Nanjing Panda Electronics Company Limited — Proxy Solicitation & Information Statement 2001

May 11, 2001

南京熊貓電子股份有限公司

NANJING PANDA ELECTRONICS COMPANY LIMITED

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

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the 2000 Annual General Meeting of Nanjing Panda Electronics Company Limited ("the Company") will be held at 9:00 am on Friday, 29 June 2001 at Reading Room, Workers' Union, 301 Zhong Shan Road East, Nanjing, the People's Republic of China (the "PRC") for the purpose of dealing with the following matters:

1) To consider and approve the Report of the Directors of the Company for the year ended 31 December 2000;

2) To consider and approve the Report of the Supervisory Committee for the year ended 31 December 2000;

3) To consider and approve the Audited Financial Statements of the Company for the year ended 31 December 2000;

4) To consider and approve the Company's 2000 Proposed Profit Appropriation Plan;

5) To consider and approve the re-appointment of Horwath Hong Kong CPA Limited (Hong Kong Certified Public Accountants) and Zhong Tian Qin (Shenzhen) Certified Public Accountants (previously known as Zhangtian (Shenzhen) Certified Public Accountants, PRC Certified Accountants) as the Company's international and PRC auditors respectively for 2001 and authorize the board of directors to fix their remuneration;

6) To consider and approve the election of Messrs. Li Anjian, Zhang Zuzhong and Zhou Zhenyu, Ms. Liu Ailian, Messrs. He Zaiding, Yang Huiqian, Zhu Lifeng, Xu Guofei, Deng Weiming and Tang Hongqing as directors of the Company and the election of Ms. Wan Hui and Ms. Ada Y. K. Wong as independent directors of the Company for a term of three years and authorize the board of directors to fix their remuneration;

7) To consider and approve the election of Ms. Zhang Zhenping and Ms. Chen Ning as supervisors of the Company and the election of Mr. Wu Shiyuan and Mr. Li Jianming, as independent supervisors of the Company for a term of three years and authorize the supervisory committee to fix their remuneration;

8) To consider and approve the change of use of RMB20.05 million from the net proceeds of the H Share Offer in 1996 intended for HFC products and RMB19.14 million from the net proceeds of the A Share Offer in 1996 intended for DVD business projects respectively and to invest RMB4.2 million in Mpower Batteries Nanjing Limited and RMB34.99 million as additional working capital of the Company;

9) To consider and approve "Rules of Procedures at General Meetings";

10) To consider and approve the amendments to the Articles of Association;

The following amendments are proposed in compliance with the guidance and directions recently issued by the relevant PRC authorities:

"I. Articles 7 shall be amended as follows:

"Articles 7 The Articles of Association of the Company shall become effective upon approval by the relevant authority. After the Articles of Association of the Company has become effective, the original Articles of Association shall be replaced by the Articles of Association of the Company."

II. Article 15 shall be amended as follows:

"Article 15 There shall be ordinary shares for the Company at any time. The ordinary shares issued by the Company shall include domestic shares and foreign investment shares. The Company may create any other classes of shares when the Company deems necessary upon approval by the relevant government authority."

III. An additional item shall be added as item (5) after item (4) of clause 2 under Article 58:

"(5) ”Two or more independent directors propose to convene the same."

IV. An additional article shall be added as Article 59 after Article 58:

"Article 59 Annual general meeting or any general meeting convened upon the request of shareholders, supervisors or independent directors shall not adopt resolutions in writing. Extraordinary general meeting may not adopt resolutions in writing when considering and approving the following matters:

(1) Increase or reduction of registered capital;

(2) Issuance of the Company's debenture;

(3) Separation, merger, dissolution and liquidation of the Company;

(4) Amendment to the Articles of Association of the Company;

(5) Profit appropriation plan and loss compensation plan;

(6) Appointment and removal of directors and supervisors;

(7) Change on use of proceeds;

(8) Connected transaction which is subject to approval by shareholders at general meeting;

(9) Acquisition or disposal of asset which is subject to approval by shareholders at general meeting;

(10) Changing of accountants' firm;

(11) Any other matters which are not allowed to be resolved by resolution in writing in accordance with the provisions of the Articles of Association."

V. Article 95 shall be amended as follows:

"The Company shall have a board of directors. The board of directors shall consist of at least 11 directors with a chairman and may have one to two vice-chairmen.

Among the members of the board of directors, there shall be at least two members who are independent persons.

The board of directors shall appoint one or more directors as executive directors to execute the matters as authorized by the board of directors."

VI. An additional item shall be added as item (12) after item (11) of Article 97:

"(12) To determine the provision of guarantee by the Company;"

VII. Clause 1 of Article 121 shall be amended as follows:

"The supervisory committee shall consist of at least 3 supervisors and one of them shall be the chairman of the supervisory committee. The term of supervisors shall be three years and may be re-elected and re-appointed.

Among the members of the supervisory committee, there shall be at least one member who is a staff representative and two independent supervisors.

The appointment and removal of chairman of the supervisory committee shall be approved by two-thirds of the members of the supervisory committee."

VIII. Article 122 shall be amended as follows:

"Among the members of the supervisory committee, there shall be at least one member who is a staff representative and two members who are independent persons and the remaining members shall be shareholders' representatives. Each staff representative shall be elected and removed through democratic election by the staff of the Company whereas each independent person and shareholders' representative shall be elected and removed by shareholders at general meeting."

IX. Article 196 shall be amended as follows:

"Any amendments to the Articles of Association concerning the contents of the "Mandatory Provisions" shall become effective upon approval by the relevant authority. If there is any amendment to the Articles of Association involving the company registration matters, the amendments shall be registered in accordance with the laws."

X. Article 200 shall be amended as follows:

"The right to interpret this Articles of Association shall be vested with the board of directors.

If there is any discrepancy between this Articles of Association and the laws, the administrative laws and regulations and the provisions of the regulations of the relevant authorities of the State, the laws, the administrative laws and regulations and the provisions of the regulations of the relevant authorities of the State shall prevail.

Any matter not specifically dealt with in this Articles of Association shall be handled in compliance with the laws, the administrative laws and regulations and the provisions of the regulations of the relevant authorities of the State. If there is no such provisions, the board of directors shall submit the relevant matter to general meeting for approval by the shareholders.

11) Any other business.

By Order of the Board

Shi Qiusheng

Company Secretary

10 May 2001

Note:

(i) All shareholders whose names have been registered in the Register of Members of the Company by the close of business on Tuesday, 29 May 2001 are entitled to attend the AGM for the year 2000 of the Company. Holders of the Company's A Shares whose names appear on the Register of Members of the Company in Shanghai Securities Central Clearing Company on 29 May 2001 are entitled to attend the AGM and should bring along their identity cards or shareholder account cards. A Share shareholders or their proxies (if any) should bring along their identity cards, shareholder account cards and proxy forms for attending the AGM (if any) and go to the securities department of the Company, 301 Zhong Shan Road East, Nanjing, for registration of the attendance of the AGM from 9:00 a.m. to 4:00 p.m. from 30 May 2001 to 8 June 2001. Shareholders outside Nanjing may register by mail or fax.

(ii) All holders of the Company's H Shares are requested to note that the Register of Members of the Company's H Shares will be closed from 30 May 2001 to 29 June 2001 (both days inclusive) during which period no transfer of H Shares will be effected. Holders of the Company's H Shares whose names appear on the Register of Members of the Company by the close of business on 29 May 2001 or their proxies, are entitled to attend the AGM and should bring along their identity cards or passports when attending the AGM. If a shareholder attends the AGM by his proxy/proxies, the proxy/proxies should bring along the instrument appointing him as the proxy.

(iii) Any shareholders entitled to attend and vote at the AGM may appoint a proxy or several proxies (who need not be a shareholder) to attend the AGM and vote thereafter instead of him.

(iv) For shareholders who appoint more than one proxy, the voting right can only be exercised when a poll is taken.

(v) The instrument appointing a proxy must be in writing under the hand of the appointor or his attorney duly authorized in writing, or in the case of corporation must be either under its common seal or under the hand of its director or duly authorised attorney. If the form of proxy is signed by the attorney or on behalf of the appointor, the power of attorney or other authority must be notarially certified. The notarially certified power of attorney or other authority together with the instrument appointing the proxy must be delivered to the registered address of the Company 24 hours prior to the time appointed for the holding of AGM.

(vi) Shareholders who intend to attend the AGM should send a written reply indicating the intention to attend the AGM to the Company's registered address on or before 9 June 2001. The dispatch of the reply may be by hand, by mail or by fax. It is hereby requested that the reply be made on the reply slip set out below or its photocopy. The above-mentioned written reply does not affect the right of shareholders to attend the AGM.

(vii) The AGM is expected to last for half a day. Shareholders and proxies attending the AGM should be responsible for their own travelling and accommodation expenses.

(viii) Correspondence address of the Company:

301 Zhong Shan Road East, Nanjing, the People's Republic of China

Postal Code : 210002

Tel No. : (8625) 4801144

Fax No. : (8625) 4820729

Authorized Representative : Mr. Shi Qiusheng

Particulars of Candidates for Directors and Supervisors:-

Mr. LI Anjian, born in 1953, is currently the Chairman and General Manager of the Company and the General Manager of Panda Electronics Group Limited ("PEGL"), a senior economist and a postgraduate. He was the Deputy General Manager of Nanjing Huadong Electronics Group Company, the Chairman and General Manager of Nanjing Changjiang Machinery Company Limited. He has been working in electronic industrial enterprises for many years, and has extensive experience in the management of operations in electronic enterprises and the industrial development. He has strong capabilities of reform and renovation and extensive experience in operation and management.

Mr. ZHANG Zuzhong, born in 1945, is currently the Vice-chairman and Party Secretary of the Company and the Party Secretary of PEGL and senior engineer. After graduating from the Radio Technology Faculty of the Nanjing Industrial College (currently known as the South East University) in 1968, he joined the Company. He has been involved in enterprise management, education and training for many years.

Mr. ZHOU Zhenyu, born in 1964, is currently the Director of the Company and the Deputy General Manager of PEGL. He holds a master degree in Mechanical Engineering. Upon graduating from the Faculty of Mechanical Engineering of the School of Engineering of Eastern China (currently known as the Nanjing Polytechnic University) in 1989, he joined the Company. He was the Deputy General Manager of the Company. He has extensive experience in enterprise management and design development.

Ms. LIU Ailian, born in 1951, is currently the Director of the Company and the Chief Accountant of PEGL. She was the Vice-Chairman of Ministry of State-owned Assets Management of the Nanjing City. Ms Liu was graduated from the Central Financial Management Cadre Institute in 1989, and South East University in 1998 specializing in financial management. She holds a bachelor's degree and the title of accountant. Ms Liu has extensive experience in finance and management.

Mr. YANG Huiqian, born in 1946, is currently the Director of the Company and the Deputy General Manager of PEGL and Senior Engineer. He joined the Company upon graduating from the Radio Technology Faculty of the South East University in 1970. He was involved in the development of technology and personnel management. He was the Deputy General Manager of the Company. He is experienced in the technological and personnel management.

Mr. HE Zaiding, born in 1951, is currently the Director of the Company and the Deputy General Manager of PEGL and an economist. He graduated from Jiangsu Television Broadcasting University in 1986 and joined the Company in 1975. He was the Deputy General Manager of the Company. He is well experienced in production operation and management.

Mr. TANG Hongqing, born in 1944, is currently the Director of the Company and the Chairman of the Worker's Union of PEGL, senior political work engineer and senior engineer. He graduated from the Radio Equipment Structure Faculty of the Nanjing Industrial College (currently known as the South East University), in 1968 and joined the Company in the same year. Mr. Tang has extensive experience in enterprise management and personnel-related work.

Mr. XU Guofei, born in 1962, is currently the Director of the Company and the Deputy General Manager of PEGL and a senior engineer. Mr. Xu graduated from the Radio Technology Faculty of the South East University in 1987, and holds a bachelor's degree. Mr. Xu has extensive experience in electronic technology and management.

Mr. ZHU Lifeng, born in 1964, is the current Deputy General Manager of PEGL and a senior engineer. Mr. Zhu graduated from the South East University specializing in signal and message management in 1996. He attained a master's degree in Industrial Studies. Mr. Zhu has extensive experience in electronic technology and management.

Mr. DENG Weiming, born in 1964, is currently the Director of the Company and the Deputy General Manager of PEGL and a senior engineer. Mr. Deng graduated from Information Engineering faculty of Huazhong Industrial College in 1987, and holds a bachelor's degree. Mr. Deng has extensive experience in electronic technology and management.

Ms. WAN Hui, born in 1957, is a senior economist. She graduated from the Correspondence College of Jiangsu Provincial Party School. She is currently the General Manager, Sales, of Industrial and Commercial Bank of China and Deputy Party Secretary. Ms. Wan has over 30-year extensive experience in financial institution management.

Ms. Ada Ying Kay Wong, born in 1959, is currently the independent director of the Company. She holds a BA (Hons.) degree from Pomona College, Claremont, California, USA. She passed the Common Professional Examination and Solicitors' Final Examination, College of Law, Lancaster Gate, London, UK. She is a practising solicitor in Hong Kong Special Administrative Region and is a partner of Philip K. H. Wong, Kennedy Y. H. Wong & Co. She is also an independent non-executive director of Hengan International Group Co., Ltd. and Dongfang Electrical Machinery Co., Ltd. She participates actively in public services including an elected member of the Wanchai District Council in Hong Kong and a member of the Hong Kong Culture and Heritage Commission and Hong Kong Policy Research Institute.

Particulars of Candidates for Supervisors:-

Ms. ZHANG Zhenping, born in 1956, is currently the Chairman of Supervisory Committee of the Company and the Deputy Party Secretary and the Secretary of the Commission for Inspecting Discipline of PEGL and an economist. Ms Zhang graduated from Nanjing Television University in 1987 specializing in management of party politics. Ms Zhang has extensive experience in technology, management, administration and duties of the Central Communist Party.

Ms. CHEN Ning, born in 1953, is currently a supervisor of the Company and an economist. Ms. Chen graduated from the Faculty of Enterprise Management of the Television Broadcasting University in 1986. She joined the Company in 1970. She has extensive experience in administration and auditing.

Mr. Zhang Mianyi, born in 1948, is the Vice-chairman of Worker's Union of the Company, an economist and a political work engineer. Mr. Zhang graduated from Nanjing Radio Industrial College in 1968. He joined the Company next year. He has extensive experience in management and mass work. (Mr. Zhang has been elected as a member of the fourth supervisory committee of the Company at the staff representative meeting of the Company.)

Mr. Wu Shiyuan, born in 1933, graduated from People's Liberation Army Military Engineering College in 1964 and is a postgraduate. He was previously Deputy Head of Jiangsu Provincial Electronics Department, Vice-chairman and General Manager of China Hualu Electronics Company Limited and Chairman of 中國華錄松下電子信息有限公司. Mr. Wu has been engaged in electronics industry for many years. He has extensive expertise and management experiences.

Mr. Li Jianming, born in 1956, is currently Head of Legal Studies Research Institute of Jiangsu Provincial Social Sciences College and a researcher. He graduated from Southwest Political and Legal University specializing in legal studies in 1984 and attained a master's degree. He is currently a member of legislative consultative expert group of Jiangsu Provincial and Nanjing Standing Committee of the National People's Congress, a member of consultation committee of Jiangsu Provincial and Nanjing People's Procuratorate and a director of China Litigation Research Association. Mr. Li has been engaged in legal research and has extensive knowledge of legal theory and nearly 20-year practical experience.