article is as follows:

• Article 37 When a connected transaction is being considered for approval at a shareholders’ general meeting, any shareholder who is interested in the connected transaction shall abstain from voting and the voting rights held by such shareholder shall not be counted towards the total number of shares with voting rights held by shareholders present at the Shareholders’ General Meeting. The announcement on the resolution of the Shareholders’ General Meeting shall fully disclose the results of the voting by shareholders who are not interested in the transaction. Where any shareholder shall abstain from voting in relation to certain matter or restricted to voting only for or only against any particular resolution in accordance with the Listing Rules of the Hong Kong Stock Exchange, any votes cast by or on behalf of such shareholder in contravention of such requirement or restriction shall not be counted.

The existing Article is hereby amended as follows:

• Article 38 Connected transaction of the Company of an amount exceeding RMB30 million or 5 % or above of the latest audited net asset value of the Company shall be proposed to the Shareholders’ General Meeting for consideration.

6

The approval power regarding other connected transaction shall be delegated by the Board who shall make resolutions on the same. Should the numbers of directors attending the meeting be less than a quorum following withdrawal from Board Meeting by the director who has an interest in the transaction, all directors (including connected directors) shall make resolutions on procedure-related issues such as whether these transactions shall be proposed to the Shareholders’ General Meeting of the Company for consideration. Related resolutions on such transactions shall be made at the Shareholders’ General Meeting.

When a connected transaction is being considered for approval at a Shareholders’ General Meeting, any shareholder who is interested in the connected transaction shall abstain from voting and the shares with voting rights held by such shareholder shall not be counted towards the total number of shares with voting rights held by shareholders present at the Shareholders’ General Meeting. The announcement on the resolution of the Shareholders’ General Meeting shall fully disclose the results of the voting by shareholders who are not interested in the transaction. Under exceptional circumstances where a connected shareholder is unable to abstain from voting, the Company, after obtaining the consent from the relevant authorities, may carry on the voting in accordance with normal procedures, and details of this shall be disclosed in the announcement on the resolutions of the Shareholders’ General Meeting. The Company shall also conduct special statistics on the votes of non-connected shareholders at the Shareholders’ General Meeting, and disclose the same in the announcement on the resolution of the shareholders’ meeting.

When connected transactions are considered at a Shareholders’ General Meeting, it shall be in compliance with the related laws and regulations of the State, and Rules Governing the Listing of Securities on The Shenzhen Stock Exchange and The Stock Exchange of Hong Kong Limited. A shareholder who has an interest in the connected transactions (including his/her authorized proxy) may attend the meeting and express his/her views to the attending shareholders according to the meeting procedures, but shall abstain from voting on the connected transaction, and also shall not intervene with the Company’ decision in any way. Where any shareholder shall abstain from voting in relation to certain matter or restricted to voting only for or only against any particular resolution in accordance with the Listing Rules of the Hong Kong Stock Exchange, any votes cast by or on behalf of such shareholder in contravention of such requirement or restriction shall not be counted.

1. Existing Articles 38 to 39 be renumbered as Articles 39 to 40.

2. Existing Article 40 be amended and renumbered as Article 41:

The existing Article is as follows:

• Article 40 Any resolution considered and approved at the Shareholders’ General Meeting demands a poll by way of registered vote. Each of the shareholders of the Company (or his proxy) shall exercise his voting rights according to the number of shares with voting rights represented by him and shall be entitled to one vote for each share held.

The existing Article is hereby amended as follows:

• Article 41 Any resolution considered and approved at the Shareholders’ General Meeting demands a poll by way of registered vote. Each of the shareholders of the Company (or his proxy) shall exercise his voting rights according to the number of shares with voting rights represented by him and shall be entitled to one vote for each share held.

7

Where the Company convenes its Shareholders’ General Meeting, except for on-the-spot meeting, the Board may decide whether to provide an online voting platform to the shareholders. However, where the Company convenes its Shareholders’ General Meeting to consider such matters as set out in Article 46 of these Articles of Association, online voting platform shall be provided to the shareholders.

If the Company convenes a Shareholders’ General Meeting to consider and approve the issues mentioned in Article 46 herein, it shall provide the shareholders with an online voting platform.

Relevant requirements issued by China Securities Regulatory Committee and Shenzhen Stock Exchange shall be complied with when implementing online voting for the Company’s Shareholders’ General Meeting.

Where online voting is adopted for the Shareholders’ General Meeting, all shareholders whose names appear on the register of members on the record date for the purpose of the Shareholders’ General Meeting, are entitled to exercise their voting rights through the online voting system of the Shareholders’ General Meeting, provided that the voting right of the same shares shall be exercised only by one of the following ways: on-the-spot voting, online voting or otherwise as specified. In the event that the voting right of the same share is repeatedly exercised by means of on-the-spot voting and online voting, the on-the-spot voting shall prevail.

Where shareholders of the Company or their authorized proxies exercise their voting rights through the online voting system of the Shareholders’ General Meeting, they shall participate in the voting within the effective time as stipulated in the notice of the Shareholders’ General Meeting.

Shareholders of the Company or their authorized proxies shall be entitled to examine their voting results through the online voting system of the Shareholders’ General Meeting.

1. Existing Article 41 be renumbered as Article 42

2. A new article be added as Article 43:

3. Article 43 Article 8.35 The following matters shall not be implemented or applied for unless they have been approved by special resolutions at the Shareholders’ General Meeting and passed by more than half of the voting rights of the public shareholders present at the Shareholders’ General Meeting:

   • (1) the issue by the Company of additional new shares to the public (including the issue of overseas listed foreign shares or other certificates of securities nature), the issue of convertible bonds of the Company and placing of shares to existing shareholders (except for shares which controlling shareholders have undertaken to subscribe for in full wholly in cash before the Shareholders’ General Meeting is held);

   • (2) any material assets restructuring of the Company in which the total consideration for the assets to be purchased exceeds the audited net book value of the assets purchased by 20% or more;

   • (3) the repayment by shareholders of their debts due to the Company using their shareholding in the Company;

8

  - (4) the overseas listing of subsidiaries of the Company which have a material impact on the Company;

  - (5) any relevant matter in the development of the Company which will have material effect on the interests of the public shareholders.

1. Existing Articles 42 to 43 be renumbered as Articles 44 to 45

2. A new article be added as Article 46:

3. Article 46 Where online voting is provided to shareholders for the Shareholders’ General Meeting, the voting results shall be announced by the representative of the vote counter at the meeting only after the vote counter has consolidated and calculated the voting results for each resolution by means of on-the-spot voting, online voting and other means as specified.

Where a Shareholders’ General Meeting is held to consider the matters as set out in Article 46 of these Articles of Association and the approval of public shareholders by separate voting shall be required, the total voting rights and the voting results of public shareholders shall be calculated separately as well.

Where there are many resolutions to be passed at the Shareholders’ General Meeting and one shareholder votes only upon one or some of such resolutions, the shareholder shall be deemed as present at the meeting and therefore be taken into account in calculating the total number of shareholders present at the meeting. Where the shareholder has not expressed any opinion on other resolutions, the shareholder shall be deemed as having abstained from voting.

Before the results of online voting are formally announced, the Company and substantial shareholders shall be under confidentiality in relation to the voting.

1. Existing Articles 44 to 47 be renumbered as Articles 47 to 50

2. Existing Article 48 be amended and renumbered as Article 51:

The existing Article is as follows:

• Article 48 Upon conclusion of meeting agenda, the person chairing the meeting shall require the Company to retain a lawyer with relevant securities issue experience to give his legal opinion in respect of the compliance of the Shareholders’ General Meeting. The legal opinion shall be announced at the same meeting.

The existing Article is hereby amended as follows:

• Article 51 Upon conclusion of meeting agenda, the person chairing the meeting shall require the Company to retain a lawyer to give his legal opinion in respect of the compliance of the Shareholders’ General Meeting. The legal opinion shall be announced at the same meeting.

9

1. Existing Articles 49 to 52 be renumbered as Articles 52 to 55

2. Existing Article 53 be amended and renumbered as Article 56:

The existing Article is as follows:

• Article 53 Announcement on the resolutions of the Shareholders’ General Meeting shall state the number of attending shareholders (and proxies), the number of shares held (represented) at the meeting and its proportion to the total number of shares of the Company carrying voting rights, the manner of voting and voting results of each motion. Statement of resolutions on shareholders’ motions shall specify the name, shareholding and motion content of the proposing shareholder(s).

The existing Article is hereby amended as follows:

• Article 56 The announcement on resolutions of a Shareholders’ General Meeting shall include the following:

• (1) the time, venue, voting manner, convener and chairman of the meeting, and descriptions on whether it is in compliance with the relevant laws, rules, regulations and the Articles of Association;

• (2) the number of attending shareholders (their proxies), the total number of shares represented and its proportion to the total number of voting shares of the Company, and descriptions on attendance of holders of listed and unlisted shares at the meeting respectively;

• (3) the way of voting on each resolution;

• (4) the voting results of each resolution, and the number of shares representing votes in favour of, against or abstained from voting with respect to each resolution by holders of listed and unlisted shares respectively. In the event that a resolution is voted at the meeting, the announcement shall state the name of proposing shareholders, the proportion of their shareholdings and content of such resolution. When voting on connected transactions at the meeting, the announcement shall include a statement on the related shareholders who abstain from voting. For resolutions required to be voted by holders of listed shares individually, the announcement shall include a special statement.

• (5) summarized legal opinion, or in the event that any resolution is added, voted against or amended at the Shareholders’ General Meeting, the whole text of such legal opinion shall be disclosed.

Where the Company convenes a Shareholders’ General Meeting to consider and approve the resolutions stated in Article 8.35, the announcement shall also set out the number of public shareholders voting at the Shareholders’ General Meeting, the total number of shares held by them, its proportion to the total number of shares held by the public shareholders, the voting results as well as the shareholdings of the 10 largest public shareholders voting at the Shareholders’ General Meeting and the voting results.

10

1. Existing Articles 54 to 58 be renumbered as Articles 57 to 61

By Order of the Board of Guangdong Kelon Electrical Holdings Company Limited Gu Chu Jun Chairman

As at the date of this announcement, the Company’s executive directors are Mr. Gu Chu Jun, Mr. Liu Cong Meng, Mr. Li Zhen Hua, Mr. Yan You Song, Mr. Zhang Hong and Mr. Fang Zhi Guo; and the independent non-executive directors are Mr. Chan Pei Cheong, Andy, Mr. Li Kung Man and Mr. Xu Xiao Lu.

Foshan City, Guangdong Province, the PRC, 28 April, 2005

11