Modern Innovative Digital Technology Company Limited - Proxy Solicitation & Information Statement 2004

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 your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in DATANG INTERNATIONAL POWER GENERATION CO., LTD., you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the 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.

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

(Stock Code: 991)

Proposed application to issue A Shares in the PRC Proposed amendments to the Articles of Association and

Connected transactions

Independent financial adviser to the independent board committee of Datang International Power Generation Co., Ltd. in respect of the connected transactions

IT IS IMPORTANT TO NOTE THAT THE PURPOSE OF DISTRIBUTING THIS CIRCULAR IS TO PROVIDE THE SHAREHOLDERS OF THE COMPANY WITH ADDITIONAL INFORMATION ON, AMONG OTHER THINGS, THE PROPOSED ISSUE OF A SHARES BY THE COMPANY, SO THAT THE SHAREHOLDERS OF THE COMPANY MAY MAKE AN INFORMED DECISION ON VOTING IN RESPECT OF CERTAIN RESOLUTIONS TO BE TABLED AT THE EXTRAORDINARY GENERAL MEETING AND THE CLASS SHAREHOLDERS MEETINGS OF THE COMPANY. THE A SHARES WILL BE ISSUED ONLY TO SUBSCRIBERS IN THE PEOPLE’S REPUBLIC OF CHINA. THIS CIRCULAR DOES NOT CONSTITUTE AN OFFER OF, OR THE SOLICITATION OF AN OFFER TO BUY ANY OF THE A SHARES, NOR IS THIS CIRCULAR CALCULATED TO INVITE OFFERS FOR ANY SHARES OR OTHER SECURITIES OF THE COMPANY.

A letter from the board of directors of the Company is set out on pages 4 to 15 of this circular. A letter from the Independent Board Committee is set out on page 16 of this circular. A letter from DBS Asia Capital Limited, the independent financial adviser to the Independent Board Committee, is set out on pages 17 to 20 of this circular.

A notice dated 6 May 2004 convening the extraordinary general meeting, the H Shares class meeting and the domestic shares class meeting of the Company to be held at Conference Room No. 804, No. 482 Guanganmennei Avenue, Xuanwu District, Beijing, the People’s Republic of China at 11:00 a.m. 11:30 a.m. and 12:00 noon respectively on 22 June 2004 (copy of all of which are set out on pages 75 to 84 of this circular), together with the relevant reply slip for attendance and proxy form, has been despatched to the shareholders of the Company. If you are eligible, and intend, to attend the extraordinary general meeting and/or the class shareholders meeting of the Company, please complete and return the relevant reply slip for attendance enclosed with the notice of extraordinary general meeting and/or the class shareholders meeting of the Company in accordance with the instructions printed thereon as soon as possible and in any event not later than 1 June 2004. Whether or not you will attend the extraordinary general meeting and/or the class shareholders meeting of the Company, you are requested to complete and return the relevant proxy form enclosed with the notice of extraordinary general meeting and/or the class shareholders meeting of the Company in accordance with the instructions printed thereon. Completion and return of the proxy form will not precluded you from attending and voting in person at the extraordinary general meeting and/or the class shareholders meeting of the Company (as the case may be) or any adjournment thereof should you so wish.

27 May 2004

		Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER	FROM THE BOARD
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
2.	Proposed application to issue A Shares in the PRC . . . . . . . . . . . . . . . . . . . . . . .	6
3.	Proposed amendments to the articles of association . . . . . . . . . . . . . . . . . . . . . .	13
4.	General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
5.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
6.	Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
LETTER	FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . .	16
LETTER	FROM DBS ASIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
APPENDIX I – PROPOSED AMENDMENTS
	TO THE ARTICLES OF ASSOCIATION . . . . . . . . . . . . . . . . . . . .	21
APPENDIX II – GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		72
NOTICE	OF EXTRAORDINARY GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . .	75
NOTICE	OF H SHARES CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	79
NOTICE	OF DOMESTIC SHARES CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . .	82

– i –

DEFINITIONS

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

“A Share(s)”
means the domestic ordinary share(s) of the Company with a nominal value of RMB1.00 each which are to be subscribed in RMB and are proposed to be issued by the Company to (i) part of the existing holders of domestic shares (in the form of State-owned legal person shares which are provisionally prohibited from listing and trading); and (ii) natural person and institutional investors in the PRC;
“A Share Issue”
means the proposed issue of A Shares to (i) part of the existing holders of domestic shares of the Company (in the form of State-owned legal person shares which are provisionally prohibited from listing and trading); and (ii) natural person and institutional investors in the PRC, by the Company. The A Shares to be issued under the Public Subscription Tranche are proposed to be listed on the Shanghai Stock Exchange;
“Articles of Association” or “Articles”
means the articles of association of the Company;
“Associate(s)”

has the meaning ascribed thereto in the Listing Rules;

“BIPDIC”
means Beijing International Power Development and Investment Company（北京國際電力開發投資公司）, a state-owned enterprise established under the laws of the PRC and a substantial shareholder of the Company holding approximately 13.01% of the issued share capital of the Company;
“Board”

means the board of Directors;

“CDGC”

means China Datang Corporation（中國大唐集團公司）, a state-owned enterprise established under the laws of the PRC and a substantial shareholder of the Company holding approximately 35.43% of the issued share capital of the Company;

“Company”
means Datang International Power Generation Co., Ltd.
（大唐國際發電股份有限公司）, a joint stock limited company incorporated in the PRC on 13 December 1994, the H Shares of which are listed on the Hong Kong Stock Exchange and the London Stock Exchange;
“Convertible Bond”

means the convertible bond issued by the Company on 3 September 2003 which can be converted into new H Shares;

– 1 –

DEFINITIONS

“CSMs” means the class shareholders meeting of the Company for each of the holders of H Shares and holders of domestic shares of the Company, each proposed to be held on 22 June 2004;
“DBS Asia” means DBS Asia Capital Limited, the independent financial adviser to the Independent Board Committee and is a deemed licensed corporation to carry out regulated activities of advising on securities and corporate finance under the SFO;
“CSRC” means China Securities Regulatory Commission; “Directors” means the directors of the Company; “EGM” means the extraordinary general meeting of the Company proposed to be held on 22 June 2004;
“Guide for Articles of Association” means the Guide for Articles of Association of Listed Companies promulgated by the CSRC on 16 December 1997;
“HCIC” means Hebei Construction Investment Company （河北省建設投資公司） a state-owned enterprise established under the laws of the PRC and a substantial shareholder of the Company holding approximately 13.01% of the issued share capital of the Company;
“H Shares” means the overseas listed foreign shares of the Company with a nominal value of RMB1.00 each which are listed on the Hong Kong Stock Exchange and the London Stock Exchange;
“HK$” means Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong” means Hong Kong Special Administrative Region of the PRC;
“Hong Kong Stock Exchange” means The Stock Exchange of Hong Kong Limited;
“Independent Board Committee” means a committee of the Board comprising the two independent non-executive Directors (namely, Mr. Xu Daping and Mr. Wu Zhentao) established for the purpose of advising the Independent Shareholders in respect of the Private Placement Arrangements;

“Guiding Opinions” means the Guiding Opinions Concerning the Establishment of the System of Independent Directors for Listed Companies promulgated by the CSRC on 16 August 2001;

– 2 –

DEFINITIONS

“Independent Shareholders”
means shareholders of the Company other than CDGC and TJIC;
“Latest Practicable Date”
means 18 May 2004, being the latest practicable date for ascertaining certain information referred to in this circular prior to the printing of this circular;
“Listing Rules”
means the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange;
“London Stock Exchange”

means the London Stock Exchange Limited;

“PRC”
means the People’s Republic of China;
“Private Placement Arrangements”
means the proposed private placing of A Shares to part of the existing holders of domestic shares of the Company at the same issue price as the A Shares to be issued under the Public Subscription Tranche. Such A Shares will not be listed and traded on the Shanghai Stock Exchange for the time being;
“Public Subscription Tranche”
means the public offer of A Shares to natural persons and institutional investors in the PRC. Such A Shares are proposed to be listed on the Shanghai Stock Exchange;
“Regulatory Opinions”
means the Regulatory Opinions on Standardising Shareholders’ General Meetings of Listed Companies promulgated by the CSRC on 18 May 2000;
“RMB”
means Renminbi, the lawful currency of the PRC;
“SFO”
means the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);
“Shanghai Stock Exchange”
means Shanghai Stock Exchange of the PRC;
“Standards”
means the Standards for the Governance of Listed Companies jointly promulgated by the CSRC and the former State Economic and Trade Commission of the PRC on 7 January 2002;
“substantial shareholders”
“TJIC”

has the meeting ascribed thereto in the Listing Rules;

means Tianjin Jinneng Investment Company (天津市津能投資公司 ), a state-owned enterprise established under the laws of the PRC and a substantial shareholder of the Company holding approximately 10.84% of the issued share capital of the Company; and

“%” percent.

For the purpose of this circular, where amounts in HK$ have been derived from RMB, such translations are for the convenience of the reader only, and except as otherwise indicated, have been made at the rate of RMB1.06 to HK$1.00. No representation is made that RMB amounts could have been or could be converted into HK$ at this rate or any other rate or at all.

– 3 –

LETTER FROM THE BOARD

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

Executive Directors: YU Hongji ZHANG Yi YANG Hongming WANG Xianzhou

Legal address: No. 482 Guanganmennei Avenue, Xuanwu District Beijing, 100053 People’s Republic of China

Non-executive Directors: ZHAI Ruoyu HU Shengmu YANG Jiayi LIU Haixia SU Tiegang YE Yonghui TONG Yunshang ZHANG Wantuo

Principal place of business in Hong Kong: c/o Simmons & Simmons 35th Floor Cheung Kong Center 2 Queen’s Road Central Central Hong Kong 27 May 2004

Independent non-executive Directors: XU Daping WU Zhentao

To the shareholders of the Company

Dear Sir or Madam,

PROPOSED APPLICATION TO ISSUE A SHARES IN THE PRC PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND CONNECTED TRANSACTIONS

1. INTRODUCTION

A Share Issue

Reference was made to the announcement dated 6 May 2004 issued by the Company, in which it was announced that the Company intends to apply to the CSRC for the issue of a maximum of 1,000,000,000 A Shares. The A Share Issue will involve (i) the issue of a maximum of 301,704,761 A Shares and 92,358,600 A Shares (in the form of State-owned legal person shares which are provisionally prohibited from listing and trading) to CDGC and TJIC, respectively, at the same issue price as the A Shares to be issued under the Public Subscription Tranche; and (ii) the issue of a maximum of 605,936,639 A Shares to natural persons and institutional investors in the PRC. The A Shares to be issued under the Public Subscription Tranche are proposed to be listed on the Shanghai Stock Exchange.

– 4 –

LETTER FROM THE BOARD

The A Share Issue is subject to be approved by the shareholders of the Company at the EGM and the CSMs. As each of CDGC and TJIC is a substantial shareholder of the Company holding approximately 35.43% and 10.84% respectively of its entire issued share capital, the proposed issue of any of the A Shares (in the form of State-owned legal person shares which are provisionally prohibited from listing and trading) under the Private Placement Arrangements to each of CDGC and TJIC, if materialised, will constitute connected transactions of the Company under the Listing Rules, and is subject to be approved by the Independent Shareholders at the EGM with CDGC and TJIC and their respective Associates abstaining from voting in the resolution regarding the Private Placement Arrangements. The Independent Board Committee has been established to consider each of the Private Placement Arrangements and to advise the Independent Shareholders in respect of the same. DBS Asia has been appointed as the independent financial adviser to advise the Independent Board Committee.

Proposed amendments to the Articles of Association

Due to the change of the Company’s name from “北京大唐發電股份有限公司 Beijing Datang Power Generation Co. Ltd.” to “大唐國際發電股份有限公司 Datang International Power Generation Co., Ltd.” effective from 15 March 2004 (the stock short name of the Company was also changed from “北京大唐發電股份 Beijing Datang” to “大唐發電 Datang Power” effective from 7 May 2004), the proposed A Share Issue and the recent amendments to the Listing Rules, amendments are proposed to be made to the Articles of Association. Such proposed amendments to be made to the Articles of Association are subject to be approved by the shareholders of the Company at the EGM, and are conditional upon obtaining any approval or registration as may be necessary from the relevant PRC authorities.

EGM

The EGM will be held on Tuesday, 22 June 2004 to consider and, if thought fit, approve, inter alia, the resolution authorising the Board to issue A Shares not exceeding 1,000,000,000 A Shares and to determine the implementation details of the A Shares Issue, the Private Placement Arrangements and the amendments proposed to be made to the Articles of Association.

CSMs

In accordance with Rule 19A.38 of the Listing Rules and the Articles of Association, for the purpose of approving the A Share Issue, CSM will be held for each of the holders of H Shares and holders of domestic shares of the Company on 22 June 2004, at which certain resolutions will be proposed to consider and, if thought fit, approve, inter alia, the resolution authorising the Board to issue A Share not exceeding 1,000,000,000 A Shares and to determine the implementation details of the A Share Issue.

– 5 –

LETTER FROM THE BOARD

The purpose of this circular is to provide shareholders of the Company with further information in relation to the A Share Issue, the Private Placement Arrangements and amendments proposed to be made to the Articles of Association, so as to enable the shareholders of the Company to vote on the resolutions set out in the Company’s notices of EGM and CSMs issued on 6 May 2004. The recommendations of the Independent Board Committee to the independent shareholders of the Company are set out on page 16 of this circular. A copy of the letter from DBS Asia containing its advice to the Independent Board Committee is set out on page 17 to 20 of this circular.

2. PROPOSED APPLICATION TO ISSUE A SHARES IN THE PRC

On 29 April 2004, the Board resolved that the Company shall apply to the CSRC for the issue of a maximum of 1,000,000,000 A Shares (with no minimum number of A Shares proposed to be issued). The A Share Issue will involve (i) the issue of a maximum of 301,704,761 A Shares and 92,358,600 A Shares (in the form of State-owned legal person shares which are provisionally prohibited from listing and trading) to CDGC and TJIC, respectively, at the same issue price as the A Shares to be issued under the Public Subscription Tranche; and (ii) the issue of a maximum of 605,936,639 A Shares to natural persons and institutional investors in the PRC. The Board also resolved that the A Shares to be issued under the Public Subscription Tranche are proposed to be listed on the Shanghai Stock Exchange.

In connection with the Private Placement Arrangements, each of CDGC and TJIC issued a written commitment in favour of the Company that CDGC and TJIC respectively will fully subscribe in cash in full, at the same issue price as the A Shares to be issued under the Public Subscription Tranche, for a maximum of 301,704,761 A Shares and 92,358,600 A Shares respectively (in the form of State-owned legal person shares which are provisionally prohibited from listing and trading) to be allocated to it under the Private Placement Arrangements. Such A Shares to be subscribed by CDGC and TJIC respectively pursuant to the Private Placement Arrangements cannot be listed on the Shanghai Stock Exchange until such time when the PRC government releases any new policy regulating the exchange trading of State-owned shares and legal person shares. To the best knowledge of the Directors, they are not aware as to whether and, if so, when any such new policy may be released. The numbers of A Shares to be placed to CDGC and TJIC will be adjusted accordingly with reference to the actual total number of A Shares to be issued.

2.1 Structure of the A Share Issue

The structure of the A Share Issue is set out below:

(1) Type of securities to be issued: RMB denominated ordinary shares
(2) Number of A Shares to be issued:

Not more than 1,000,000,000 A Shares, the exact number of which shall be determined by the Board as proposed to be authorised by the shareholders of the Company at the EGM and CSMs

(3) Par value:

RMB1.00 per A Share

(4) Target subscribers:

Part of the existing holders of domestic shares of the Company, natural persons

– 6 –

LETTER FROM THE BOARD

and institutional investors (who and which have established shareholders account and except those prohibited by PRC laws or regulations) in the PRC.

(i) CDGC and TJIC, being part of the existing holders of domestic shares of the Company, intended to subscribe at the same issue price as the A Shares to be issued under the Public Subscription Tranche for not more than 301,704,761 A Shares and 92,358,600 A Shares (based on the issue of 1,000,000,000 A Shares), r e s p e c t iv e l y, r e p r e s e n t i n g approximately 30.17% and 9.24% of the total number of A Shares to be issued (based on the issue of 1 , 0 0 0 , 0 0 0 , 0 0 0 A S h a r e s ) , respectively. The number of A Shares to be placed to each of CDGC and TJIC will be adjusted accordingly with reference to the actual total number of A Shares to be issued so that the shareholding of each of CDGC and TJIC in the enlarged issued share capital of the Company upon completion of the A Share Issue will be approximately 33.40% and 10.22%, respectively. Such A Shares will not be listed and traded on the Shanghai Stock Exchange for the time being.
(ii) The Company intends to issue not more than 605,936,639 A Shares to natural persons and institutional investors (who and which have established shareholders account and except those prohibited by PRC laws or regulations) in the PRC.

(5) Issue price and pricing process:

The issue price of the A Shares will be determined in accordance with strict market principles based on the PRC securities market condition at the time when the A Share Issue takes place. The final issue price as well as the pricing mechanism will, as may be required under the relevant PRC laws and

– 7 –

LETTER FROM THE BOARD

regulations, be subject to be approved by all relevant PRC regulatory authorities including the CSRC.

(6) Use of proceeds:

It is currently expected that the net proceeds from the A Share Issue will not b e m o r e t h a n R M B 6 b i l l i o n (approximately HK$5.7 billion). The Board currently intend to use the net proceeds from the A Share Issue in instalment in following projects:

(a) approximately RMB248 million (approximately HK$234 million) to complete phase II of the Datang Tuoketuo power generation project;
(b) approximately RMB350 million (approximately HK$330 million) to complete the Datang Shentou power generation project;
(c) approximately RMB211 million (approximately HK$208 million) to complete the Datang Liancheng power generation project;
(d) approximately RMB323 million (approximately HK$305 million) to complete phase II of the Datang Tangshan power generation project;
(e) approximately RMB347 million (approximately HK$327 million) to complete the Datang Honghe power generation project;
(f) approximately RMB854 million (approximately HK$806 million) to complete the Datang Pengshui power generation project;
(g) approximately RMB609 million (approximately HK$575 million) to complete phase III of the Datang Tuoketuo power generation project;
(h) approximately RMB1,094 million (approximately HK$1,032 million) to complete the Datang Chaozhou power generation project;

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LETTER FROM THE BOARD

(i) approximately RMB546 million (approximately HK$515 million) to complete phase I of the Fujian Datang Ningde power generation project; and
(j) approximately RMB999 million (approximately HK$942 million) to complete phase I of the Zhejiang Datang Wushashan power generation project.

To the extent that the net proceeds from the A Share Issue are not sufficient to fund the above projects, the Company will use its internal resources, if necessary.

To the extent that the net proceeds from the A Share Issue are not immediately required for the above projects, the Company may place such funds in deposits with banks. To the extent that the net proceeds exceed the funds required for the above projects, the Company may use such funds as working capital or to repay outstanding loan facilities of the Company.

A resolution will be proposed at the EGM that the Board shall be authorised to make appropriate adjustments to the use of proceeds from the A Share Issue within the scope of the 10 projects stated above which will be approved by the shareholders of the Company in the EGM and to determine the final plan for the use of proceeds from the A Share Issue, including, but not limited to, determining each specific project and the amount of funds to be used, and to sign any contracts relating to the projects. In the event that any adjustments are to be made to the use of proceeds from the A Share Issue which fall outside the scope of the 10 projects stated above as approved by the shareholders of the Company in the EGM, the Company will make an announcement as and when appropriate.

– 9 –

LETTER FROM THE BOARD

The A Share Issue (including the proposed issue of A Share (in the form of Stateowned legal person shares which are provisionally prohibited from listing and trading) to each of CDGC and TJIC) shall be conducted in accordance with the requirements of the CSRC. It should be noted that the A Share Issue and the structure thereof, is also subject to the approval and/or endorsement of the CSRC, and that of the Shanghai Stock Exchange in respect of the listing and trading on the Shanghai Stock Exchange of such A Shares to be issued under the Public Subscription Tranche.

2.2 Ancillary matters relating to the A Share Issue

2.2.1 Sharing of unappropriated accumulated profits

After completion of the A Share Issue, the existing and new shareholders of the Company shall, subject to be approved by the shareholders of the Company at the EGM and CSMs, be entitled to mutual sharing of the Company’s unappropriated accumulated profits when the A Share Issue takes place.

2.2.2 Taking of necessary action by the Directors

The Directors shall, under circumstances that do not violate any PRC laws, regulatory requirements and the Articles of Association and subject to be approved by the shareholders of the Company at the EGM and CSMs, be authorised to sign all documents, carry out all procedures and take any other action as are necessary to effect, for the purpose of or otherwise in connection with, and upon, the A Share Issue and the proposed listing of such A Shares to be issued under the Public Subscription Tranche on the Shanghai Stock Exchange.

2.2.3 Shareholders’ approvals to be sought at the EGM and CSMs and effective period of such approvals

The A Share Issue, including, but not limited to, the proposal relating to the A Share Issue, the listing of such A Shares to be issued under the Public Subscription Tranche on the Shanghai Stock Exchange, the mutual sharing of the Company’s unappropriated accumulated profits between its existing and new shareholders when the A Share Issue takes place, and the authorisation of the Directors in such terms and in such manner as set out above, are subject to be approved by the shareholders of the Company at the EGM and each of the holders of the H Shares and the holders of the domestic shares of the Company at the respective CSM.

Moreover, the use of proceeds of the A Share Issue, the proposed amendments to the Articles of Association and the authorisations for the Board to implement the above matters are also subject to the approval of the shareholders of the Company at the EGM.

All resolutions to be proposed and sought at the EGM and CSMs in respect of or otherwise relating to the A Share Issue, if passed by the shareholders of the Company thereat, are, in compliance with and legally required under the relevant PRC laws, proposed to be effective for a period of one year from the date on which

– 10 –

LETTER FROM THE BOARD

the relevant resolutions are being approved in the EGM and CSMs, such that if the A Share Issue is not completed within such one year period, the relevant resolutions passed at each of the EGM and CSMs will no longer be effective and fresh resolutions relating to the A Share Issue will then be required to be sought at the general meeting and class shareholders meetings of the Company to be convened for that purposes. Having said that, it is the current intention of the Board that the A Share Issue will, subject to the approval(s) by all relevant PRC regulatory authorities including the CSRC being obtained, take place within one year following each of the EGM and CSMs.

As at the Latest Practicable Date, as each of CDGC and TJIC is a substantial shareholder of the Company holding approximately 35.43% and 10.84% respectively of its entire issued share capital, the proposed issue of any of the A Shares (in the form of State-owned legal person shares which are provisionally prohibited from listing and trading) under the A Share Issue to each of CDGC and TJIC, if materialised, will constitute a connected transaction of the Company under the Listing Rules, and is subject to be approved by the Independent Shareholders at the EGM with CDGC and TJIC abstaining from voting in the resolution regarding the Private Placement Arrangements. As confirmed by the Company’s legal advisers as to PRC laws and Hong Kong laws, the Board is of the view that under the applicable laws, regulation, rules and the Articles of Association, except for the resolution regarding the proposed issue of A Shares to each of CDGC and TJIC under the Private Placement Arrangements, each of CDGC and TJIC is not required to abstain from voting in respect of all other resolutions relating to the A Share Issue and to be sought at the EGM or the CSMs. Further, in the event that the resolution to approve the proposed issue by the Company of a maximum of 1,000,000,000 A Shares under the A Share Issue is not passed or approved at the EGM and/or the CSMs and/or by the CSRC, the resolution regarding the proposed issue of A Shares to CDGC and TJIC under the Private Placement Arrangements, even if passed, will not become effective as no A Shares will be issued by the Company under such circumstances.

The Board has appointed the Independent Board Committee to consider and advise the Independent Shareholders on, among other things, the terms of the proposed issue of A Shares to each of CDGC and TJIC under the Private Placement Arrangements, and has appointed DBS Asia as the independent financial adviser to advise the Independent Board Committee on the terms of the Private Placement Arrangements insofar the Independent Shareholders are concerned.

2.2.4 Regulatory requirements for holding of A Shares

According to the current PRC laws and regulations, unless specifically approved, A Shares can only be subscribed by natural persons and institutional investors in the PRC. Accordingly, the Company is effectively not allowed to extend similar private placement arrangements to the holders of H Shares due to the restrictions of the relevant PRC laws and regulations for A Shares.

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LETTER FROM THE BOARD

2.3 Reasons for and the benefits of the A Share Issue

The Directors believe that with the proceeds raised from the A Share Issue, the Company could further develop its business in the development, construction and operation of power plants in the PRC. The A Share Issue will also provide the Company with an alternative channel to raise further capital and will enhance the shareholders base and enlarge the capital base of the Company. It will also enhance the profile of the Company in the PRC.

2.4 Effects of the A Share Issue on the Company’s capital structure

Set out below is a summary of the changes in the shareholding percentage of the Company prior to and immediately upon completion of the A Share Issue based on the assumption that the entire 1,000,000,000 A Shares will be issued and the Convertible Bond issued by the Company will be fully converted into 215,812,558 H Shares (based on the conversion price of HK$5.558 per H Shares) immediately upon completion of the A Share Issue:

			Shareholding	Immediately upon	Shareholding
	Shareholders of	Prior to the	percentage (%)	completion of	percentage (%)
	the Company	A Share Issue	(approximate)	the A Share Issue	(approximate)
1.	Unlisted domestic shares:
	CDGC	1,828,768,200	35.43	2,130,472,961(1)	33.40
	BIPDIC	671,792,400	13.01	671,792,400	10.53
	HCIC	671,792,400	13.01	671,792,400	10.53
	TJIC	559,827,000	10.84	652,185,600(2)	10.22
2.	Listed domestic and foreign shares:
	Public holders of
	A Shares	–	–	605,936,639	9.50
	Public holders of
	H Shares	1,430,669,000	27.71	1,646,481,558(3)	25.81
	Total	5,162,849,000	100.00	6,378,661,558	100.00

Notes:

1. Include the 301,704,761 A Shares to be issued under the Private Placement Arrangements.

2. Include the 92,358,600 A Shares to be issued under the Private Placement Arrangements.

3. Include the Convertible Bond issued by the Company assumed to be fully converted into 215,812,558 H Shares.

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LETTER FROM THE BOARD

3. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

To cater for the A Share Issue, amendments will, in accordance with laws and regulations prescribed by the relevant PRC authorities including the CSRC stipulating provisions mandatory or otherwise recommended for inclusion in Articles of Associations of PRC listed companies (including the Guide for Articles of Association, the Standards, the Regulatory Opinions and the Guiding Opinions), be made to the Articles of Association in compliance or otherwise in accordance with all such legal and regulatory requirements.

The proposed amendments to be made to the Articles of Association primarily aim to enhance the corporate governance of the Company and, in accordance with the abovementioned PRC laws and regulations, deal with matters relating to a number of areas including: rights of shareholders, authority of, and procedures at, shareholders’ general meetings, qualifications of Directors and supervisors of the Company, authority of, and procedures for, the Board, procedures for nominating and electing Directors, duties of the Company secretary, duties of the manager and internal audit and certain other related matters.

The Articles of Association will also be amended to reflect the change of name of the Company as well as to reflect the recent amendments to the Listing Rules.

Such proposed amendments to be made to the Articles of Association are subject to be approved by the shareholders of the Company at the EGM, and are conditional upon obtaining any approval, or registration as may be necessary from the relevant PRC authorities. Details regarding such proposed amendments are set out in Appendix I.

The Directors believe that such proposed amendments are a practical opportunity to update the Articles of Association, and will ensure that mechanisms will be in place for the Company, as a company listed on the Hong Kong Stock Exchange and, upon completion of the A Share Issue, expected to be listed on the Shanghai Stock Exchange, to continue to adhere to the standards of corporate governance required by the Hong Kong Stock Exchange and the Shanghai Stock Exchange.

4. GENERAL INFORMATION

4.1 The A Share Issue and connected transactions

The A Share Issue shall be conducted in accordance with the requirements of the CSRC. It should also be noted that the A Share Issue, upon being approved by the shareholders of the Company and the Independent Shareholders, is subject to the approval of the CSRC, and that of the Shanghai Stock Exchange in respect of the listing and trading on the Shanghai Stock Exchange of such A Shares to be issued under the Public Subscription Tranche.

As each of CDGC and TJIC is a substantial shareholder of the Company holding approximately 35.43% and 10.84% respectively of its entire issued share capital as at the Latest Practicable Date, the proposed issue of any of the A Shares (in the form of Stateowned legal person shares which are provisionally prohibited from listing and trading) under the Private Placement Arrangements to each of CDGC and TJIC, if materialised,

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LETTER FROM THE BOARD

will constitute a connected transaction for the Company under the Listing Rules, and is subject to be approved by the Independent Shareholders at the EGM with CDGC and TJIC abstaining from voting in the resolution regarding the Private Placement Arrangements. The Board has appointed the Independent Board Committee to consider and advise the Independent Shareholders on, among other things, the Private Placement Arrangements, and has appointed DBS Asia as the independent financial adviser to advise the Independent Board Committee.

There is no assurance that the A Share Issue will materialise or will proceed in such manner and in such terms as are set out herein. Investors are therefore advised to exercise caution when dealing in the H Shares. Further details regarding the A Share Issue will, when the A Share Issue materialises, be disclosed in newspapers in the PRC, and the Company will then publish an announcement in newspapers in Hong Kong simultaneously in accordance with the Listing Rules.

4.2 EGM

The EGM will be held on Tuesday, 22 June 2004 to consider, and if thought fit, approve, inter alia, the resolution authorising the Board to issue A Shares not exceeding 1,000,000,000 A Shares and to determine the implementation details of the A Shares Issue, the Private Placement Arrangements and the amendments proposed to be made to the Articles of Association. A notice dated 6 May 2004 convening the EGM (a copy of which is set out on pages 75 to 78 of this circular), together with the reply slip for attendance and proxy form has been despatched to the shareholders of the Company.

4.3 CSMs

Shareholders of the Company whose names appeared on the register of members of the Company at the close of business on Friday, 21 May 2004 are entitled to attend the EGM and the CSMs. The H Share register of members of the Company will be closed on Saturday, 22 May 2004 until Tuesday, 22 June 2004, both days inclusive, during which period no transfer of H Shares will be effected.

If you are eligible, and intend, to attend the EGM and/or the CGM, please complete and return the relevant reply slip for attendance enclosed with the Company’s notice of the EGM and/or the CGM in accordance with the instructions printed thereon as soon as possible and in any event by Tuesday, 1 June 2004. Whether or not you will attend the EGM and/or the CGM, you are requested to complete and return the relevant proxy form enclosed with the Company’s notice of the EGM and/or the CGM in accordance with the instructions printed thereon. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM and/or the CGM or any adjournment thereof should you so wish.

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LETTER FROM THE BOARD

5. RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee which is set out on page 16 of this circular. The text of a letter from DBS Asia, the independent financial adviser to the Independent Board Committee, containing its advice in respect of the Private Placement Arrangements, is set out on pages 17 to 20 of this circular.

The Independent Board Committee, having taken into account the advice of DBS Asia, consider that the terms of each of the Private Placement Arrangements are all fair and reasonable so far as the Company and its shareholders are concerned. Accordingly, the Independent Board Committee recommends that the Independent Shareholders to vote at the EGM in favour of the resolution regarding the issue of a maximum of 301,704,761 A Shares to CDGC and a maximum of 92,358,600 A Shares to TJIC by the Company.

6. ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

Yours faithfully,

For and on behalf of the board of Directors of

Datang International Power Generation Company Limited Zhai Ruoyu

Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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

Legal address and head office: No. 482 Guanganmennei Avenue Xuanwu District Beijing, 100053 People’s Republic of China

27 May 2004

To the Independent Shareholders

Dear Sir or Madam,

We refer to the circular (the “Circular”) dated 27 May 2004 to the shareholders of the Company of which this letter forms part. Unless the context requires otherwise, terms and expressions defined in the Circular shall have the same meanings in this letter.

We have been appointed to advise the Independent Shareholders in connection with terms regarding the proposed issue of A Shares by the Company to each of CDGC and TJIC under the Private Placement Arrangements, details of all of which are set out in the letter from the Board contained in the Circular.

As each of CDGC and TJIC is a substantial shareholder of the Company holding approximately 35.43% and 10.84% respectively of its entire issued share capital, the proposed issue of any of the A Shares (in the form of State-owned legal person shares which are provisionally prohibited from listing) under the Private Placement Arrangements to each of CDGC and TJIC, if materialised, will constitute a connected transaction of the Company under the Listing Rules, and is subject to be approved by the Independent Shareholders at the EGM with CDGC and TJIC abstaining from voting in the resolution regarding the Private Placement Arrangements.

We wish to draw your attention to the letter of advice issued by DBS Asia which is set out on pages 17 to 20 of the Circular. We have discussed that letter and the advice contained therein with DBS Asia.

Having considered, among other things, the factors and reasons considered by, and the advice of, DBS Asia, as stated in the aforementioned letter, we are of the opinion that the terms regarding the proposed issue of A Shares by the Company to each of CDGC and TJIC under the Private Placement Arrangements are fair and reasonable so far as the Company and its shareholders are concerned. Accordingly, we recommend that the Independent Shareholders vote at the EGM in favour of the resolution regarding the issue of a maximum of 301,704,761 A Shares to CDGC and a maximum of 92,358,600 A Shares to TJIC by the Company.

Yours faithfully, Xu Daping Wu Zhentao Independent Board Committee

– 16 –

LETTER FROM DBS ASIA

The following is the text of the letter of advice dated 27 May 2004 from DBS Asia to the Independent Board Committee in respect of the terms regarding the proposed issue of A Shares by the Company to each of CDGC and TJIC under the Private Placement Arrangements prepared for the purpose of incorporation into this circular:

Asia Capital

27 May 2004

To the Independent Board Committee of Datang International Power Generation Company Limited

Dear Sirs,

CONNECTED TRANSACTIONS PROPOSED ISSUE OF A SHARES UNDER THE PRIVATE PLACEMENT ARRANGEMENTS

We refer to our engagement as the independent financial adviser to the Independent Board Committee in relation to the Private Placement Arrangements, details of which are contained in a circular (the “Circular”) to the shareholders of the Company dated 27 May 2004, of which this letter forms part. Expressions used in this letter shall have the same meanings as defined in the Circular.

As each of CDGC and TJIC is a substantial shareholder of the Company as at the Latest Practicable Date, the proposed issue and allotment of A Shares to CDGC and TJIC under the Private Placement Arrangements, if materialised, constitute connected transactions of the Company under the Listing Rules. Our scope of work under this engagement is to assess the fairness and reasonableness of the terms of such connected transactions insofar as the Independent Shareholders are concerned. It is not within our scope of work to opine on any other aspects of the A Share Issue or the A Share Issue as a whole.

In arriving at our opinion, we have relied on the information, opinions and facts supplied, and representations made to us, by the Directors, and advisers and representatives of the Company (including those contained or referred to in the Circular). We have also assumed that the information and representations contained or referred to in the Circular were true and accurate in all respects at the time they were made and continue to be so at the date of the despatch of the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors. We have relied on certain information available to the public and have assumed such information to be accurate and reliable, and we have not independently verified the accuracy of such information. We have also been advised by the Directors and believe that no material facts have been omitted from the Circular.

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our opinion. We have not, however, conducted an independent verification of the information nor have we conducted any form of in-depth investigation into the businesses and affairs or the prospects of the Company or any of its respective subsidiaries or Associates.

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LETTER FROM DBS ASIA

Principal factors and reasons considered:

In arriving at our opinion with regard to the terms of the proposed issue of A Shares to each of CDGC and TJIC under the Private Placement Arrangements, we have considered the principal factors and reasons set out below.

Background and principal terms

As stated in the announcement of the Company dated 6 May 2004, the Board resolved that the Company shall apply to the CSRC for the issue of a maximum of 1,000,000,000 A Shares. The A Share Issue will involve (i) the issue of a maximum of 301,704,761 A Shares and 92,358,600 A Shares (in the form of unlisted State-owned legal person shares) to CDGC and TJIC, respectively at the same issue price as the A Shares to be issued under the Public Subscription Tranche; and (ii) the issue of a maximum of 605,936,639 A Shares to natural persons and institutional investors in the PRC. The A Shares to be issued under the Public Subscription Tranche are proposed to be listed on the Shanghai Stock Exchange. Further details regarding the structure and other aspects of the A Share Issue are contained in the letter from the Board contained in the Circular.

We note that as the proposed issue and allotment of A Shares to each of CDGC and TJIC are component transactions of the A Share Issue, they are effectively subject to the approval to be granted by the shareholders of the Company at the EGM in respect of the A Share Issue.

Reasons for the A Share Issue

As stated in the letter from the Board, the Directors believe that with the proceeds raised from the A Share issue, the Company could further develop its business in the development, construction and operation of power plants in the PRC. The Directors have set out 10 power generation projects for which the net proceeds from the A Share Issue are intended to be used. The Directors have also stated that to the extent the proceeds of the A Share Issue are not sufficient to fund the above projects, the Company will use its internal resources, if necessary. The Company advised us that demand for electricity in the PRC will continue to be strong in the forthcoming years and it has undertaken detailed feasibility and return studies for each of the projects. We note that the Company intends to utilise the net proceeds from the A Share Issue towards its core business of power generation.

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LETTER FROM DBS ASIA

The A Share Issue will provide the Company with an alternative channel to raise further capital and will enhance the shareholder base and enlarge the capital base of the Company. It will also enhance the profile of the Company in the PRC since the A Shares will be sold exclusively to natural persons and institutional investors in the PRC.

The Directors indicated that they have considered various fund raising alternatives and have concluded that the A Share Issue is appropriate for the Company at this stage having considered the fact that the A Share Issue could raise the profile of the Company in the PRC. Taking into consideration factors including the overall valuation of the A Share market relative to the current valuation of the Company’s H Shares being traded on the Hong Kong Stock Exchange, the expected positive demand on the Company’s new A Shares and the size of the proposed fund raising for the A Share Issue, we concur with Directors’ view that the A Share Issue is appropriate for the Company.

Regulatory requirements for holding of A Shares

According to the current PRC laws and regulations, unless specifically approved, A Shares can only be subscribed by natural persons and institutional investors in the PRC. Accordingly, while the proposed issue of A Shares to CDGC and TJIC under the Private Placement Arrangements constitute connected transactions of the Company under the Listing Rules, the Company is effectively not allowed to extend similar private placement arrangements to the holders of H Shares due to the restrictions of the relevant PRC laws and regulations for A Shares.

Shareholding

Assuming that a total of 1,000,000,000 A Shares are issued under the A Share Issue and assuming that the Convertible Bond issued by the Company will be fully converted into 215,812,558 H Shares (based on the conversion price of HK$5.558 per H Shares), of which a total of 301,704,761 A Shares and 92,358,600 A Shares (in the form of unlisted State-owned legal person shares) are allocated and issued to CDGC and TJIC respectively, the approximate shareholding percentage of CDGC and TJIC in the Company will be diluted from 35.43% and 10.84% respectively immediately before completion of the A Share Issue to 33.40% and 10.22% respectively immediately upon completion of the A Share Issue. The aggregate shareholding of the shareholders of the Company (excluding CDGC and TJIC) will increase from approximately 53.73% immediately before completion of the A Share Issue to approximately 56.38% immediately upon completion of the A Share Issue. The aggregate shareholding of the original holders of H Shares will be diluted from approximately 27.71% immediately before completion of the A Share Issue to approximately 25.81% immediately upon completion of the A Share Issue. The aggregate amount of H Shares and such A Shares to be issued and held by the public following completion of the A Share Issue will represent approximately 35.31% of the then total enlarged issued share capital of the Company.

We note that following completion of the A Share Issue, CDGC will continue to be the controlling shareholder of the Company and that each of BIPDIC, HCIC and TJIC will continue to be a substantial shareholder of the Company. The Directors consider that such arrangement is conducive to the maintenance of a close relationship between the Company and each of CDGC, BIPDIC, HCIC and TJIC which is instrumental to the future continuing success of the Company.

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LETTER FROM DBS ASIA

We also note, given the fact that the Independent Shareholders (except for BIPDIC and HCIC) are effectively not legally allowed to subscribe or hold any A Shares to be issued under the A Share Issue, the individual shareholding levels of the shareholders of the Company (excluding CDGC and TJIC) shall be diluted due to the issue of A Shares under the A Share Issue as a whole rather than as a result of the proposed issue of A Shares to each of CDGC and TJIC under the Private Placement Arrangements.

Pricing of the A Share Issue under the Private Placement Arrangements

The A Share Issue (including the proposed issue of A Shares to each of CDGC and TJIC), as stated in the letter from the Board contained in the Circular, shall be conducted in accordance with the requirements of the CSRC and is subject to, among other things, the approval and/or endorsement of the CSRC. The issue price as well as the pricing mechanism for the A Share Issue will, as may be required under relevant PRC laws and regulations, be subject to be approved by all relevant PRC regulatory authorities including the CSRC, and be determined in accordance with strict market principles based on the PRC securities market conditions at the time when the A Share Issue takes place.

As the issue of A Shares to each of CDGC and TJIC will be at the same issue price as the issue price for the A Shares to be issued under the Public Subscription Tranche, we consider the aforesaid pricing mechanism for determining the issue price for the A Shares to be issued to each of CDGC and TJIC to be in line with market practice. We also note that there were precedents whereby new A shares were proposed to be issued to the existing State-owned shareholders of a H Share listed company on the Hong Kong Stock Exchange.

Opinion

Having considered the principal factors and reasons discussed above, we are of the opinion that the terms of the proposed issue of A Shares by the Company to each of CDGC and TJIC under the A Share Issue are fair and reasonable so far as the Independent Shareholders are concerned and are in the interest of the Company as a whole. Accordingly, we would recommend the Independent Shareholders to vote in favour of the resolution regarding the issue of a maximum of 301,704,761 A Shares and 92,358,600 A Shares to CDGC and TJIC respectively at the EGM.

Yours faithfully, For and on behalf of

DBS ASIA CAPITAL LIMITED Kelvin S.K. Lau Managing Director

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PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX I

ARTICLES OF ASSOCIATION

(Explanations to the Proposed Amendments)

Amended in accordance with the relevant provisions of the Company Law, the Special Provisions Regarding Overseas Offering and Listing of Shares by Joint Stock Limited Companies, the Further Standardizing Operations and Intensifying Reform of Companies Listed Outside China Opinion, the Mandatory Provisions for Articles of Association of Companies to be Listed Overseas (the “Mandatory Provisions”), the Guide for Articles of Association of Listed Companies (the “Guide for Articles of Association”), the Standards for Governance of Listed Companies (the “Standards”), the Regulatory Opinions on Standardising Shareholders’ General Meetings of Listed Companies (the “Regulatory Opinions”), the Guiding Opinions Concerning the Establishment of the System of Independent Directors for Listed Companies (the “Guiding Opinions”) and other relevant provisions of China Securities Regulatory Commission and the Rules Governing the Listing on Securities of The Stock Exchange of Hong Kong Limited (the “Listing Rules”).

CHAPTER 6

The heading is changed from “Shares Certificates and Register of Members” to “Share Certificates and Register of Members”.

A new chapter 23 headed “Supplementary Provisions” is added.

CHAPTER 1: GENERAL PROVISIONS

Article 2

The registered name of the Company in Chinese is changed to “大唐國際發電股份有限公司 ”.

The registered name of the Company in English is changed to “Datang International Power Generation Company Limited”.

Article 6

The first paragraph of Article 6 is amended as follows:

The Articles of Association of the Company (“Articles”) are formulated in accordance with the Company Law, the Mandatory Provisions for Articles of Association of Companies to be Listed Overseas (the “Mandatory Provisions”), the Guide for Articles of Association of Listed Companies (the “Guide for Articles of Association”), the Rules Governing the Listing of Securities or The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and other relevant provisions, and will come into effect on the day when they are approved by the department responsible for the examination and approval of companies.

Bases and explanation: Based on Rule 13.01 of the Listing Rules, additional regulations are added as bases for the formulation of the Articles of Association of the Company to meet the requirements of A share issue.

Article 7

The second paragraph of Article 7 is amended as follows:

Without breaching the relevant provisions of Chapter 20 of these Articles, under these Articles, the Company’s shareholders may bring action(s) against the Company; the Company

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

may bring action(s) against the Company’s shareholders, Directors, supervisors, managers and other officers; the Company’s shareholders may bring action(s) against each other; and the Company’s shareholders may bring action(s) against the Directors, supervisors, managers and other officers of the Company.

Bases and explanation: Based on Article 10 of the Guide for Articles of Association, additional provision is added under these Articles, the Company may bring action(s) against the Directors, supervisors, managers and other officers of the Company.

Article 8

The specific article number of the Company Law referred to in the second paragraph of this article is deleted.

Explanation: The deletion is made to avoid changes in the serial number of the article of the Company Law in case of any amendments thereto.

CHAPTER 2: OBJECTIVES AND SCOPE OF BUSINESS

Article 10

The second paragraph of Article 10 is amended as follows:

The scope of business of the Company includes: construction and operation of power plants; sales of electricity and thermal power; inspection and commissioning of power equipment; the provision of technological services in relation to power industry; and other business activities permitted by laws and administrative regulations.

CHAPTER 3: SHARES AND REGISTERED CAPITAL

Article 11

In Article 11, “the department authorized by the State Council for the examination and approval of companies” is changed to “the examination and approval department authorized by the State Council”.

Bases and explanation: The amendment is made in accordance with the actual government establishment for the time being.

Article 15

Article 15 is amended as follows:

Upon establishment after obtaining the approval of the department authorized by the State Council for examination and approval of companies, the Company issued a total of 3,732,180,000 ordinary shares, all of which were subscribed by the three promoters.

After its establishment, the Company, under the approval of the department authorized by the State Council for examination and approval of companies and the State Council securities

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

regulatory authority, issued overseas-listed foreign-invested shares of 1,430,669,000 shares, which were listed on The Stock Exchange of Hong Kong Limited and London Stock Exchange. After completion of the issue, the total issued ordinary shares of the Company amounted to 5,162,849,000 shares, of which 72.29 percent was domestic shares held by the promoters and 27.71 percent was overseas-listed foreign-invested shares.

The Group Company, one of the promoters, has transferred the 1,775,331,800 shares held by it to BIC, HCI and Tianjin Municipality Jinneng Investment Company respectively in the amount of 575,732,400 shares, 639,772,400 shares and 559,827,000 shares. After completion of the share transfer, the Group Company held 1,828,768,200 shares, amounting to 35.43 percent of the total issued ordinary shares of the Company, BIC held 671,792,400 shares, amounting to 13.01 percent of the total issued ordinary shares of the Company, HCI held 671,792,400 shares, amounting to 13.01 percent of the total issued ordinary shares of the Company and Tianjin Municipality Jinneng Investment Company held 559,827,000 shares, amounting to 10.84 percent of the total issued ordinary shares of the Company. Holders of overseas-listed foreign-investment shares held 1,430,669,000 shares, amounting to 27.71 percent of the total issued ordinary shares of the Company.

In accordance with the Guo Han (2003) No. 16 “Approval of the State Council regarding the establishment of CDGC” issued by the State Council, all the shares of the Company held by the Group Company have been transferred to CDGC, which replaces the Group Company to hold 1,828,768,200 shares, amounting to 35.43 percent of the total issued ordinary shares of the Company.

Upon approval by special resolution of the Company’s extraordinary shareholders’ meeting and resolution of the Company’s class shareholders’ meeting, and the approval of the regulatory authority of the PRC government, the Company, in September 2003, issued outside the PRC convertible bonds (the “Convertible Bonds”) with a total principal of USD153.8 million which were convertible into overseas-listed foreign-invested shares of the Company. The total share capital and share structure of the Company will be modified in accordance with the actual amount of Convertible Bonds finally converted into overseas-listed foreign-invested shares of the Company.

On 22 June 2004, upon approval by special resolution of the Company’s extraordinary shareholders’ meeting and resolution of the Company’s class shareholders’ meeting, and approval of the examination and approval department authorized by the State Council, the Company issued [•] Renminbi-denominated ordinary shares, of which [•] shares and [•] shares were placed with CDGC and Tianjin Municipality Jinneng Investment Company respectively. After completion of the additional issue of domestic shares and the placing, the amount of shares held by the shareholders and their respective shareholding proportion are as follows:

CDGC	[•] shares	[•] percent
BIC	[•] shares	[•] percent
HCI	[•] shares	[•] percent
Tianjin Municipality Jinneng Investment Company	[•] shares	[•] percent
Other holders of domestic shares	[•] shares	[•] percent
Holders of overseas-listed foreign-invested shares	[•] shares	[•] percent

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Bases and explanation: The amendments are made to reflect in these Articles the various issues made by the Company and changes in its share capital.

Article 16

In the second paragraph of Article 16, “the State Council Securities Commission” is changed to “the State Council securities regulatory authority” and “approval” is changed to “verification”.

Article 17

In Article 17, “the State Council Securities Commission” is changed to “the State Council securities regulatory authority”

Article 18

The specific amount of registered capital of the Company referred to in Article 18 will be determined after completion of this issue.

Article 19

Two additional items are added to the second paragraph of Article 19 as item 4 and item 5. The article is amended as follows:

The Company may, depending on the needs of its operation and development, approve increase in capital according to the relevant provisions of these Articles, and implement the same according to the procedures stipulated in the relevant laws and administrative regulations of the State.

The Company may increase non-specified capital in any of the following manners:

issue new shares to non-specific investors;
issue rights to existing shareholders to subscribe new shares;
issue bonus shares to existing shareholders;
unrest reserve fund into capital;
conversion of convertible bonds into capital of the Company pursuant to the approval of the State Council securities regulatory authority and other relevant provisions;
other manners permitted under PRC laws and administrative regulations.

Bases and explanation: Article 22 of the Guide for Articles and Association.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 20

Three additional paragraphs are added to Article 20 as the second, third and fourth paragraphs thereof. The article is amended as follows:

Unless otherwise provided in laws and administrative regulations, shares in the Company may be freely transferred without any lien.

The Company shall not accept its own shares as the subject matter of any pledge.

The Directors, supervisors, managers and other officers of the Company shall disclose to the Company on a regular basis during their term of office the amount of shares held by them. They shall not transfer the shares held by them during their term of office and within 6 months after they vacate office.

If the Directors, supervisors, managers and other officers of a legal person shareholder which holds 5 percent or more of voting shares in the Company sell the shares held by them within 6 months after purchasing or purchase shares within 6 months after selling, any profits received therefrom shall be vested in the Company.

Bases and explanation: Articles 28, 29 and 30 of the Guide for Articles of Association

CHAPTER 4: REDUCTION OF CAPITAL AND SHARE REPURCHASE

Article 23

Article 23 is amended as follows:

The Company may under the following circumstances purchase its issued shares by means of the passing of a resolution in accordance with these Articles and submitting the same for approval by the relevant authority-in-charge of the State:

when shares are cancelled for the purpose of reducing the Company’s capital;
when the Company merges with another company or companies which hold(s) shares in the Company;
other circumstances permitted by law and administrative regulation.

Bases and explanation: Amendment of serial number of the article.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 24

An additional item is added to Article 24 as item 4 thereof. The article is amended as follows:

The Company may, after obtaining approval from the relevant authority-in-charge of the State, repurchase its own shares through any of the following methods:

a general offer to all shareholders to repurchase on a pro rata basis;
share repurchase through open trading on a stock exchange;
an off-market contract outside of a stock exchange;
any other methods approved by laws, administrative regulations and the State Council securities regulatory authority.

Bases and explanation: Article 25 of the Guide for Articles of Association.

CHAPTER 5: FINANCIAL ASSISTANCE TO PURCHASE SHARES IN THE COMPANY

Article 29

Article 29 is amended as follows:

In this Chapter, “financial assistance” includes (but is not limited to) assistance by way

of:

gift;
guarantee (including the provision of any undertaking or property to secure the performance of obligations by the obligor), indemnity (other than an indemnity in respect of the Company’s default), release or waiver;
provision of loans, or any other agreement under which the obligations of the Company are to be fulfilled before the obligations of another party to the agreement, or the novation of, or the assignment of rights under, such loan(s) or agreement;
advance;
financial assistance given in any other manner where the Company is unable to pay its debts, has no net assets or in situations where its net assets would be reduced by a material extent.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

In this Chapter, “incurring a liability” includes liabilities incurred by changing one’s financial position by making an agreement or joint arrangement (whether enforceable or otherwise and whether made on one’s own account or with any other person) or by any other means.

Bases and explanation: Article 21 of the Guide for Articles of Association, add serial number to the items.

CHAPTER 6: SHARE CERTIFICATES AND REGISTER OF MEMBERS

Article 33

Article 33 is amended as follows:

The Company shall maintain a register of its shareholders containing the following information:

Name of each shareholder, address (residence), occupation or nature of occupation;
Class and number of shares held by each shareholder;
Amount paid or payable by each shareholder for the shares;
Serial number of the share certificate held;
Date on which each shareholder is registered; and
Date on which each shareholder ceases to be a shareholder.

Unless there is evidence to the contrary, the register of shareholders is sufficient evidence as proof of ownership by a shareholder of the Company’s shares.

Explanation: Add serial number to the items.

Article 35

In item 1 of paragraph 1 of Article 35, “paragraphs (2) and (3) of this Article” is changed to “paragraph 2 and paragraph 3 of this Article”.

Article 40

The specific article number of the Company Law referred to in paragraph 2 of this Article is deleted, and “paragraphs (3) and (4) of this Article” in item 5 of paragraph 4 is changed to “paragraph 3 and paragraph 4 of this Article”.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

CHAPTER 7: RIGHTS AND OBLIGATIONS OF SHAREHOLDERS

Article 44

In item 2 of Article 44, “and to vote thereat” is changed to:

“and to vote thereat in proportion to the number of shares held”.

Item 4 of the Article is changed to:

the right to transfer, give and pledge shares held in accordance with relevant laws, administrative regulations and these Articles;

An additional item is added as item 7 of the Article:

The right to institute a legal action in the people’s court for stopping illegal acts and infringing acts if a resolution of a shareholders’ general meeting or board meeting violates laws and administrative regulations or infringes the lawful rights and interests of the shareholders, and the right to request the Company to institute a legal action for claiming compensation in accordance with laws if a Director, supervisor, manager or other officer of the Company violates laws, administrative regulations or these Articles in execution of his/her duties, causing damages to the Company.

The original item 7 becomes item 8.

Article 44 is amended as follows:

Each holder of ordinary shares of the Company shall enjoy the following rights:

the right to receive dividends and other distributions in proportion to the number of shares held;
the right to attend or to appoint a proxy to attend on his/her behalf shareholders’ general meetings and to vote thereat in proportion to the number of shares held;
the right to supervise the operation of the Company and to make suggestions or inquiries;
the right to transfer, give and pledge shares held in accordance with relevant laws, administrative regulations and these Articles;
the right to receive any relevant information in accordance with the Articles of the Company, including:
(1) the right to a copy of the Articles after payment of costs;

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PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX I

(2) the right to inspect and copy at reasonable charges any part of the register of shareholders; the personal particulars of each of the Directors, supervisors, managers and other officers including his/her present and former name(s) and alias(es); his/her principal address (residence); his/her nationality; his/her primary and all other occupations and duties; and his/her identification document and number.
(3) state of the Company’s share capital;
(4) reports showing the number and par value of shares repurchased by the Company since the end of the previous financial year, the aggregate amount paid by the Company for the shares repurchased and the maximum and minimum price paid, in respect of each class of shares repurchased; and
(5) minutes of shareholders’ meetings.
the right to participate in the distribution of the residual assets of the Company according to the number of share held upon the termination or liquidation of the Company;
the right to institute a legal action in the people’s court for stopping illegal acts and infringing acts if a resolution of a shareholders’ general meeting or board meeting violates laws and administrative regulations or infringes the lawful rights and interests of the shareholders, and the right to request the Company to institute a legal action for claiming compensation in accordance with laws if a Director, supervisor, manager or other officer of the Company violates laws, administrative regulations or these Articles in execution of his/her duties, causing damages to the Company.
other rights conferred by relevant laws, administrative regulations and these Articles.

Bases and explanation: Articles 35 and 37 of the Guide for Articles of Association; Article 4 of the Standards; adjust the format of the Article.

Article 45

An additional item is added to Article 45 as item 3 thereof:

“3. Except under the circumstances provided in laws and administrative regulations, the shareholders shall not withdraw their contributions to share capital;”

The original item 3 becomes item 4.

Bases and explanation: Article 38 of the Guide for Articles of Association.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 47

In item 2 and item 3 of paragraph 1 of this Article, “with 30 percent” is deleted.

An additional paragraph is added as paragraph 2 of this Article:

The expression “acting in concert” in this Article refers to two or more persons (including natural persons, legal persons or other organizations, institutions) acting under agreement (oral or written) to obtain or strengthen the control of a company through acquiring voting rights in the company by either of them.

Bases and explanation: Article 41 of the Guide for Articles of Association; the meaning of “more than” is added to the supplementary provisions of these Articles.

CHAPTER 8: SHAREHOLDERS’ GENERAL MEETINGS

Article 49

Item 13 of Article 49 is amended as follows:

“to consider interim proposals made by the shareholders representing more than 5 percent of the total amount of voting shares in the Company or by the supervisory committee at annual general meetings”.

Bases and explanation: Article 12 of the Regulatory Opinions

Article 51

Item 3 of paragraph 2 of Article 51 is amended as follows:

“the shareholder(s), alone or together, holding more than 10 percent of the total amount of voting shares in the Company request(s) in writing;”

Bases and explanation: Article 44 of the Guide for Articles of Association

Two additional items are added to paragraph 2 of this Article as item 5 and item 6:

the required number of independent Director(s) propose(s);
any other circumstances provided in these Articles.”

Bases and explanation: Article 5 of the Guiding Opinions.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 51 is amended as follows:

A shareholders’ general meeting shall either be an annual general meeting or an extraordinary general meeting shall be convened by the Board, annual general meetings are held once every year within six months after the end of a financial year.

The Board shall convene an extraordinary general meeting within two months of the occurrence of any one of the following events:

the number of Directors is less than the number provided for in the Company Law or less than two-thirds of the number prescribed in the Articles;
the Company’s unaccounted losses amount to one-third of its share capital;
the shareholder(s), alone or together, holding more than 10 percent of the total amount of voting shares in the Company request(s) in writing;
when the Board considers necessary or upon the request of the supervisory committee.
the required number of independent Director(s) propose(s);
any other circumstances provided in these Articles.

Article 53

Article 53 is amended as follows:

Proposals of shareholders’ general meeting shall mean specific proposals relating to matters which shall be discussed at shareholders’ general meeting and such specific proposals shall be resolved thereat. The contents of the proposals of shareholders’ general meeting shall not be in conflict with the provisions of laws, administrative regulations and these Articles, and shall be within the business scope of the Company and the scope of duties of shareholders’ general meeting. The proposals shall have a clear subject for discussion and contain specific resolution matters, and shall be submitted or sent to the Board of the Company in writing. If the proposal is to modify any matters relating to a resolution of a last shareholders’ general meeting, the content of the proposal shall be complete and shall not contain only modifications. Matters listed as “other matters” without specific contents shall not be deemed as proposals and shall not be voted at shareholders’ general meeting.

The Board shall list the matters to be discussed at the forthcoming shareholders’ general meeting in the notice of the meeting, and make sufficient disclosure of the contents of all the proposals put forward by the Board. No new proposal shall be put forward by the Board after dispatch of the notice of meeting. Any amendments to the original proposals shall be announced 15 days preceding the date of the shareholders’ general meeting, failing which the date of the shareholders’ meeting shall be postponed accordingly in order to ensure an interval of at least 15 days is available.

Bases and explanation: Articles 9, 10 and 11 of the Regulatory Opinions.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 54

The following article is added as Article 54:

The shareholder(s), alone or together, holding more than 5 percent of the total amount of voting shares in the Company, or the supervisory committee may put forward interim proposals at annual general meeting and the Company shall include in the agenda of the meeting any of the matters contained in the proposals which are within the scope of responsibilities of the general meeting.

If an interim proposals involve new matters which have not been listed in the notice of the annual general meeting issued by the Board, the proposer shall submit the interim proposal to the Board 10 days prior to the date of the annual general meeting for consideration by the Board in accordance with the provisions of laws, regulations, rules, standard documents and the Listing Rules of the stock exchange on which the shares of the Company are listed with respect to issues such as whether the proposal is directly related to the Company, whether the proposal is within the scope of responsibilities of the shareholders’ general meeting, and the procedures involved. If the Board decides to include the proposal in the agenda of the meeting, an announcement shall be made in accordance with the relevant provisions.

Bases and explanation: Articles 12 and 13 of the Regulatory Opinions.

Article 55

The original Article 54 becomes Article 55.

Article 56

Two additional items are added to the original Article 55 as item 9 and item 10 thereof:

“9. the date of recording the shareholding of shareholders entitled to attend the shareholders’ general meeting;”
“10. the name and telephone number of the permanent contact person(s) for the general meetings.”

Bases and explanation: Article 48 of the Guide for Articles of Association.

Article 57, Article 58

The original Article 56 and Article 57 become Article 57 and Article 58 respectively.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 59

The original Article 58 is amended as follows:

Any shareholder entitled to attend and vote at a meeting of the Company shall be entitled to appoint one or more other persons (whether a shareholder or not) as his/her proxy to attend and vote on behalf of him/her, and a proxy so appointed shall:

have the same rights as the shareholder to speak at the meeting;
have the authority to demand or join in demanding a poll; and
have the right to vote by a show of hands or on a poll provided that where a shareholder has appointed more than one proxy, such proxies may only vote on a poll.

Bases and explanation: Add serial number to the items.

Article 60

The serial numbers at the beginning of paragraph 1 and paragraph 2 of the original Article 59 are deleted.

Articles 61, 62, 63, 64

The original Articles 60, 61, 62, 63 become Articles 61, 62, 63, 64 respectively.

Article 65

The original Article 64 is amended as follows:

On a poll, a shareholder (including proxies) shall exercise the voting rights in accordance with the voting rights represented by the total number of shares he/she holds. Except the relevant PRC laws, regulations, rules or regulatory documents provide otherwise, each share shall carry one vote.

Bases and explanation: The shareholder voting system shall be improved.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 66

The first paragraph of the original Article 65 is amended as follows:

At any meeting of the shareholders a resolution put to the vote of the meeting shall be decided on the show of hands unless a poll is demanded (before or after any vote by the show of hands) the following persons:

the chairman of the meeting;
at least two shareholders or proxies having the right to vote;
one or more shareholders or proxies having more than 10 percent of all shares carrying the right to vote at the meeting.

Bases and explanation: Add serial number to the items.

Article 67, Article 68

The original Articles 66 and 67 become Articles 67 and 68 respectively.

Article 69

In the original Article 68, “votes for for” is changed to “votes for”.

Article 70

Two additional items are added to the original Article 69 as items 1 and 6 thereof and the serial numbers of the original items are changed accordingly. This Article is amended as follows:

The following matters shall be resolved by ordinary resolutions at shareholders’ general meetings:

deciding on the business objectives of the Company;
work reports of the Board and supervisory committee;
plans for profit distribution and plans for making up losses drafted by the Board;
appointment and removal of members of the Board and supervisory committee, and the amount of their remuneration and method of payment;
the Company’s budget and final accounts, balance sheet, profit statement and other financial reports;
appointment and termination of appointment of and non-renewal of appointment an accounting firm;

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

matters other than those required by relevant laws, administrative regulations or the Articles to be resolved by special resolutions.

Bases and explanation: The amendments are made based on the responsibilities of shareholders’ general meeting.

Article 71

The original Article 70 becomes Article 71, and an additional item is added as item 1 thereof:

deciding on the investment proposals of the Company;

The original item 1 becomes item 2 and the words of “or repurchase of shares” is added. The serial numbers of the following items are changed accordingly.

Article 72

The original Article 71 is amended as follows:

The following procedures should be followed when the shareholders request the convening of extraordinary general meeting or class shareholders’ meetings:

The shareholder(s), alone or together, holding an aggregate of more than 10 percent of the voting shares may make a request in writing by signing on one or more copies of a document in the same form and contents to the Board to convene an extraordinary general meeting or a class shareholders’ meeting, stating the matters to be considered at the meeting. Upon receipt of the above-mentioned written request from the shareholder(s), the Board shall make a decision within 15 days in accordance with laws, administrative regulations, these Articles and other relevant provisions, notify the proposing shareholder(s) of the decision, and report it to the branch of China Securities Regulatory Commission and the stock exchange in the place where the Company is situated.
Where the Board decides to convene an extraordinary general meeting or class shareholders’ meeting, it shall give the notice of the extraordinary general meeting or class shareholders’ meeting and any changes to the original proposals in the notice shall be made with the consent of the proposing shareholder(s). No new proposals shall be put forward by the Board after the notice is issued. The time of convening the shareholders’ meeting shall not be changed or postponed without the consent of the proposing shareholder(s).
Where the Board considers that the above-mentioned request is in violation of laws, administrative regulations, these Articles and other relevant provisions, it shall decide not to convene the extraordinary general meeting or class shareholders’ meeting and notify the proposing shareholder(s) of its decision. The proposing shareholder(s) may, within 15 days of receipt of the notice, decide not to convene the meeting or give notice of the meeting by himself/themselves.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Where the Board neither gives notice of the extraordinary general meeting or class shareholders’ meeting nor notifies the proposing shareholder(s) of its decision not to convene the meeting within 30 days upon receipt of the above-mentioned request, the proposing shareholder(s) may convene the meeting by himself/themselves within 4 months of the date of receipt of the request by the Board.
Where the proposing shareholder(s) decide(s) not to convene the extraordinary general meeting or the class shareholders’ meeting, the shareholder(s) shall report to the branch of China Securities Regulatory Commission and the stock exchange in the place where the Company is situated.
Where the proposing shareholder(s) decide(s) to convene the extraordinary general meeting or class shareholders’ meeting by himself/themselves, the shareholder(s) shall notify the Board in writing, and give a notice of the meeting in writing after reporting to the branch of China Securities Regulatory Commission and the stock exchange in the place where the Company is situated. The procedures for the extraordinary general meeting or class shareholders’ meeting convened by the proposing shareholder(s) shall be, as far as possible, the same as those for the meeting convened by the Board. The notice of the meeting shall comply with the following provisions:
(1) No new contents shall be added to the proposals. Otherwise, the proposing shareholders shall, in accordance with the above-mentioned procedures, make another request to the Board with respect to convening a shareholders’ meeting.
(2) The place for holding the meeting shall be the place where the Company is situated.
Where the proposing shareholder(s) decide(s) to convene the extraordinary general meeting or class shareholders’ meeting, the Board or the secretary of the board shall perform their duties effectively to ensure that the meeting is convened in normal order. The meeting shall be presided over by the chairman of the board. If the chairman is not able to perform its duties for special reasons, the meeting shall be presided over by the deputy chairman or other Directors designated by the chairman. The meeting must be attended by the secretary to the Board. The Board shall engage a lawyer qualified to practise in the PRC to give a legal opinion in accordance with laws. The reasonable expenses for the meeting shall be borne by the Company. Where the chairman is not able to preside over the meeting and has not designated a Director to preside over the meeting, such meeting may be presided over by the proposing shareholder(s) after reporting for record to the branch of China Securities Regulatory Commission in the place where the Company is situated.

Bases and explanation: Articles 21, 22, 23, 24, 25 and 26 of the Regulatory Opinions.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 73

The following article is added as Article 73:

The supervisory committee may propose to the Board to convene an extraordinary general meeting. The Board shall, within 15 days of receipt of the supervisory committee’s written proposal for convening an extraordinary general meeting, give a notice of extraordinary general meeting and the procedures for convening such meeting shall comply with the provisions of these Articles.

Bases and explanation: Article 19 and Article 20 of the Regulatory Opinions.

Article 74

The following article is added as Article 74:

When the shareholder(s), alone or together, holding more than 10 percent of the total amount of voting shares in the Company propose(s) to the Board to convene an extraordinary general meeting or class shareholders’ meeting and when the supervisory committee proposes to the Board to convene an extraordinary general meeting, the subject to be considered at the meeting and the proposals with complete content shall be submitted to the Board in writing. The written proposals shall be reported to the branch of China Securities Regulatory Commission and the stock exchange in the place where the Company is situated for record. The proposing shareholder(s) or the supervisory committee shall ensure that the contents of the proposals are in compliance with laws, administrative regulations and these Articles.

Bases and explanation: Article 19 of the Regulatory Opinions.

Article 75

The following article is added as Article 75:

The shareholder(s) involved in a connected transaction shall not vote on the connected transaction at a shareholders’ meeting and the voting rights held by such shareholder(s) shall not be counted into the total amount of voting shares at the shareholders’ meeting.

Bases and explanation: Article 34 of the Regulatory Opinions.

Article 76

The following article is added as Article 76:

Pursuant to the provisions of the Listing Rules, if a shareholder is required to waive his/ her voting rights or is restricted to vote for or against a resolution, any vote cast by such shareholder (including its proxy) in breach of such requirement or restriction shall not be counted into the total amount of voting shares at the shareholders’ meeting.

Bases and explanation: Section 14 of Appendix 3 of the Listing Rules.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 77

The original Article 72 is amended as follows:

Shareholders’ general meetings shall be convened by the Board in accordance with laws and presided over by the Chairman of the board who shall act as a chairman at such meeting. If the Chairman of the board is unable to attend for whatever reasons, the Vice-Chairman of the board or other Directors designated by the Chairman of the board shall preside over and act as chairman at the meeting. Where both the Chairman and the Vice-Chairman of the board are unable to attend and no one has been designated by the Chairman of the board, the Board may specify a Director to preside over and act as chairman at the meeting. If no chairman is appointed for a meeting by the Board, shareholders present at the meeting may elect one shareholder to preside over the meeting and act as chairman. If, for any reason, such shareholder is not able to preside over the meeting, the shareholder, whether attending in person or by proxy, with the largest number of shares with voting rights should preside over and act as chairman of the meeting.

Bases and explanation: Article 46 of the Guide for Articles of Association.

Article 78

The original Article 73 is amended as follows:

At a shareholders’ general meeting, the chairman shall decide whether a resolution is adopted based on the result of voting. His/her decision shall be announced to the meeting, recorded in the minutes of meeting and shall be final. The Company shall make information disclosure of the relevant matters relating to the resolutions of shareholders’ general meeting pursuant to applicable laws and the relevant provisions of the stock exchange on which the Company’s shares are listed.

Bases and explanation: Contents about announcement of matters relating to resolutions of shareholders’ general meeting are added based on Article 87 of the Standards.

Article 79, Article 80, Article 81

The original Articles 74, 75 and 76 become Articles 79, 80 and 81 respectively.

CHAPTER 9: SPECIAL PROCEDURES FOR VOTING BY HOLDERS OF DIFFERENT CLASSES OF SHARES

Article 82

The original Article 77 becomes Article 82.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 83

The original Article 78 is amended as follows:

If the Company intends to vary or abrogate rights attached to any class of shares it must obtain the approval of shareholders in a general meeting by way of a special resolution and by a resolution of the Shareholders of the affected class passed at a separate meeting conducted in accordance with the provisions of Articles 85 to 89.

Article 84

The original Article 79 becomes Article 84.

Article 85

The original Article 80 is amended as follows:

Shareholders of the affected class, whether or not having the right to vote at general meetings, shall nevertheless have the rights to vote at class meetings in respect of matters concerning paragraphs 2 to 8, 11 and 12 in Article 84 above, but interested shareholder(s) shall not be entitled to vote at class meetings.

An “interested shareholder” mentioned in the preceding paragraph is:

in the case of a repurchase of shares made under Article 24 by a general offer to all shareholders to repurchase in the same ratio or by open trading on a stock exchange, an interested shareholder, as defined in Article 47;
in the case of a repurchase of shares by an off-market contract under Article 24, a holder of the relevant shares relating to the contract;
in the case of a restructuring of the Company, a shareholder of a class who bears a less than proportionate burden imposed on other shareholders of that class under the proposed restructuring or who has an interest in the proposed restructuring different from that of other shareholders of that class.

Bases and explanation: Amend the serial number of the articles referred to in this Article according to the revised order of the articles.

Article 86

In the original Article 81, “Article 80” is changed to “Article 85”.

Article 87, Article 88

The original Articles 82 and 83 become Articles 87 and 88 respectively.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 89

In the original Article 84, “the State Council Securities Commission” in item 2 of paragraph 2 is changed to “the State Council securities regulatory authority”.

CHAPTER 10: THE BOARD

Article 90

The original Article 85 is amended as follows:

The Company shall establish a Board, which shall report to the shareholders’ general meeting. Directors shall be natural persons.

The Board shall consist of 15 members, of which one shall be the Chairman and one shall be Vice-Chairmen. The composition, the number of independent Directors and the formation of the Board shall comply with the requirements of laws, administrative regulations, rules and regulatory documents.

Bases and explanation: Article 77 of the Guide for Articles of Association and Article 1 of the Guiding Opinions.

Article 91

The original Article 86 is amended as follows:

The Directors shall be elected by shareholders at general meetings. The term of office of a Director is 3 years. Upon expiry, the term of office of a Director is renewable upon reappointment or re-election. The term of re-appointment of an independent Director shall not exceed 6 years.

Bases and explanation: Article 4 of the Guiding Opinions.

Article 92

The following article is added as Article 92:

The list of candidates for Director shall be submitted to a shareholders’ meeting for consideration in the form of proposal.

Candidates for non-independent Director shall be nominated by shareholder(s), alone or together, holding more than 5 percent of the total amount of voting shares in the Company or by the Board and elected at shareholders’ meeting.

Candidates for independent Director shall be nominated by shareholder(s), alone or together, holding more than 1 percent of the total amount of voting shares in the Company or by the Board, supervisory committee and elected at shareholders’ meeting.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

When the shareholder(s), alone or together, holding more than 5 percent of the total amount of voting shares in the Company put(s) forward interim proposal at an annual general meeting for election of non-independent Directors, the proposal relating to the nomination of candidates and the written notice from the candidates stating their acceptance of the nomination shall be submitted to the Company one day after issue of the notice of annual general meeting but no later than 10 days before the annual general meeting is convened.

Bases and explanation: Article 67 of the Guide for Articles of Association, Article 28 of the Standards, Article 4 of the Guiding Opinions, sections 4.(4) and 4(5) of Appendix 3 of the Listing Rules.

Article 93

The following article is added as Article 93:

Investigations on the qualifications of the candidates for non-independent Director and independent Director, solicitation for the opinions of the candidates, nomination procedures and information disclosure shall be conducted in compliance with the requirements of laws, administrative regulations, rules, regulatory documents and the Listing Rules of the stock exchange on which the Company’s shares are listed.

Bases and explanation: Articles 29 and 30 of the Standards and Article 4 of the Guiding Opinions

Article 94

The following article is added as Article 94:

Subject to compliance with the relevant laws and administrative regulations, the shareholders’ general meeting may by way of a special resolution remove a Director whose term of office has not expired (however, any claim which may arise in accordance with any contract shall not be affected).

A non-independent Director shall be deemed to be failed to perform his/her duties if he/ she does not attend in person or authorize another Director to attend two consecutive board meetings, and the Board shall propose at the shareholders’ general meeting for dismissal of such Director.

If an independent Director fails to attend in person three consecutive board meetings, the Board shall propose at shareholders’ general meeting for dismissal of such Director. Unless upon the occurrence of the above circumstances and the circumstances provided in the Company Law under which a person shall not act as Director, an independent Director shall not be dismissed without reason before expiry of his/her term of office. If an independent Director is dismissed before expiry of his/her term of office, the dismissal shall be disclosed by the Company as a special disclosed matter. If such Director considers his/her dismissal by the Company is without proper reasons, he/she may make public announcements.

Bases and explanation: Article 85 of the Guide for Articles of Association, Article 4 of the Guiding Opinion, Section 4.(3) of Appendix 3 of the Listing Rules.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 95

The following article is added as Article 95:

A Director may resign before expiry of his/her term of office. The resigning Director shall submit his/her resignation to the Board in writing. Independent Directors shall also give an explanation of matters relating to his/her resignation or matters as he/she thinks necessary for the shareholders and creditors of the Company to pay attention.

Where the number of Directors becomes less than the statutory minimum number of Directors by reason of resignation of a Director, or the number of independent Directors becomes less than the number required by laws, administrative regulations, rules or regulatory documents by reason of resignation of an independent Director, the resignation of such Director shall take effect after the vacancy is filled up.

The Board shall convene an extraordinary general meeting as soon as possible during its remaining term to elect a Director to fill up the vacancy arising from the resignation of Director. Before a decision is made by the shareholders’ general meeting regarding the election of Director, the power of the resigning Director and the Board shall be restricted to a reasonable extent during the remaining term.

Bases and explanation: Articles 86 and 87 of the Guide for Articles of Association, Article 4 of the Guiding Opinions.

Article 96

The original Article 87 is amended as follows:

The Board shall be accountable to the general meetings of the shareholders, and shall exercise the following functions and powers:

to convene general meetings and report on its work to the shareholders;
to implement resolutions of general meetings;
to decide on the Company’s business plans;
to decide on the Company’s investment proposals;
to formulate the Company’s proposed annual financial budgets and final accounts;
to formulate the Company’s profit distribution plans and plans for making up for losses;
to formulate proposals for the increase or reduction of the Company’s registered capital, the issue of corporate bonds or other securities and the listing plan;
to prepare substantial acquisition by the Company;

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

to prepare plans for the repurchase of shares or merger, division or dissolution of the Company;
subject to Article 97 of these Articles, and within the scope of authorization by the shareholders’ meeting, to decide on the disposal of the Company’s fixed assets and exercise of the Company’s financing and lending rights;
to decide any security provided by the Company to external parties;
to decide on the establishment of the Company’s internal management structure;
to appoint or dismiss the Company’s managers and secretary to the Board, and pursuant to the managers’ nominations to appoint or dismiss the deputy general managers and financial officers of the Company and to decide on their remuneration and rewards;
to formulate the Company’s basic management system;
to formulate plans for the amendment to the Company’s Articles of Association;
to be responsible for information disclosure of the Company;
to propose to the shareholders’ general meeting to appoint or replace the accounting firm acting as the Company’s auditor;
to hear working reports of managers and examine their work;
to decide on the wage level and the welfare and bonus plan of the Company;
to establish special committees, appoint and remove the relevant members in accordance with the resolutions of shareholders’ general meeting;
to decide on other important affairs and administrative matters which are not required in these Articles to be decided at the shareholders’ general meetings.
to exercise other functions and powers specified by laws, administrative regulations and these Articles and conferred at the shareholders’ general meetings.

The special committees mentioned in paragraph 20 above shall comprise one or more Director(s) and their composition shall comply with the relevant provisions. Members of the special committees shall assist the Board in the exercise of its functions and powers under the authority of the Board.

Resolutions relating to the above, with the exception to items 4, 7, 8, 9, 11 and 15 above which require the consent of two-thirds or more of the Directors through voting, shall require the consent of more than half of the Directors.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Bases and explanation: Article 94 of the Guide for Articles of Association and Article 2 of the Notice on Several Issues Concerning the Regulation of Transaction of Funds Between Listed Companies and their Affiliates and the Provision of Security to External Parties by Listed Companies.

Article 97

The original Article 88 becomes Article 97.

Article 98

The following article is added as Article 98:

The Chairman and Vice Chairman of the Board shall be Directors of the Company and shall be elected and removed by a majority of the Board.

Bases and explanation: Article 98 of the Guide for Articles of Association.

Article 99

The original Article 89 is amended as follows:

The Chairman of the Board shall exercise the following functions and powers:

to preside over shareholders’ general meetings, and to convene and preside over meetings of the Board;
to enforce and inspect the implementation of resolutions of the Board;
to sign share certificates, bonds and other marketable securities of the Company;
to sign material documents of the Board and other documents which shall be signed by the legal representative of the Company
to exercise the functions and powers of the legal representative;
to exercise special powers which are in compliance with laws and for the benefits of the Company, to handle affairs of the Company on the occurrence of force majeure events such as serious natural disasters, and report the same to the Company’s Board and shareholders’ general meeting subsequently;
other functions and powers defined and conferred by the Board.

With the authorization of the Board, the Chairman of the board may exercise part of the functions and powers of the Board when the board is not in session, provided that the authorization shall be clear and specific. Matters involving substantial interest of the Company shall be decided by the Board.

Where the Chairman of the board is unable to exercise his/her functions and powers, he/ she may designate the Vice-Chairman or other Directors to act on his/her behalf.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Bases and explanation: Article 99 of the Guide for Articles of Association and Article 48 of the Standards.

Article 100

The following article is added as Article 100:

In addition to the functions and powers conferred on Directors by the Company Law and other laws and administrative regulations, independent Directors shall also have the following special functions and powers:

Any proposed substantial connected transaction between the Company and a connected party with a total value equal to or more than the value provided in laws, administrative regulations, rules, regulatory documents or provisions of relevant departments shall be subject to the permission of independent shareholders before submitting to the Board for discussion in accordance with the relevant provisions. Before making a decision, independent Directors may engage an intermediary institution to issue a report of independent financial advisor to serve as the base for making decision.
to propose to the Board to appoint or dismiss an accounting firm;
to propose to the Board to convene an extraordinary general meeting;
to propose to convene a meeting of the Board;
to engage external auditors and advisors independently;
to solicit for voting rights publicly from shareholders before the convention of a shareholders’ general meeting.

The expenses incurred by independent Directors for engaging intermediary institutions and exercising other functions and powers shall be borne by the Company.

The above functions and powers shall be exercised by an independent Director with the consent of more than half of the number of independent Directors.

If the above proposals are not adopted or the above functions and powers cannot be exercised in a normal manner, the relevant situation shall be disclosed by the Company.

In addition to the above functions and powers, independent Directors shall give independent advice to the Board or shareholders’ general meeting on matters which require the independent advice of independent Directors in accordance with laws.

Bases and explanation: Articles 5, 6 and 7 of the Guiding Opinion.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 101

The original Article 90 is amended as follows:

Meetings of the Board shall be held at least twice per annum, to be convened by the Chairman of the Board who shall notify all the Directors 10 days before the date of such a meeting.

The Chairman of the Board shall convene an ad hoc Directors’ meeting within 7 working days on the occurrence of any of the following:

when it is deemed as necessary by the Chairman of the Board;
when jointly proposed by more than one third of Directors;
when jointly proposed by more than half of independent Directors;
when proposed by the supervisory committee;
when proposed by the managers.

Bases and explanation: Article 102 of the Guide for Articles of Association.

Article 102

Item 5 is deleted from the original Article 91. The article is amended as follows:

The manner and timing of giving notices to convene a regular Directors’ meeting and an ad hoc Directors’ meeting are as follows:

In the event that the time and venue of regular meetings of the Board have been decided in advance by the Board, notices need not be given for the convening of such meetings.
In the event that the time and venue of meetings of the Board have not been decided in advance by the Board, the Chairman of the board shall, by telex, telegram, fax, courier, registered mail or hand delivery, inform all Directors of the time and venue of the meeting of the Board at least 10 days or at most 30 days prior to such meetings.
The notice shall be written in Chinese, but an English version of the notice may be attached if necessary. Such notice shall include the agenda, topic for discussion, cause and the date of issue of the notice.
Where a Director has attended a meeting, and has not made complaints for not having received the notice of meeting prior to and during such meeting, it shall be deemed that the notice of meeting has been issued to the Director.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Bases and explanation: contents not related to the manner and timing of giving notices to convene a Directors’ meeting are deleted based on Article 104 of the Guide for Articles of Association.

Article 103

Paragraph 2 of the original Article 92 is amended as follows:

Each Director shall have one vote. Unless otherwise these Articles require, resolutions of the board are required to be passed by more than half of all Directors. However, when the numbers of votes for and against are equal, the Chairman of the board shall have the right to cast a second vote.

Bases and explanation: the conditions for passing resolutions of the board are revised.

Article 104

The following article is added as Article 104:

The ad hoc meetings of the Board may be conducted by way of telephone conference or by means of similar communications facilities. When convening such meetings, provided that all attending Directors can clearly hear what the other Directors are saying, and can communicate with one another, it shall be deemed that all attending Directors have attended such meeting in person.

The ad hoc meetings of the Board may be conducted by way of written resolutions instead of convening a board meeting provided that the Directors may fully express their opinions. The draft of such resolutions shall be sent to each Director by hand, post, telegram or facsimile. Where the board resolutions have been distributed to all Directors, signed by the minimum quorum of Directors required by laws, administrative regulations and these Articles and returned to the secretary to the Board of the Company by the above methods, such resolutions shall become resolutions of the Board.

Bases and explanation: revised based on Article 106 of the Guide for Articles of Association and the amendments to these Articles.

Article 105

Paragraph 1 of the original Article 93 is amended as follows:

Meetings of the Board shall be attended by the Directors in person. If a Director is unable to attend a board meeting, he/she may appoint another Director by a written power of attorney to attend on his/her behalf. Such a power of attorney shall specify the scope of the authorization. An independent Director must not appoint a non-independent Director to attend meetings of the Board on his/her behalf.

Bases and explanation: the provision that an independent Director must not appoint a nonindependent Director to attend meetings of the Board on his/her behalf is added.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 106

Item 2 of the original Article 94 is deleted. The article is amended as follows:

The Board shall keep minutes of its decisions on the matters considered. The Directors and secretary attending the meeting shall sign the minutes of the meeting. The minutes of each board meeting shall be provided for review by to of the Directors in a timely manner. The Directors shall be responsible for the resolutions of the Board. If a resolution of the Board violates the laws, administrative regulations or the Articles as a result of which the Company sustains serious losses, the Directors participating in the resolution are liable to compensate the Company. However, if it can be proved that a Director expressly objected to the resolution when the resolution was voted on, and that such objection was recorded in the minutes of the meeting such Director may be released from liability.

Bases and explanation: revised based on the amendments to these Articles.

CHAPTER 11: SECRETARY TO THE BOARD

Article 107

The original Article 95 becomes Article 107.

Article 108

The original Article 96 is amended as follows:

The secretary to the Board of the Company shall be appointed by the Board and be a natural person who has the requisite professional knowledge and experience. The secretary to the Board can be one or two natural persons appointed or dismissed by the Board. The qualifications for the position of secretary to the Board shall comply with the provisions of documents such as the Listing Rules of the stock exchange on which the shares of the Company are listed. The circumstances provided in the Company Law and the relevant laws, administrative regulations, rules and regulatory documents under which a person must not act as Director also apply to the secretary to the Board.

The primary responsibilities of the secretary to the Board are:

to ensure that the Company has complete constitutional documents and records;
to prepare and submit the reports and documents required by the relevant State departments or authority-in-charge to be issued by the Board or shareholders’ general meeting;
to arrange for Director’s meetings and shareholders’ general meetings, and be responsible for recording of the meetings and keeping the meeting documents and records;
to be responsible for information disclosure of the Company and ensure that the information disclosure is made in a timely, accurate, lawful, true and complete manner;

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

to ensure that the Company’s register(s) of shareholders is properly maintained, and that persons entitled to records and documents of the Company have access to such records and documents without delay.
any other responsibilities provided by these Articles and the Listing Rules of the stock exchange on which the Company’s shares are listed.

Bases and explanation: Articles 114 and 115 of the Guide for Articles of Association.

Article 109

The original Article 97 is amended as follows:

A Director or other officer of the Company, who is not the Company’s manager (excluding deputy positions) or person-in-charge of finance, may concurrently hold the office of secretary to the Board. Officers of the Company’s controlling shareholder or an accountant of the accounting firm appointed by the Company shall not hold the office of secretary to the Board concurrently.

Where the secretary to the Board is also a Director and an action is required to be taken by a Director and the secretary to the Board separately, a person who is both a secretary to the Board and Director may not take the action in his/her dual capacity.

Bases and explanation: Article 6 of the Overseas Secretaries to Board of Directors of Companies Listed Overseas Working Guidelines and Article 1 of the Further Standardizing Operations and Intensifying Reform of Companies Listed Outside China Opinion.

CHAPTER 12 MANAGER

Article 110

Two additional items are added to the original Article 98 as items 2 and 3 thereof:

Directors may take office as managers, deputy managers or other officers but the number of Directors who take office as managers, deputy managers or other officers shall not exceed 50 percent of the total number of Directors.

The term of office of managers and deputy managers shall be three years and is renewable upon re-election or reappointment.

Bases and explanation: Article 118 of Guide for Articles of Association.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 111

Two additional items are added to the original Article 99 as items 9 and 10 thereof and the original item 9 becomes item 11. The article is amended as follows:

The manager is accountable to the Board and shall exercise the following functions and powers:

to be in charge of the production, operation and management of the Company and to organize the implementation of the resolutions of the Board;
to organize the implementation of the Company’s annual business plans and investment plans;
to devise the plan for establishment of the Company’s internal management organisation;
to devise the Company’s basic management system;
to formulate the basic rules and regulations of the Company;
to request the appointment or dismissal of the Company’s deputy manager and personnel in charge of financial affairs;
to appoint or dismiss management staff other than those who should be appointed or dismissed by the Board;
without prejudice to item 10 of Article 96, to exercise investment, borrowing and lending powers in respect of fixed assets items representing less than 1 percent of the share capital and to decide on the disposal of fixed assets representing less than 1 percent of the share capital;
to fix the wages, welfare benefits, award and penalty system of employees and decide on the appointment and dismissal of employees;
to propose convening of ad hoc Director’s meetings;
other functions and powers conferred by the Board or the Articles.

Bases and explanation: Article 121 of the Guide for Articles of Association.

Article 112

The original Article 100 becomes Article 112.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 113

An additional paragraph is added to the original Article 101 as paragraph 2. The article is amended as follows:

In the exercise of his/her functions and powers, the manager shall abide by the laws, administrative regulations and these Articles, and shall act in good faith and with diligence.

Managers shall report to the Board and supervisory committee the details of execution and implementation of material contracts, details of use of capital and earnings and losses of the Company and shall ensure that such report is true.

Bases and explanation: Article 123 of the Guide for Articles of Association.

CHAPTER 13: SUPERVISORY COMMITTEE

Article 114

The original Article 102 becomes Article 114.

Article 115

The original Article 103 is amended as follows:

The supervisory committee shall consist of 4 members, one of whom shall be the Chairman and one of whom shall be the Vice-Chairman of the committee. 3 supervisor(s) shall be representative(s) of shareholders and 1 supervisor(s) shall be representative(s) of employees. The number of external supervisors (supervisors who do not hold office in the Company) shall be not less than half of the total number of members of the Committee.

The term of office of supervisors shall be 3 years, renewable upon re-election or reappointment.

The appointment and dismissal of the Chairman and Vice-Chairman of the supervisory committee shall be determined by a resolution passed by two-thirds or more of the members of the committee.

Bases and explanation: Articles 129 and 131 of the Guide for Articles of Association, Article 7 of the Further Standardizing Operations and Intensifying Reform of Companies Listed Outside China Opinion.

Article 116

The original Article 104 is amended as follows:

The list of candidates for supervisors representing shareholders shall be submitted by way of proposal to the shareholders’ general meeting for approval. The candidates for supervisors representing shareholders shall be nominated by shareholder(s), alone or together, holding 5 percent or more of the voting shares or by the supervisory committee and shall be elected or removed by shareholders’ general meeting; while supervisors representing employees shall be elected or removed democratically by the employees of the Company.

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Bases and explanation: Article 67 of the Guide for Articles of Association.

Article 117

The original Article 105 is amended as follows:

Directors, manager(s), personnel in charge of financial affairs and secretary to the Board of the Company shall not take office as supervisors.

Bases and explanations: Article 130 of the Guide for Articles of Association.

Article 118

The following Article is added as Article 118:

Supervisors not attending meetings of the Supervisors consecutively twice shall be regarded as non-performance of duty and shall be removed in general meetings or meetings of employees’ representative.

Bases and explanations: Article 132 of the Guide for Articles of Association.

Article 119

The following Article is added as Article 119:

Supervisors may resign before expiry of office. The requirements relating to the resignation of Directors in Article 10 of Articles are applicable to Supervisors.

Bases and explanations: Article 133 of the Guide for Articles of Association.

Article 120

The original Article 106 is now amended as follows:

The supervisory committee shall convene at least twice per annum. Meetings of the supervisory committee shall be convened and presided over by the chairman of the committee. In event that the chairman of the supervisory committee cannot perform his/her duties, he/she should entrust the Vice-Chairman of the supervisory committee to perform the duties on his/ her behalf.

Bases and explanations: Amendments are made to that Article after considering the actual situation of the Company.

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PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX I

Article 121

Three additional items are added to the original Article 107 as item 6, item 7 and item 8 and amendments are made to item 1 and item 10 as follows:

The supervisory committee shall be accountable to the shareholders’ general meetings and shall exercise the following functions and powers:

to examine the Company’s financial affairs and appoint another accounting firm in the name of the Company to review the Company’s financial affairs whenever necessary;
to supervise the Directors, the manager(s) and other officers to see whether or not they have violated any laws, administrative regulations or the Articles in the course of their performance of their duties at the Company;
if an act of a Director, manager or other officer is harmful to the Company’s interests, to require him/her to correct such act;
to verify the financial information such as financial reports, business reports and profit distribution plans etc. proposed by the Board to be submitted to the shareholders’ general meeting and, where queries are raised, to appoint in the name of the Company registered accountants or practising auditors to assist in the reexamination thereof;
to propose the holding of extraordinary general meeting;
to propose interim proposals at general meetings;
to propose the holding of ad hoc meetings of the Board;
to require the Directors, the manager(s), debuty manager(s), personnel in charge of financial affairs, secretary to the Board, internal and external auditors to attend meetings of the supervisory committee and to answer matters of concerns of the supervisory committee;
to represent the Company in negotiations with Directors or in institution of proceedings against Directors;
other functions and powers provided for in the Articles.

Supervisors shall attend meetings of the Board.

Bases and explanation: Article 136 of the Guide for Articles of Association, Article 7 of the Further Standardizing Operations and Intensifying Reform of Companies Listed Outside China Opinion and Article 67 of the Standards.

Article 122

The original Article 108 becomes Article 122.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 123

The following Article is added as Article 123:

Minutes should be made for the meetings of the supervisory committee and the Supervisors attending and the transcriber shall sign on the minutes. Supervisors are entitled to make explanatory records for statements made by them at the meetings. Minutes of the meetings of the supervisory committee shall be kept by secretary to the Board as company files.

Bases and explanation: Article 142 of the Article of Association Guidelines.

Article 124, Article 125

The original Article 109, Article 110 become Article 124, Article 125

CHAPTER 14: QUALIFICATION AND OBLIGATIONS OF DIRECTORS, SUPERVISORS, MANAGER AND OFFICERS

Article 126

Two additional items are added to Article 111 as item 7 and item 11. The Article is amended as follows:

The following persons may not serve as a Director, supervisor, manager or officer of the Company:

persons with no civil capacity or with restricted civil capacity;
persons who have committed the offences of corruption, bribery, trespass of property, misappropriation of property or damaging the social economic order, and have been penalised due to the above offences, where less than five years have elapsed since the date of the completion of implementation of the penalty or persons who have committed crimes and have been deprived of their political rights due to such crimes, where less than five years have elapsed since the date of the completion of the implementation of such deprivation;
persons who were former Directors, factory chiefs or managers of a company or enterprise which has become bankrupt and been liquidated as a result of mismanagement and were personally liable for the bankruptcy of such company or enterprise, where less than three years have elapsed since the date of the completion of the bankruptcy and liquidation of the company or enterprise;
persons who were legal representatives of a company or enterprise which had its business licence revoked due to a violation of the law and who were personally liable, where less than three years have elapsed since the date of the revocation of the business licence;
persons who have failed to pay a relatively large debt when due;

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

persons who have committed criminal offences and are still under investigation by judicial authorities;
civil servants of the country;
persons who, according to relevant laws and administrative regulations, are not allowed to act as leaders of enterprises;
persons who are not natural persons;
persons who have been convicted of offences of violating provisions of the relevant securities laws and regulations, or offences relating to fraud or acting in bad faith, where less than 5 years have lapsed since the date of conviction.
persons who have been confirmed as being prohibited from participating in the market or have not been released from such prohibitation by the State Council securities regulatory authorities.

Bases and explanation: Rule 58 of the Company Law, Article 78, Article 119 and Article 130 of the Article of Association Guidelines.

Article 127

The following Article is added as Article 127:

The management personnel of the controlling shareholders of the Company shall not take the office as managers, debuty managers, personnel in charge of financial affairs and secretary to the Board.

Bases and explanation: Rule 1 of the Further Standardizing Operations and Intensifying Reform of Companies Listed Outside China Opinion.

Article 128

The following Article is added as Article 128:

Independent Directors shall meet the requirements corresponding to their powers. Person acting as Independent Directors should meet the following requirements:

possesses the qualifications to act as Directors of the Company in accordance with the relevant laws, administrative regulations and other relevant regulations;
conform with independence required by relevant laws, administrative regulations, department rules, the State Council securities regulatory authorities and the Listing Rules of the stock exchange on which the Company’s shares are listed;
possesses the basic knowledge of operation of listed company and is familiar with relevant laws and administrative regulations;

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PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX I

possesses 5 years or above experience in law, economics or other working experience necessary for performing duties of independent Director.
other conditions required by these Articles of Association.

Bases and explanation: Rule 2 of the Independent Directors’ Guiding Opinion.

Article 129

The following Article is added as Article 129:

Independent Directors shall have independence. Unless otherwise required by relevant laws, administrative regulations, department rules, regulatory documents and the Listing Rules of the stock exchange on which the Company’s shares are listed, the following persons cannot act as Independent Directors:

Persons working in the company or its subsidiaries and their immediate family members (means spouse, parents, children, etc.), persons of major social relationship (means siblings, parent-in-law, daughter-in-law, son-in-law, spouse of siblings and siblings of spouse etc.);
natural person shareholders directly or indirectly holding 1 percent or more in aggregate of the issued share capital of the Company or natural person shareholder of the top ten shareholders of the Company and their immediate family;
personnel and their direct relative working in shareholding units which directly or indirectly holding 5 percent or more in aggregate of the issued share capital of the Company or in the five largest shareholding units of the Company;
personnel having the above three conditions within the most recent one year;
personnel who provides financial, legal, consulting or other services to the Company or its subsidiaries;
persons who are prohibited to act as independent Directors by the State Council securities regulatory authorities;
persons who are prohibited to act as independent Directors by the Listing Rules.

Bases and explanation: Article 3 of the Independent Directors’ Guiding Opinion and Rule 3.13 of the Listing Rules.

Article 130

A paragraph is added to the original Article 112 as the second paragraph. That article is amended as follows:

The validity of the conduct of Directors, supervisors, manager or other officers who have acted on behalf of the Company with respect to third parties who have acted in good faith shall not be affected by any irregularity in the employment, election or qualification of the Directors, supervisors, manager or other officers.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Unless provided by these Articles or legally authorized by the Board and the supervisory committee, any Director, supervisor, manager or other officer of the Company shall not act on behalf of the Company, the Board or the supervisory committee in his/her own name. In the event that any Director, supervisor, manager or other officer of the Company acts in his/her own name where a third party may believe on a reasonable basis that such Director, supervisor, manager or other officer is a representative of the Company, the Board or the supervisory committee, such a person shall declare his/her position and capacity in advance.

Bases and explanation: Article 82 and Article 91 of Guide for Articles of Association.

Article 131 and Article 132

The original Article 113 and Article 114 become Article 131 and Article 132 respectively.

Article 133

Item 12 of the original Article 115 is amended as follows:

“12. without the informed consent of shareholders’ general meeting, not to disclose confidential information of the Company acquired while in office and not to use the information other than in furtherance of the interests of the Company, save and except that disclosure of such information to a court or other governmental authorities is permitted if:
(1) disclosure is made under compulsion of law;
(2) disclosure is required by public interest; or
(3) disclosure is required by the personal interest of the Director, supervisor, manager or other officer.”

Bases and explanation: the amendments are made to the format of the article.

Article 134

The original Article 116 is amended as follows:

The Directors, supervisors, manager or other officers of the Company shall not direct the following persons or authority (“connected persons”) to do what they are not permitted to do:

the spouse or minor child of the Director, supervisor, manager or other officer;
a trustee for the Director, supervisor, manager or other officer or of any person referred to in paragraph 1 above;
a partner of the Director, supervisor, manager or other officer or of any person referred to in paragraphs 1 and 2 above;

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

a company in which the Director, supervisor, manager or officer, alone or together with one or more persons referred to in paragraphs 1, 2 and 3 above or together with other Directors, supervisors, mangers or other officers has a de facto controlling interest;
the Directors, supervisors, managers or other officers to whom the controlling interests referred to in paragraph 4 above relate.

Bases and explanation: the amendments are made to the format of the article.

Article 135

An additional item is added to the original Article 117 as its first item. This article is amended as follows:

Any Directors, supervisors, managers or other officers in the period of office shall be liable for the indemnity of any losses incurred upon the company due to the absence from their duty without permission.

Before the resignations take effect or during the reasonable time thereafter, and during the reasonable time after the expiry of their terms of office, the fiduciary duty owed by the Directors, supervisors, manager and other officers will not necessarily cease to be owed, but their duty to keep confidential commercial secrets of the Company continues to be owed after the expiry of their term of office until such secrets become public information. The continuation of other duties shall be determined in accordance with the principles of equity, taking into consideration the time interval between the occurrence of an event and expiry of office, and the circumstances under which the said person leaves the Company.

Bases and explanation: Article 88, Article 89, Article 91 of Guide for Articles of Association

Article 136

The original Article 118 becomes to Article 136.

Article 137

The Chinese word “撤消 ” in the second section of the original Article 119 is changed to “ 撤銷 ”.

Article 138

The following article is added as Article 138:

A Director shall not vote at any meeting of the Board with respect to the approval of any contracts, transactions or arrangement under which he/she or any either his/her associate is entitled to material interests, and shall not be counted in the quorum of the meeting.

The aforementioned associate is a person as defined in Listing Rules.

Bases and explanation: Rule 4 (1) of Appendix 3 of the Listing Rules.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 139, Article 140, Article 141, Article 142

The original Article 120 to Article 123 become Article 139, Article 140, Article 141 and Article 142.

Article 143

The words of “Article 122” appeared in the original Article 124 is changed to “Article 141” and amendments are made to the numbering of the items. This Article is amended as follows:

A loan guarantee provided by the Company in breach of paragraph (1) of Article 141, that constitutes no violations of laws, administrative regulations and relevant provisions, shall not be enforced against the Company, unless:

it was provided in connection with a loan to a connected person of a Director, supervisor, manager or officer of the Company or its parent company and at the time the loan was advanced the lender did not know of the relevant circumstances.
any collateral provided by the Company has been lawfully disposed of by the lender to a bona fide purchaser.

Article 144

The original Article 125 becomes Article 144.

Article 145

The Chinese word “撤消 ” appeared in paragraph 2 of the original Article 126 is changed to “撤銷 ”.

Article 146

The original Article 127 becomes Article 146.

Article 147

The original Article 128 becomes Article 147.

CHAPTER 15 FINANCIAL AND ACCOUNTING SYSTEM AND PROFIT DISTRIBUTION

Article 148

The original Article 129 is amended as follows:

The company shall establish its own financial and accounting system in accordance with the relevant laws, administrative regulations and other national provisions.

Bases and explanation: Article 143 of Guide for Articles of Association.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 149

The original Article 130 is amended as follows:

The company shall prepare financial reports at the end of each financial year and prepare interim reports after the first six months of each financial year. Such financial reports shall be examined and verified in accordance with the laws.

Bases and explanation: Article 144 of Guide for Articles of Association.

Article 150

The original Article 131 becomes Article 150.

Article 151

The Chinese words of “股東大會年會 ” appeared in the original Article 132 is changed to “股東年會 ”.

Article 152 and Article 153

The original Article 133 and Article 134 become Article 152 and Article 153.

Article 154

The following article is added as Article 154:

The annual financial reports and interim financial reports indicating interim profit distribution shall include the following:

balance sheet;
profit statement;
profit distribution statement;
cash flow statement;
notes to the financial statement;
other documents required by the Listing Rules of the stock exchange where the Company listed.

If the Company doesn’t make an interim profit distribution, the interim financial report shall include financial statements and notes except the above sub-classes (3).

Bases and explanation: Article 145 of Guide for Articles of Association.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 155

The original Article 135 becomes Article 155.

Article 156

The original Article 136 becomes Article 156.

Article 157

The original Article 137 is now amended as follows:

The profits of the Company after making allowances for taxes and levies shall be applied in the following order:

making up of losses;
allocation to statutory common reserve;
allocation to statutory provident fund;
allocation to discretionary common reserve fund;
payment of dividends in respect of ordinary shares.

The detailed distribution proportions in respect of items 4 to 5 above for any year shall be formulated by the Board in accordance with the operational conditions and development requirements of the Company and shall be submitted to the shareholders’ general meeting for approval.

No dividend shall be paid before the Company has made up its losses and has made allocation to the statutory common reserve and statutory provident fund. No dividends, unless the same is not paid by the Company when due and payable, shall bear interest as against the Company.

The Company shall allocate 10 percent of its profits after tax to the statutory common reserve, provided that no allocation is required if the statutory common reserve shall have reached 50 percent of the registered capital of the Company.

The Company shall allocate 10 percent of its profits after tax to the statutory provident fund;

The discretionary common reserve fund shall be allocated separately out of the profits of the Company in accordance with the resolutions of shareholders’ general meetings.

Bases and explanation: The adjustment and amendments are made to the order and the format of the article.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 158

The following article is added as Article 158:

The common reserve includes the statutory common reserve, the discretionary common reserve fund and the capital common reserve.

The following sums shall be appropriated to the capital common reserve:

the amount of share premium arising from the issue of shares at a premium;
other income required by the State Council department in charge of finance to be appropriated to the capital common reserve.

The common reserve shall only be used for the following purposes:

to make up losses;
to expand the Company’s production operations; and
for conversion into share capital.

The Company may, upon approval by a resolution of shareholders’ general meeting, convert its common reserve into share capital and issue bonus shares to existing shareholders in proportion to their original shareholdings or increase the nominal value of each share. When converting the Company’s statutory common reserve into capital, the amount of such reserve remaining unconverted must not be less than 25 percent of the registered capital.

Bases and explanation: the adjustments are made to the order of the article.

Article 159

The following article is added as Article 159:

The Company shall allocate monies to its statutory provident fund and use the funds for the collective welfare of its employees.

Bases and explanation: Article 180 of Company law.

Article 160

The following article is added as Article 160

Subject to Article 158, annual dividends shall be paid in proportion to the shareholding of each shareholder within 6 months after the end of each financial year. The annual dividends shall be sanctioned by the shareholders’ general meetings but the amount of dividends payable shall not exceed the amount recommended by the Board. Unless otherwise resolved by the shareholders’ general meeting, the Board may distribute interim dividends or bonus.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

After the shareholders’ general meeting makes a resolution with respect to the profit distribution plan, the Board shall complete the distribution of dividends (or shares) within 2 months after the general meeting.

Bases and explanation: Article 150 of Guide for Articles of Association, and the adjustments are made to the order of the article.

Article 161

The original Article 138 is amended as follows:

The Company may distribute dividends by way of cash or bonus shares (or a combination of both).

Dividends or other distributions on ordinary shares shall be distributed and denominated in Renminbi.

Dividends or other distributions on domestic shares shall be paid in Renminbi.

Dividends or other distributions payable on overseas-listed foreign-investment shares listed in Hong Kong and London shall be paid in Hong Kong dollars. The conversion rate shall be the average of the closing Renminbi-Hong Kong dollar conversion rates quoted by the People’s Bank of China on each business day in the calendar week preceding the date of declaration of dividend or distributions.

When distributing dividends to shareholders, the Company shall make withholdings for tax payable on dividend payable to shareholders in accordance with PRC tax law.

When the Company distributes dividends in the form of shares, approval shall be obtained from the State examination and approval authority.

Bases and explanation: adjustments are made to the order and format of the article.

Article 162

The original Article 139 becomes Article 162.

Article 163

The following article is added as Article 163:

The Company shall adopt an internal audit system. It shall have specialized auditing staff to conduct internal audit and supervision of its revenues and expenditures and economic activities.

Bases and explanation: Article 152 of the Guide for Articles of Association.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 164

The following article is added as Article 164:

The Company’s internal audit system and the duties of the auditing staff shall be effected upon approval by the Board. The person-in-charge of audit shall be accountable to and report their work to the Board.

Bases and explanation: Article 153 of the Guide for Articles of Association.

CHAPTER 16: APPOINTMENT OF AUDIT FIRM

Article 165

The original Article 140 becomes Article 165.

Article 166

The original Article 141 is amended as follows:

The term of appointment of an audit firm appointed by the Company shall be one year commencing from the conclusion of the annual general meeting at which they are appointed until the conclusion of the next annual general meeting of the Company. The appointment may be renewed upon expiry of the appointment term.

Bases and explanation: the amendments to this article are made based on Article 154 of the Guide for Articles of Association.

Article 167, Article 168, Article 169

The original Article 142 to Article 144 become Articles 167, 168 and 169 respectively.

Article 170

The original Article 145 is amended as follows:

Remuneration of the audit firm and the manner by which it is determined shall be decided by shareholders in general meeting. Where the audit firm is appointed by the Board to fill up a vacancy, its remuneration shall be decided by the Board and reported to the shareholders in general meeting for approval.

Bases and explanation: this article is revised based on Article 158 of the Guide for Articles of Association.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 171

Paragraph 1 of the original Article 146 is revised according to the relevant provisions and the format of this article is modified. The article is amended as follows:

The appointment, dismissal or termination of the office of an audit firm by the Company shall be determined at shareholders’ general meetings and disclosed on the relevant newspapers in accordance with the applicable laws, administrative regulations, share Listing Rules and other relevant provisions and, where necessary, the reason for the replacement shall be stated, and reported to the State Council securities regulatory authorities and Chinese Institute of Certified Public Accountants for record.

The shareholders’ general meetings shall abide by the following provisions when proposing to pass a resolution regarding the appointment of an audit firm not currently serving the Company to fill the vacancy of auditor, or the renewal of terms of service of an audit firm appointed by the Board to fill the vacancy, or the dismissal of an audit firm before the expiry of its term:

When the Company appoints or dismisses an audit firm, written notice shall be sent 10 days prior to the date for convening shareholders’ general meeting to the audit firm to be appointed, the audit firm to be dismissed or the audit firm which has left its post during the accounting year.

“Leaving” includes dismissal, resignation and retirement.

In the event that the audit firm leaving office makes a statement in writing and requests the Company to inform shareholders of such statement, unless the Company receives the statement too late, the Company shall adopt the following measures:
(1) state on the notice issued for adoption of the resolution that the audit firm about to leave its post has made a statement;
(2) submit the copy of the statement as an appendix to the notice to the shareholders in the manner stipulated in the Articles.
In the event that the statement of the audit firm has not been despatched in accordance with the provisions in paragraph (2) of this Article, the audit firm concerned may request such statement to be read at the shareholders’ general meeting, and may make further statements.
The audit firm leaving its post shall be entitled to attend the following meetings:
(1) the shareholders’ general meeting at which its term of service would otherwise expire;
(2) the shareholders’ general meeting at which it is proposed to fill the vacancy caused by its dismissal;
(3) the shareholders’ general meeting convened as a result of its voluntary resignation.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The audit firm leaving service shall be entitled to obtain all notices of meeting of the aforementioned meetings and other information relating to such meetings; it shall also be entitled to present its views at the aforementioned meetings on matters in relation to its previous engagement as the audit firm of the Company.

Bases and explanation: Article 159 of the Guide for Articles of Association.

Article 172

In the original Article 147, the format of certain paragraphs and part of its content including paragraph 1 are amended. The article is amended as follows:

In the event of the dismissal or termination of the office of an audit firm, such audit firm which is to be dismissed or whose office is to be terminated shall be given notice in advance in accordance with the provisions of these Articles. Such audit firm shall have the right to present its views at shareholders’ general meetings. In the event that the audit firm considers that the dismissal or termination of its office is without proper reasons, it may appeal to the State Council securities regulatory authority or Chinese Institute of Certified Public Accountants. In the event that the audit firm resigns on its own initiative, such audit firm shall be required to inform the shareholders at shareholders’ general meeting whether or not there is any impropriety in the Company.

The audit firm may resign from office by a notice in writing deposited at the legal address of the Company. Any such notice shall be effective on the date on which it is deposited at the legal address of the company or on such later date as may be specified therein and must contain:

A statement to the effect that there are no circumstances connected with its resignation which it considers should be brought to the notice of the shareholders or creditors of the Company;
A statement of any such circumstances which should be accounted for.

After receipt of the written notice referred to in the preceding paragraph, the Company shall within 14 days send a copy of the notice to the authority-in-charge. If the notice contains a statement referred to in the two preceding items above, a copy of that notice shall be deposited at the Company for inspection by shareholders. The Company shall also send a copy of the notice to every overseas-listed foreign-investment shareholder by prepaid post to his/her address as recorded in the register(s) of shareholders.

Where the audit firm’s notice of resignation contains a statement that should be made, it may require the Directors to convene an extraordinary general meeting for the purpose of receiving an explanation of the circumstances connected with its resignation.

Bases and explanation: the amendments are made based on Article 160 of the Guide for Articles of Association and the serial numbers of certain paragraphs are altered.

– 66 –

APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

CHAPTER 17: MERGER AND DIVISION OF THE COMPANY

Article 173

The original Article 148 is amended as follows:

The Company may conduct merger or division in accordance with laws. The merger or division of the Company shall follow the procedures below:

the Board prepares a plan for merger or division;
the shareholders’ general meeting passes a resolution in accordance with these Articles;
the parties concerned sign the contract for merger or division;
the relevant approval procedures are effected in accordance with laws;
deal with matters relating to the merger or division such as creditor’s right and liabilities;
carry out the registration for dissolution or alteration of registration.

In case of merger or division, the Board of the Company shall take all necessary measures to protect the lawful rights and interests of the shareholders opposing the merger or division.

Shareholders opposing the merger or division plan are entitled to request the Company or shareholders who agree to such a plan to purchase their shares at a fair price.

The contents of the resolution in respect of a merger and division of the Company shall form a special document and will be made available to the shareholders for examination.

In respect of holders of overseas-listed foreign-investment shares, the above mentioned document shall be sent to such shareholders by mail.

Bases and explanation: the amendments are made based on Articles 169 and 170 of the Guide for Articles of Association in conjunction with the content of this article.

Article 174, 175 and 176

The original Articles 149 to 151 become Articles 174, 175 and 176 respectively.

CHAPTER 18: DISSOLUTION AND LIQUIDATION OF THE COMPANY

Article 177

The original Article 152 becomes Article 177.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 178

An additional paragraph is added to the original Article 153 as paragraph 2 and part of the content of the original article is revised according to the amendments to these Articles. The article is amended as follows:

When the Company is dissolved pursuant to paragraph 1 of the preceding Article, it shall establish a liquidation committee within 15 days. The composition of such liquidation committee shall be decided by the shareholders in general meeting.

When the Company is dissolved pursuant to paragraph 2 of the preceding Article, liquidation shall be conducted by the relevant parties to the merger or division in accordance with the contract signed in respect of the merger or division.

If the Company is dissolved pursuant to paragraph (3) of the preceding Article, the People’s Court shall form a liquidation committee according to law from amongst the shareholders, relevant authorities and relevant professionals to carry out the liquidation of the Company.

If the Company is dissolved pursuant to paragraph (4) of the preceding Article, the authority-in-charge shall arrange for the shareholders, relevant authorities and relevant professionals to establish a liquidation committee to carry out the liquidation.

Bases and explanation: liquidation procedures for dissolution due to merger or division are added based on Article 177 of the Guide for Articles of Association.

Article 179

Paragraph 2 of the original Article 154 is amended as follows:

Upon the passing of the resolution approving the liquidation of the Company at shareholders’ general meeting and the establishment of a liquidation committee, the power of the Company’s Board shall cease immediately. During the course of liquidation, the Company shall not engage in new business activities.

Bases and explanation: Article 178 of the Guide for Articles of Association.

Article 180

The original Article 155 is amended as follows:

The liquidation committee shall notify creditors within 10 days of its establishment and shall advertise the same in newspapers designated by the State Council securities regulatory authority at least three times within 60 days of its establishment. All claims shall be registered by the liquidation committee.

Bases and explanation: Article 180 of the Guide for Articles of Association.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 181

The original Article 156 becomes Article 181.

Article 182

The original Article 157 is amended as follows:

After the liquidation committee has thoroughly examined the assets of the Company and has prepared a balance sheet and an assets list, it shall draw up a proposal for liquidation and submit the same for confirmation by the shareholders in general meeting and the relevant authority-in-charge.

The Company’s assets shall be applied in the following order:

liquidation expenses;
outstanding wages and social insurance expenses of staff and workers;
outstanding taxes, surcharges and contributions to funds payable;
bank loans, Company bonds and other debts of the Company;
distribution to shareholders according to the class of shares held by them and their shareholding proportion.

Bases and explanation: this article is revised based on Article 183 of the Guide for Articles of Association and the amendments to the article.

Article 183, Article 184

The original Articles 158 and 159 become Articles 183 and 184 respectively.

CHAPTER 19: PROCEDURES FOR MAKING AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Article 185

The original Article 160 is amended as follows:

The Company may amend its Articles in accordance with provisions contained in relevant laws, administrative regulations and these Articles upon approval by the original examination and approval authority. The amended Articles shall take effect upon approval at shareholders general meeting by a special resolution and approval by the original examination and approval authority.

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The Company shall amend its Articles upon occurrence of any of the following circumstances:

The Company Law or other relevant laws and administrative regulations are revised and the provisions of these Articles are in conflict with the revised laws and administrative regulations;
There are changes in the situation of the Company which are inconsistent with that contained in these Articles;
The shareholders’ general meeting resolves to amend these Articles.

Bases and explanation: Article 187 of the Guide for Articles of Association.

Article 186

The original Article 161 is amended as follows:

Where any amendments to these Articles (approved by resolution of shareholders’ general meeting) are required be examined and approved by the competent authority, they shall be reported to the examination and approval authority authorized by the State Council for approval. Where such amendments involve the Mandatory Provisions, they shall also be reported to the State Council securities regulatory authority for approval. Where such amendments involve company registration matters, they shall be subject to the alteration of registration according to laws.

Where the amendments to these Articles are information to be disclosed as required by laws, regulations, rules, standardization documents and listing rules of the stock exchange on which the Company’s shares are listed, they shall be disclosed accordingly.

Bases and explanation: Articles 188 and 190 of the Guide for Articles of Association.

CHAPTER 20: SETTLEMENT OF DISPUTES

Article 187

The original Article 162 becomes Article 187.

CHAPTER 21: NOTICE

Article 188

The following article is added as Article 188:

Unless the applicable laws, administrative regulations and the relevant Listing Rules requires otherwise, notice of the Company shall be given by the following methods:

to be delivered by hand;

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APPENDIX I PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

to be sent by post;
to be given by way of public notice;
any other methods permitted by the relevant provisions of laws and administrative regulations.

Notice of the Company, if delivered by hand, shall be deemed to be served on the day of acknowledgement of receipt by the addressee by signing or affixing a seal on the receipt of service; if sent by post, shall be deemed to be served on the day of delivering the same to the post office; if given by public notice, shall be deemed to be served on the first day of publication of the notice and all parties concerned shall be deemed to have received the notice once it is published.

Bases and explanation: Articles 161, 162 and 166 of the Guide for Articles of Association.

Article 189

The original Article 163 becomes Article 189.

CHAPTER 22: DEFINITIONS

Article 190

In the original Article 164, the definition of “Company” is amended as follows:

the “Company” means Datang International Power Generation Company Limited

CHAPTER 23: SUPPLEMENTARY PROVISIONS

Article 191

The following article is added as Article 191:

In these Articles, the expressions “more than” and “less than” which are related to figures and the expressions “within X day(s)” and “X days before” which are related to time shall include the figure referred to in the expression.

Article 192

The following article is added as Article 192:

These Articles are subject to the interpretation of the Board of the Company.

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GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts not contained in this circular, the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors and supervisors of the Company

As at the Latest Practicable Date, none of the Directors, chief executive officer or supervisors of the Company had any interest or short position in the shares, underlying shares and/or debentures (as the case may be) of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which was required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interest and short position which any such Director, chief executive or supervisor is taken or deemed to have under such provisions of the SFO) or which was required to be entered in the register required to be kept by the Company pursuant to Section 352 of the SFO or which was otherwise required to be notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as contained in Appendix 10 to the Listing Rules.

(b) Substantial shareholders

As at the Latest Practicable Date, so far as the Directors are aware, each of the following persons, not being a Director, chief executive or supervisor of the Company, had an interest in the Company’s shares which falls to be disclosed to the Company and the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Shares held/Approximate shareholding percentage

			Interest
			Approximate	Approximate
			percentage of	percentage of	Approximate	Short position
			shareholding in	shareholding in	percentage of
			the Company’s	the Company’s	shareholding in
Name of		Number of	total issued	total issued	the total issued
shareholder	Shares	shares held	share capital	domestic shares	H Shares
CDGC	Domestic	1,828,768,200	35.43	49	–	–
BIPDIC	Domestic	671,792,400	13.01	18	–	–
HCIC	Domestic	671,792,400	13,01	18	–	–
TJIC	Domestic	559,827,000	10.84	15	–	–

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GENERAL INFORMATION

APPENDIX II

Save as disclosed above and so far as the Directors are aware, as at the Latest Practicable Date, no other person had an interest or short position in the Company’s shares or underlying shares (as the case may be) which would fall to be disclosed to the Company and the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or was otherwise a substantial shareholder (as such term is defined in the Listing Rules) of the Company.

Save as disclosed herein, as at the Latest Practicable Date, none of the Directors, the Company’s supervisors nor DBS Asia had any interest, direct or indirect, in any assets which had, since 31 December 2003, being the date to which the latest published audited accounts of the Company were made up, been acquired or disposed of by or leased to any member of the Group or were proposed to be acquired or disposed of by or leased to any member of the Group.

Save as disclosed herein, as at the Latest Practicable Date, none of the Directors or the Company’s supervisors was materially interested in any contract or arrangement subsisting as at the date of this circular which is significant to the business of the Group.

As at the Latest Practicable Date, none of the Directors, proposed directors (if any) or supervisors of the Company had any existing or proposed service contract with member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

As at the Latest Practicable Date, DBS Asia has not had any interest in the securities of the Company or any shareholding in its subsidiaries or had the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

3. PROCEDURES FOR DEMANDING A POLL BY SHAREHOLDERS OF THE COMPANY

Pursuant to the Articles of Association, a general voting shall be made at the shareholders meeting by a show of hands. However, (i) the chairman of the meeting; or (ii) at least two shareholders of the Company present in person or by proxy entitled to vote at the meeting; or (iii) one or more shareholders of the Company present in person or by proxy representing 10% or more of the total voting rights of all the shareholders of the Company, shall have the right to request for a voting by poll before or after a voting by show of hands. A person who has made a request for voting by poll can withdraw such demand.

A poll demanded on the election of a chairman, or a question of adjournment, shall be taken forthwith. Other issues shall be voted by poll at the time to be decided by the chairman, and the meeting can continue with other matters. The result of such voting by poll shall also be regarded as the resolution adopted at the meeting.

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GENERAL INFORMATION

APPENDIX II

4. QUALIFICATIONS OF EXPERTS

The following are the qualification of the expert who have given opinions or advice which are contained in this circular:

Name Qualification DBS Asia Capital Limited Deemed licensed corporation to carry out regulated activities of advising on securities and corporate finance under the SFO

5. CONSENT

DBS Asia has given and has not withdrawn its written consent to the issue of this circular, with the inclusion herein of its report, letter and/or certificate (as the case may be) and references to its name, in the form and context in which it appears.

6. NO MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2003, being the date to which the latest published audited accounts of the Group were made up.

7. LITIGATION

No member of the Company and its subsidiaries is at present engaged in any litigation or arbitration of material importance to the Company and its subsidiaries and no litigation or claim of material importance to the Company and its subsidiaries is known to the Directors to be pending or threatened by or against any member of the Company and its subsidiaries.

8. GENERAL

(a) The legal address and head office of the Company is situated at 14 Jingsan Road, Jinan, No. 482 Guanganmennei Avenue, Xuanwu District, Beijing, the PRC.
(b) The Hong Kong share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited at Room 1712-1716, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(c) The secretary of the Company is Mr. Yang Hongming, who is a senior economist and graduated from North China Power College.
(d) The English text of this circular shall prevail over the Chinese text.

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the offices of Simmons & Simmons at 35th Floor, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong during normal business hours from the date of this circular to and including 11 June 2004:

(a) the letter from the Independent Board Committee, the text of which is set out in this circular;
(b) the letter from DBS Asia, the text of which is set out in this circular; and
(c) the written consent referred to under the paragraph headed “Consent” in this appendix.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [227 x 44] intentionally omitted <==

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

(Stock Code: 991)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the Company (“Extraordinary General Meeting”) will be held on 22 June 2004 at 11:00 a.m. at Conference Room No. 804, No. 482, Guanganmennei Avenue, Xuanwu District, Beijing, the People’s Republic of China (the “PRC”) to consider and, if thought fit, to pass the following resolutions as special resolutions:

THAT the Company’s application for the proposed issue of not more than 1,000,000,000 Renminbi (“RMB”) denominated ordinary shares (“A Shares”), comprising a private placing of A Shares made to China Datang Corporation and Tianjin Jinneng Investment Company and a public offer of A Shares to the public (the “A Share Issue”), be and is hereby considered and approved. The A Shares proposed to be issued shall be of par value RMB1.00 each and the A Shares proposed to be issued to the public shall be listed on the Shanghai Stock Exchange. Details are as follows:–
(1) THAT the Company’s issue of not more than 1,000,000,000 A Shares pursuant to the proposed A Share Issue be and is hereby considered and approved (Note 1);
(2) THAT the Company’s private placing in the form of state-owned legal person shares, which are provisionally prohibited from listing and trading, of 301,704,761 and 92,358,600 state-owned legal person shares to China Datang Corporation and Tianjin Jinneng Investment Company respectively out of the total amount of A Shares to be issued by the Company pursuant to the proposed A Share Issue stated in the above resolution 1(1) be and is hereby considered and approved (Note 2);
(3) THAT the Company’s issue of not more than 605,936,639 A Shares to the public out of the total amount of A Shares to be issued by the Company pursuant to the proposed A Share Issue stated in the above resolution 1(1) be and is hereby considered and approved;
(4) THAT the A Shares to be issued by the Company pursuant to the proposed A Share Issue shall be of par value RMB1.00 be and is hereby considered and approved;
(5) THAT the A Shares to be issued by the Company to the public shall be applied to be listed on the Shanghai Stock Exchange be and is hereby considered and approved;
(6) THAT the A Shares to be issued by the Company to the public pursuant to the proposed A Share Issue shall be issued to natural persons and institutional investors within the PRC (except those prohibited by PRC laws and regulations) who and which have established shareholder accounts be and is hereby considered and approved;

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NOTICE OF EXTRAORDINARY GENERAL MEETING

(7) THAT the proposal in relation to the share of accumulated profits among the new and old shareholders of the Company after the completion of the proposed A Share Issue be and is hereby considered and approved (Note 3); and
(8) THAT the board of directors of the Company be and is hereby authorised to make final decision in relation to the proposal of the A Share Issue, sign all such agreements and/or documents, carry out all such procedures and take all such actions as they deem necessary, in connection with the completion of the proposed A Share Issue as well as the execution and completion of the procedures for the listing on the Shanghai Stock Exchange of such portion of shares to be issued to the public in the PRC after the completion of the A Share Issue.
THAT all decisions made by the Company in relation to the A Share issue, i.e. all resolutions mentioned in 1 above, shall be valid for one year from the date of passing of the relevant resolutions at the forthcoming Extraordinary General Meeting of the Company and being approved by way of resolutions by holders of H Shares of the Company at a H Shares class meeting and by holders of domestic shares of the Company at a Domestic Shares Class Meeting be and is hereby considered and approved.
THAT the Company’s proposed plan in relation to the use of proceeds from the A Share Issue be and is hereby considered and approved, and the board of directors of the Company be and is hereby authorised to determine the final plan of the use of proceeds.
THAT the board of directors of the Company be and is hereby authorised to complete and file the amendments to the articles of association of the Company with the relevant authorities for approval to such amendments.
THAT the amendments to the articles of association of the Company be and is hereby considered and approved, i.e. the change of the Company’s name from “北京大唐發電股份有限公司 Beijing Datang Power Generation Co. Ltd.” to “大唐國際發電股份有限公司 Datang International Power Generation Co. Ltd.”, and that the board of directors of the Company be and is hereby authorized to file the amendments to the articles of association of the Company with the relevant authorities for approval to such amendments.

By order of the Board Yang Hongming Company Secretary

Beijing, the People’s Republic of China, 6 May 2004

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

The proposed A Share Issue and the Company’s proposed plan in relation to the use of net proceeds from the A Share Issue

The Company’s shareholders are reminded to read carefully details of the proposed A Share Issue as well as the relevant content of the proposal made by the Company in relation to the use of proceeds from the A Share Issue as contained in the announcement of the Company dated 6 May 2004 (the “Announcement”). Further details will be included in a circular to be despatched to the shareholders of the Company (the “Circular”).

Private placing of state-owned legal person shares to part of the holders of domestic shares of the Company.

Both China Datang Corporation and Tianjin Jinneng Investment Company are substantial shareholders of the Company. Accordingly, the Company’s private placing of A Shares, being state-owned legal person shares which are provisionally prohibited from listing and trading, to the aforesaid holders of domestic shares of the Company will constitute connected transactions of the Company as defined under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and be subject to the Company’s independent shareholders’ approval respectively. Details of the private placing of A Shares are contained in the Announcement and Circular.

Arrangement on accumulated profits

After the completion of the Company’s A Share Issue, the Company’s unappropriated accumulated profits as at the date of such issue shall be shared among the new and old shareholders of the Company.

4. Other matters

(A) The Company’s shareholders are reminded that pursuant to the articles of association of the Company, the register of members of the Company will be closed from 22 May 2004 to 22 June 2004, both dates inclusive, during which period no transfer of shares will be registered. The Company’s shareholders, whose names appear on the register of members of the Company on 22 May 2004 are entitled to attend and vote at the extraordinary general meeting.
(B) Every shareholder of the Company entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint one or more proxies to attend and vote on his behalf. A proxy need not be a shareholder of the Company.
(C) Where a shareholder of the Company appoints more than one proxy, his proxies may only vote in a poll.
(D) To be valid, shareholders of the Company must deliver the form of proxy and, if such proxy is signed by a person on behalf of his appointer pursuant to a power of attorney or other authority, the power of attorney or other authority under which it is signed or a certified copy of that power or authority (such certification to be made by a notary) to the Company not less than 24 hours before the time scheduled for holding the Extraordinary General Meeting.
(E) Shareholders of the Company who wish to attend the Extraordinary General Meeting are required to return to the Company notice of attendance on or before 1 June 2004 (3 weeks before the date of the meeting). Completion and return of this form of proxy and notice of attendance will not preclude a shareholder of the Company from attending and voting at the Extraordinary General Meeting in person.
(F) Holders of H Shares shall deliver the form of proxy and, if such proxy is signed by a person on behalf of his appointer pursuant to a power of attorney or other authority, the power of attorney or other authority under which it is signed or a certified copy of that power or authority (such certification to be made by a notary) and notice of attendance to the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited at Rooms 1712-1716, Hopewell Center, 183 Queen’s Road East, Wanchai, Hong Kong.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

(G) Holders of domestic shares of the Company shall deliver the form of proxy and, if such proxy is signed by a person on behalf of his appointer pursuant to a power of attorney or other authority, the power of attorney or other authority under which it is signed or a certified copy of that power or authority (such certification to be made by a notary) and notice of attendance to the office of the Company at its registered address. Details of the Company’s registered address are as follows:

No. 482 Guanganmennei Avenue Xuanwu District Beijing People’s Republic of China Postal Code: 100053 Tel: (8610) 8358 1905 Fax: (8610) 8358 1907

The Extraordinary General Meeting is expected to last for about half an hour. Shareholders of the Company and their proxies attending the Extraordinary General Meeting shall be responsible for their own travel and accommodation expenses.

As at the date of this announcement, the directors of the Company are:–

Zhai Ruoyu, Yu Hongji, Zhang Yi, Hu Shengmu, Yang Hongming, Wang Xianzhou, Liu Haixia, Su Tiegang, Ye Yonghui, Tong Yunshang, Zhang Wantuo, Yang Jiayi, Xu Daping, Wu Zhentao

independent non-executive directors

– 78 –

NOTICE OF H SHARES CLASS MEETING

==> picture [207 x 40] intentionally omitted <==

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

(Stock Code: 991)

NOTICE IS HEREBY GIVEN that a class meeting of the holders of Renminbi (“RMB”) denominated ordinary shares of RMB1.00 each in the registered capital of Datang International Power Generation Co., Ltd. (the “Company”) which are subscribed for and traded in Hong Kong dollars (“H Shares”) will be held on 22 June 2004 at 11:30 a.m. (or immediately after the extraordinary general meeting of the Company to be held on the same date and at the same place) at Conference Room No. 804, No. 482, Guanganmennei Avenue, Xuanwu District, Beijing, the People’s Republic of China (the “PRC”) (the “H Shares Class Meeting”) to consider and, if thought fit, to pass the following resolutions:

THAT the Company’s application for the proposed issue of not more than 1,000,000,000 RMB denominated ordinary shares (“A Shares”), comprising a private placing of A Shares made to China Datang Corporation and Tianjin Jinneng Investment Company and a public offer of A Shares to the public (the “A Share Issue”), be and is hereby considered and approved. The A Shares proposed to be issued shall be of par value RMB1.00 each and the A Shares proposed to be issued to the public shall be listed on the Shanghai Stock Exchange. Details are as follows:–
(1) THAT the Company’s issue of not more than 1,000,000,000 A Shares pursuant to the proposed A Share Issue be and is hereby considered and approved (Note 1);
(2) THAT the Company’s private placing in the form of state-owned legal person shares, which are provisionally prohibited from listing and trading, of 301,704,761 and 92,358,600 state-owned legal person shares to China Datang Corporation and Tianjin Jinneng Investment Company respectively out of the total amount of A Shares to be issued by the Company pursuant to the proposed A Share Issue stated in the above special resolution 1(1) be and is hereby considered and approved (Note 2);
(3) THAT the Company’s issue of not more than 605,936,639 A Shares to the public out of the total amount of A Shares to be issued by the Company pursuant to the proposed A Share Issue stated in the above special resolution 1(1) be and is hereby considered and approved;
(4) THAT the shares to be issued by the Company pursuant to the proposed A Share Issue shall be of par value RMB1.00 be and is hereby considered and approved;
(5) THAT the A Shares to be issued by the Company to the public shall be listed on the Shanghai Stock Exchange be and is hereby considered and approved;

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NOTICE OF H SHARES CLASS MEETING

(6) THAT the A Shares to be issued by the Company to the public pursuant to the proposed A Share Issue shall be issued to natural persons and institutional investors within the PRC (except those prohibited by PRC laws and regulations) who and which have established shareholder accounts be and is hereby considered and approved;
(7) THAT the proposal in relation to the share of accumulated profits among the new and old shareholders of the Company after the completion of the proposed A Share Issue be and is hereby considered and approved (Note 3);
(8) THAT the board of directors of the Company be and is hereby authorised to make final decision in relation to the proposal of the A Share Issue, sign all such agreements and/or documents, carry out all such procedures and take all such actions as they deem necessary, in connection with the completion of the proposed A Share Issue as well as the execution and completion of the procedures for the listing on the Shanghai Stock Exchange of such portion of shares to be issued to the public in the PRC after the completion of the A Share Issue.
THAT all decisions made by the Company in relation to the A Share Issue, i.e. all resolutions mentioned in resolution 1 above, shall be valid for one year from the date of passing of the relevant resolutions at the forthcoming H Shares Class Meeting and being approved by way of resolutions at an extraordinary general meeting and the domestic shares class meeting of the Company be and is hereby considered and approved.

By order of the Board Yang Hongming Company Secretary

Beijing, the People’s Republic of China, 6 May 2004

Notes:

The proposed A Share Issue and the Company’s proposed plan in relation to the use of net proceeds from the A Share Issue

Private placing of state-owned legal person shares to holders of domestic shares of the Company (“Domestic Shares”)

Both China Datang Corporation and Tianjin Jinneng Investment Company are substantial shareholders of the Company. Accordingly, the Company’s private placing of A Shares, being state-owned legal person shares which are provisionally prohibited from listing and circulating, to the aforesaid holders of Domestic Shares will constitute connected transactions of the Company as defined under the Rules governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and is subject to the Company’s independent shareholders’ approval respectively. Details of such private placing of A Shares are contained in the Announcement and Circular.

– 80 –

NOTICE OF H SHARES CLASS MEETING

Arrangement on accumulated profits

Other matters
(A) The Company’s holders of H Shares are reminded that pursuant to the articles of association of the Company, the register of members of the Company will be closed from 22 May 2004 to 22 June 2004, both dates inclusive, during which period no transfer of shares will be registered. The Company’s holders of H Shares, whose names appear on the register of members of the Company on 22 May 2004 are entitled to attend and vote at the H Shares Class Meeting.
(B) Every shareholder of the Company entitled to attend and vote at the H Shares Class Meeting is entitled to appoint one or more proxies to attend and vote on his behalf. A proxy need not be a shareholder of the Company.
(C) Where a holder of H Shares appoints more than one proxy, his proxies may only vote in a poll.
(D) To be valid, holders of H Shares must deliver the form of proxy and, if such proxy is signed by a person on behalf of his appointer pursuant to a power of attorney or other authority, the power of attorney or other authority under which it is signed or a certified copy of that power or authority (such certification to be made by a notary) to the Company’s H Share registrar Computershare Hong Kong Investor Services Limited, which is located at Rooms 1712-16 Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, in not less than 24 hours before the time scheduled for holding the H Shares Class Meeting.
(E) Shareholders of the Company who wish to attend the H Shares Class Meeting are required to return to the Company’s H Share registrar Computershare Hong Kong Investor Services Limited, which is located at Rooms 1712-16 Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, notice of attendance on or before 1 June 2004 (3 weeks before the date of the meeting). Completion and return of the form of proxy and notice of attendance will not preclude a holder of H Shares from attending and voting at the H Shares Class Meeting in person.
(F) The H Shares Class Meeting is expected to last for about half an hour. Holders of H Shares and their proxies attending the H Shares Class Meeting shall be responsible for their own travel and accommodation expenses.

As at the date of this announcement, the directors of the Company are:–

Zhai Ruoyu, Yu Hongji, Zhang Yi, Hu Shengmu, Yang Hongming, Wang Xianzhou, Liu Haixia, Su Tiegang, Ye Yonghui, Tong Yunshang, Zhang Wantuo, Yang Jiayi, Xu Daping, Wu Zhentao

independent non-executive directors

– 81 –

NOTICE OF DOMESTIC SHARES CLASS MEETING

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

(Stock Code: 991)

NOTICE IS HEREBY GIVEN that a class meeting of the holders of Renminbi (“RMB”) denominated ordinary shares of RMB1.00 each in the registered capital of Datang International Power Generation Co., Ltd. (the “Company”) (“Domestic Shares”) will be held on 22 June 2004 at 12:00 noon (or immediately after the H shares class meeting of the Company to be held on the same date and at the same place) at Conference Room No. 804, No. 482, Guanganmennei Avenue, Xuanwu District, Beijing, the People’s Republic of China (the “PRC”) (the “Domestic Shares Class Meeting”) to consider and, if thought fit, to pass the following resolutions:

THAT the Company’s application for the proposed issue of not more than 1,000,000,000 RMB denominated ordinary shares (“A Shares”), comprising a private placing of A Shares made to China Datang Corporation and Tianjin Jinneng Investment Company and a public offer of A Shares to the public (the “A Share Issue”), be and is hereby considered and approved. The A Shares proposed to be issued shall be of par value RMB1.00 each and the A Shares proposed to be issued to the public shall be listed on the Shanghai Stock Exchange. Details are as follows:–
(1) THAT the Company’s issue of not more than 1,000,000,000 A Shares pursuant to the proposed A Share Issue be and is hereby considered and approved (Note 1);
(2) THAT the Company’s private placing in the form of state-owned legal person shares, which are provisionally prohibited from listing and trading, of 301,704,761 and 92,358,600 state-owned legal person shares to China Datang Corporation and Tianjin Jinneng Investment Company respectively out of the total amount of A Shares to be issued by the Company pursuant to the proposed A Share Issue stated in the above special resolution 1(1) be and is hereby considered and approved (Note 2);
(3) THAT the Company’s issue of not more than 605,936,639 A Shares to the public out of the total amount of A Shares to be issued by the Company pursuant to the proposed A Share Issue stated in the above special resolution 1(1) be and is hereby considered and approved;
(4) THAT the shares to be issued by the Company pursuant to the proposed A Share Issue shall be of par value RMB1.00 be and is hereby considered and approved;
(5) THAT the A Shares to be issued by the Company to the public shall be listed on the Shanghai Stock Exchange be and is hereby considered and approved;
(6) THAT the A Shares to be issued by the Company to the public pursuant to the proposed A Share Issue shall be issued to natural persons and institutional investors within the PRC (except those prohibited by PRC laws and regulations) who and which have established shareholder accounts be and is hereby considered and approved;

– 82 –

NOTICE OF DOMESTIC SHARES CLASS MEETING

(7) THAT the proposal in relation to the share of accumulated profits among the new and old shareholders of the Company after the completion of the proposed A Share Issue be and is hereby considered and approved (Note 3);
(8) THAT the board of directors of the Company be and is hereby authorised to make final decision in relation to the proposal of the A Share Issue, sign all such agreements and/or documents, carry out all such procedures and take all such actions as they deem necessary, in connection with the completion of the proposed A Share Issue as well as the execution and completion of the procedures for the listing on the Shanghai Stock Exchange of such portion of shares to be issued to the public in the PRC after the completion of the A Share Issue.
THAT all decisions made by the Company in relation to the A Share Issue, i.e. all resolutions mentioned in resolution 1 above, shall be valid for one year from the date of passing of the relevant resolutions at the forthcoming Domestic Shares Class Meeting and being approved by way of resolutions at an extraordinary general meeting and the H shares class meeting of the Company be and is hereby considered and approved.

By order of the Board Yang Hongming Company Secretary

Beijing, the People’s Republic of China, 6 May 2004

Notes:

The proposed A Share Issue and the Company’s proposed plan in relation to the use of net proceeds from the A Share Issue

Private placing of state-owned legal person shares to holders of domestic shares of the Company (“Domestic Shares”)

Both China Datang Corporation and Tianjin Jinneng Investment Company are substantial shareholders of the Company. Accordingly, the Company’s private placing of A Shares, being state-owned legal person shares which are provisionally prohibited from listing and circulating, to the aforesaid holders of Domestic Shares will constitute connected transactions of the Company as defined under the Rules governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and is subject to the Company’s independent shareholders’ approval respectively. Details of such private placing of A Shares are contained in the Announcement and Circular.

Arrangement on accumulated profits

– 83 –

NOTICE OF DOMESTIC SHARES CLASS MEETING

Other matters
(A) The Company’s holders of Domestic Shares are reminded that pursuant to the articles of association of the Company, the register of members of the Company will be closed from 22 May 2004 to 22 June 2004, both dates inclusive, during which period no transfer of shares will be registered. The Company’s holders of Domestic Shares, whose names appear on the register of members of the Company on 22 May 2004 are entitled to attend and vote at the Domestic Shares Class Meeting.
(B) Every shareholder of the Company entitled to attend and vote at the Domestic Shares Class Meeting is entitled to appoint one or more proxies to attend and vote on his behalf. A proxy need not be a shareholder of the Company.
(C) Where a holder of Domestic Shares appoints more than one proxy, his proxies may only vote in a poll.
(D) To be valid, holders of Domestic Shares must deliver the form of proxy and, if such proxy is signed by a person on behalf of his appointer pursuant to a power of attorney or other authority, the power of attorney or other authority under which it is signed or a certified copy of that power or authority (such certification to be made by a notary) to the Company’s Domestic Share registrar Computershare Hong Kong Investor Services Limited, which is located at Rooms 1712-16 Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, in not less than 24 hours before the time scheduled for holding the Domestic Shares Class Meeting.
(E) Shareholders of the Company who wish to attend the Domestic Shares Class Meeting are required to return to the Company’s Domestic Share registrar Computershare Hong Kong Investor Services Limited, which is located at Rooms 1712-16 Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, notice of attendance on or before 1 June 2004 (3 weeks before the date of the meeting). Completion and return of the form of proxy and notice of attendance will not preclude a holder of Domestic Shares from attending and voting at the Domestic Shares Class Meeting in person.
(F) The Domestic Shares Class Meeting is expected to last for about half an hour. Holders of Domestic Shares and their proxies attending the Domestic Shares Class Meeting shall be responsible for their own travel and accommodation expenses.

As at the date of this announcement, the directors of the Company are:–

Zhai Ruoyu, Yu Hongji, Zhang Yi, Hu Shengmu, Yang Hongming, Wang Xianzhou, Liu Haixia, Su Tiegang, Ye Yonghui, Tong Yunshang, Zhang Wantuo, Yang Jiayi, Xu Daping, Wu Zhentao

independent non-executive directors

– 84 –

AI assistant

Modern Innovative Digital Technology Company Limited — Proxy Solicitation & Information Statement 2004

50521_rns_2004-05-27_92298464-bf37-409a-b74e-3bd8f0bd354c.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Proposed application to issue A Shares in the PRC Proposed amendments to the Articles of Association and

Connected transactions

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

PROPOSED APPLICATION TO ISSUE A SHARES IN THE PRC PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND CONNECTED TRANSACTIONS

1. INTRODUCTION

A Share Issue

Proposed amendments to the Articles of Association

EGM

CSMs

2. PROPOSED APPLICATION TO ISSUE A SHARES IN THE PRC

2.1 Structure of the A Share Issue

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

2.2 Ancillary matters relating to the A Share Issue

2.2.1 Sharing of unappropriated accumulated profits

2.2.2 Taking of necessary action by the Directors

2.2.4 Regulatory requirements for holding of A Shares

2.3 Reasons for and the benefits of the A Share Issue

2.4 Effects of the A Share Issue on the Company’s capital structure

3. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

4. GENERAL INFORMATION

4.1 The A Share Issue and connected transactions

4.2 EGM

4.3 CSMs

5. RECOMMENDATION

6. ADDITIONAL INFORMATION

Datang International Power Generation Company Limited Zhai Ruoyu

Asia Capital

CONNECTED TRANSACTIONS PROPOSED ISSUE OF A SHARES UNDER THE PRIVATE PLACEMENT ARRANGEMENTS

Principal factors and reasons considered:

Background and principal terms

Reasons for the A Share Issue

Regulatory requirements for holding of A Shares

Shareholding

Pricing of the A Share Issue under the Private Placement Arrangements

Opinion

DBS ASIA CAPITAL LIMITED Kelvin S.K. Lau Managing Director

ARTICLES OF ASSOCIATION

(Explanations to the Proposed Amendments)

TABLE OF CONTENTS

CHAPTER 6

CHAPTER 1: GENERAL PROVISIONS

Article 2

Article 6

Article 7

Article 8

CHAPTER 2: OBJECTIVES AND SCOPE OF BUSINESS

Article 10

CHAPTER 3: SHARES AND REGISTERED CAPITAL

Article 11

Article 15

Article 16

Article 17

Article 18

Article 19

Article 20

CHAPTER 4: REDUCTION OF CAPITAL AND SHARE REPURCHASE

Article 23

Article 24

CHAPTER 5: FINANCIAL ASSISTANCE TO PURCHASE SHARES IN THE COMPANY

Article 29

CHAPTER 6: SHARE CERTIFICATES AND REGISTER OF MEMBERS

Article 33

Article 35

Article 40

CHAPTER 7: RIGHTS AND OBLIGATIONS OF SHAREHOLDERS

Article 44

Article 45

Article 47

CHAPTER 8: SHAREHOLDERS’ GENERAL MEETINGS

Article 49

Article 51

Modern Innovative Digital Technology Company Limited Proxy Solicitation & Information Statement 2004