Shanghai Henlius Biotech, Inc. — Proxy Solicitation & Information Statement 2008

Feb 3, 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or otherwise transferred all your shares in BYD Company Limited , you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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比亞迪股份有限公司 BYD COMPANY LIMITED

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

(Stock Code: 1211)

• (1) PROPOSED BONUS ISSUE AND INCREASE IN REGISTERED CAPITAL

• (2) PROPOSED DECLARATION OF INTERIM DIVIDEND

• (3) PROPOSED A SHARE ISSUE

• (4) PROPOSED APPOINTMENT, RE-ELECTION AND RESIGNATION OF INDEPENDENT NON-EXECUTIVE DIRECTORS

• (5) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

• (6) PROPOSED ADOPTION OF THE SETS OF PROCEDURAL RULES

• (7) PROPOSED GUARANTEE FOR BANKING FACILITIES GRANTED TO SUBSIDIARIES OF THE COMPANY

• (8) PROPOSED ESTABLISHMENT OF A STRATEGY COMMITTEE

• (9) PROPOSED CHANGE OF THE COMPOSITION OF THE SUPERVISORY COMMITTEE AND APPOINTMENT OF ADDITIONAL SUPERVISORS

It is important to note that the purpose of distributing this circular is to provide the Shareholders with information on, among other things, the proposed issue of A Shares of the Company, so that the Shareholders may make an informed decision on voting in respect of certain resolution(s) to be tabled at the EGM and the Class Meetings. This circular does not constitute, or form part of, an offer or invitation, or solicitation or inducement of an offer, to subscribe for or purchase any of the A Shares or other securities of the Company, nor is this circular calculated to invite offers for any shares or other securities of the Company.

A letter from the Board is set out on pages 4 to 16 of this circular.

Notices convening the EGM and the Class Meetings are set out in this circular. Whether or not you are able to attend the meetings in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed as soon as possible and in any event not less than 24 hours before the time appointed for the holding of the meetings or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meetings or any adjourned meetings should you so wish.

4 February, 2008

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Appendix I — Proposed Revised Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Appendix II — Rules and Procedures of Shareholders’ General Meeting . . . . . . . . . . . . . .	129
Appendix III — Rules of Procedure of Meetings of the Board of Directors . . . . . . . . . . . .	147
Appendix IV — Proposed System of Independent Director of BYD Company Limited . . .	157
Appendix V — Proposed Fair Decision-Making System for Connected Transactions . . . . .	165
Appendix VI — Proposed Rules of Procedure of Meetings of the Supervisory Committee.	173
Appendix VII — System of Securities in favour of External Parties of BYD Company
Limited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	180
Appendix VIII — The Usage Management System of Funds Raised of BYD Company
Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	185
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	188
Notice of Domestic Shares Class Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	195
Notice of H Shares Class Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	200

— i —

DEFINITIONS

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

“A Shares”

the Domestic Shares, which are proposed to be listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange (subject to the Company’s final decision)

“A Share Issue” the proposed issue of not more than 58,500,000 A Shares (taking no account of any Bonus Shares which may be issued under the Bonus Issue) or not more than 222,300,000 A Shares (on the basis that the Bonus Issue is completed and that an aggregate of 1,510,600,000 Bonus Shares are issued) to natural persons, legal persons and investors, who maintain A share accounts with the Shanghai Stock Exchange or the Shenzhen Stock Exchange (depending on which stock exchange the Company finally decides to list the A Shares), by way of public offering of new shares and/or such other manner as shall be approved by the Relevant Authorities, which are proposed to be listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange

• “Articles of Association” the articles of association of the Company from time to time

• “Board”

• the board of Directors of the Company

• “Bonus Issue” the issue of Shares to the Shareholders by way of the capitalisation of the capital reserve fund of the Company

• “Bonus Domestic Shares” Domestic Shares to be issued under the Bonus Issue

• “Bonus H Shares” H Shares to be issued under the Bonus Issue

• “Bonus Shares” Shares to be issued under the Bonus Issue

• “Class Meetings”

• the extraordinary general meetings of, respectively, the H Shareholders and the Domestic Shareholders to be held on 20 March 2008 to approve, inter alia, certain matters referred to in this circular

“Company”

• BYD Company Limited, a company incorporated in the PRC and shares of which are listed on the Hong Kong Stock Exchange

“CSRC” China Securities Regulatory Commission（中國證券監督管理 委員會）

• “Directors” the directors of the Company

• “Domestic Shareholders” holders of Domestic Shares

— 1 —

DEFINITIONS

“Domestic Shares”	the ordinary shares of RMB1.00 each issued by the Company,
	which are subscribed for or credited as fully paid up in
	Renminbi
“EGM”	the extraordinary general meeting of all the shareholders of
	the Company to be held on 20 March, 2008 to approve, inter
	alia, the matters referred to in this circular
“Group”	the Company and its subsidiaries
“Hong Kong Stock Exchange”	The Stock Exchange of Hong Kong Limited
“H Shareholders”	holders of H Shares
“H Shares”	overseas listed foreign shares of RMB1.00 each in the share
	capital of the Company which are listed on the Hong Kong
	Stock Exchange
“Latest Practicable Date”	1 February, 2008, the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein
“Listing Rules”	the Rules Governing the Listing of Securities on the Hong
	Kong Stock Exchange
“MOC”	the Ministry of Commerce of the PRC
“PRC”	the People’s Republic of China, excluding, for the purpose of
	this announcement only, Hong Kong Special Administrative
	Region, Macau Special Administrative Region, and Taiwan
“Record Date”	20 March, 2008
“RMB”	Renminbi, the lawful currency of the PRC
“Relevant Authorities”	competent authorities in the PRC for approving the matters
	referred to in this circular
“Sets of Procedural Rules”	the procedural rules of, respectively, the meetings of the
	Shareholders, Board and Supervisory Committee of the
	Company, the terms of reference for independent
	non-executive directors, and the internal regulations of the
	Company on the conduct of connected transactions, use of
	proceeds and grant of third party guarantees as set out in
	appendices II to VIII to this circular
“Shareholders”	holders of Domestic Shares and H Shares
“Shares”	Domestic Shares and H Shares

— 2 —

DEFINITIONS

“Supervisors” supervisors of the Company “Supervisory Committee” the supervisory committee of the Company

— 3 —

LETTER FROM THE BOARD

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比亞迪股份有限公司 BYD COMPANY LIMITED

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

(Stock Code: 1211)

Board of Directors: Legal Address: Executive Directors Yan An Road Mr. Wang Chuan-fu Kuichong Mr. Xia Zuo-quan Longgang District Shenzhen Non-executive Director Guangdong Province Mr. Lu The PRC

Non-executive Director Mr. Lu Xiang-yang

Independent Non-executive Directors

Mr. Li Guo-xun Mr. Kang Dian Mr. Lin You-ren

Principal Place of Business in Hong Kong: Unit 1712, 17th Floor Tower 2 Grand Central Plaza No.138 Shatin Rural Committee Road Shatin, New Territories Hong Kong

4 February, 2008

To the Shareholders

Dear Sir or Madam,

• (1) PROPOSED BONUS ISSUE AND INCREASE IN REGISTERED CAPITAL

• (2) PROPOSED DECLARATION OF INTERIM DIVIDEND

• (3) PROPOSED A SHARE ISSUE

• (4) PROPOSED APPOINTMENT, RE-ELECTION AND RESIGNATION OF INDEPENDENT NON-EXECUTIVE DIRECTORS

• (5) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

• (6) PROPOSED ADOPTION OF THE SETS OF PROCEDURAL RULES

• (7) PROPOSED GUARANTEE FOR BANKING FACILITIES GRANTED TO SUBSIDIARIES OF THE COMPANY

• (8) PROPOSED ESTABLISHMENT OF A STRATEGY COMMITTEE

• (9) PROPOSED CHANGE OF THE COMPOSITION OF THE SUPERVISORY COMMITTEE AND APPOINTMENT OF ADDITIONAL SUPERVISORS

— 4 —

LETTER FROM THE BOARD

1. INTRODUCTION

On 28 January, 2008, the Board announced that the Company proposes to increase the registered capital of the Company by capitalising the capital reserve fund of the Company, pursuant to which Bonus Shares will be allotted and issued to the Shareholders on the basis of 28 Bonus Shares for every 10 Shares held by the Shareholders on the Record Date.

The registered capital of the Company will increase from RMB539,500,000 to RMB2,050,100,000 upon completion of the Bonus Issue. Based on a total of 539,500,000 Shares in issue on the Record Date, 1,510,600,000 Bonus Shares will be issued by the Company, of which 418,600,000 Shares are Bonus H Shares and 1,092,000,000 are Bonus Domestic Shares. The Bonus Issue and the increase in the registered capital of the Company are subject to approval of the MOC. In addition, the Bonus Issue and the increase in the Company’s registered capital are subject to the Shareholders’ approval at the EGM and at the Class Meetings.

The Board recommended the declaration of an interim dividend for the six months ended 30 June, 2007 of RMB1.3 per Share. Subject to the approval of the Shareholders at the EGM and the Class Meetings, the interim dividend will be paid to the Shareholders whose names appear on the register of H Shareholders or the register of Domestic Shareholders on the Record Date.

Subject to the approvals of the Relevant Authorities in the PRC, it is proposed that the Company shall allot and issue not more than 58,500,000 A Shares (taking no account of the Bonus Shares to be issued under the Bonus Issue) or not more than 222,300,000 A Shares (on the basis that the Bonus Issue is completed and that a total of 1,510,600,000 Bonus Shares are issued) to natural persons, legal persons or other investors, who maintain A share accounts with the Shanghai Stock Exchange or the Shenzhen Stock Exchange (depending on the Company’s final decision on which stock exchange the A Shares are to be listed) but excluding those who are prohibited under the PRC laws, regulations or other regulatory requirements applicable to the Company, by way of public offering of new shares and/or such other manner as shall be approved by the Relevant Authorities. The A Share Issue is subject to approvals by (a) the Shareholders at the EGM, (b) the H Shareholders and Domestic Shareholders at the respective Class Meetings; and (c) the Relevant Authorities. The Company is still considering which of the Shanghai Stock Exchange or the Shenzhen Stock Exchange the A Shares are to be listed and shall apply to the relevant stock exchange for the listing of such A Shares when a decision is being made. Further announcement will be made once the Company has decided the matter.

In light of the legal and regulatory requirements for the proposed A Share Issue, Mr. Wang Chuan-fu has nominated Madam Li Dong for election by the Shareholders as an independent non-executive director of the Company.

Further, the term of office of Mr. Lin You-ren, one of the Company’s existing independent non-executive directors, expired on 30 September, 2007. In accordance with the Articles of Association, Mr. Wang Chuan-fu has nominated Mr. Lin for re-election at the EGM as an independent non-executive director of the Company effective from 1 October, 2007.

In addition, Mr. Li Guo-xun has tendered his resignation as an independent non-executive director of the Company. Such resignation is to be approved by the Shareholders at the EGM.

— 5 —

LETTER FROM THE BOARD

In compliance with the relevant regulatory requirements for the proposed A Share Issue, the Board also proposes that guarantees be granted by the Company in respect of banking facilities granted or to be granted to the Company’s subsidiaries. The grant of guarantees is subject to the approval of the Shareholders at the EGM.

It is proposed that a Strategy Committee comprises of three directors be established as a committee of the Board to be principally responsible for, among other things, formulating long-term strategic development plan and proposals on major investment or fund raising of the Company. Establishment of the Strategy Committee is subject to the approval of the Shareholders at the EGM.

The Company proposes to increase the number of its Supervisors from three to five and to appoint two additional Supervisors accordingly. Mr. Zhang Hui-bin (as nominee of the Shareholders) and Madam Yan Chen (as nominee of elected by the Company’s employees) have been nominated as Supervisors.

The proposed change of composition of the Supervisory Committee and the appointment of Mr. Zhang Hui-bin as an additional Supervisor are subject to the approval of the Shareholders at the EGM. Madam Yan’s appointment will come into effect upon the Shareholders’ approval of the proposed change of composition of the Supervisory Committee and the corresponding amendments to the Articles of Association.

Amendments to the Articles of Association are being proposed primarily as a result of the Bonus Issue and the A Share Issue in compliance with applicable PRC laws and regulations. In addition, amendments to the Articles of Association are being proposed in light of the proposed change of the composition of the Supervisory Committee. The amendments to the Articles of Association will be adopted and implemented with effect from the date on which the A Shares first trade on the relevant stock exchange and to be subsequently approved by the MOC, except that the amendments that are only relevant to the Bonus Issue or the proposed change of the composition of the Supervisory Committee will come into effect upon the Shareholders’ approval and subsequently, the MOC’s approval.

In addition to the amendments to the Articles of Associations in contemplation of the proposed A Share Issue, pursuant to the relevant laws, rules and regulations and the requirements of CSRC, the Company has compiled the Sets of Procedural Rules for, among others, Shareholders’ Meetings, Board meetings and Supervisory Committee meetings. Adoption of the Sets of Procedural Rules is subject to Shareholders’ approval at the EGM, and the obtaining of any approval, endorsement or registration (as applicable) from or with the Relevant Authorities.

The purpose of this circular is to give the Shareholders details of, among other things, the proposed Bonus Issue, the proposed declaration of interim dividend, the proposed A Share Issue, the proposed appointment and re-election of independent non-executive directors, the proposed amendments to the Articles of Association, the proposed adoption of the Sets of Procedural Rules, the proposed guarantee in respect of banking facilities granted or to be granted to subsidiaries of the

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LETTER FROM THE BOARD

Company, the proposed establishment of a Strategy Committee and the proposed change of the composition of the Supervisory Committee and appointment of additional Supervisors so as to enable the Shareholders to vote on the resolutions to be sought at the EGM and if applicable, the relevant Class Meetings.

2. PROPOSED BONUS ISSUE AND INCREASE IN REGISTERED CAPITAL

The Board announced that the Company proposes to increase the registered capital of the Company by capitalising the capital reserve fund of the Company, pursuant to which Bonus Shares will be allotted and issued to the Shareholders on the basis of 28 Bonus Shares for every 10 Shares held by the Shareholders on the Record Date.

The Company’s capital reserve fund as of 30 June, 2007 based on the Company’s unaudited consolidated financial statements (including the notes thereto) as of the same date amounted to approximately RMB1,537,692,000. On the basis of 28 Bonus Shares for every 10 Shares held by the Shareholders on the Record Date, an amount of RMB1,510,600,000 out of the Company’s capital reserve fund will be capitalised for the purpose of the Bonus Issue.

The registered capital of the Company will increase from RMB539,500,000 to RMB2,050,100,000 upon completion of the Bonus Issue. Based on a total of 539,500,000 Shares in issue on the Record Date, 1,510,600,000 Bonus Shares, credited as fully paid and ranking pari passu in all respects of the existing Shares of the Company (save where the H Shares are listed on the Hong Kong Stock Exchange), will be issued by the Company to its Shareholders whose names appear on the register of H Shares or the register of Domestic Shares on the Record Date, of which 418,600,000 Shares are Bonus H Shares and 1,092,000,000 are Bonus Domestic Shares.

The Bonus Issue is subject to the approval of the Shareholders at the EGM and at the respective Class Meetings of the H Shareholders and the Domestic Shareholders. In addition, the Bonus Issue and the increase in the registered capital of the Company are subject to approval of the MOC.

Application will be made to the Listing Committee of the Hong Kong Stock Exchange for listing of, and permission to deal in, the Bonus H Shares.

3. PROPOSED DECLARATION OF INTERIM DIVIDEND

The Board announced that the Company proposes the declaration of an interim dividend for the six months ended 30 June, 2007 of RMB1.3 per Share. Subject to the approval of the Shareholders at the EGM and the Class Meetings, the interim dividend shall be paid to the Shareholders whose names appear on the register of H Shareholders or the register of Domestic Shareholders on the Record Date. The interim dividend for the H Shares will be paid in Hong Kong dollars. The exchange rate applicable for calculating the amount of interim dividend for H Shares will be determined based the average middle exchange rate of Hong Kong dollars to Renminbi on the interbank foreign exchange market as announced by the China Foreign Exchange Trade System under the authorisation of the People’s Bank of China for the five business days before the Record Date. On the assumption of an exchange rate of HK$1 = RMB0.92, the amount of interim dividend per H Share is HK$1.4. Payment of the interim dividend is expected to be made on or before 18 April, 2008.

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LETTER FROM THE BOARD

Declaration of the interim dividend is subject to the approval of the Shareholders at the EGM and at the Class Meetings.

4. PROPOSED A SHARE ISSUE

A. Background

At the Board meeting held on 28 January 2008, it was resolved that the Company shall apply to the Relevant Authorities for the allotment and issue of not more than 58,500,000 A Shares (taking no account of the number of Bonus Shares to be issued under the Bonus Issue) or not more than 222,300,000 A Shares (on the basis that the Bonus Issue is completed and that an aggregate of 1,510,600,000 Bonus Shares are issued) to natural persons, legal persons or other investors, who maintain A share accounts with the Shanghai Stock Exchange or the Shenzhen Stock Exchange (depending on which stock exchange the Company finally decides to list the A Shares) but excluding those who are prohibited under the PRC laws, regulations or other regulatory requirements applicable to the Company. The Company is still considering which of the Shanghai Stock Exchange or the Shenzhen Stock Exchange the A Shares are to be listed. Further announcement will be made once a decision is made. The sole sponsor and lead underwriter of the A Share Issue is UBS Securities Co. Limited and the A Share Issue is expected to be completed within year 2008.

B. Structure of the A Share Issue:

Type of securities to be A Shares issued Number of A Shares to be Not more than 58,500,000 A Shares (taking no account of the issued: Bonus Shares which may be issued under the Bonus Issue) or not more than 222,300,000 A Shares (on the basis that the Bonus Issue is completed and that an aggregate of 1,510,600,000 Bonus Shares are issued). The final number of A Shares to be issued and the structure of the issue are subject to the approval by CSRC and other Relevant Authorities and the adjustments (if any) made by the Board as authorised by the Shareholders at the EGM

Nominal value:

RMB1.00 each

Rights attached to A Share: The A Shares are listed Domestic Shares and, except as otherwise provided for in the applicable laws, rules and regulations and the Articles of Association, will rank pari passu with the existing Domestic Shares and H Shares in all respects. Once the A Share Issue is completed, both new and existing Shareholders will be entitled to share the accumulated retained earnings at the time of the A Share Issue

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LETTER FROM THE BOARD

Target subscribers:

natural persons, legal persons or other investors, who maintain A share accounts with the Shanghai Stock Exchange or the Shenzhen Stock Exchange (depending on the Company’s final decision) but excluding those who are prohibited under the PRC laws, regulations or other regulatory requirements applicable to the Company

Method of issue:

The A Share Issue will be conducted via a combination of placement through offline offering to investors subject to market consultation, and placement through online subscription at the issue price, or such other method(s) as approved by CSRC

• Basis for determining the issue price:

• The issue price range of the A Share Issue will be determined on the basis of market conditions, the condition prevailing in the PRC securities market at the time of the A Share Issue by way of market consultation or any such other price determination method as approved by CSRC. Market consultation can only be conducted after all the requisite approvals have been obtained. Thus, the amount of funds to be raised from the A Share Issue cannot be confirmed at the Latest Practicable Date. Further announcement will be made upon determination of the issue price

The price consultation will be undertaken with not less than 20 qualified price enquiry participants recognised by the Securities Association of China. Pursuant to the relevant PRC regulations, the issue price shall not be lower than the net asset value (excluding minority interest per Share) according to the then latest audited financial statements of the Company

Use of proceeds:

Funds raised from the A Share Issue will be used to fund the Group’s development projects on, among other things, lithium-ion batteries, LED light bars, camera modules, automobiles, electricity-power vehicles, automobile components and parts (including electronic components and devices), mouldings for automobile components. Any surplus will be used as working capital of the Company and/or to repay banking borrowings of the Group

C. Shareholders’ Approval and other Approvals

The EGM and the Class Meetings will be held on 20 March, 2008 to consider and, if thought fit, approve, among other things, the A Share Issue and to authorise the Board to determine and deal with at its discretion and with full authority, matters relating to the A Share Issue (including but not limited to the specific timing of the issue, the stock exchange on which the A Shares are to be listed, number of A Shares to be issued, offering mechanism, final pricing mechanism, issue price, target subscribers,

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LETTER FROM THE BOARD

the number and proportion of A Shares to be issued to each subscriber and the use of proceeds). It should be noted that the A Share Issue, upon approval by the Shareholders at the EGM and at the Class Meetings, is still subject to the approval of the CSRC and other Relevant Authorities, if necessary. In addition, the approval of the Shanghai Stock Exchange or the Shenzhen Stock Exchange (depending on the Company’s final decision as to which stock exchange the A Shares are to be listed) as to the listing and dealings in the A Shares is also required.

It is proposed that the Shareholder’s approval in respect of the A Shares, if obtained from the EGM and the Class Meetings, will be effective for a period of 12 months from the date of such approval.

D. Reasons for and Benefits of the A Share Issue

The Company believes that the A Share Issue will establish a new financing platform for the Company and will broaden the Company’s access to different securities markets. This will enable the Company to enhance the development of its operations and to further improve its competitiveness. Also, the Board believes that the A Share Issue will benefit the Company and the Shareholders as a whole.

E. Effect of the Bonus Issue and the A Share Issue on the Company’s shareholding structure

Set out below is the shareholding structure of the Company as at the Latest Practicable Date and immediately upon completion of the Bonus Issue and the A Share Issue (based on the assumption that (1) an aggregate of 1,510,600,000 new Bonus Shares will be issued under the Bonus Issue and (2) an aggregate of 58,500,000 new A Shares (on the basis that there is no Bonus Issue) and an aggregate of 222,300,000 new A Shares (on the basis that the Bonus Issue is completed and that an aggregate of 1,510,600,000 Bonus Shares are issued) will be issued under the A Share Issue):

						Immediately after	**Immediately **	after
						completion of the	completion of the
				**Immediately **	after	the A Share Issue	the Bonus Issue
		As at the Latest		completion of the		taking no account of	and the
		Practicable Date		Bonus Issue		the Bonus Issue	A Share Issue
		Number of		Number of		Number of	Number of
		Shares	%	Shares	%	Shares %	Shares	%
(1)	Domestic Shares	390,000,000	72.3	1,482,000,000	72.3	390,000,000 65.22	1,482,000,000	65.22
	- Existing Domestic Shares issued	390,000,000	72.3	1,482,000,000	72.3	390,000,000 65.22	1,482,000,000	65.22
	- A Shares to be Issued	—	—	—	—	58,500,000 9.78	222,300,000	9.78
(2)	H Shares	149,500,000	27.7	568,100,000	27.7	149,500,000 25	568,100,000	25
(3)	Total number of Shares	539,500,000	100	2,050,100,000	100	598,000,000 100	2,272,400,000	100

— 10 —

LETTER FROM THE BOARD

5 PROPOSED APPOINTMENT, RE-ELECTION AND RESIGNATION OF INDEPENDENT NON-EXECUTIVE DIRECTORS

In light of the legal and regulatory requirements in the PRC for the proposed A Share Issue, Mr. Wang Chuan-fu has nominated Madam Li Dong for election by the Shareholders at the EGM as an independent non-executive director.

Madam Li Dong, aged 43, is a registered accountant and registered assets valuer in the PRC. Madam Li is the deputy director of Beijing Xinghua Accounting Firm Co., Ltd.（北京興華會計師事 務所有限責任公司）. Madam Li graduated from the Faculty of Finance and Politics 財政系 of Beijing Finance and Trade Academy（北京財貿學院）(now known as Capital University of Economics and Business（首都經濟貿易大學）). She worked in the Joint Venture Department（合資處）of Beijing Finance Bureau（北京市財政局）for the period between July 1986 and December 1992. Madam Li acted as the manager of the Valuation Department of Beijing Xinghua Accounting Firm Co., Ltd. when she joined the firm in December, 1992. She then acted as the manager of the audit department of the firm since 1996 until she took on the current position.

Further, the term of office of Mr. Lin You-ren, one of the Company’s independent non-executive directors, expired on 30 September, 2007. In accordance with the requirements of the Articles of Association, Mr. Wang Chuan-fu has nominated Mr. Lin for re-election at the EGM as an independent non-executive director of the Company with effect from 1 October, 2007.

Each of Madam Li Dong and Mr. Lin You-ren did not hold any position in other listed companies in the last three years. Each of Madam Li Dong and Mr. Lin You-ren does not have (i) any relationships with any Directors, supervisors, senior management, substantial shareholders or controlling shareholders of the Company, except that Madam Li is the daughter of Mr. Li Guo-xun, an independent non-executive director who has already tendered his resignation; (ii) any interest in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). Save as disclosed above, the Board is not aware of any matters that need to be brought to the attention of the Shareholders in respect to the appointment of Madam Li and re-election of Mr. Lin and there is no other information relating to Madam Li and Mr. Lin which is required to be disclosed pursuant to any of the requirement of Rule 13.51(2) of the Listing Rules.

The Board announces that Mr. Li Guo-xun has tendered his resignation as an independent non-executive director of the Company as Mr. Li wishes to take on less work commitment in preparation for his retirement. The Board confirms that there are no matters that need to be brought to the attention of the Shareholders. The Company would like to take this opportunity to express its gratitude towards Mr. Li for his contribution to the Company during his term of office as an independent non-executive director.

6. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Amendments to the Articles of Association are being proposed primarily as a result of the proposed Bonus Issue and the A Share Issue in compliance with applicable PRC laws and regulations. In addition, amendments to the Articles of Association are being proposed in light of the proposed change of the composition of the Supervisory Committee. The amendments to the Articles of

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LETTER FROM THE BOARD

Association will be adopted and implemented with effect from the date on which the A Shares first trade on the relevant stock exchange and to be subsequently approved by the MOC, except that the amendments that are only relevant to the Bonus Issue and the proposed change of composition of the Supervisory Committee will come into effect upon the Shareholders’ approval and subsequently, the MOC’s approval.

The proposed amendments deal with a number of areas, including:

• (a) alteration of the Company’s registered capital and shareholding structure;

• (b) regulations on the proceedings of Shareholders’ general meetings;

• (c) regulations on the election and appointment of Directors and Supervisors;

• (d) regulations on the rights and obligations of the Shareholders, Directors, Supervisors and the President（總裁）;

• (e) provisions in relation to the rules and procedures of the Shareholders’ meetings, Board meetings and Supervisory Committee meetings; and

• (f) other provisions as required by any applicable laws and regulations for companies with A Shares in issue.

7. PROPOSED ADOPTION OF THE SETS OF PROCEDURAL RULES

Pursuant to the relevant laws, rules and regulations and the requirements of CSRC, the Company has compiled the Sets of Procedural Rules for, among others, Shareholders’ Meetings, Board meetings and Supervisory Committee meetings.

Adoption of the Sets of Procedural Rules is subject to Shareholders’ approval at the EGM, and the obtaining of any approval, endorsement or registration (as applicable) from or with the Relevant Authorities.

8. PROPOSED GUARANTEE FOR BANKING FACILITIES GRANTED TO SUBSIDIARIES OF THE COMPANY

In compliance with the relevant regulatory requirements for the proposed A Share Issue, the Board proposes that guarantees be granted by the Company in respect of banking facilities granted or to be granted to the Company’s subsidiaries. The Company’s current subsidiaries are not connected person as defined under the Listing Rules. The grant of guarantees is subject to the approval of the Shareholders at the EGM. The Company confirms that no guarantees have been granted to any of its subsidiaries as at the Latest Practicable Date which will constitute connected transactions of the Company under the Listing Rules, and that it will comply with all applicable requirements under the Listing Rules for the grant of any of such guarantees.

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LETTER FROM THE BOARD

9. PROPOSED ESTABLISHMENT OF A STRATEGY COMMITTEE

The Board proposes that a Strategy Committee comprises of three directors, namely Mr. Wang Chuan-fu (as Chairman of the committee), Mr. Lu Xiang-yang and Mr. Xia Zuo-quan, be established as a committee of the Board to be principally responsible for, among other things, formulating long-term strategic development plan and proposals on major investment or fund raising of the Company.

Establishment of the Strategy Committee is subject to the approval of the Shareholders at the EGM.

10. PROPOSED CHANGE OF THE COMPOSITION OF THE SUPERVISORY COMMITTEE AND APPOINTMENT OF ADDITIONAL SUPERVISORS

The Company proposes to increase the number of its Supervisors from three to five and to appoint two additional Supervisors accordingly. Mr. Zhang Hui-bin (as nominee of the Shareholders) and Madam Yan Chen (as nominee of the employees of the Company) have been nominated as Supervisors.

Mr. Zhang Hui-bin, aged 39, is a holder of master degree in EMBA awarded by Zhongshan University in June, 2000. Mr. Zhang worked at Agricultural Machinery Supervisory and Administration Station of He County in Anhui province（安徽省和縣農機監理站）from September, 1992 to July, 1994. Mr. Zhang joined Guangzhou Rongjie Investment Company Limited（廣州融捷投 資管理集團有限公司）as a deputy manager in August, 1994 and since then he has acted as manager of the administration department, general manager of the planning and investment department, finance department and marketing director of the company at different periods. Mr. Zhang was appointed as vice-president of the company in October, 2006. He is also a deputy general manager of Financing & Guarantee of Guangzhou Rongjie Financing Company Limited（廣東融捷融資擔保有限公司）and the general manager of Guangzhou Jianjin Information and Technology Company Limited（廣州漸進信 息科技有限公司）.

Madam Yan Chen, aged 31, graduated from Beijing University of Aeronautics & Astronautics in July, 2000 with a bachelor degree. Madam Yan was a system engineer of Division One Quality Assurance Department of the Company from October, 2000 to March, 2001, system engineer of the System Office of the Company and secretary to the president for Quality Assurance from March, 2001 to December, 2002, secretary to the president of Xian BYD Automobile Company Limited from January, 2003 to October, 2003, chief office director of the management office of Shanghai BYD Company Limited from October, 2003 to October, 2005, manager of the regional administration department for Shanghai and Xian and manager of the automobile business office of the Company from October, 2005 to May, 2007, and thereafter up to present, manager of the automobile business office of the Company for the Shanghai, Shenzhen and Xian regions. She is also in charge of the Pudong branch of Shanghai BYD Company Limited. Madam Yan is also a committee member of the third session of Sungjiang District, Shanghai of China People’s Political Consultative Congress（中 國人民政治協商會議上海市松江區第三届委員會委員）and the secretary to Shanghai BYD Company Limited committee of China Communism Youth Association（中國工產主義青年團上海比亞迪有限公 司團委書記）.

— 13 —

LETTER FROM THE BOARD

Each of Mr. Zhang Hui-bin and Madam Yan Chen did not hold any position in other listed companies in the last three years. Save as disclosed herein, each of Mr. Zhang Hui-bin and Madam Yan Chen does not have any relationships with any Directors, supervisors, senior management, substantial shareholders or controlling shareholders of the Company. Each of Mr. Zhang Hui-bin and Madam Yan Chen does not have any interest in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). Save as disclosed above, the Board is not aware that there are any other matters that need to be brought to the attention of the Shareholders in respect to the appointment of Mr. Zhang and Madam Yan and there is no other information relating to Mr. Zhang and Madam Yan which is required to be disclosed pursuant to any of the requirement of Rule 13.51(2) of the Listing Rules.

The proposed change of composition of the Supervisory Committee and the appointment of Mr. Zhang as additional Supervisors are subject to the approval of the Shareholders at the EGM. Madam Yan’s appointment will come into effect upon the Shareholders’ approval of the change of composition of the Supervisory Committee and the corresponding amendments to the Articles of Association.

11. CLOSURE OF REGISTER OF MEMBERS

In order to determine the list of Shareholders who will be entitled to receive the Bonus Shares and the interim dividends, the register of members of the Company will be closed from 19 February, 2008 to 20 March, 2008, both days inclusive, during which no transfer of Shares will be effected. Holders of H Shares and Domestic Shares whose names appear on the register of members of the Company on 20 March, 2008 shall be entitled to receive the Bonus Shares and the interim dividends. In order for the H Shareholders to qualify for the Bonus Shares and the interim dividend payment, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s H share registrar, Computershare Hong Kong Investor Services Limited, no later than 4:30 p.m. on 18 February, 2008 for registration.

12. EXTRAORDINARY GENERAL MEETING AND CLASS MEETINGS

Special resolutions to approve, among other matters, the proposed Bonus Issue, the proposed A Share Issue, the proposed amendments to the Articles of Association will be proposed at the EGM and to the extent applicable, the Class Meetings. Ordinary resolutions to approve, among other matters, the proposed declaration of interim dividend, the proposed appointment and re-election of independent non-executive directors, the adoption of the Sets of Procedural Rules, the proposed guarantee in respect of banking facilities granted or to be granted to subsidiaries of the Company, the proposed establishment of a Strategy Committee, and the proposed change of the composition of the Supervisory Committee and appointment of additional Supervisors will also be proposed at the EGM.

No Shareholder is required to abstain from voting in connection with the matters to be resolved at the EGM and the Class Meetings.

A notice convening the extraordinary general meeting of the Company for all Shareholders to be held on 20 March, 2008, Thursday, at 9:00 a.m. at the Company’s Conference Room at No. 3001, Hengping Road, Pingshan, Longgang, Shenzhen, Guangdong Province, the People’s Republic of China is set out on pages 188 to 194 of this circular.

— 14 —

LETTER FROM THE BOARD

A notice convening the class meeting for holders of the Domestic Shares of the Company to be held on 20 March, 2008, Thursday, at 10:00 a.m. at the Company’s Conference Room at No. 3001, Hengping Road, Pingshan, Longgang, Shenzhen, Guangdong Province, the People’s Republic of China is set out on pages 195 to 199 of this circular.

A notice convening the class meeting for holders of the H Shares of the Company to be held on 20 March, 2008, Thursday, at 11:00 a.m. at the Company’s Conference Room at No. 3001, Hengping Road, Pingshan, Longgang, Shenzhen, Guangdong Province, the People’s Republic of China is set out on pages 200 to 204 of this circular.

Whether or not you intend to attend the EGM or the relevant Class Meeting, you are requested to complete and return the form of proxy attached hereto in accordance with the instructions printed thereon as soon as possible and in any event not less than 24 hours before the time appointed for the holding of the meetings or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meetings or any adjourned meeting should you so wish.

13. PROCEDURES FOR DEMANDING A POLL AT THE EGM

Pursuant to the Articles of Association, at any general meeting of Shareholders, a resolutions shall be decided on a show of hands unless a poll is demanded by any of the following persons before (or after) any vote by a show of hand:

• (a) the chairman of the meeting; or

• (b) at least two Shareholders entitled to vote present in person or by proxy; or

• (c) one or more Shareholders present in person or by proxy and representing 10% of more of all shares carrying the right to vote at the meeting.

14. RECOMMENDATION

The Directors consider that the proposed Bonus Issue, the proposed declaration of interim dividend, the proposed A Share Issue, the proposed appointment and re-election of independent non-executive directors, the proposed amendments to the Articles of Association, the adoption of the Sets of Procedural Rules, the proposed guarantee in respect of banking facilities granted or to be granted to subsidiaries of the Company, the proposed establishment of a Strategy Committee, and the proposed change of the composition of the Supervisory Committee and appointment of additional Supervisors are in the best interests of the Company and its Shareholders as a whole.

Accordingly, the Directors recommend the Shareholders to vote in favour of the resolutions which will be proposed at the EGM and to the extent applicable, at the Class Meetings.

— 15 —

LETTER FROM THE BOARD

15. GENERAL

There is no assurance that the Bonus Issue, the declaration of interim dividend, the A Share Issue or any other matters mentioned in this circular will proceed. Investors are advised to exercise caution in dealing in the H Shares. Further details about the A Share Issue will be disclosed by the Company in the newspapers in the PRC when the A Share Issue materialises and an extract of which will be disclosed by the Company in the Company’s website concurrently in accordance with the Listing Rules.

Yours faithfully, For and on behalf of the Board WANG Chuan-fu Chairman

— 16 —

PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

Please note that the following Proposed Revised Articles of Association are written in Chinese and there is no official English translation in respect thereof. The translation into English language in this Appendix I is for reference only. In case of any inconsistency between the English and Chinese versions, the Chinese version shall prevail.

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION CORRESPONDING TO THE CHANGE IN COMPOSITION OF THE SUPERVISORY COMMITTEE OF THE COMPANY

The former Article 109	The Company shall have a Supervisory Committee.	Mandatory
		Provision 103
is amended as:
Article 131	The Company shall have a Supervisory Committee. The	Guideline 143
	Supervisory Committee shall be composed of five	of Articles of Association
	supervisors, of which more than half should be external
	supervisors (supervisors not holding any position in the
	Company, same hereinafter), and supervisors who are staff
	representatives shall not be less than one third of the number
	of supervisors.
The former Article 110	The Supervisory Committee shall be composed of two	Mandatory
	independent supervisors and one staff representative. The	Provisions 104
	terms of the supervisors shall be for three years, and shall be
	eligible for re-election and re-assignment.
is amended as:
Article 132	The Supervisory Committee shall be composed of two	Mandatory
	independent supervisors, one Shareholder representative	Provisions 104
	Supervisor and two staff representatives. The terms of the
	supervisors shall be for three years, and shall be eligible for
	re-election and re-assignment.
The former Article 111	Independent supervisors shall be elected and removed by the	Mandatory
	shareholders’ general meeting, while the staff representative	Provisions 105
	shall be elected and removed by the staff of the Company
	democratically.
	The Supervisory Committee shall have one chairman. His
	appointment and dismissal shall be adopted by over two thirds
	(inclusive) of the supervisors.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

is amended as: Article 133 Independent supervisors and Shareholder representative Mandatory Supervisor shall be elected and removed by the shareholders’ Provision 105 general meeting, while the staff representative shall be elected and removed by the staff of the Company democratically. The Supervisory Committee shall have one chairman. His appointment and dismissal shall be adopted by over two thirds (inclusive) of the supervisors.

If the term of office of a supervisor expires but re-election is Guideline 138 not made responsively or if any supervisor resigns during his of Articles of Association term of office so that the membership of the Supervisory Committee falls short of the quorum, the said supervisor shall continue fulfilling the duties as supervisor pursuant to relevant laws, administrative regulations and the Articles of Association until a new supervisor is elected.

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION CORRESPONDING TO THE BONUS ISSUE

The former Article 1 The Company is a joint stock limited company incorporated in accordance with “The Company Law of the People’s Republic of China” (hereinafter referred to as the “Company Law”), “The Special Regulations of the State Council on the Overseas Offering and Listing of Shares by Joint Stck Limited Companies” (hereinafter referred as the “Special Regulations”) and other relevant laws and administrative regulations of the State.

The Company was established on 18 March 2002 by way of promotion and modification approved by the State Economic and Trade Commission of the PRC, and was registered with Shenzhen Administration of Industry and Commerce and obtained its Business License on 11 June 2002. The number of the Company’s existing Business License is: 0857080, and its registration No. is: Qi He Yue Shen Zhong Zi Di No.110183.

The shareholders of the Company include: Guangzhou Youngy Management & Investment Group Co., Ltd., Mr. Wang Chuan-fu, Mr. Lu Xiang-yang, Mr. Xia Zuo-quan, Mr. Yang Long-zhong, Mr. Mao De-he, Mr. Wang Nian-qiang, Ms. Dai Chang, Mr. Liu Wei-ping, Ms. Gu Wei-ni, Ms. Jia Yan-xiu, Ms. Li Ke, Ms. Fang Fang, Mr. Li Wei, Mr. Li

Mandatory Provision 1

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APPENDIX I

PROPOSED REVISED ARTICLES OF ASSOCIATION

Yong-guang, Mr. Liu Huan-ming, Mr. Lun Xu-feng, Mr. Sun Yi-zao, Mr. Wang Chuan-fang, Mr. Wu Chang-hui, Mr. Wu Jing-sheng, Mr. Xiao Ping-liang, Ms. Zhang Yi, Mr. Yan Yue-qing, Ms. Lu Guo-zhi, Mr. He Zhi-qi, Ms. Qu Bing, Mr. Wan Qiu-yang, Mr. Wang Hai-tao, Mr. Xia Zhi-bing, Ms. Xie Qiong, Mr. Liu Wei-hua, Mr. Wang Hai-quan, Ms. Zhu Ai-yun, Mr. Li Zhu-hang, Mr. Zhang Jin-tao, Mr. Xiao-feng, Mr. Chen Gang, Mr. He Long and Mr. Deng Guo-rui as well as holders of H Shares.

is amended as: Article 1 The Company is a joint stock limited company incorporated in accordance with “The Company Law of the People’s Republic of China” (hereinafter referred to as the “Company Law”), “The Special Regulations of the State Council on the Overseas Offering and Listing of Shares by Joint Stck Limited Companies” (hereinafter referred as the “Special Regulations”) and other relevant laws and administrative regulations of the State.

Mandatory Provision 1

The Company was established on 18 March 2002 by way of promotion and modification approved by the State Economic and Trade Commission of the PRC, and was registered with Shenzhen Administration of Industry and Commerce and obtained its Business License on 11 June 2002. The Company’s existing registration No. is: Qi Gu Yue Shen Zhong Zi Di No.110183.

The promoter shareholders of the Company include: Guangzhou Youngy Management & Investment Group Co., Ltd., Mr. Wang Chuan-fu, Mr. Lu Xiang-yang, Mr. Xia Zuo-quan, Mr. Yang Long-zhong, Mr. Mao De-he, Mr. Wang Nian-qiang, Ms. Dai Chang, Mr. Liu Wei-ping, Ms. Gu Wei-ni, Ms. Jia Yan-xiu, Ms. Li Ke, Ms. Fang Fang, Mr. Li Wei, Mr. Li Yong-guang, Mr. Liu Huan-ming, Mr. Lun Xu-feng, Mr. Sun Yi-zao, Mr. Wang Chuan-fang, Mr. Wu Chang-hui, Mandatory Provision 1 Mr. Wu Jing-sheng, Mr. Xiao Ping-liang, Ms. Zhang Yi, Mr. Yan Yue-qing, Ms. Lu Guo-zhi, Mr. He Zhi-qi, Ms. Qu Bing, Mr. Wan Qiu-yang, Mr. Wang Hai-tao, Mr. Xia Zhi-bing, Ms. Xie Qiong, Mr. Liu Wei-hua, Mr. Wang Hai-quan, Ms. Zhu Ai-yun, Mr. Li Zhu-hang, Mr. Zhang Jin-tao, Mr. Xiao-feng, Mr. Chen Gang, Mr. He Long and Mr. Deng Guo-rui.

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APPENDIX I PROPOSED REVISED ARTICLES OF ASSOCIATION

The former Article 3	Address of the Company: Yan An Road, Kuichong, Longgang	Address of the Company: Yan An Road, Kuichong, Longgang	Address of the Company: Yan An Road, Kuichong, Longgang	Mandatory
	District, Shenzhen, Guangdong Province			Provision 3
	Postal Code: 518119
	Telephone No: 0755 84218888
	Facsimile: 0755 84202222
is amended as:
Article 3	Address of the Company: Yan An Road, Kuichong, Longgang			Mandatory
	District, Shenzhen, Guangdong Province			Provision 3
	Postal Code: 518119
	Telephone No: 0755 89888888
	Facsimile: 0755 84202222
Article 10	The scope of operations of the Company	shall be defined by		Mandatory
	the projects approved by the companies registration			Provision 10
	authorities.
	The scope of key operations of the	Company	include:
	production and sales of Li-ion batteries	and other	batteries,
	chargers, electronic products, instruments and		meters,
	hardwares, LCD monitors, parts and components of		handsets,
	moulds, plastic products and other related accessories.
is amended as:
Article 10	The scope of operations of the Company	shall be defined by		Mandatory
	the projects approved by the companies registration			Provision 10
	authorities.
	The scope of key operations of the	Company	include:
	production and sales of Li-ion batteries	and other	batteries,
	chargers, electronic products, instruments and		meters,
	flexible circuit boards, hardwares, LCD	monitors,	parts and
	components of handsets, moulds, plastic	products and other
	related accessories.
The former Article 15	Upon approval by the company approving department of the			Mandatory
	State Council, the Company may issue a total of 390,000,000			Provision 15
	ordinary shares, of which 390,000,000 Shares were		issued to
	the promoters upon the establishment	of the Company,
	representing 100% of the ordinary shares may be issued by
	the Company.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

is amended as:
Article 15	Upon approval by the company approving department of the
	State Council, the Company issued a total of 390,000,000
	ordinary shares to the promoters upon establishment of the
	Company.
The former Article 16	Subsequent to the establishment of the Company, the	Mandatory
	Company issued a total of 149,500,000 Overseas Listed	Provision 16
	Foreign Shares, representing 27.71% of the total ordinary
	shares of the Company in issue.
is amended as:
Article 16	Subsequent to the establishment of the Company, the
	Company issued an additional 149,500,000 Overseas Listed
	Foreign Shares. Upon the issue, the Company’s share capital
	structure was: 539,500,000 ordinary shares, of which
	390,000,000 shares were held by the promoters, representing
	72.29% of the Company’s total ordinary shares in issue;
	149,500,000 shares were held by holders of Overseas Listed
	Foreign Shares, representing 27.71% of the Company’s total
	ordinary shares in issue.
	Upon completion of the issue of the aforesaid Overseas Listed
	Foreign Shares, and subject to the approval by the
	shareholders’ general meeting, the Company capitalized its
	capital common reserves and issued 28 bonus shares for every
	10 shares to all shareholders. Upon completion of the bonus
	issue, the Company’s share capital structure was:
	2,050,100,000 ordinary shares, of which 1,482,000,000 shares
	were held by holders of non-overseas listed foreign shares,
	representing 72.29% of the Company’s total ordinary shares
	in issue; 568,100,000 shares were held by holders of Overseas
	Listed Foreign Shares, representing 27.71% of the Company’s
	total ordinary shares in issue.
The former Article 19	The registered capital of the Company is RMB539,500,000.	Mandatory
		Provision 19
is amended as:
Article 19	The registered capital of the Company is RMB2,050,100,000.	Mandatory
		Provision 19

— 21 —

APPENDIX I PROPOSED REVISED ARTICLES OF ASSOCIATION

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION CORRESPONDING TO THE A SHARE ISSUE

CHAPTER 1 GENERAL PROVISIONS

The former Article 5	The Company is a perpetual continuing joint stock limited	Mandatory
	company.	Provision 5
is amended as:
Article 5	The Company is a perpetual continuing joint stock limited	Company Law
	company.	Article 3
	The entire capital of the Company is divided into equal
	shares. The shareholders of the Company shall be responsible
	for the obligations of the Company to the extent of the shares
	held by them. The Company shall be liable to its creditors to
	the extent of its entire assets.
The former Article 6	The Articles of Association become effective from the date of
	establishment of the Company.
	From the effective date of the Articles of Association, the	Mandatory
	Articles of Association constituted a legally binding	Provision 6
	document regulating the Company’s organization and
	activities, and the rights and obligations between the
	Company and each shareholder and among the shareholders.
	Pursuant to the Articles of Association, a shareholder may	Mandatory
	take legal action against the Company and vice versa,	Provision 7
	shareholders may take legal action against each another, a
	shareholder may take legal action against the directors,
	supervisors, managers and other senior management officers
	of the Company.
	The legal actions referred to in the preceding clause include
	litigation proceedings in courts and arbitration proceedings
	by arbitration institutions.
is amended as:
Article 6	The Articles of Association become effective from the date of
	establishment of the Company.
	From the effective date of the Articles of Association, the	Mandatory
	Articles of Association constituted a legally binding	Provision 7

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

	document regulating the Company’s organization and
	activities, and the rights and obligations between the
	Company and each shareholder and among the shareholders.
	Pursuant to the Articles of Association, a shareholder may	Guideline 10
	take legal action against the Company, the Company may take	of Articles of Association
	legal action against the shareholders, directors, supervisors,
	the president and other senior management officers,
	shareholders may take legal action against each another, a
	shareholder may take legal action against the directors,
	supervisors, president and other senior management officers
	of the Company.
	The legal actions referred to in the preceding clause include
	litigation proceedings in courts and arbitration proceedings
	by arbitration institutions.
The former Article 7	The Articles of Association are binding on the Company and	Mandatory
	its shareholders, directors, supervisors, managers and other	Provision 7
	senior management officers. The above mentioned persons
	may file claims of rights regarding matters of the Company
	pursuant to the Articles of Association.
is amended as:
Article 7	The Articles of Association are binding on the Company and	Mandatory
	its shareholders, directors, supervisors, president and other	Provision 7
	senior management officers. The above mentioned persons
	may file claims of rights regarding matters of the Company
	pursuant to the Articles of Association.
The former Article 8	The Company may invest in other limited liability companies
	or joint stock limited companies. The Company’s liabilities to
	an investee company shall be limited to the amount of its
	capital contribution to the investee company.
	The Company may, upon the approval of the approving	Mandatory
	department as authorised by the State Council, operate in	Provision 8
	accordance with the holding company as referred to under
	clause 2 of Article 12 of the Company Law.
is amended as:
Article 8	The Company may invest in other enterprises, however,
	unless otherwise provided by the law, the Company shall not
	become an investor that assumes joint and several liability of
	debts of any investee company.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

CHAPTER 3 SHARES, SHARE TRANSFERS AND REGISTERED CAPITAL

The former Article 13 Subject to the approval from the securities governing authority of the State Council, the Company may issue and offer shares to domestic investors and foreign investors for subscription. The aforesaid foreign investors shall mean the investors from Mandatory Provision 13 foreign countries and regions of Hong Kong, Macau and Taiwan who subscribe for the shares issued by the Company; domestic investors shall mean the investors within the PRC other than those investors in the aforesaid regions who subscribed for the shares issued by the Company. is amended as: Article 13 Subject to the approval from the securities regulatory authority of the State Council, the Company may issue and offer shares to domestic investors and foreign investors for subscription. The aforesaid foreign investors shall mean the investors from Mandatory foreign countries and regions of Hong Kong, Macau and Provision 13 Taiwan who subscribe for the shares issued by the Company; domestic investors shall mean the investors within the PRC other than those investors from the aforesaid regions who subscribed for the shares issued by the Company. The former Article 14 Shares issued by the Company to domestic investors for Mandatory subscription in RMB shall be referred to as “Domestic Provision 14 Shares”. Shares issued by the Company to foreign investors for subscription in foreign currencies shall be referred to as “Foreign Shares”. Foreign Shares which are listed overseas are called “Overseas Listed Foreign Shares”. is amended as: Article 14 Shares issued by the Company to investors for subscription in RMB shall be referred to as “Domestic Shares”. Shares issued by the Company to foreign investors for subscription in foreign currencies shall be referred to as “Foreign Shares”. Foreign Shares which are listed overseas are called “Overseas Listed Foreign Shares (H Shares)”. Domestic Shares listed in the PRC are called “PRC Listed Domestic Shares (A Shares)”.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

Domestic Shares of the Company are centrally held in custody by the [●] Branch of China Securities Depository and Clearing Corporation Limited.

Note: “[ ● ]” above, such information to be inserted once the Company has decided which stock exchange the A Shares are to be listed. The former Article 16 Subsequent to the establishment of the Company, the Mandatory Company issued a total of 149,500,000 Overseas Listed Provision 16 Foreign Shares, representing 27.71% of the total ordinary shares of the Company in issue. is amended as: Article 16 Subsequent to the establishment of the Company, the Company issued an additional 149,500,000 Overseas Listed Foreign Shares. Upon the issue, the Company’s share capital structure was: 539,500,000 ordinary shares, of which 390,000,000 shares were held by the promoters, representing 72.29% of the Company’s total ordinary shares in issue; 149,500,000 shares were held by holders of Overseas Listed Foreign Shares, representing 27.71% of the Company’s total ordinary shares in issue.

Upon completion of the issue of the aforesaid Overseas Listed Foreign Shares, and subject to the approval by the shareholders’ general meeting, the Company capitalized its capital common reserves and issued 28 bonus shares for every 10 shares to all shareholders. Upon completion of the bonus issue, the Company’s share capital structure was: 2,050,100,000 ordinary shares, of which 1,482,000,000 shares were held by holders of non-overseas listed foreign shares, representing 72.29% of the Company’s total ordinary shares in issue; 568,100,000 shares were held by holders of Overseas Listed Foreign Shares, representing 27.71% of the Company’s total ordinary shares in issue.

Upon the completion of the aforesaid bonus issue and the placement, subject to the approval by way of a special resolution in the shareholders’ general meeting, and verification by the Securities Regulatory Authorirty of the State Council, the Company issued [●] shares of Domestic Shares.

Upon completion of the issue of the aforesaid capital increment and issue of Domestic Shares, the Company’s share capital structure was: [●] ordinary shares, of which, 1,482,000,000 ordinary shares are held by holders of non-overseas listed foreign shares prior to the current issue,

— 25 —

PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

	representing [●]% of the Company’s total ordinary shares in
	issue; and 568,100,000 shares were held by holders of
	overseas listed foreign shares, representing [●]% of the
	Company’s ordinary shares in issue; [●] shares were held by
	holders of PRC listed Domestic Shares, representing [●]% of
	the Company’s total ordinary shares in issue.
	Note: [●] above will be filled out with the actual numbers of the A Share
	Issue.
The former Article 17	Upon approval by the securities governing authority of the
	State Council of the proposed plan to issue Overseas Listed
	Foreign Shares and Domestic Shares, the Company’s Board of
	Directors may make separate implementing arrangements for
	their issuance.
	The Company’s plan to issue Overseas Listed Foreign Shares	Mandatory
	and Domestic Shares pursuant to the preceding paragrah may	Provision 17
	be implemented separately within fifteen months from the
	date of approval by the China Securities Regulatory
	Commission.
is amended as:
Article 17	Upon approval by the securities regulatory authority of the
	State Council of the proposed plan to issue Overseas Listed
	Foreign Shares and Domestic Shares, the Company’s Board of
	Directors may make separate implementing arrangements for
	their issuance.
	The Company’s plan to issue Overseas Listed Foreign Shares
	and Domestic Shares pursuant to the preceding clause are
	implemented separately. The issue of Overseas Listed Foreign
	Shares may be implemented within fifteen months from the
	date of approval by the securities regulatory authority of the
	State Council, while the issue of Domestic Shares may be
	implemented within six months from the date of approval by
	the securities regulatory authority of the State Council.
The former Article 18	In respect of the total number of shares as stated in a shares	Mandatory
	issuing proposal, where the Company shall separately issue	Provision 18
	Overseas Listed Foreign Shares and Domestic Shares, such
	shares should be fully issued in one exercise at their
	respective offerings. If the shares cannot be fully issued at

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

their offerings in one exercise due to some special circumstances, then subject to the approval from the securities commission of the State Council, the shares may be issued in phases.

is amended as:

Article 18 In respect of the total number of shares as stated in a shares issuing proposal, where the Company shall separately issue Overseas Listed Foreign Shares and Domestic Shares, such shares should be fully issued in one exercise at their respective offerings. If the shares cannot be fully issued at their offerings due to some special circumstances, then subject to the approval from the securities regulatory administration authority of the State Council, the shares may be issued in phases.

Mandatory Provision 18

The former Article 20 Subject to the relevant provisions under the Articles of Association, the Company may increase its capital to meet the needs of operations and development.

The Company may increase capital in the following ways:

• (1) Offer of new shares to non-specific investors;

• (2) Placement of new shares to existing shareholders;

• (3) Distribution of new shares to existing shareholders;

• (4) Others ways permitted by laws and administrative regulations.

When the Company increases its capital and issues new shares and upon approval is granted in accordance with the Articles of Association, the exercise may be implemented in accordance with the procedures stipulated by the relevant laws and administrative regulations of the State.

Mandatory Provision 20

Upon an increase or reduction of capital, the Company shall effect changes of registration details with the companies registration authority and issue a public announcement.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

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is amended as:

Article 20

Subject to the relevant provisions under the Articles of Association, the Company may increase its capital to meet the needs of operations and development.

The Company may increase capital in the following ways:

• (1) Offer of new shares to non-specific investors;

• (2) Non-public offer of share issue;

Guideline 21 of Articles of Association

• (3) Placement of new shares to existing shareholders;

• (4) Distribution of new shares to existing shareholders;

• (5) Capitalisation by converting the common reserve fund into share capital;

• (6) Other ways permitted by laws and administrative regulations.

When the Company increases its capital and issues new shares and upon approval is granted in accordance with the Articles of Association, the exercise may be implemented in accordance with the procedures stipulated by the relevant laws, administrative regulations of the State.

CHAPTER 4 CAPITAL REDUCTION AND REPURCHASE OF SHARES

The former Article 23 When the Company reduces its registered capital, it must prepare a balance sheet and a list of properties.

Mandatory Provision 22

The Company shall notify its creditors within ten days from the date of the Company’s resolution for reduction of capital and shall publish an announcement in a newspaper at least three times within thirty days from the date of such resolution. A creditor has the right, within thirty days of receiving the notice from the Company or, in the case of a creditor who does not receive the notice, within ninety days from the date of the first public announcement, to require the Company to repay his debt or provide a corresponding guarantee for such debt.

The Company’s registered capital after reduction shall not be less than the minimum statutory amount.

Mandatory Provision 23

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APPENDIX I	PROPOSED REVISED ARTICLES OF ASSOCIATION	PROPOSED REVISED ARTICLES OF ASSOCIATION
is amended as:
Article 23	When the Company reduces its registered capital, it must
	prepare a balance sheet and a list of properties.
	The Company shall notify its creditors within ten days from	Company Law
	the date of the Company’s resolution for reduction of capital	178
	and shall publish an announcement in a newspaper within
	thirty days from the date of such resolution. A creditor has the
	right, within thirty days of receiving the notice from the
	Company or, in the case of a creditor who does not receive the
	notice, within forty-five days from the date of the first public
	announcement, to require the Company to repay his debt or
	provide a corresponding guarantee for such debt.
	The Company’s registered capital after reduction shall not be
	less than the minimum statutory amount.
The former Article 24	The Company may, in accordance with the procedures as
	provided in the Articles of Association and subject to the
	approval of the relevant governing authority of the State,
	repurchase its issued shares under the following
	circumstances:
	(1) Cancellation of shares for reduction of its capital;
	(2) Merging with another company that holds shares in the	Mandatory
	Company;	Provision 24
	(3) Other circumstances permitted by laws and
	administrative regulations.
is amended as:
Article 24	The Company may, in accordance with the procedures as
	provided in the Articles of Association and subject to the
	approval of the relevant governing authority of the State,
	repurchase its issued shares under the following
	circumstances:
	(1) Cancellation of shares for reduction of its capital;
	(2) Merging with another company that holds shares in the	Guideline 23
	Company;	of Articles of Association
	(3) The Company awards its employees with shares;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

	(4)	Shareholders, who disagree to the resolutions passed by
		the shareholders’ general meeting on the merger or split
		of the Company, request the Company to acquire their
		shares;
	(5)	Other circumstances permitted by laws and
		administrative regulations.
The former Article 25	The	Company may, with the approval of the relevant
	competent authority of the State for repurchasing its shares,
	conduct the repurchase in one of the following ways:
	(1)	Making a pro rata general offer of repurchase to all its	Mandatory
		shareholders;	Provision 25
	(2)	Repurchase through public dealing on a stock exchange;
	(3)	Repurchase by an off-market agreement outside a stock
		exchange
is amended as:
Article 25	The	Company may, with the approval of the relevant	Guideline 24
	competent authority of the State for repurchasing its shares,		of Articles of Association
	conduct the repurchase in one of the following ways:
	(1)	Making a pro rata general offer of repurchase to all its
		shareholders;
	(2)	Repurchase through public dealing on a stock exchange;
	(3)	Repurchase by an off-market agreement outside a stock
		exchange;
	(4)	Other ways as may be recognised by China Securities
		Regulatory Commission.
The former Article 27	After the repurchase of shares in accordance with the laws,		Mandatory
	the Company shall cancel such portion of shares within the		Provision 27
	time	limit as provided under the laws and administrative
	regulations, and an application has to be made to the original
	company registration authority for registration of changes in
	registered capital.

The total par value of the cancelled shares shall be verified and deducted from the registered capital of the Company.

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is amended as:
Article 27	After the repurchase of shares in accordance with the laws,	Mandatory
	the Company shall cancel or transfer such portion of shares within the time limit as provided under the laws and	Provision 27 Company Law 143
	administrative regulations. In the event of cancellation of
	shares, an application has to be made to the original company
	registration authority for registration of change in registered
	capital. Shares repurchased under item (1) of Article 24 in the
	Articles of Association shall be cancelled within ten days
	from the date of acquisition; for those circumstances
	described under items (2) and (4), the shares shall be
	transferred or cancelled within six months, for those under
	item (3), it should be transferred to the employees within one
	year. For shares repurchased for reasons described under
	items (1) to (3), resolutions thereof are required to be passed
	by the shareholders’ general meeting.
	The total par value of the cancelled shares shall be verified
	and deducted from the registered capital of the Company.

CHAPTER 6 SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS

The former Article 33	The share certificates of the Company shall be signed by the	Mandatory
	Chairman of the Board of Directors. Where the stock	Provision 33
	exchanges on which the Company’s shares are listed require
	other senior management officer(s) of the Company to sign on
	the share certificates, the share certificates shall also be
	signed by such senior management officer(s). The share
	certificates shall take effect after being sealed or printed with
	the seal of the Company. The share certificates shall only be
	sealed with the Company’s seal under the authorization of the
	Board of Directors. The signatures of the Chairman or other
	senior management officer(s) of the Company may also be
	printed in mechanical form.
is amended as:
Article 33	The share certificates of the Company shall be signed by the	Company Law
	legal representative. Where the stock exchanges on which the	129 Mandatory Provision 33
	Company’s shares are listed require other senior management
	officer(s) of the Company to sign on the share certificates, the
	share certificates shall also be signed by such senior
	management officer(s). The share certificates shall take effect
	after being sealed or printed with the seal of the Company.
	The share certificates shall only be sealed with the Company’s

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

seal under the authorization of the Board of Directors. The signatures of the legal representative or other senior management officer(s) of the Company may also be printed in mechanical form.

Additions:
Article 34	The Company shall not accept the Company’s share	Guideline 28
	certificates as the subject of pledges.	of Articles of Association
Article 35	The directors, supervisors, president, vice president and other	Company Law
	senior management officers of the Company shall within their	142
	terms of office regularly report to the Company and the stock
	exhanges where the Company’s shares are listed (as
	applicable) about their shareholding and changes thereof.
	Transfer of shares by the aforesaid persons shall comply with
	the relevant laws, regulations and/or relevant listing rules.
Article 36	If the directors, supervisors, senior management officers, and
	shareholders holding more than 5% shares of the Company
	sell their shares within six months after buying the same or
	buy shares within six months after selling the same, the
	earnings arising therefrom shall belong to the Company, and
	the Board of the Company will recover the said earnings.
	However, if a securities company holds more than 5% shares
	by buying the remaining shares pursuant to an underwriting
	arrangement, the six-month limitation for selling the said
	shares shall not apply.
	If the Board of Directors does not observe the preceding
	clause, shareholders shall be entitled to request the
	implementation by the Board within 30 days. If the Board of
	Directors fails to implement within the aforesaid time limit,
	the shareholders may directly initiate court proceedings in
	their own name.
	If the Board of Directors failed to perform in compliance with
	the provision in the first paragraph, the responsible directors
	shall be jointly and severally liable for such default.

The subsequent Article will be renumbered accordingly.

The former Article 35 The Company may, in accordance with understanding and agreements reached between the securities governing authority of the State Council and overseas securities regulatory institutions, keep overseas its original register of

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APPENDIX I

PROPOSED REVISED ARTICLES OF ASSOCIATION

shareholders of Overseas Listed Foreign Shares, and entrust an overseas agency with its management. The original register of shareholders of Overseas Listed Foreign Shares listed in Hong Kong is to be kept in Hong Kong. The Company shall keep the duplicate of the register of shareholders of Overseas Listed Foreign Shares at the domicile of the Company. The entrusted overseas agency shall at all times warrant the consistency between the original and duplicate of the register of shareholders of Overseas Listed Foreign Shares. In case of discrepancy between the original and duplicate of Mandatory Provision 35 the register of shareholders of Overseas Listed Foreign Shares, the original shall prevail.

is amended as: Article 38 The Company may, in accordance with understanding and agreements reached between the securities regulatory authority of the State Council and overseas securities regulatory institutions, keep overseas its original register of shareholders of Overseas Listed Foreign Shares, and entrust an overseas agency with its management. The original register of shareholders of Overseas Listed Foreign Shares listed in Hong Kong is to be kept in Hong Kong. The Company shall keep the duplicate of the register of shareholders of Overseas Listed Foreign Shares at the domicile of the Company. The entrusted overseas agency shall at all times warrant the consistency between the original and duplicate of the register of shareholders of Overseas Listed Foreign Shares. In case of discrepancy between the original and duplicate of the register of shareholders of Overseas Listed Foreign Shares, the original shall prevail.

All subsequent Articles will be renumbered accordingly.

The former Article 39 When the Company convenes a shareholders’ meeting, Mandatory Provision 39 distributes dividends, carries out liquidation, or engaged in other acts for which share ownership needs to be confirmed, the Board shall assign a date as the confirmation date of share ownership. At the end of such date, shareholders on the register are the shareholders of the Company.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

is amended as:

Article 42 When the Company convenes a shareholders’ meeting, distributes dividends, carries out liquidation, or engaged in other acts for which share ownership needs to be confirmed, the Board or the convenor of the shareholders’ general meeting shall assign a date as the confirmation date of share ownership. Shareholders on the register after close of business on the confirmation date shall be shareholders of the Company who are entitled to relevant interests.

Mandatory Provision 39 Guideline 31 of Articles of Association

The subsequent Article will be renumbered accordingly.

The former Article 41 If any shareholder recorded in the register of shareholders, or any person who requests to record his name (title) in such register, has lost his share-certificate(s) (namely the “original share-certifcate(s)”) may apply to the Company for re-issue of (a) new share-certificate(s) for the said shares (namely the “related shares”).

Any application for re-issue of lost share certificate(s) made by a holder of Domestic Shares shall be processed in accordance with the provisions of Article 150 of the Company Law.

Any application for re-issue of lost share certificate(s) made by a shareholder of an Overseas Listed Foreign Share shall be processed in accordance of the laws of the location of depository of the register of shareholders of Overseas Listed Foreign Shares and the provisions of the rules of the stock exchange or other related regulations.

Applications for re-issue of share certificates of Overseas Listed Foreign Shares listed in Hong Kong shall satisfy the following requirements:

• (1) The applicant shall file its application on the standard form as designated by the Company, and attach to it a notarial deed or statutory statement. The notarial deed or statutory statement shall contain the reasons for such application, details and evidence on loss of the share certificate(s), as well as a declaration that no other people will request to be recorded as the shareholder for the related stock.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

• (2) Before deciding upon the re-issue of new share certificate(s), the Company has not received any request to be recorded as the shareholder for such stock from any person other than the applicant.

• (3) Where the Company decides to re-issue new share-certificate(s) to the applicant, it shall publish a declaration thereon in Hong Kong newspapers and magazines (at least one in Chinese and one in English) as designated by the Board, which shall be repeated at least once every 30 days in a duration of 90 days.

• (4) The Company shall submit a duplicate of the declaration to be published regarding the re-issue of new share certificate(s) to the securities exchange listing the stock, and will only publish it after receiving a reply from the said securities exchange confirming the display of the declaration on the said exchange. The duration for such display on the exchange is 90 days.

If the application for re-issue of share certificate(s) has not been agreed by the shareholder of the related stock recorded in the register, the Company shall mail a photocopy of the declaration to be published to the shareholder.

• (5) If the Company has not received objections from anybody regarding the re-issue of share certificate(s) upon expiry of the 90-day limit for the declaration and its display as specified in clauses (3) and (4), it may re-issue of new share certificate(s) as applied by the applicant.

Mandatory Provision 41

• (6) Upon re-issue of new share certificate(s) according to this regulation, the Company shall cancel the original share certificate(s) immediately, and record such cancellation and re-issue in the register of shareholders.

• (7) All company’s expenses arising from the cancellation of the original share certificate(s) and re-issue of new ones, shall be borne by the applicant. Before the applicant provides a reasonable warranty, the Company is entitled to refuse taking any action.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

is amended as:

Article 44

If any shareholder recorded in the register of shareholders, or any person who requests to record his name (title) in such register, has lost his share-certificate(s) (namely the “original share-certifcate(s)”) may apply to the Company for re-issue of (a) new share-certificate(s) for the said shares (namely the “related shares”).

Any application for re-issue of lost share certificate(s) made by a holder of Domestic Shares shall be processed in accordance with the provisions of Article 144 of the Company Law.

Any application for re-issue of lost share certificate(s) made by a shareholder of an Overseas Listed Foreign Share shall be processed in accordance of the laws of the location of depository of the register of shareholders of Overseas Listed Foreign Shares and the provisions of the rules of the stock exchange or other related regulations.

Applications for re-issue of share certificates of Overseas Listed Foreign Shares listed in Hong Kong shall satisfy the following requirements:

• (1) The applicant shall file its application on the standard form as designated by the Company, and attach to it a notarial deed or statutory statement. The notarial deed or statutory statement shall contain the reasons for such application, details and evidence on loss of the share certificate(s), as well as a declaration that no other people will request to be recorded as the shareholder for the related stock.

• (2) Before deciding upon the re-issue of new share certificate(s), the Company has not received any request to be recorded as the shareholder for such stock from any person other than the applicant.

• (3) Where the Company decides to re-issue new share-certificate(s) to the applicant, it shall publish a declaration thereon in Hong Kong newspapers and magazines (at least one in Chinese and one in English) as designated by the Board, which shall be repeated at least once every 30 days in a duration of 90 days.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

• (4) The Company shall submit a duplicate of the declaration Mandatory Provision 41

• to be published regarding the re-issue of new share certificate(s) to the securities exchange listing the stock, and will only publish it after receiving a reply from the said securities exchange confirming the display of the declaration on the said exchange. The duration for such display on the exchange is 90 days.

If the application for re-issue of share certificate(s) has not been agreed by the shareholder of the related stock recorded in the register, the Company shall mail a photocopy of the declaration to be published to the shareholder.

• (5) If the Company has not received objections from anybody regarding the re-issue of share certificate(s) upon expiry of the 90-day limit for the declaration and its display as specified in clauses (3) and (4), it may re-issue of new share certificate(s) as applied by the applicant.

• (6) Upon re-issue of new share certificate(s) according to this regulation, the Company shall cancel the original share certificate(s) immediately, and record such cancellation and re-issue in the register of shareholders.

• (7) All company’s expenses arising from the cancellation of the original share certificate(s) and re-issue of new ones, shall be borne by the applicant. Before the applicant provides a reasonable warranty, the Company is entitled to refuse taking any action.

All subsequent Articles will be renumbered accordingly.

CHAPTER 7 SHAREHOLDERS’ RIGHTS AND OBLIGATIONS

The former Article 45 Shareholders of Company’s ordinary shares enjoy the following rights:

• (I) Receive dividends and division of earnings in other forms depending on its shares;

• (II) Attend general meetings either in person or by proxy and exercise the voting right;

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APPENDIX I

PROPOSED REVISED ARTICLES OF ASSOCIATION

• (III) Supervise over the Company’s business operation activities and make suggestions or inquiries;

• (IV) Transfer its shares in accordance with the laws, regulations and the stipulations in the Articles of Association;

• (V) Obtain relevant information in line with the stipulations in the Articles of Association, including:

• obtain the Articles of Association after paying the cost;

• have the right to inspect and reproduce after paying a rational fee:

  • (1) All parts of the register of shareholders;

  • (2) Personal data of the Company’s directors, supervisors, general manager and other senior management officers, including:

    • (a) present and previous names and alias;

    • (b) main addresses (domiciles);

    • (c) nationality;

    • (d) full-time and all part-time occupations and positions;

    • (e) identity certification document and its number.

  • (3) Status of Company’s share capital;

  • (4) Total par value, quantity, ceiling price and bottom price of each category of shares repurchased by the Company since the previous accounting year, as well as the report on Company’s payment of all such expenses;

  • (5) Minutes of shareholders’ meetings;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

	(VI)	In the event of the termination or liquidation of the	Mandatory
		Company, the right to participate in the distribution of	Provision 45
		remaining assets of the Company in accordance with the
		number of shares held;
	(VII)Other rights conferred by laws. Administrative
		regulations and the Articles of Association.
is amended as:
Article 48	Shareholders of Company’s ordinary shares enjoy the		Mandatory
	following rights:		Provision 45
	(I)	Receive dividends and division of earnings in other	Guideline 32
		forms depending on its shares;	of Articles of Association
	(II)	Lawfully require, convene, preside over or attend
		general meetings either in person or by proxy and
		exercise the voting right;
	(III)	Supervise over the Company’s business operation
		activities and make suggestions or inquiries;
	(IV)	Transfer, give or pledge its shares in accordance with the
		laws, administrative regulations and the Articles of
		Association;
	(V)	Obtain relevant information in line with the Articles of
		Association, including:
		1. obtain the Articles of Association after paying the
		cost;
		2. have the right to inspect and reproduce after paying
		a rational fee:
		(1) All parts of the register of shareholders;
		(2) Personal data of the Company’s directors,
		supervisors, president and other senior
		management officers, including:
		(a) present and previous names and alias;
		(b) main addresses (domiciles);

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APPENDIX I

PROPOSED REVISED ARTICLES OF ASSOCIATION

  - (c) nationality;

  - (d) full-time and all part-time occupations and positions;

  - (e) identity certification document and its number.

• (3) Status of Company’s share capital;

• (4) Total par value, quantity, ceiling price and bottom price of each category of shares repurchased by the Company since the previous accounting year, as well as the report on Company’s payment of all such expenses;

• (5) Minutes of shareholders’ meetings;

• (6) Stubs of corporate bonds, resolutions of Board meetings, resolutions of Supervisory Committee meetings, and financial reports.

• (VI) In the event of the termination or liquidation of the Company, the right to participate in the distribution of remaining assets of the Company in accordance with the number of shares held;

• (VII)The right to request the Company to repurchase their shares as a result of disagreement on the resolutions passed by the shareholders’ general meeting on the merger or division of the Company;

• (VIII) The right to institute legal proceedings and claim related rights concerning any act infringing upon the equity of the Company or its shareholders pursuant to the Company Law or others laws and administrative regulations and departmental rules and regulations;

• (IX) Other rights conferred by laws. Administrative regulations and the Articles of Association.

The former Article 46 Shareholders of the Company’s ordinary shares shall assume the following obligations:

• (1) To abide by the Articles of Association;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

• (2) To pay subscription monies according to the number of shares subscribed and the method of subscription;

• (3) To assume losses and liabilities of the Company in the proportion of the shares they held and limited to the shares subscribed;

• (4) To conscientiously safeguard the Company’s interests;

• (5) Not to withdraw their shares subsequent to the industrial and commercial registration by the Company;

• (6) Other obligations to be borne as required under the laws, administrative regulations and the Articles of Association.

Except for the conditions agreed upon by the share subscriber Mandatory Provision 46 at the time of subscription, the shareholder does not assume the responsibility for any subsequent increment of shares.

is amended as:

Article 49 Shareholders of the Company’s ordinary shares shall assume the following obligations:

• (1) To abide by the laws, administrative regulations and the Articles of Association;

• (2) To pay subscription monies according to the number of Guideline 37 shares subscribed and the method of subscription; of Articles of Association

• (3) Not to withdraw their shares unless in the circumstances stipulated by laws and administrative regulations;

• (4) Not to abuse shareholders’ right to damage the equity of the Company or other shareholders; not to abuse the independent status of legal persons or shareholders’ limited liability to damage the interests of the Company’s creditors;

• (5) To assume losses and liabilities of the Company in the proportion of the shares they held and limited to the shares subscribed;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

(6) To conscientiously safeguard the Company’s interests; (7) Other obligations to be borne as required under the laws, administrative regulations and the Articles of Association. Except for the conditions agreed upon by the share subscriber at the time of subscription, the shareholder does not assume the responsibility for any subsequent increment of shares.

Additions:
Article 50	If any shareholder holding more than 5% voting shares of the
	Company pledges the said voting shares, the said shareholder
	shall submit a written report to the Company on the date on
	which the said pledge is executed.
Article 51	The controlling shareholders and effective controllers of the
	Company shall not use the connected relations to damage the
	interests of the Company, otherwise they shall make
	compensation for the loss incurred to the Company.
	The controlling shareholders and effective controllers of the
	Company shall be honest to the Company and general public
	shareholders. The controlling shareholders shall duly exercise
	contributors’ rights according to law, shall not damage the
	legitimate rights and interests of the Company and general
	public shareholders by such means as profit distribution, asset
	reorganization, external investment, fund appropriation and
	loan guarantee and shall not abuse its controlling status to
	damage the interests of the Company and general public
	shareholders.

All subsequent Articles will be renumbered accordingly.

CHAPTER 8 SHAREHOLDERS’ GENERAL MEETINGS

The former Article 50 The shareholders’ general meeting shall exercise the following functions and powers:

• (1) To decide on the Company’s operational policies and investment plans;

• (2) To elect and replace directors and decide on matters relating to the remuneration of directors;

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APPENDIX I

PROPOSED REVISED ARTICLES OF ASSOCIATION

• (3) To elect and replace the supervisors who are representatives of shareholders, and to decide on matters relating to the remuneration of supervisors;

• (4) To examine and approve reports of the Board of Directors;

• (5) To examine and approve reports of the Supervisory Committee;

• (6) To examine and approve the Company’s annual preliminary and final financial budgets;

• (7) To examine and approve the Company’s profit distribution plans and plans for making up losses;

• (8) To decide on increase or decrease in the Company’s registered capital;

• (9) To decide on matters such as merger, division, dissolution and liquidation of the Company;

• (10) To decide on the issue of debentures by the Company;

• (11) To decide on the appointment, dismissal and disengagement of the accountants of the Company;

• (12) To amend the Articles of Association;

• (13) To consider motions raised by shareholders representing 5% (including 5%) or more of the voting shares of the Company;

• (14) Other matters which require resolutions of the shareholders at shareholders’ general meetings according to the relevant laws, administrative regulations and the Articles of Association;

Subject to compliance with the laws, administrative regulations and the Articles of Association, in the event of the issue of preferential shares by the Company, the rights and obligations of shareholders shall be determined by the shareholders’ general meeting.

Mandatory Provision 50

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

is amended as:

Article 55 The shareholders’ general meeting shall exercise the following functions and powers:

• (1) To decide on the Company’s operational policies and investment plans;

• (2) To elect and replace directors and decide on matters relating to the remuneration of directors;

• (3) To elect and replace the supervisors who are representatives of shareholders, and to decide on matters relating to the remuneration of supervisors;

• (4) To examine and approve reports of the Board of Directors;

• (5) To examine and approve reports of the Supervisory Committee;

• (6) To examine and approve the Company’s annual preliminary and final financial budgets;

• (7) To examine and approve the Company’s profit distribution plans and plans for making up losses;

• (8) To decide on increase or decrease in the Company’s registered capital;

• (9) To decide on matters such as merger, division, dissolution and liquidation or change in company form of the Company;

• (10) To decide on the issue of debentures by the Company;

• (11) To decide on the appointment, dismissal and disengagement of the accountants of the Company;

• (12) To amend the Articles of Association;

• (13) To consider motions raised by shareholders representing 3% (including 3%) or more of the voting shares of the Company;

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APPENDIX I

PROPOSED REVISED ARTICLES OF ASSOCIATION

• (14) To consider the Company’s purchase or sale of major assets within one year with the transaction amount exceeding 30% of the latest audited total assets of the Company;

• (15) External guarantees requiring resolutions by the shareholders’ general meeting pursuant to the laws, administrative regulations and the Articles of Association;

• (16) To consider and approve matters relating to changes in the use of proceeds from share offerings;

• (17) To consider and approve share incentive scheme;

• (18) Other matters which require resolutions of the shareholders at shareholders’ general meetings according to the relevant laws, administrative regulations and the Articles of Association;

The above functions of the shareholders’ general meeting shall not be delegated to be exercised by the Board of Directors or other institutions and individuals by way of authorisation. Additions: Article 56 Any external guarantee of the Company shall be considered and passed by the Board of Directors. Guarantees in the following circumstances shall be approved by the shareholders’ general meeting after being considered by the Board:

Guideline 41 of Articles of Association

• (1) Any provision of external guarantee, where the total amount of guarantees provided by the Company or its holdings subsidiaries reaches or exceeds 50% of the latest audited net assets;

• (2) Any external guarantee to be given by the Company, the total amount of which reaches or exceeds 30% of its latest audited total assets;

• (3) Provision of external guarantee to anyone whose gearing ratio exceeds 70%;

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APPENDIX I

PROPOSED REVISED ARTICLES OF ASSOCIATION

• (4) Provision of a single guarantee whose amount exceeds 10% of the latest audited net assets;

• (5) Provision of guarantee to shareholders, effective controllers and their connected parties;

When motions on providing guarantees for shareholders, effective controllers and their connected parties are being considered at the shareholders’ general meeting, the shareholder or the shareholder under the control of the effective controller shall abstain from voting, and such resolution shall be voted by more than half of the voting shares of other shareholders present in the general meeting. The aforesaid item (2) must be approved by two-thirds of the voting shares of the shareholders (including proxies) present in the general meeting.

If any director, the president and other senior administrative officer violates the examination and approval right and consideration procedure concerning external guarantee specified in the laws, administrative regulations and the Articles of Association, the aforesaid person shall be liable for compensating the Company for any loss incurred thereto, and the Company may pursue action against the said person pursuant to law.

In the event of other requirements on external guarantees of the Company by China Securities Regulatory Commission and the stock exchange where the shares of the Company is listed, the above clause of the Articles of Association shall not apply, while the stricter requirement by China Securities Regulatory Commission and the stock exchange where the shares of the Company is listed shall apply.

Article 57

Matters which, pursuant to the laws, administrative regulations and the Articles of Association, are required to be approved by the general meeting must only be considered at such meetings so as to protect the decision-making power of the shareholders of the Company on such matters. Under necessary and reasonable circumstances, the general meeting may authorize the Board to decide, within the scope of authorization granted by the general meeting, specific issues relating to matters to be resolved on by the general meeting which may not be decided upon immediately at a general meeting.

Principles of governance

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	With regard to an authorization granted by a general meeting	Company Law
	to the Board, if the matter is within the scope of the ordinary	104
	resolution, it shall be passed by votes representing more than
	half (exclusive) of the voting rights held by the attending
	shareholders (including their proxies); and if it is within the
	scope of the special resolution, it shall be passed by votes
	representing more than two-thirds (exclusive) of the voting
	rights held by the attending shareholders (including their
	proxies). The contents of the authorization shall be specific
	and detailed.
The former Article 51	Without prior approval by the shareholders’ general meeting,
	the Company shall not conclude a contract with other people
	than the directors, supervisors, general managers and other
	senior management officers or delegating management of all
	or Company’s important operation to such people.
is amended as:
Article 58	Without prior approval by the shareholders’ general meeting,
	the Company shall not conclude a contract with other people
	than the directors, supervisors, president and other senior
	management officers or delegating management of all or
	Company’s important operation to such people.
The former Article 52	The shareholders’ meeting is divided into the annual general
	meeting and extraordinary general meeting. The general
	meeting is convened by the Board of Directors. The annual
	general meeting is held once a year, and shall take place in six
	months after termination of the previous accounting year.
	In any of the following cases, the Board of Directors shall call
	an extraordinary general meeting within two months:
	(1) When the number of directors is below that specified in
	the Company law, or less than 2/3 of that specified in the
	Articles of Association;
	(2) When the uncompensated loss of the Company reaches
	1/3 of the total share capital of the Company;
	(3) When required in writing by shareholder(s) severally or
	jointly holding more than 10% (inclusive) equity of the
	Company;

• (4) When the Board of Directors considers it necessary or it Mandatory is proposed by the Supervisory Committee to convene it; Provision 52

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• (5) When jointly proposed by more than two independent directors.

is amended as:

Article 59 The shareholders’ meeting is divided into the annual general meeting and extraordinary general meeting. The general meeting is convened by the Board of Directors. The annual general meeting is held once a year, and shall take place in six months after termination of the previous accounting year. The shareholders’ general meeting shall set meeting venue and be convened by ways of on-site meetings. The Company will provide online transmission for the convenience of shareholders where technologically viable. Shareholders who attend shareholders’ general meetings in the aforesaid manners shall be deemed as present.

Guideline 43 of Articles of Association

In any of the following cases, the Board of Directors shall call an extraordinary general meeting within two months:

• (1) When the number of directors is below that specified in the Company law, or less than 2/3 of that specified in the Articles of Association;

• (2) When the uncompensated loss of the Company reaches 1/3 of the total share capital of the Company;

• (3) When required in writing by shareholder(s) severally or jointly holding more than 10% (inclusive) equity of the Company;

• (4) When the Board of Directors considers it necessary or it is proposed by the Supervisory Committee to convene it;

• (5) Other circumstances stipulated by laws, administrative regulations, departmental rules or the Articles of Association.

The amount of shareholding mentioned in (3) above is calcualted as required in writing by the shareholder(s).

The former Article 53

Unless otherwise unanimously waived in writing by all shareholders, the Company shall deliver a written notice 45 days before the date of the general meeting to inform all shareholders on record of the matters to be examined at the meeting as well as the date and location of the meeting. Shareholders intending to attend the meeting shall serve their

Mandatory Provision 53

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APPENDIX I

	written response on attendance to the Company twenty days
	before the meeting is held. Subject to compliance with the
	previous clause, the Company’s notice in writing on the
	convening of shareholders’ general meeting shall not be sent
	more than 45 days before the convening of the meeting.
	The calculation of the time of issue of the notice shall not
	include the date of the meeting and the date of issue of the
	notice.
	In respect of the notice issued as referred to in this clause, the
	date of issue shall be the date when the relevant notice is
	delivered to the post office by the Company or the share
	registrar appointed by the Company.
is amended as:
Article 60	The Company shall deliver a written notice 45 days before the	Guideline 54
	date of the general meeting to inform all shareholders on	of Articles of Association
	record of the matters to be examined at the meeting as well as
	the date and location of the meeting. Shareholders intending
	to attend the meeting shall serve their written response on
	attendance to the Company twenty days before the meeting is
	held.
	The calculation of the time of issue of the notice shall not
	include the date of the meeting and the date of issue of the
	notice.
	In respect of the notice issued as referred to in this clause, the
	date of issue shall be the date when the relevant notice is
	delivered to the post office by the Company or the share
	registrar appointed by the Company.
The former Article 54	At the annual general meeting of the Company, shareholders	Mandatory
	holding more than 5% (including 5%) of the voting shares of	Provision 54
	the Company may propose in writing new motions to the
	Company. The Company shall include the matters belonging
	to the scope of the functions of the general meeting in the
	agenda of the meeting, provided such motions shall be
	delivered to the Company within thirty days from the date of
	issue of the notice of meeting.
is amended as:
Article 61	At general meetings of the Company, the Board, Supervisory	Guideline 53
	Committee, and shareholder(s) severally or jointly holding	of Articles of Association
	more than 3% of the Company’s total shares may propose
	motions to the Company.

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Shareholder(s) severally or jointly holding more than 3% (inclusive) equity of the Company may submit a written provisional motion to the convener 10 days before a general meeting is convened; the convener shall issue a supplementary notice of general meeting within 2 days after receipt of the said provisional motion, to announce the contents of the said provisional motion. Save as specified in the preceding clause, the convener shall not change the motion set out in the notice of general meeting or add any new motion after the said notice is served. Additions: Article 62 Motions not set out in the notice of general meeting as referred to in Article 60 or not complying with Article 61 in the Articles of Association shall not be voted on or resolved at the general meeting. Article 63 Motions at a general meeting refer to specific motions Guideline 52 regarding issues which shall be disccused at the general of Articles of Association meeting. Motions at a general meeting shall meet the following requirements: (1) The contents shall comply with provisions of the laws, regulations and the Articles of Association and shall fall within the scope of business of the Company and terms of reference of a general meeting; (2) The motions shall cover specific topics for discussion and specific issues to be resolved; and

• (3) The motions shall be served or submitted to the convener in writing.

The subsequent Article will be renumbered accordingly.

The former Article 56 A notice of meeting of shareholders shall:

• (1) be in writing;

• (2) specify the place, the date and time of the meeting;

• (3) state the matters to be considered at the meeting;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

• (4) provide such information and explanation as are necessary for the shareholders to make an informed decision on the proposals put before them. Without limiting the generality of the foregoing, where a proposal is made to amalgamate the Company with another, to repurchase shares, to reorganise the share capital, or to restructure the Company in any other way, the terms of the proposed transaction must be provided in detail together with copies of the proposed agreement, if any, and the cause and effect of such proposal must be properly explained;

• (5) contain a disclosure of the nature and extent, if any, of the material interests of any director, supervisor, general manager or other senior administrative officer in the proposed transaction and the effect of the proposed transaction on them in their capacity as shareholders in so far as it is different from the effect on the interests of the shareholders of the same class;

• (6) contain the full text of any special resolution to be proposed at the meeting;

• (7) contain conspicuously a statement that a shareholder Mandatory entitled to attend and vote is entitled to appoint one or Provision 56 more proxies to attend and vote instead of him and that a proxy need not be a shareholder;

• (8) specify the time and place for lodging proxy forms for the relevant meeting.

• is amended as: Article 65 A notice of meeting of shareholders shall: (1) be in writing; (2) specify the place, the date and time of the meeting; (3) state the matters to be considered at the meeting; (4) provide such information and explanation as are necessary for the shareholders to make an informed decision on the proposals put before them. Without limiting the generality of the foregoing, where a proposal is made to amalgamate the Company with

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PROPOSED REVISED ARTICLES OF ASSOCIATION

another, to repurchase shares, to reorganise the share capital, or to restructure the Company in any other way, the terms of the proposed transaction must be provided in detail together with copies of the proposed agreement, if any, and the cause and effect of such proposal must be properly explained;

• (5) contain a disclosure of the nature and extent, if any, of the material interests of any director, supervisor, president or other senior administrative officer in the proposed transaction and the effect of the proposed transaction on them in their capacity as shareholders in so far as it is different from the effect on the interests of the shareholders of the same class;

• (6) contain the full text of any special resolution to be proposed at the meeting;

• (7) contain conspicuously a statement that a shareholder entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of him and that a proxy need not be a shareholder;

• (8) specify the time and place for lodging proxy forms for the relevant meeting;

• (9) specify the record date of shareholding of shareholders entitled to attend the shareholders’ general meeting;

• (10) specify the name and telephone number of the contact person of the meeting.

The former Article 57 Notices of shareholders’ meetings shall be delivered to shareholders (with or without voting power at the shareholders’ meeting) in person or by mail with postage paid to the addresses as recorded in the register of shareholders. For holders of Domestic Shares, such notices can also be made in the form of a declaration.

The declaration as mentioned in the preceding clause shall be published in one or more newspapers as designated by the securities governing authority of the State Council 45-50 days prior to the meeting. Once such declaration is made, all holders of Domestic Shares are deemed as having received the notice on the shareholders’ meeting.

Mandatory Provision 57

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APPENDIX I	PROPOSED REVISED ARTICLES OF ASSOCIATION	PROPOSED REVISED ARTICLES OF ASSOCIATION
is amended as:
Article 66	Notices of shareholders’ meetings shall be delivered to
	shareholders (with or without voting power at the
	shareholders’ meeting) in person or by mail with postage paid
	to the addresses as recorded in the register of shareholders.
	For holders of Domestic Shares, such notices can also be
	made in the form of a declaration.
	The declaration as mentioned in the preceding clause shall be
	published in one or more newspapers as designated by the
	securities regulatory authority of the State Council 45-50
	days prior to the meeting. Once such declaration is made, all
	holders of Domestic Shares are deemed as having received the
	notice on the shareholders’ meeting.
All subsequent Articles	will be renumbered accordingly.
Addition:
Article 73	When a connected transaction is considered at a general	Mandatory
	meeting, the connected shareholders shall not vote, and the	Provision 63
	voting shares held by them shall not be counted in the total
	number of shares with voting rights; the announcement of any
	resolution made at the shareholders’ general meeting shall
	adequately disclose information relating to voting by
	non-connected shareholders.
	The aforesaid connected shareholders refer to shareholders in
	the following circumstances: connected parties or
	non-connected parties but persons or associates (defined in
	relevant listing rules) with material interests in the
	to-be-voted transactions in accordance with the listing rules
	prevailing or amended from time to time.

The subsequent Article will be renumbered accordingly.

The former Article 65 When voting in the shareholders’ general meeting, a Mandatory shareholder (including shareholder’s attorney) shall exercise Provision 65 its voting right with the number of voting stock represented by it, with one vote for each share. However, during the process of voting, any special privilege or restriction on the voting rights then attaching to any class of shares shall be complied with, as well as the requirements of the relevant applicable laws, regulations and the Articles of Association. If in complying with the “Rules Governing the Listing of

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Securities of The Hong Kong Stock Exchange Limited”, any of its schedules or any listing agreements, other contractual agreements entered into basing on the above documents and decisions of The Hong Kong Stock Exchange Limited (hereinafter referred to as “Hong Kong Listing Requirements”), any shareholder is allowed to exercise his voting rights in respect of any voting, or is under any restriction in respect of the exercise of voting rights, while he has not complied with the relevant requirements, the voting right as exercised by such shareholder shall be deemed as invalid and shall not be accounted. is amended as: Article 75 When voting in the shareholders’ general meeting, a Mandatory shareholder (including shareholder’s attorney) shall exercise Provision 65 its voting right with the number of voting stock represented by it, with one vote for each share. However, during the process of voting, any special privilege or restriction on the voting rights then attaching to any class of shares shall be complied with, as well as the requirements of the relevant applicable laws, regulations and the Articles of Association. If in complying with the “Rules Governing the Listing of Securities of The Hong Kong Stock Exchange Limited”, any of its schedules or any listing agreements, other contractual agreements entered into basing on the above documents and decisions of The Hong Kong Stock Exchange Limited (hereinafter referred to as “Hong Kong Listing Requirements”), any shareholder is allowed to exercise his voting rights in respect of any voting, or is under any restriction in respect of the exercise of voting rights, while he has not complied with the relevant requirements, the voting right as exercised by such shareholder shall be deemed as invalid and shall not be accounted. The Company has no voting right for the shares it holds, and Guideline 78 such part of shares shall be excluded from the total number of of Articles of Association voting shares represented by the shareholders attending the general meeting. The former Article 66 A shareholders’ meeting shall vote by a show of hands, unless voting by ballot is required for the relevant matters pursuant to the Hong Kong Listing Rules or the following persons so request before or after voting by a show of hands: (1) Chairman of the meeting;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

• (2) At least two shareholders or proxies of shareholders with voting rights;

• (3) One or more shareholders (including proxies of shareholders) who solely or jointly hold(s) more than 10% (including 10%) of the shares that carry voting rights at the meeting.

Unless voting by ballot is proposed, the chairman of the meeting shall announce the passing of resolutions according to the result of voting by a show of hands and record the same in the minutes of the meeting as conclusive evidence, without any need to prove the number of affirmative or negative votes or their proportion in respect of the resolution(s) passed at the meeting.

The request for voting by ballot may be withdrawn by the proposing party.

is amended as:

Article 76

A shareholders’ meeting shall vote by a show of hands, unless voting by ballot is required for the relevant matters pursuant to the Hong Kong Listing Rules or the following persons so request before or after voting by a show of hands:

• (1) Chairman of the meeting;

• (2) At least two shareholders or proxies of shareholders with voting rights;

• (3) One or more shareholders (including proxies of shareholders) who solely or jointly hold(s) more than 10% (including 10%) of the shares that carry voting rights at the meeting.

Unless voting by ballot is proposed, the chairman of the meeting shall announce the passing of resolutions according to the result of voting by a show of hands and record the same in the minutes of the meeting as conclusive evidence, without any need to prove the number of affirmative or negative votes or their proportion in respect of the resolution(s) passed at the meeting.

The request for voting by ballot may be withdrawn by the proposing party.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

All subsequent Articles will be renumbered accordingly.

The former Article 71 The following matters need to be adopted through an ordinary resolution of the shareholder’s meeting:

• (1) Working reports made by the Board of Directors and Supervisory Committee;

• (2) Profit distribution plans and loss compensation schemes formulated by the Board of Directors;

• (3) Appointment and removal of the members of the Board of Directors and Supervisory Committee, including any directors who are also the general manager of the Company or other positions and their remunerations and payment methods;

• (4) Company’s annual budget and final account reports, balance sheet, profit and loss statement and other financial statements;

• (5) Matters other than those that should be adopted through an extraordinary resolution as specified in the laws, regulations and the Articles of Association.

is amended as:

Article 81

The following matters need to be adopted through an ordinary resolution of the shareholder’s meeting:

• (1) Working reports made by the Board of Directors and Supervisory Committee;

• (2) Profit distribution plans and loss compensation schemes formulated by the Board of Directors;

• (3) Appointment and removal of the members of the Board of Directors and Supervisory Committee, including any directors who are also the general manager of the Company or other positions and their remunerations and payment methods;

• (4) Company’s annual budget and final account reports, balance sheet, profit and loss statement and other financial statements;

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APPENDIX I

• (5) Company’s annual report;

• (6) Matters other than those that should be adopted through an extraordinary resolution as specified in the laws, regulations and the Articles of Association.

The former Article 72 The following are adopted by the general meeting through an extraordinary resolution:

• (1) The Company’s increase/decrease of share capital as well as issue of any type of shares, certificates of subscription and other similar securities;

• (2) Issue of Company’s debentures;

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

• (4) Revision of the Articles of Association;

• (5) Other matters adopted by the general meeting in an ordinary resolution that are considered to exert great influence on the Company and need to be adopted through a resolution under Article 71 of the Mandatory Provisions;

• (6) Other issues as required by the Listing Rules.

is amended as:

Article 82 The following are adopted by the general meeting through an extraordinary resolution:

• (1) The Company’s increase/decrease of share capital as well as issue of any type of shares, certificates of subscription and other similar securities;

• (2) Issue of Company’s debentures;

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

• (4) Revision of the Articles of Association;

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• (5) The Company’s acquisition or disposal of major assets Guideline 77 of Articles of

• within one year with the transaction amount exceeding Association

• 30% of the latest audited total assets of the Company;

• (6) Approval of equity incentive scheme;

• (7) Other matters adopted by the general meeting in an ordinary resolution that are considered to exert great influence on the Company and need to be adopted through a special resolution;

• (8) Other issues as required by the Listing Rules.

• The former Article 73 Shareholders requisitioning the convening of extraordinary general meetings or class meetings shall abide the following procedures: (1) Two or more shareholders jointly holding 10% (including 10%) or more of the voting rights in the meeting to be convened may sign one or more written counterpart requisitions requiring the Board of Directors to convene an extraordinary general meeting or class meeting and stating the object of the meeting. The Board of Directors shall give a written notice advising their opinion on whether to convene an extraordinary general meeting or class meeting as soon as possible upon the receipt of the aforesaid written request from the date of issue of such written requisition.

• (2) If the Board of Directors fails to issue a notice to convene the meeting within thirty days after receipt of the aforesaid written requisition, the shareholder raising such requisition may convene the meeting by itself within four months after the receipt of such requisition by the Board of Directors. The procedures of convening the meeting should be similar to those of convening a shareholders’ general meeting by the Board of Directors as far as possible.

If shareholders convene a meeting by itself due to failure of the Board of Directors to the aforesaid requisition, the reasonable expenses for the meeting shall be borne by the Company and deducted from the monies payable by the Company to the defaulting directors.

Mandatory Provision 72

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PROPOSED REVISED ARTICLES OF ASSOCIATION

is ameded as:

Article 83

Shareholders severally or jointly holding 10% or more of the shares of the Company requisitioning the convening of extraordinary general meetings or class meetings shall abide the following procedures:

Guidelines of Articles of Association

• (1) Two or more shareholders severally or jointly holding 10% (including 10%) or more of the voting rights in the meeting to be convened may sign one or more written counterpart requisitions requiring the Board of Directors to convene an extraordinary general meeting or class meeting and stating the object of the meeting. The Board of Directors shall give a written notice advising their opinion on whether to convene an extraordinary general meeting or class meeting as soon as possible upon the receipt of the aforesaid written request from the date of issue of such written requisition.

• (2) If the Board of Directors agrees to convene an extraordinary general meeting, it shall issue a notice convening the general meeting within five days after the Board of Directors has made the resolution, notifying changes to the original motion for the consent of the original proposer.

• (3) If the Board of Directors does not agree to convene the extraordinary general meeting, it shall make an announcement with relevant explanation.

• (4) If the Board of Directors does not agree to the proposal made by the Supervisory Committee to convene the shareholders’ extraordinary general meeting, or fails to give a relevant notice within ten days after the receipt of the request, it shall be deemed that the Board of Directors is unable to fulfill or fails to fulfill its responsibilities to convene the shareholders’ general meeting. The Supervisory Committee can hereby convene and preside the meeting by itself. The procedures of convening the meeting should be similar to those of convening a shareholders’ general meeting by the Board of Directors as far as possible.

• (5) If the Board of Directors does not agree to the proposal made by the shareholders to convene the shareholders’ extraordinary general meeting, shareholders shall make a written proposal to the Supervisory Committee for convening such meeting.

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If the Supervisory Committee agrees to convene the extraordinary general meeting, it shall dispatch a notice of such meeting within five days upon receipt of such request. No amendments to the original proposal shall be made without the prior consent of the proposing shareholders.

If the supervisory fails to dispatch a notice of the general meeting within a prescribed period of time, it shall be deemed that the Supervisory Committee fails to convene and preside over the general meeting. The shareholder(s) continuously holding for 90 days individually or collectively 10% or more of the shares of the Company may convene a meeting by themselves. The procedures of convening the meeting should be similar to those of convening a shareholders’ general meeting by the Board of Directors as far as possible.

If the Supervisory Committee or the shareholders themselves convenes a meeting as provided for in the preceding clause, they shall notify the board in writing and file with the relevant regulatory authority pursuant to the relevant regulations. The board and board secretary shall be cooperative in relation to the meeting, and the Board shall provide the shareholders’ register. The reasonable expenses for the meeting shall be borne by the Company and deducted from the monies payable by the Company to the defaulting directors.

The former Article 74 The general meeting shall be convened and presided over by the Chairman. If the chairman is unable or fails to fulfill the duty thereof, the vice chairman shall convene and preside over the meeting; if even the vice chairman is unable or fails to fulfill the duty thereof, the Board of Directors may appoint a director to convene and preside over the meeting. Where no chairman has been appointed, shareholders present at the meeting at the meeting may elect a person to act as chairman. If for any reason the shareholders are unable to elect a chairman, the shareholder with the greatest number of voting shares present at the meeting, whether in person or by proxy, shall act as chairman.

Mandatory Provision 73

is amended as: Article 84 The general meeting shall be convened and presided over by the Chairman. If the chairman is unable or fails to fulfill the duty thereof, the vice chairman shall convene and preside over the meeting. If the vice chairman is unable or fails to fulfill the duty thereof, a director jointly elected by more than half of the directors shall preside over the meeting.

Guideline 67 of Articles of Association

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	Where a General Meeting is convened by the Supervisory
	Committee itself, the General Meeting shall be presided over
	by the chairman of the Supervisory Committee. If the
	chairman of the Supervisory Committee is unable or fails to
	fulfill the duty thereof, the vice chairman shall convene and
	preside over the meeting. If the vice chairman of the
	Supervisory Committee is unable or fails to perform his duty,
	the General Meeting shall be presided over by a supervisor
	collectively elected by more than half of the supervisors.
	Where a General Meeting is convened by shareholders
	themselves, the General Meeting shall be presided over by a
	representative elected by the conveners.
	If the chairman of the meeting violates the rules of procedures
	during the general meeting so that the meeting is unable to
	proceed, shareholders present at the meeting may by majority
	vote elect a person as chairman to proceed with the meeting.
The former Article 75	The chairman of the meeting decides whether a resolution of	Mandatory
	the shareholders’ general meeting has been adopted or not,	Provision 74
	with such decision being final, and shall announce it and enter
	it in the minutes of the meeting.
is amended as:
Article 85	The chairman of the meeting decides whether a resolution of	Mandatory
	the shareholders’ general meeting has been adopted or not,	Provision 74
	with such decision being final, and shall announce it and enter
	it in the minutes of the meeting.
The subsequent Article	will be renumbered accordingly.
The former Article 77	If the votes are counted at a shareholders’ general meeting,
	the result of such counting shall be recorded in the minutes of
	the meeting.
	Meeting minutes together with the signature register and	Mandatory
	power of attorney of attending proxies, shall be kept in the	Provision 76
	Company for at least 10 years.

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APPENDIX I

is amended as: Article 87 If the votes are counted at a shareholders’ general meeting, Mandatory the result of such counting shall be recorded in the minutes of Provision 76 the meeting. Shareholders’ general meetings shall have minutes, which Guideline 73 shall be recorded by the Board secretary and signed by the of Articles of Association attending directors, supervisors, Board secretary, convener or representatives thereof.

Meeting minutes together with the signature register and power of attorney of attending proxies, shall be kept in the Company for at least 10 years.

All subsequent Articles will be renumbered accordingly.

CHAPTER 9 SPECIAL PROCEDURE FOR VOTING BY CLASS SHAREHOLDERS

The former Article 80	If the Company intends to revise or cancel the rights of class	Mandatory
	shareholders, they are subject to adoption by the	Provision 79
	shareholders’ meeting through a special resolution as well as
	adoption by affected shareholders at shareholders’ meetings
	held respectively as per Articles 82 to 86. If when voting for
	a resolution in respect of the voting rights it holds, any
	shareholder (or its attorney) elects to abstain or not exercise
	its voting rights, the voting rights involved in the counting of
	voting rights held by the attending class shareholders (in
	respect of this resolution) shall not be counted.
is amended as:
Article 90	If the Company intends to revise or cancel the rights of class
	shareholders, they are subject to adoption by the
	shareholders’ meeting through a special resolution as well as
	adoption by affected shareholders at shareholders’ meetings
	held respectively as per Articles 92 to 96. If when voting for
	a resolution in respect of the voting rights it holds, any
	shareholder (or its attorney) elects to abstain or not exercise
	its voting rights, the voting rights involved in the counting of
	voting rights held by the attending class shareholders (in
	respect of this resolution) shall not be counted.

The subsequent Article will be renumbered accordingly.

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The former Article 82 Affected class shareholders, regardless of whether they have the voting right at shareholders’ meetings, have the voting right on class shareholders’ meetings as far as matters in Articles 81 (2)—(8) and (11)—(12) are concerned, but shareholders having related interests do not have the voting right at class shareholders’ meetings.

The shareholder having related interests as mentioned in the preceding clause refers to the following:

• (1) Under the condition that the Company, according to the requirement in Article 25 of the Articles of Association, sends a repurchase offer at the same proportion to all the shareholders, or repurchases its own shares in an open transaction form at the stock exchange, the shareholder having related interests refers to the controlling shareholder as defined in Article 48 of the Articles of Association;

• (2) Under the condition that the Company purchases its own shares through an agreement at other places than stock exchanges according to Article 25 of the Articles of Association, the shareholder having related interests refers to the shareholder related to the said agreement;

• (3) In the reorganization scheme of the Company, the shareholder having related interests refers to the shareholder assuming responsibilities at a proportion lower than those of other shareholders of the class, or the shareholder holding different interests from those of other shareholders of the class.

Mandatory Provision 81

is amended as:

Article 92 Affected class shareholders, regardless of whether they have the voting right at shareholders’ meetings, have the voting right on class shareholders’ meetings as far as matters in Articles 91 (2)-(8) and (11)-(12) are concerned, but shareholders having related interests do not have the voting right at class shareholders’ meetings.

The shareholder having related interests as mentioned in the preceding clause refers to the following:

• (1) Under the condition that the Company, according to the requirement in Article 25 of the Articles of Association,

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APPENDIX I

	sends a repurchase offer at the same proportion to all the
	shareholders, or repurchases its own shares in an open
	transaction form at the stock exchange, the shareholder
	having related interests refers to the controlling
	shareholder as defined in Article 53 of the Articles of
	Association;
	(2) Under the condition that the Company purchases its own
	shares through an agreement at other places than stock
	exchanges according to Article 25 of the Articles of
	Association, the shareholder having related interests
	refers to the shareholder related to the said agreement;
	(3) In the reorganization scheme of the Company, the
	shareholder having related interests refers to the
	shareholder assuming responsibilities at a proportion
	lower than those of other shareholders of the class, or
	the shareholder holding different interests from those of
	other shareholders of the class.
The former Article 83	Resolutions of a class shareholders’ meeting can only be made	Mandatory
	after they are passed through voting by over 2/3 of the voting	Provision 82
	stock of the shareholders attending the class shareholders’
	meeting according to Article 81.
is amended as:
Article 93	Resolutions of a class shareholders’ meeting can only be made	Mandatory
	after they are passed through voting by over 2/3 of the voting	Provision 82
	stock of the shareholders attending the class shareholders’
	meeting according to Article 91.
All subsequent Articles	will be renumbered accordingly.
The former Article 86	Except for other class shareholders, shareholders of Domestic
	Shares and shareholders of Overseas Listed Foreign Shares
	are deemed as shareholders of different classes;
	The special procedure for the voting of class shareholders	Mandatory
	does not apply to the following cases: (1) As approved by a	Provision 85
	special resolution of the shareholders’ general meeting, the
	Company issues Domestic Shares and Overseas Listed
	Foreign Shares separately or at the same time every 12
	months, and neither of the numbers of the planned Domestic
	Shares and Overseas Listed Foreign Shares does not exceed
	the issued shares of the class by 20%; (2) The plan for issue

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APPENDIX I

of the Domestic Shares and Overseas Listed Foreign Shares made at the time of establishment of the Company is fulfilled in 15 months after the date of approval by the Securities Regulatory Commission of the State Council.

is amended as:
Article 96	Except for other class shareholders, shareholders of Domestic
	Shares and shareholders of Overseas Listed Foreign Shares
	are deemed as shareholders of different classes;
	The special procedure for the voting of class shareholders
	does not apply to the following cases: (1) As approved by a
	special resolution of the shareholders’ general meeting, the
	Company issues Domestic Shares and Overseas Listed
	Foreign Shares separately or at the same time every 12
	months, and neither of the numbers of the planned Domestic
	Shares and Overseas Listed Foreign Shares does not exceed
	the issued shares of the class by 20%; (2) The plan for issue
	of the Domestic Shares and Overseas Listed Foreign Shares
	made at the time of establishment of the Company is fulfilled
	in 15 months after the date of approval by the Securities
	Regulatory Commission of the State Council.

CHAPTER 10 BOARD OF DIRECTORS

The subsequent Article will be renumbered accordingly.

The former Article 89 The Board of Directors is responsible to the shareholders’ general meeting and performs the following functions:

• (1) Convene shareholders’ general meetings, and report its work to the shareholders’ general meetings;

• (2) Implement resolutions adopted by shareholders’ general meetings;

• (3) Decide upon company’s business plans and investment schemes;

• (4) Formulate company’s annual financial budget schemes and final account schemes;

• (5) Formulate company’s profit distribution schemes and loss compensation schemes;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

• (6) Formulate company’s schemes for increase/decrease of its registered capital as well as schemes for issue of company’s bonds or other securities and listing;

• (7) Formulate company’s schemes for merging, division and dissolution of the Company’s structure;

• (8) Decide on the allocation of company’s internal management structure;

• (9) Appoint or dismiss company’s general manager, and based on his nomination, appoint or dismiss company’s deputy general managers(s) and financial officer, and decide upon their remuneration;

• (10) Formulate company’s basic management regulations;

• (11) Formulate a revision scheme for the Articles of Association;

• (12) Resolve on the important issues and administrative issues of the Company other than those which should be resolved at general meetings pursuant to laws, regulations and the Articles of Association;

• (13) Decide on the setting up of special committees and appointment and removal of relevant personnel;

• (14) Formulate company’s major purchase or sales schemes; and

• (15) Other functions as assigned by the shareholders’ general meeting and the Articles of Association.

Except that clauses (6), (7) and (11) are subject to consent of over 2/3 directors by voting, resolutions of the Board of Directors regarding the other matters need consent of over 1/2 of the directors by voting. The Board of Directors shall abide with the laws and administrative regulations of the State, the Articles of Association and implement its duties in accordance with the resolutions of shareholders. However, regulations set up in the company’s shareholders’ general meeting will not invalidate actions which are formerly valid prior to the setting of such regulations.

Mandatory Provision 88

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is amended as:

Article 99

The Board of Directors is responsible to the shareholders’ general meeting and performs the following functions:

• (1) Convene shareholders’ general meetings, and report its work to the shareholders’ general meetings;

• (2) Implement resolutions adopted by shareholders’ general meetings;

• (3) Decide upon company’s business plans and investment schemes;

• (4) Formulate company’s annual financial budget schemes and final account schemes;

• (5) Formulate company’s profit distribution schemes and loss compensation schemes;

• (6) Formulate company’s schemes for increase/decrease of its registered capital as well as schemes for issue of company’s bonds or other securities and listing;

• (7) Formulate company’s major acquisitions, purchase of the company’s shares or schemes for merging, division and dissolution of the Company’s structure;

• (8) Decide on other external guarantees that require the approval of the general meetings according to laws, administrative regulations and the Articles of Association;

• Mandatory Provision 107

• (9) Decide on the company’s external investments, purchase and disposal of assets, asset mortgage, consigned financial management, connected transactions, etc. within the authority granted by the general meeting;

• (10) Decide on the allocation of company’s internal management structure;

• (11) Appoint or dismiss company’s president and board secretary, and based on the nomination of the president, appoint or dismiss company’s vice president(s) and financial officer, and decide upon their remuneration;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

• (12) Formulate company’s basic management regulations;

• (13) Manage the company’s disclosure of information;

• (14) Formulate a revision scheme for the Articles of Association;

• (15) Make applications to the shareholders’ general meeting for the appointment or removal of the company’s accountants;

• (16) Attend to the working report of the president and inspect the works of the president;

• (17) Resolve on the important issues and administrative issues of the Company other than those which should be resolved at general meetings pursuant to laws, regulations and the Articles of Association;

• (18) Decide on the setting up of special committees and appointment and removal of relevant personnel;

• (19) Formulate company’s major purchase or sales schemes; and

• (20) Other functions as assigned by the shareholders’ general meeting and the Articles of Association.

Except that clauses (6), (7) and (14) are subject to consent of over 2/3 directors by voting, resolutions of the Board of Directors regarding the other matters need consent of over 1/2 of the directors by voting. The Board of Directors shall abide with the laws and administrative regulations of the State, the Articles of Association and implement its duties in accordance with the resolutions of shareholders. However, regulations set up in the company’s shareholders’ general meeting will not invalidate actions which are formerly valid prior to the setting of such regulations.

Additions:

Article 100

If any director has connection with the enterprise involved in the resolution made at a Board meeting, the said director shall not vote on the said resolution for himself or on behalf of other director. The Board meeting may be held when more than one-half of the non-connected directors attend the

Company Law 125

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APPENDIX I

meeting. The aforesaid matter which required to be passed by the resolution of more than two-thirds of the directors shall be passed by the voting of more than two-thirds of the non-connected directors. If the number of non-connected directors attending the meetings is less than 3, the issue shall be submitted to the general meeting for examination.

A resolution made at a Board meeting on the Company’s connected transaction shall not be valid unless it is signed by the independent (non-executive) directors.

The subsequent Article will be renumbered accordingly.

Addition:

Article 102

A director may resign before his term of office expires. In resigning his duties, a director shall tender a resignation to the Board in writing and an independent director, in particular shall specify any matter which is related to his resignation or which he considers necessary to bring to the attention of the Company’s shareholders and creditors.

Guideline 100 of Articles of Association

If the number of directors of the Board falls below the quorum as a result of any resignation, such resignation shall not become effective until the vacancy resulting from such resignation is filled up by a succeeding director. The remaining directors shall convene an extraordinary general meeting as soon as possible to elect a director to fill the vacancy caused by the said resignation. Before a resolution is made at a general meeting in relation to the election of directors, the functions and powers of such resigning director and other remaining directors shall be subject to reasonable restrictions.

If the percentage of independent directors of the Board falls below the minimum requirement of the relevant regulatory authority as a result of resignation of any independent director, such resignation shall not become effective until the vacancy resulting from such resignation is filled up by a succeeding independent director.

Save as provided in the preceding paragraph, a director’s resignation shall be effective when his resignation is served to the Board.

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APPENDIX I	PROPOSED REVISED ARTICLES OF ASSOCIATION	PROPOSED REVISED ARTICLES OF ASSOCIATION
The former Article 91	The Board of Directors may set up certain special committees
	to assist the Board of Directors to execute its duties under the
	leadership of the Board of Directors, or to provide proposals
	or consultation opinions for the decision of the Board of
	Directors. Members of the special committees may not
	necessarily be directors or management of the Company.
is amended as:
Article 103	The Board of Directors may set up certain special committees	Principles of
	to assist the Board of Directors to execute its duties under the	Governance 52
	leadership of the Board of Directors, or to provide proposals
	or consultation opinions for the decision of the Board of
	Directors. Members of the special committees shall comprise
	directors, of which independent directors in the Audit
	Committee, Nomination Committee and Remuneration
	Committee shall be majority and shall be the convener. In the
	Audit Committee, at least one independent director should be
	a professional accountant.
The former Article 92	In the event of the Board of Directors disposing of fixed
	assets, if the sum of the anticipated value of the fixed assets
	to be disposed of, and the value obtained from the fixed assets	Mandatory
	disposed of in the 4 months before the suggested disposal,	Provision 89
	exceeds 33% of the value of the fixed assets indicated in last
	balance sheet examined by the shareholders’ meeting, then the
	Board of Directors shall not dispose of or give consent to
	disposal of the said fixed assets without approval from the
	shareholders’ meeting.
	The disposal of fixed assets as referred to in this article,
	includes actions of transferring capital benefits, but not
	includes the action of providing guarantee with fixed assets.
	The effectiveness of the transaction of company’s disposal of
	fixed assets will not be affected by violation of Clause 1 of
	this Article.
is amended as:
Article 104	In the event of the Board of Directors disposing of fixed	Mandatory
	assets, if the sum of the anticipated value of the fixed assets	Provision 89
	to be disposed of, and the value obtained from the fixed assets
	disposed of in the 4 months before the suggested disposal,
	exceeds 33% of the value of the fixed assets indicated in last
	balance sheet examined by the shareholders’ meeting, then the

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PROPOSED REVISED ARTICLES OF ASSOCIATION

Board of Directors shall not dispose of or give consent to disposal of the said fixed assets without approval from the shareholders’ meeting. Should there be any inconsistency between the preceding requirements and provisions of the stock exchange on which the Company’s shares are listed in respect of the issue, the latter shall prevail. If the Company’s shares are listed on two or more stock exchanges, and should there be any inconsistency with the listing rules of the stock exchanges, the strictest one shall prevail.

The disposal of fixed assets as referred to in this article, includes actions of transferring capital benefits, but not includes the action of providing guarantee with fixed assets.

The effectiveness of the transaction of company’s disposal of fixed assets will not be affected by violation of Clause 1 of this Article.

Addition: Article 105 Unless otherwise required by applicable laws, regulations and/or the relevant listing rules, the Board of Directors shall have the right to make decisions on investment (including risk investment) or acquisition projects within the scope authorized by the shareholders’ general meeting. In respect of material investment or acquisitions exceeding the approval limit of the Board of Directors, the Board of Directors should organize the relevant experts and professional personnel to make assessments, and to submit to the shareholders’ general meeting for approval.

The subsequent Article will be renumbered accordingly.

The former Article 94 The Board of Directors shall hold at least two regular Mandatory meetings every year, which shall be convened by the Provision 91 chairman. All the directors shall be informed thereof 10 days prior to the convening of the meeting. Under urgent situation, a provisional Board meeting can be convened with the proposal of more than three directors or the company general manager. is amended as: Article 107 The Board of Directors shall hold at least four regular Mandatory meetings every year, which shall be convened by the Provision 91 chairman. All the directors shall be informed thereof 14 days prior to the convening of the meeting.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

	In any of the following circumstances, the Board shall	Company
	convene a provisional meeting within 10 days, and all	Law 111
	directors and supervisors shall be notified two days before the	Guideline 115
	convening of such meeting:	of Articles of Association
	(1) proposed by shareholders representing more than 10% of
	the voting rights;
	(2) deemed necessary by the chairman of the Board;
	(3) jointly proposed by more than one-third of the directors;
	(4) jointly proposed by more than half of the independent
	directors;
	(5) proposed by the Supervisory Committee;
	(6) proposed by the president;
	(7) requested by the securities regulatory authority.
The former Article 95	Notices of Board meetings and provisional Board meetings	Mandatory
	shall be delivered by: telephone and facsimile; and time limit	Provision 92
	of notice shall be ten days before the convening of the
	meeting.
is amended as:
Article 108	Notices of Board meetings and provisional Board meetings	Mandatory
	shall be delivered by: telephone and facsimile; and time limit	Provision 92
	of notice shall be: regular Board meetings: 14 days before the
	convening of the meeting; provisional Board meetings: 2 days
	before the convening of the meeting.
The former Article 96	A Board meeting can only be convened if more than half of	Mandatory
	the directors are present.	Provision 93
	Each director shall have one vote. A resolution of the Board
	of Directors must be passed by more than half of all the
	directors at present.
	In the event of equal pros and cons, the chairman shall be
	entitled to one additional vote.
	Written resolution signed and agreed by all directors
	respectively shall be deemed with similar effect as resolutions

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APPENDIX I

passed by Board meetings legally convened. Such written resolution may comprise one set or more documents, with each document signed by one or more directors. A resolution signed by directors or bearing the names of the directors and sent by telegram, telex, express mail, facsimile or by hand shall for the purpose of this clause be regarded as document signed by them.

is amended as:
Article 109	A Board meeting can only be convened if more than half of	Mandatory
	the directors are present.	Provisions 93
	Each director shall have one vote. A resolution of the Board	Company
	of Directors must be passed by more than half of all the	Law 112
	directors.
	In the event of equal pros and cons, the chairman shall be
	entitled to one additional vote.
	Written resolution signed and agreed by all directors
	respectively shall be deemed with similar effect as resolutions
	passed by Board meetings legally convened. Such written
	resolution may comprise one set or more documents, with
	each document signed by one or more directors. A resolution
	signed by directors or bearing the names of the directors and
	sent by telegram, telex, express mail, facsimile or by hand
	shall for the purpose of this clause be regarded as document
	signed by them.
The former Article 97	Directors should attend board meetings in person. If a director
	is not able to attend for some reasons, he or she may authorise
	another director in writing to attend on his behalf. The
	instrument of proxy should specify the scope of authorization.
	A director attending a Board meeting as proxy shall exercise	Mandatory
	the right of a director within the scope of authorization. If a	Provision 94
	director fails to attend a Board meeting and to authorize a
	proxy to attend on his behalf shall be deemed as waiving the
	right to vote at that meeting.
is amended as:
Article 110	Directors should attend board meetings in person. If a director	Guideline 121
	is not able to attend for some reasons, he or she may authorise	of Articles of Association
	another director in writing to attend on his behalf. The

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APPENDIX I

				instrument of proxy should specify the name of the proxy,
				matters to be authorised, scope of authorization and the
				validity period, and the proxy shall sign on or affix a chop to
				such instrument.
				A director attending a Board meeting as proxy shall exercise
				the right of a director within the scope of authorization. If a
				director fails to attend a Board meeting and to authorize a
				proxy to attend on his behalf shall be deemed as waiving the
				right to vote at that meeting.
				If any director fails to attend Board meetings in person or by	Guideline 99
				proxy for two consecutive times, the said director shall be	of Articles of Association
				deemed incapable of performing his duties, and the Board
				shall suggest that the general meeting remove the said
				director.
**The **	**former **	**Article **	98	The Board of Directors shall keep minutes of its decisions on	Mandatory
				the matters considered. Directors attending the meeting and	Provision 95
				the person taking the minutes shall sign their names on the
				minutes of the meeting. Directors shall be responsible for the
				resolutions of the board meetings. Where a resolution of the
				board meetings violates laws, administrative regulations or
				the Articles of Association and causes serious losses to the
				Company, the directors who took part in such a resolution
				shall be liable to compensate the Company. However, if a
				director can prove that he had expressed his opposition to
				such resolution when it was put to the vote, and such
				opposition is recorded in the minutes of the meeting, the
				director may be relieved of such liability.
				Board meetings may be held by way of telephone conference
				or similar communication equipment so long as all directors
				participating in the meeting can clearly hear and communicate
				with each other. All such directors shall be deemed to be
				present in person at the meeting.

is amended as:
Article 111	The Board of Directors shall keep minutes of its decisions on
	the matters considered. Directors attending the meeting and
	the person taking the minutes shall sign their names on the
	minutes of the meeting. Directors shall be responsible for the
	resolutions of the board meetings. Where a resolution of the
	board meetings violates laws, administrative regulations or
	the Articles of Association and causes serious losses to the

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

Company, the directors who took part in such a resolution shall be liable to compensate the Company. However, if a director can prove that he had expressed his opposition to such resolution when it was put to the vote, and such opposition is recorded in the minutes of the meeting, the director may be relieved of such liability.

Minutes of Board Meetings shall be kept as records of the Company for a period of at least ten years.

Board meetings may be held by way of telephone conference or similar communication equipment so long as all directors participating in the meeting can clearly hear and communicate with each other. All such directors shall be deemed to be present in person at the meeting.

Guideline 112 of Articles of Association

All subsequent Articles will be renumbered accordingly.

The former Article 101 The Board of Directors may set up committees or working teams comprising two or more directors from time to time, and delegate such committees or working teams with certain powers, duties and discretionary powers of the Board of Directors itself. The relevant committee and working team shall act within the scope as authorized by the Board of Directors, and shall abide with the rules set by the Board of Directors from time to time. The Board of Directors may also resolve to dismiss the relevant committee or working team or change the scope of its authorization.

The quorum of meetings of the Board committees or working teams shall be the two members of the committees or working teams or more than half of the members. The requirements on the procedures and minutes of meetings as applicable to Articles 93 to 97 in the Articles of Association shall also be applicable on the relevant committees or working teams, unless the relevant requirements have been replaced by the rules as mentioned in the previous paragraph.

Unless otherwise required by the Board of Directors, managers who are not directors may attend Board meetings, and shall be entitled to receive notices and relevant documents of such meetings. However, unless the managers are directors, they shall have no voting rights in the Board meetings.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

is amended as: Article 114 The Board of Directors may set up committees or working teams comprising two or more directors from time to time, and delegate such committees or working teams with certain powers, duties and discretionary powers of the Board of Directors itself. The relevant committee and working team shall act within the scope as authorized by the Board of Directors, and shall abide with the rules set by the Board of Directors from time to time. The Board of Directors may also resolve to dismiss the relevant committee or working team or change the scope of its authorization. The quorum of meetings of the Board committees or working teams shall be the two members of the committees or working teams or more than half of the members. The requirements on the procedures and minutes of meetings as applicable to Articles 106 to 110 in the Articles of Association shall also be applicable on the relevant committees or working teams, unless the relevant requirements have been replaced by the rules as mentioned in the previous paragraph. Unless otherwise required by the Board of Directors, the president who is not a director may attend Board meetings, and shall be entitled to receive notices and relevant documents of such meetings. However, unless the president is a director, he shall have no voting rights in the Board meetings.

• Addition: Article 115 Independent director candidates shall be nominated by the Board of Directors, the Supervisory Committee, or shareholder(s) severally or jointly holding more than 1% of the total number of the voting shares of the Company, and shall be elected at a general meeting of the Company. (1) The nominator of an independent director candidate shall seek the consent of the nominee before nomination, shall collect adequate information about the occupation, academic qualification, title, detailed work experience, all concurrent undertakings, etc., and shall submit the said information to the Company. The candidates shall undertake in writing to the Company that they accept the nominations, that the information announced about them is true and adequate, and that they will diligently fulfill the duties as director if elected.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

• (2) The nominator of an independent director candidate System for shall give opinion on the qualification and independence Independent directors 4

• of the nominee to act as an independent director, covering relevant provisions in applicable laws, regulations and/or relevant listing rules, and the nominee shall make an open announcement as to the absence of any relationship between the Company and him which may possibly affect his independent and objective judgment;

• (3) Where an independent director candidate is nominated before the Company holds the Board meeting, if the governing laws, regulations and/or the relevant listing rules have relevant provisions, the written documents relating to the nominee as described in clauses (1) and (2) of this article shall be announced together with the resolution of the Board pursuant to the said provisions;

• (4) If shareholder(s) severally or jointly holding more than 3% of the total number of the voting shares of the Company or the Supervisory Committee submits a provisional motion on election of independent directors, then the written notice of the intent to nominate director candidates and the nominee’s will to accept the nomination, the written documents and undertakings of the nominee as described in clauses (1) and (2) of this article shall be submitted to the Company 16 days before convening of the general meeting;

• (5) Before the general meeting for the election of independent directors, if the governing laws, regulations and/or the relevant listing rules have relevant provisions, the Company shall pursuant to the said provisions submit the relevant documents concerning the nominee to the securities regulatory authority of the State Council and/or its local office and the stock exchange with which the Company’s shares are listed. If the Board disputes the particulars pertaining to the nominee, the written opinions of the Board shall also be submitted. If the securities regulatory authority under the State Council opposes to the nomination of any candidate, such candidate may not be included as an independent director candidate. When a general meeting is convened to elect independent directors, the Board shall make a statement on whether the securities regulatory authority under the State Council objects to the nominations.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

• Article 116 An independent director shall meet the following basic conditions: (1) having the qualifications as director of the Company in accordance with the laws, administrative regulations and other relevant provisions;

• (2) having the independence as required by the laws, administrative regulations, department rules and the Listing Rules;

• (3) having basic knowledge about operations of listed System for companies, and proficient in relevant laws, independent directors 2

• administrative regulations and rules (including but not limited to applicable accounting standards);

• (4) having more than five years’ experience in legal and economic work or other work required for fulfilling duties as independent director;

• (5) other conditions specified in the Articles of Association.

• Article 117 Independent directors must be independent. The following persons shall not serve as independent directors save as otherwise specified in the governing laws, regulations and/or relevant listing rules: (1) persons employed by the Company or its subsidiaries and their immediate family members and major social connections (immediate family members shall include spouse, parents and issues and major social connections shall include siblings, parents-in-law, sons/daughters-in-law, spouses of siblings, siblings of spouse);

• (2) natural person shareholders who directly or indirectly System for hold more than 1% of the Company’s issued shares or independent directors 3

• who are top ten shareholders of the Company, and the immediate family members of the said shareholders;

• (3) persons employed by the shareholder entities which directly or indirectly hold more than 5% of the Company’s issued shares or which are top five shareholder entities of the Company, and the immediate family members of the said persons;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

		(4) persons who belonged to categories (1) to (3) within the
		preceding year;
		(5) persons who provide financial, legal and consulting
		services to the Company or its subsidiaries;
		(6) persons deemed by the securities regulatory authority
		under the State Council as not fit to serve as independent
		directors.
**Article **	118	If any independent director fails to attend Board meetings in
		person for three consecutive times, the Board shall suggest
		that the general meeting remove the said director. Unless in
		the above circumstances and in circumstances as specified in
		Company Law where a person is prohibited from acting as a
		director, no independent director may be removed before his
		term of office expires without cause. In the event of
		premature removal, the Company shall disclose it by way of
		special disclosure. If the removed independent director deems
		his removal by the Company as unjustifiable, he may make an
		open declaration.
**Article **	119	An independent director shall have the following special
		powers in addition to the powers granted to directors under
		Company Law, other relevant laws, administrative regulations
		and the Articles of Association:

System for independent directors 4

• (1) material connected transactions (as per the standards issued from time to time by the relevant regulatory authority) that must be considered at a general meeting pursuant to the laws, regulations and/or relevant listed rules, and appointment or dismissal of accounting firm, shall comply with the relevant provisions, if any, in the laws, regulations and/or relevant listed rules, and shall be submitted to the general meeting for consideration upon approval by more than half of the independent directors. Resolutions made by the Board in relation to connected transactions shall not be effective unless signed by the independent directors; the independent directors may, before making judgment, appoint an intermediary to provide independent financial and advisory reports as a basis for their judgment;

• (2) to propose to the Board for appointment or dismissal of accounting firm;

System for independent directors 5

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APPENDIX I

• (3) to propose to convene an extraordinary general meeting;

• (4) to propose to convene a Board meeting;

• (5) to independently appoint external audit and consulting institutions;

• (6) to openly collect voting rights from shareholders before a general meeting is held;

• (7) to directly report to the general meeting, the securities regulatory authority under the State Council and other relevant authorities.

Independent directors shall seek the consent of more than half of all the independent directors before exercising the powers under (2), (3), (4), (6) and (7); independent directors shall seek the consent of all the independent directors before exercising the powers under (5).

Article 120

Independent directors shall, in addition to fulfilling the aforesaid duties, provide the Board or general meeting with independent opinions on the following matters:

• (1) nomination, appointment and dismissal of directors;

• (2) appointment or dismissal of senior executives;

• (3) remunerations of directors and senior executives of the Company;

• (4) matters which independent directors deem likely to damage the interests of small and medium shareholders;

• System for independent directors 6

• (5) material capital transactions between the Company and its shareholders or connected enterprises;

• (6) cash profit distribution plan not formulated by the Board;

• (7) other issues specified in relevant laws and regulations or the Articles of Association.

Independent directors shall express one of the following types of opinions on the aforesaid issues: agreement; qualified opinion and reason thereof; objection and reason thereof; inability to express opinion and reason thereof.

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APPENDIX I	PROPOSED REVISED ARTICLES OF ASSOCIATION
Article 121	Independent directors shall submit their yearly work reports
	at the general meeting and make a statement on their
	fulfillment of duties

CHAPTER 11 SECRETARY TO THE BOARD OF DIRECTORS OF THE COMPANY

The former Article 102 The Company shall have two board secretaries, who are Mandatory senior management officers of the Company. Provision 96 is amended as: Article 122 The Company shall have one board secretary, who is a senior Mandatory administrative officer of the Company. Provision 96 The subsequent Article will be renumbered accordingly. The former Article 104 A director of the Company or other senior administrative officer may serve as secretary to the Board of Directors of the Company concurrently. An accountant from the accounting firm as appointed by the Company shall not be appointed secretary to the Board of Directors of the Company concurrently. When a director serves as secretary to the Board of Directors Mandatory of the Company concurrently, and if an action should be made Provision 98 by a director and the secretary to the Board of Directors of the Company respectively, then it shall not be made by the concurrent director and secretary to the Board in his dual status. The Company secretary can be served by one or two natural persons concurrently. Under such circumstances, the duties of the Company secretary shall be shared by the two persons, any one shall have the right of exercising all the powers of a company secretary. is amended as: Article 124 An accountant from the accounting firm as appointed by the Company shall not be appointed secretary to the Board of Directors of the Company concurrently. When a director serves as secretary to the Board of Directors of the Company concurrently, and if an action should be made by a director and the secretary to the Board of Directors of the Company respectively, then it shall not be made by the concurrent director and secretary to the Board in his dual status.

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APPENDIX I

CHAPTER 12 GENERAL MANAGER OF THE COMPANY

The former Article 105	The	Company shall have one general manager, who is	Mandatory
	appointed or dismissed by the Board of Directors.		Provision 99
is amended as:
Article 125	The	Company shall have one president, who is appointed or	Mandatory
	dismissed by the Board of Directors.		Provision 99
	The	Company shall have several vice presidents, who shall be	Guideline 124
	appointed or dismissed by the Board of Directors.		of Articles of Association
Addition:
Article 126	Members of staff of the controlling shareholders and effective		Guideline 126
	controllers of the Company who serve positions other than		of Articles of Association
	directors shall not serve as senior executives of the Company.
Article 127	The	term of office of the president shall be for three years,	Guideline 127
	and	is eligible for re-election and re-assignment.	of Articles of Association
The former Article 106	The	general manager shall be accountable to the Board of
	Directors and exercise the following functions and powers:
	(1)	To be in charge of the Company’s production, operation
		and management and to organize the implementation of
		the resolutions of the Board of Directors;
	(2)	To organise the implementation of the Company’s
		annual business plan and investment plan;
	(3)	To draft plans for the establishment of the Company’s
		internal management structure;
	(4)	To establish the Company’s basic management system;
	(5)	To formulate basic rules and regulations for the
		Company;
	(6)	To propose the appointment or dismissal of the
		Company’s vice president(s) and financial controller;
	(7)	To appoint or dismiss management officers other than
		those required to be appointed or dismissed by the Board
		of Directors;

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(8) To exercise the powers to pledge, lease, sub-contract or transfer company assets within the scope as authorised by the Board of Directors; (9) Other powers conferred by the Articles of Association and the Board of Directors. The deputy general manager and financial officer shall assist Mandatory the general manager in his works and be accountable to him. Provision 100 is amended as: Article 128 The president shall be accountable to the Board of Directors Mandatory and exercise the following functions and powers: Provision 100

• (1) To be in charge of the Company’s production, operation and management and to organise the implementation of the resolutions of the Board of Directors;

• (2) To organise the implementation of the Company’s annual business plan and investment plan;

• (3) To draft plans for the establishment of the Company’s internal management structure;

• (4) To establish the Company’s basic management system;

• (5) To formulate basic rules and regulations for the Company;

• (6) To propose the appointment or dismissal of the Company’s vice president(s) and financial controller;

• (7) To appoint or dismiss management officers other than those required to be appointed or dismissed by the Board of Directors;

• (8) To exercise the powers to pledge, lease, sub-contract or transfer company assets within the scope as authorised by the Board of Directors;

• (9) Other powers conferred by the Articles of Association and the Board of Directors.

The vice president and financial officer shall assist the president in his works and be accountable to him.

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APPENDIX I	PROPOSED REVISED ARTICLES OF ASSO	CIATION
The former Article 107	The general manager of the Company attends meetings of the	Mandatory
	Board of Directors. Managers not as directors have no voting	Provision 101
	right at a meeting of the Board of Directors.
is amended as:
Article 129	The president of the Company attends meetings of the Board	Mandatory
	of Directors. The president has no voting right at a meeting of	Provision 101
	the Board of Directors unless he is also a director.
The former Article 108	In exercising his functions and powers, the general manager	Mandatory
	shall act honestly and diligently in accordance with laws,	Provision 102
	administrative regulations and the Articles of Association.
is amended as:
Article 130	In exercising his functions and powers, the president shall act	Mandatory
	honestly and diligently in accordance with laws,	Provision 102
	administrative regulations and the Articles of Association.
	CHAPTER 13 SUPERVISORY COMMITTEE
The former Article 112	Directors, general manager and other senior management	Mandatory
	officers of the Company (including but not limited to the	Provision 106
	financial officer) shall not be supervisors.
is amended as:
Article 134	Directors, president and other senior management officers of	Mandatory
	the Company (including but not limited to the financial	Provision 106
	officer) shall not be supervisors.
The subsequent Article will be renumbered accordingly.
The former Article 114	The Supervisory Committee shall be accountable to the
	shareholders’ general meeting and exercise the following
	functions and powers in accordance with law:
	(1) To examine the Company’s financial situation;
	(2) To supervise whether the directors, general manager and
	other senior management officers have violated any
	laws, administrative regulations and the Articles of
	Association in the course of performing their duties;

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APPENDIX I

	(3)	To demand rectification from the directors, president or
		other senior management officers when the acts of such
		persons are harmful to the Company’s interest;
	(4)	To check the financial information such as the financial
		report, business report and profit distribution plans to be
		submitted by the Board of Directors to the shareholders’
		general meetings and, should any queries arise, to
		entrust in the name of the Company public certified
		accountants or public auditors to re-examine the
		financial information;
	(5)	To propose the convening of extraordinary general
		meeting;
	(6)	To deal with or pursue action against directors on behalf
		of the Company;
	(7)	Other functions and powers specified in the Articles of	Mandatory
		Association.	Provision 108
	Supervisors may attend Board meetings.
is amended as:
Article 136	The	Supervisory Committee shall be accountable to the
	shareholders’ general meeting and exercise the following
	functions and powers in accordance with law:
	(1)	To examine the regular reports of the Company prepared	Guideline 144
		by the Board and produce written opinions thereon;	of Articles of Association
	(2)	To examine the Company’s financial situation;
	(3)	To supervise whether the directors, president and other
		senior management officers have violated any laws,
		administrative regulations and the Articles of
		Association in the course of performing their duties;
	(4)	To demand rectification from the directors, president or
		other senior management officers when the acts of such
		persons are harmful to the Company’s interest;
	(5)	To check the financial information such as the financial
		report, business report and profit distribution plans to be
		submitted by the Board of Directors to the shareholders’

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PROPOSED REVISED ARTICLES OF ASSOCIATION

general meetings and, should any queries arise, to entrust in the name of the Company public certified accountants or public auditors to re-examine the financial information;

• (6) To propose the convening of extraordinary general meeting and, in case the Board does not perform the obligations to convene and preside over the general meetings in accordance with Company Law, to convene and preside over the general meetings;

• (7) To present motions to the shareholders’ general meetings;

• (8) To deal with or pursue action against directors in accordance with Article 152 of the Company Law;

• (9) To make investigations upon discovery of abnormal operations of the Company, and if necessary, may entrust professional institutions such as public accountants and lawyers to assist at the expense of the Company;

• (10) Other functions and powers specified in the Articles of Association.

The supervisors may attend Board meetings and make Guideline 140 inquiries or suggestions in relation to the resolutions of Board of Articles of Association meetings. The former Article 115 Meetings of the Supervisory Committee shall be held at least twice every year, and shall be convened by the chairman of the Supervisory Committee. Under reasonable reasons, supervisors are entitled to request the chairman of the Supervisory Committee to convene a provisional meeting of the Supervisory Committee. Notice of meeting shall be given to each supervisor in writing ten days before the meeting by way of telephone or facsimile. The notice shall include the date, venue, duration, topics of the meeting and the date on which the notice is sent.

A supervisors’ meeting can only be held when over half of the supervisors can attend. Voting in the meeting shall be taken by poll, and each supervisor shall have one vote. In the case of an equality of votes, the chairman shall be entitled to one additional vote. Supervisors should be present in the meetings

Mandatory Provision 109

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APPENDIX I

in prson. If the supervisor is unable to attend the meeting, he may assign in writing other supervisors to attend on his behalf, and should state the scope of authorisation in the proxy form.

Resolutions of regular meetings and resolutions of provisional meetings of the Supervisory Committee shall be resolutions of the Supervisory Committee, and are subject to adoption of over two thirds of the supervisors by voting.

is amended as: Article 137 Meetings of the Supervisory Committee shall be held at least Mandatory Provision 107 twice every year, and shall be convened by the chairman of the Supervisory Committee. Under reasonable reasons, supervisors are entitled to request the chairman of the Supervisory Committee to convene a provisional meeting of the Supervisory Committee. Notice shall be by way of telephone or facsimile. The notice shall include the date, venue, duration, topics of the meeting and the date on which the notice is sent. The time limits for notifications are: regular meetings: ten days before convening the meeting; provisional meetings: two days before convening the meeting.

A supervisors’ meeting can only be held when over half of the Mandatory Provision 109 supervisors can attend. Voting in the meeting shall be taken by poll, and each supervisor shall have one vote. In the case of an equality of votes, the chairman shall be entitled to one additional vote. Supervisors should be present in the meetings in prson. If the supervisor is unable to attend the meeting, he may assign in writing other supervisors to attend on his behalf, and should state the scope of authorisation in the proxy form.

Resolutions of regular meetings and resolutions of provisional meetings of the Supervisory Committee shall be resolutions of the Supervisory Committee, and are subject to adoption of over two thirds of the supervisors by voting.

All subsequent Articles will be renumbered accordingly.

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APPENDIX I

CHAPTER 14 QUALIFICATIONS AND DUTIES OF THE DIRECTORS, SUPERVISORS, GENERAL MANAGER AND OTHER SENIOR MANAGEMENT OFFICERS OF THE COMPANY

is amended as:

CHAPTER 14 QUALIFICATIONS AND DUTIES OF THE DIRECTORS, SUPERVISORS, PRESIDENT AND OTHER SENIOR MANAGEMENT OFFICERS OF THE COMPANY

The former Article 122 One may not serve as company’s director, supervisor, general manager or other senior management officers in any of the following cases:

• (1) With civil incompetence or limited civil competence;

• (2) Not over 5 years have elapsed since termination of the execution period for a penalty imposed on account of a crime of corruption, bribery, encroachment of property, embezzlement of property or the crime of undermining social economic order, or not over 5 years have elapsed since termination of the execution period for deprivation of political rights on account of commitment of a crime;

• (3) Not over 3 years have elapsed since termination of liquidation due to bankruptcy of a company or enterprise on account of poor management where the one has served as a director or factory director, manager and has been held personally responsible for the bankruptcy of such company or enterprise;

• (4) Not over 3 years have elapsed since the date of cancellation of the business license of a company or enterprise on account of breach of law where the one has served as legal representative and has been held personally responsible;

• (5) A relatively large amount of personal debt is overdue;

• (6) Be investigated by the judicial organ after case-filing on account of breach of criminal law, pending conclusion of the case;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

• (7) Not in a position to serve an enterprise director as specified in the laws and regulations;

• (8) Not a natural person;

• (9) Not over 5 years have elapsed since the date of award on violation of related securities regulation and involvement in fraudulent or dishonest actions as rendered by the competent authority;

• (10) Unless otherwise permitted under the laws, any public Mandatory servant of the State. Provision 112

is amended as: Article 144 One may not serve as company’s director, supervisor, president or other senior management officers in any of the following cases:

• (1) With civil incompetence or limited civil competence;

• (2) Not over 5 years have elapsed since termination of the execution period for a penalty imposed on account of a crime of corruption, bribery, encroachment of property, embezzlement of property or the crime of undermining social economic order, or not over 5 years have elapsed since termination of the execution period for deprivation of political rights on account of commitment of a crime;

• (3) Not over 3 years have elapsed since termination of liquidation due to bankruptcy of a company or enterprise on account of poor management where the one has served as a director or factory director, manager and has been held personally responsible for the bankruptcy of such company or enterprise;

• (4) Not over 3 years have elapsed since the date of cancellation of the business license of a company or enterprise on account of breach of law where the one has served as legal representative and has been held personally responsible;

• (5) A relatively large amount of personal debt is overdue;

• (6) Be investigated by the judicial organ after case-filing on account of breach of criminal law, pending conclusion of the case;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

• (7) Not in a position to serve an enterprise director as specified in the laws and regulations;

• (8) Not a natural person;

• (9) Not over 5 years have elapsed since the date of award on violation of related securities regulation and involvement in fraudulent or dishonest actions as rendered by the competent authority;

(10) Prohibition to enter the security market imposed by the securities regulatory authority under the State Council is not expired. In any of the aforesaid circumstances, the Board shall, commencing from the date upon obtaining the relevant information, immediately stop the duties of the related director, and propose the shareholders’ general meeting to remove the same. Where the president is in any of the above circumstances, the Board shall, commencing from the date upon obtaining the relevant information, immediately stop the duties of the related president, and convene a Board meeting for his dismissal. Where a supervisor is in any of the above circumstances, the Supervisory Committee shall, commencing from the date upon obtaining the relevant information, immediate stop the duties of the related supervisor, and propose the shareholders’ general meeting or meeting of staff representatives for his replacement. Addition: Article 145 Save as specified in the Articles of Association or properly Guideline 102 authorized by the Board, no director shall act on behalf of the of Articles of Association Company or the Board in his personal name. If a director acts in his own name but a third party may reasonably think the said director is acting on behalf of the Company or the Board, the said director shall make a prior statement of his standpoint and capacity. The former Article 123 Effectiveness of actions conducted by company’s directors, Mandatory supervisors, general manager and other senior management Provision 113 officers on behalf of the Company toward bona fide third party, will not be affected by any of their irregular actions with respect to their assumption of duty, election or qualification.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

is amended as:

• Article 146 Effectiveness of actions conducted by company’s directors, Mandatory supervisors, president and other senior management officers Provision 113 on behalf of the Company toward bona fide third party, will not be affected by any of their irregular actions with respect to their assumption of duty, election or qualification.

• The former Article 124 In addition to the duties required in the laws, regulations or the listing regulation of the securities exchange listing the Company’s shares, in exercising the powers as granted by the Company, company’s directors, supervisors, general manager and other senior administrative officer shall assume the following duties to each shareholder: (1) Shall not have the Company exceed the business scope as specified in its business license;

• (2) Shall behave honestly from the starting point of the maximal interests of the Company;

• (3) Shall not deprive the Company of its property in any manner, including (but not limited to) such chances as are favorable to the Company;

• (4) Shall not deprive the shareholders of their individual Mandatory rights and benefits, including (but not limited to) Provision 114 distribution right and voting right, but excluding company reorganization as submitted to and adopted by the shareholders’ general meeting according to the Articles of Association.

is amended as: Article 147 In addition to the duties required in the laws, regulations or the listing regulation of the securities exchange listing the Company’s shares, in exercising the powers as granted by the Company, company’s directors, supervisors, president and other senior administrative officer shall assume the following duties to each shareholder:

• (1) Shall not have the Company exceed the business scope as specified in its business license;

• (2) Shall behave honestly from the starting point of the maximal interests of the Company;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

	(3) Shall not deprive the Company of its property in any
	manner, including (but not limited to) such chances as
	are favorable to the Company;
	(4) Shall not deprive the shareholders of their individual
	rights and benefits, including (but not limited to)
	distribution right and voting right, but excluding
	company reorganization as submitted to and adopted by
	the shareholders’ general meeting according to the
	Articles of Association.
The former Article 125	Company’s directors, general manager and other senior	Mandatory
	management officers are all obliged to do what they should,	Provision 115
	in exercising their rights or performing their duties, with such
	prudence, diligence and skill as a rational and prudent person
	ought to have in similar circumstances.
is amended as:
Article 148	Company’s directors, president and other senior management	Mandatory
	officers are all obliged to do what they should, in exercising	Provision 115
	their rights or performing their duties, with such prudence,
	diligence and skill as a rational and prudent person ought to
	have in similar circumstances.
The former Article 126	In performing their functions, company’s directors,
	supervisors, general manager and other senior management
	officers shall follow the principle of good faith, and shall not
	put themselves in a position that may possibly conflict with
	their own interests or the duties assumed. This principle
	includes (but not limited to) performance of the following
	duties:
	(1) To act honestly to the best interests of the Company;
	(2) To exercise powers within the scope of his functions,
	and not to exceed those powers;
	(3) To exercise the discretion vested in him in personally
	and not to allow himself to act under the control of
	another and, unless and to the extent permitted by laws,
	administrative regulations or with the informed consent
	of shareholders given in shareholders’ general meeting,
	not to delegate the exercise of his discretion;

(4)	To treat shareholders of the same class equally and to
	treat shareholders of different classes fairly;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

• (5) Not to enter into a contract, transaction or arrangement with the Company, unless otherwise in accordance with the Articles of Association or with the informed consent of shareholders given in shareholders’ general meeting;

• (6) Without the informed consent of shareholders given in shareholders’ meeting, not to use the Company’s property for his own benefit;

• (7) Not to exploit his position to accept bribes or other illegal income or expropriate the Company’s property by any means, including but not limited to opportunities advantageous to the Company;

• (8) Without the informed consent of shareholders given in shareholders’ general meeting, not to accept commissions in connection with the Company’s transactions;

• (9) To abide by the Articles of Association, perform his official duties faithfully and protect the Company’s interests, and not to exploit his position and power in the Company to advance his own private interests;

• (10) Not to compete with the Company in any way unless with the informed consent of shareholders given in shareholders’ general meeting;

• (11) Not to misappropriate the Company’s funds or lend such funds to others, not to open accounts in his own name or other names for the deposit of the Company’s assets and not to provide a guarantee for debts of a shareholder of the Company or other individual(s) with the Company’s assets;

• (12) Unless otherwise permitted by informed shareholders in shareholders’ general meeting, to keep in confidence information acquired by him in the course of and during his tenure and not to use the information other than in furtherance of the interests of the Company, save that disclosure of such information to the court or other governmental authorities is permitted if:

• disclosure is required by the law;

• the interests of the public require disclosure;

Mandatory Provision 116

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APPENDIX I

PROPOSED REVISED ARTICLES OF ASSOCIATION

1. the interests of the relevant director, supervisor, general manager or other senior management officers require disclosure.

is amended as: Article 149 In performing their functions, company’s directors, supervisors, president and other senior management officers shall follow the principle of good faith, and shall not put themselves in a position that may possibly conflict with their own interests or the duties assumed. This principle includes (but not limited to) performance of the following duties:

• (1) To act honestly to the best interests of the Company;

• (2) To exercise powers within the scope of his functions, and not to exceed those powers;

• (3) To exercise the discretion vested in him in personally and not to allow himself to act under the control of another and, unless and to the extent permitted by laws, administrative regulations or with the informed consent of shareholders given in shareholders’ general meeting, not to delegate the exercise of his discretion;

• (4) To treat shareholders of the same class equally and to treat shareholders of different classes fairly;

• (5) Not to enter into a contract, transaction or arrangement with the Company, unless otherwise in accordance with the Articles of Association or with the informed consent of shareholders given in shareholders’ general meeting;

• (6) Without the informed consent of shareholders given in shareholders’ meeting, not to use the Company’s property for his own benefit;

• (7) Not to exploit his position to accept bribes or other illegal income or expropriate the Company’s property by any means, including but not limited to opportunities advantageous to the Company;

• (8) Without the informed consent of shareholders given in shareholders’ general meeting, not to accept commissions in connection with the Company’s transactions;

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PROPOSED REVISED ARTICLES OF ASSOCIATION

(9)	To abide by these Articles of Association, perform his
	official duties faithfully and protect the Company’s
	interests, and not to exploit his position and power in the
	Company to advance his own private interests;
(10)	Not to compete with the Company in any way unless
	with the informed consent of shareholders given in
	shareholders’ general meeting;
(11)	Not to misappropriate the Company’s funds or lend such
	funds to others, not to open accounts in his own name or
	other names for the deposit of the Company’s assets and
	not to provide a guarantee for debts of a shareholder of
	the Company or other individual(s) with the Company’s
	assets;
(12)	Unless otherwise permitted by informed shareholders in
	shareholders’ general meeting, to keep in confidence
	information acquired by him in the course of and during
	his tenure and not to use the information other than in
	furtherance of the interests of the Company, save that
	disclosure of such information to the court or other
	governmental authorities is permitted if:
	1. disclosure is required by the law;
	2. the interests of the public require disclosure;
	3. the interests of the relevant director, supervisor,
	general manager or other senior administrative
	officers require disclosure.

Earnings obtained by directors, the president, the vice president and other senior administrative officers in violation of the provisions herein shall belong to the Company, and shall be liable for compensation for any loss incurred to the Company.

Guideline 97 of Articles of Association

Addition: Article 150 If the shareholders’ general meeting requires directors, supervisors, the president and other senior administrative officers to attend the meeting, they shall attend the meeting and make explanations in relation to the inquiries and suggestions of the shareholders.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

APPENDIX I

Directors, supervisors, the president and other senior executives shall honestly provide the Supervisory Committee with relevant information and shall not prevent the Supervisory Committee from exercising their functions and powers.

The former Article 127 The Company’s directors, supervisors, general manager and other senior administrative officers shall not instruct following persons or organizations (refer to hereinafter “related persons”) to do what the directors, supervisors, general manager and other senior administrative officers are not in a position to do:

• (1) Spouses or minor children of the Company’s directors, supervisors, general manager and other senior administrative officers;

• (2) Persons acting in the capacity of trustees of the directors, supervisors, general manager and other senior administrative officers, or the persons as mentioned in clause (1) of this article;

• (3) Persons acting in the capacity of partners of the directors, supervisors, general manager and other senior administrative officers, or the persons as mentioned in clauses (1) and (2) of this article;

• (4) A company in which that director, supervisor, general manager or other senior administrative officer, alone or jointly with one or more persons referred to in clause (1) to (3) of this article or other directors, supervisors, general manager and other senior administrative officers have a de facto controlling interest;

• (5) Directors, supervisors, general manager and other senior administrative officers of the controlled company as mentioned in clause (4) of this article;

• (6) Any parties who are liable to be deemed “associates” (as defined under the Rules Governing the Listing of Securities of The Stock Exchange of Hong Kong Limited) of such directors, supervisors, general manager and other senior administrative officers.

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APPENDIX I

is amended as:

Article 151

The Company’s directors, supervisors, president and other senior administrative officers shall not instruct following persons or organizations (refer to hereinafter “related persons”) to do what the directors, supervisors, president, deputy general managers and other senior administrative officers are not in a position to do:

Mandatory Provision 117

• (1) Spouses or minor children of the Company’s directors, supervisors, president and other senior administrative officers;

• (2) Persons acting in the capacity of trustees of the directors, supervisors, president and other senior administrative officers, or the persons as mentioned in clause (1) of this article;

• (3) Persons acting in the capacity of partners of the directors, supervisors, president and other senior administrative officers, or the persons as mentioned in clauses (1) and (2) of this article;

• (4) A company in which that director, supervisor, president or other senior administrative officer, alone or jointly with one or more persons referred to in clause (1) to (3) of this article or other directors, supervisors, president and other senior administrative officers have a de facto controlling interest;

• (5) Directors, supervisors, president and other senior administrative officer of the controlled company as mentioned in clause (4) of this article;

• (6) Any parties who are liable to be deemed “associates” (as defined under the Rules Governing the Listing of Securities of The Stock Exchange of Hong Kong Limited) of such directors, supervisors, president and other senior administrative officers.

The former Article 128 The fiduciary duties of the directors, supervisors, general manager and other senior administrative officers of the Company do not necessarily cease with the termination of their tenure. The duty of confidentiality in relation to trade secrets of the Company survives the termination of their tenure. Other duties may continue for such period as fairness

Mandatory Provision 118

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APPENDIX I

	may require depending on the time lapse between the
	termination and the act concerned and the circumstances
	under which the relationships between them and the Company
	are terminated.
is amended as:
Article 152	The fiduciary duties of the directors, supervisors, president	Mandatory
	and other senior administrative officers of the Company do	Provision 118
	not necessarily cease with the termination of their tenure. The
	duty of confidentiality in relation to trade secrets of the
	Company survives the termination of their tenure. Other
	duties may continue for such period as fairness may require
	depending on the time lapse between the termination and the
	act concerned and the circumstances under which the
	relationships between them and the Company are terminated.
Addition:
Article 153	Where a director, supervisor, president and other senior
	administrative officer of the Company violates the laws,
	administrative regulations, departmental rules or these
	Articles of Association during the discharge of the Company’s
	duties and causing damages to the Company, he shall be liable
	for compensation. Where a director, supervisor, president and
	other senior administrative officer leaves his office and
	causing damages to the Company, he shall be liable for
	compensation.
The former Article 129	The liability assumed by the Company’s directors,	Mandatory
	supervisors, general manager and other senior administrative	Provision 119
	officer on account of breach of a certain duty, may be released
	with the informed consent of shareholders given in
	shareholders’ general meeting, with the exception of what is
	specified in Article 47 of these Articles of Association.
is amended as:
Article 154	The liability assumed by the Company’s directors,	Mandatory
	supervisors, president and other senior administrative officer	Provision 119
	on account of breach of a certain duty, may be released with
	the informed consent of shareholders given in shareholders’
	general meeting, with the exception of what is specified in
	Article 52 of these Articles of Association.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

The former Article 130 Where the Company’s directors, supervisors, general manager and other senior administrative officers have major related interests directly or indirectly with the Company’s concluded or planned contracts, transactions and arrangements (with the exception of appointment contracts of directors, supervisors, general manager and other senior administrative officers), they shall disclose the nature and extent of such related interests to the Board of Directors as soon as possible, regardless of whether the related matters need approval by the Board in normal conditions. Unless Company’s director, supervisor, general manager and other senior administrative officers having related interests have made disclosure to the Board of Directors as required in the preceding clause of this article, and the Board of Directors approves the matter at a meeting without his inclusion in the quorum and without his participation in the voting, the Company is entitled to cancel such contract, transaction or arrangement, except that the other party is a bona fide party that does not know the facts about breach of duties on the part of related directors, supervisors, general manager and other senior administrative officers.

Where a related person of the Company’s directors, supervisors, general manager and other senior administrative officers has related interests in a certain contract, transaction or arrangement, the related directors, supervisors, general manager and other senior administrative officers shall also be deemed as having related interests.

Mandatory Provision 120

is amended as:

Article 155 Where the Company’s directors, supervisors, president and other senior administrative officers have major related interests directly or indirectly with the Company’s concluded or planned contracts, transactions and arrangements (with the exception of appointment contracts of directors, supervisors, president and other senior administrative officers), they shall disclose the nature and extent of such related interests to the Board of Directors as soon as possible, regardless of whether the related matters need approval by the Board in normal conditions.

Unless Company’s director, supervisor, president and other senior administrative officers having related interests have made disclosure to the Board of Directors as required in the

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preceding clause of this article, and the Board of Directors approves the matter at a meeting without his inclusion in the quorum and without his participation in the voting, the Company is entitled to cancel such contract, transaction or arrangement, except that the other party is a bona fide party that does not know the facts about breach of duties on the part of related directors, supervisors, president and other senior administrative officers. Where a related person of the Company’s directors, supervisors, president and other senior administrative officers has related interests in a certain contract, transaction or arrangement, the related directors, supervisors, president and other senior administrative officers shall also be deemed as having related interests. The former Article 131 If the Company’s director, supervisor, general manager and Mandatory other senior administrative officer, before the Company’s first Provision 121 consideration of entering into the relevant contract, transaction or arrangement, has sent a written notice to the Board of Directors, declaring that in view of the content of the notice, the contract, transaction or arrangement to be entered by the Company will have related interests with him, then in the scope stated in the notice, the related director, supervisor, general manager and other senior administrative officer shall be deemed as having made such disclosure as is specified in the preceding article of this chapter. is amended as: Article 156 If the Company’s director, supervisor, president and other Mandatory senior administrative officer, before the Company’s first Provision 121 consideration of entering into the relevant contract, transaction or arrangement, has sent a written notice to the Board of Directors, declaring that in view of the content of the notice, the contract, transaction or arrangement to be entered by the Company will have related interests with him, then in the scope stated in the notice, the related director, supervisor, president and other senior administrative officer shall be deemed as having made such disclosure as is specified in the preceding article of this chapter. The former Article 132 The Company shall not pay taxes in any manner for its Mandatory directors, supervisors, general manager and other senior Provision 122 administrative officers.

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is amended as:

Article 157

The Company shall not pay taxes in any manner for its Mandatory Provision 122 directors, supervisors, president and other senior administrative officers.

The former Article 133 The Company shall not provide loans or security for loan directly or indirectly to the directors, supervisors, general managers and other senior administrative officers of the Company and its parent company, or provide loans or security for loan to the related persons of the above mentioned persons.

The preceding clause does not apply to the following cases:

• (1) The Company provides loan or security for loan to its subsidiaries;

• (2) According to the appointment contracts approved by the shareholders’ general meeting, the Company provide loans, security for loan or other sum to the Company’s directors, supervisors, general manager and other senior administrative officers in order that they may make payments for the purpose of the Company or pay the expenses incurred on account of their performance of the duties in the Company;

• (3) If the Company’s normal business scope includes provision of loan and security for loan, the Company may provide loans and security for loan to relevant directors, supervisors, general manager and other senior administrative officers as well as related persons, provided that such provision shall be made under normal commercial conditions.

Mandatory Provision 123

is amended as:

Article 158

The Company shall not provide loans or security for loan directly or indirectly to the directors, supervisors, president and other senior administrative officers of the Company and its parent company, or provide loans or security for loan to the related persons of the above mentioned persons.

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The preceding clause does not apply to the following cases:

(1) The Company provides loan or security for loan to its subsidiaries; (2) According to the appointment contracts approved by the shareholders’ general meeting, the Company provide loans, security for loan or other sum to the Company’s directors, supervisors, president and other senior administrative officers in order that they may make payments for the purpose of the Company or pay the expenses incurred on account of their performance of the duties in the Company; (3) If the Company’s normal business scope includes provision of loan and security for loan, the Company may provide loans and security for loan to relevant directors, supervisors, president and other senior administrative officers as well as related persons, provided that such provision shall be made under normal commercial conditions. The subsequent Article will be renumbered accordingly.

The former Article 135	A guarantee for repayment of	A guarantee for repayment of	loan provided by the Company
	in breach of clause 1 of Article 133 shall not be enforceable
	against the Company, unless:
	(1)	at the time the loan was	provided to the related persons	Mandatory
		of the directors, supervisors, general managers and other		Provision 125
		senior administrative officers of the Company or its
		parent company, the lender did not know the relevant
		circumstances;
	(2)	the collateral provided	by the Company have been
		lawfully disposed of by the lender to a bona fide
		purchaser.
is amended as:
Article 160	A guarantee for repayment of		loan provided by the Company
	in breach of clause 1 of Article 158 shall not be enforceable
	against the Company, unless:
	(1)	at the time the loan was	provided to the related persons
		of the directors, supervisors, president and other senior
		administrative officers	of the Company or its parent
		company, the lender	did not know the relevant
		circumstances;

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• (2) the collateral provided by the Company have been lawfully disposed of by the lender to a bona fide purchaser.

The subsequent Article will be renumbered accordingly.

Addition:

Article 162

The Company can buy liability insurance for the directors, supervisors, president and other senior administrative officers with the content of the shareholders’ general meeting, save as the liabilities caused by the breach of laws and the Articles of Association by the directors, supervisors, president and other senior administrative officers.

The former Article 137 In addition to any rights and remedies provided by the laws and administrative regulations, where a director, supervisor, general manager or other senior administrative officer of the Company is in breach of his duties to the Company, the Company has a right to:

• (1) claim damages from the director, supervisor, general manager and other senior administrative officer in compensation for losses sustained by the Company as a result of such breach;

• (2) rescind any contract or transaction entered into by the Company with the director, supervisor, general manager and other senior administrative officer or with a third party (where such third party knows or should know that there is such a breach of duties by such director, supervisor, general manager and other senior administrative officer);

• (3) demand an account of the profits made by the director, supervisor, general manager and other senior administrative officer in breach of his duties;

• (4) recover any monies received by the director, supervisor, general manager and other senior administrative officer which should otherwise have been received by the Company, including but not limited to commissions;

• (5) request such director, supervisor, general manager and other senior administrative officer to return the interests accrued or may be accrued on the monies which should have been paid to the Company;

• Mandatory Provision 127

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• (6) adopt legal proceedings to decide that the assets obtained by the director, supervisor, general manager as result of breach of his duties shall belong to the Company.

• is amended as: Article 163 In addition to any rights and remedies provided by the laws and administrative regulations, where a director, supervisor, president or other senior administrative officer of the Company is in breach of his duties to the Company, the Company has a right to:

• (1) claim damages from the director, supervisor, president and other senior administrative officer in compensation for losses sustained by the Company as a result of such breach;

• (2) rescind any contract or transaction entered into by the Company with the director, supervisor, president and other senior administrative officer or with a third party (where such third party knows or should know that there is such a breach of duties by such director, supervisor, president and other senior administrative officer);

• (3) demand an account of the profits made by the director, supervisor, president and other senior administrative officer in breach of his duties;

• (4) recover any monies received by the director, supervisor, president and other senior administrative officer which should otherwise have been received by the Company, including but not limited to commissions; and

• (5) request such director, supervisor, president and other senior administrative officer to return the interests accrued or may be accrued on the monies which should have been paid to the Company.

• (6) adopt legal proceedings to decide that the assets obtained by the director, supervisor, president as result of breach of his duties shall belong to the Company.

All subsequent Articles will be renumbered accordingly.

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CHAPTER 15 FINANCIAL ACCOUNTING SYSTEMS AND PROFIT DISTRIBUTION

The former Article 141 The Company shall, upon termination of each accounting year, prepare its financial report, subject to examination and verification as provide by law.

Mandatory Provision 131

The Company adopts the calendar year as its accounting year, starting on January 1 and ending on December 31 of each calendar year.

is amended as:

Article 167

The Company shall, upon termination of each accounting year, prepare its financial report, subject to examination and verification as provide by law.

The Company’s annual financial report and the interim Company Law financial report for interim profit distributions shall include 165 (but not limited to) the following contents:

• (1) Balance sheet;

• (2) Profit and loss statement;

• (3) Profit distribution statement;

• (4) Cashflow statement;

• (5) Notes to financial statements;

• (6) Other contents as required or requested by the stock exchange where the shares of the Company are listed.

Where no interim profit distribution is made, the interim financial report shall include financial statements and notes other than item (3) in the preceding paragraph.

The Company adopts the calendar year as its accounting year, starting on January 1 and ending on December 31 of each calendar year.

All subsequent Articles will be renumbered accordingly.

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The former Article 146	The Company shall issue two financial reports in every	Mandatory
	accounting year, i.e. the interim financial report issued within	Provision 136
	60 days after the end of the first six months of the accounting
	year, and the annual financial report issued within 120 days
	after the end of the accounting year.
is amended as:
Article 172	The Company shall issue four financial reports in every	Guideline 150
	accounting year, i.e. the firstly quarterly financial report	of Articles of Association
	issued within 30 days after the end of the first three months
	of the accounting year; the interim financial report issued
	within 60 days after the end of the first six months of the
	accounting year; the third quarterly financial report issued
	within 30 days after the end of the first nine months of the
	accounting year; and the annual financial report issued within
	120 days after the end of the accounting year.
	The Company shall prepare its financial reports in accordance
	with the relevant laws, administrative regulations and
	departmental rules.
The former Article 147	The Company shall not keep other accounting books than	Mandatory
	those specified by the laws.	Provision 137
is amended as:
Article 173	The Company shall not keep other accounting books than
	those specified by the laws.
Addition:
Article 174	Assets of the Company shall not be deposited in an account
	maintained in the name of any individual.
The former Article 148	Capital common reserve fund includes the following:	Mandatory
		Provision 138
	(1) Premium on shares issued at a premium price;
	(2) Any other income designated for the capital common
	reserve fund by the regulations of the finance regulatory
	department of the State Council.

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is amended as:
Article 175	Capital common reserve fund includes the following:	Mandatory
		Provision 138
	(1) Premium on shares issued at a premium price;
	(2) Any other income designated for the capital common
	reserve fund by the regulations of the finance regulatory
	department of the State Council.
	The common reserve fund of the Company shall be applied to	Company Law
	make up losses, expand the Company’s production and	169
	operation or increase the Company’s capital. However, capital
	common reserve fund shall not be used to make up losses.
	When the Company converts its common reserve fund into its
	capital upon a resolution adopted in shareholders’ general
	meeting, the Company shall either distribute new shares in
	proportion to the shareholders’ number of shares, or increase
	the par value of each share, provided, however, that when the
	statutory common reserve fund is converted to capital, the
	balance of the statutory common reserve fund shall not be less
	than 25% of the registered capital.
Addition:
Article 176	After the profit distribution plan has been resolved at the	Guideline 154
	shareholders’ general meeting, the Board of Directors shall	of Articles of Association
	complete the dividend (or share) distribution within two
	months after the holding of the general meeting.
The former Article 149	The Company may distribute the dividends in the following	Mandatory
	forms (or adopting both forms at the same time):	Provision 139
	(1) Cash;
	(2) Shares.
	Dividends and other payments declared by the Company to be
	payable to holders of Domestic Shares shall be declared and
	calculated in RMB, and paid in RMB within three months
	after the date of dividend declaration. Those payable to
	holders of Overseas Listed Foreign Shares shall be declared
	and calculated in RMB, and paid in foreign currency within
	three months after the date of dividend declaration. The
	exchange rate shall be based on the average closing price of

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APPENDIX I

five working days preceding the date on which such dividends or other payments are declared. Foreign currency needed by the Company to pay cash dividends and other monies to holders of Overseas Listed Foreign Shares shall be obtained pursuant to relevant state regulations on the administration of foreign exchange.

is amended as: Article 177 The Company may distribute the dividends in the following Mandatory forms (or adopting both forms at the same time): Provision 139 (1) Cash; (2) Shares. Dividends and other payments declared by the Company to be payable to holders of Domestic Shares shall be declared and calculated in RMB, and paid in RMB within three months after the date of dividend declaration. Those payable to holders of Overseas Listed Foreign Shares shall be declared and calculated in RMB, and paid in foreign currency within three months after the date of dividend declaration. The exchange rate shall be based on the average closing price of five working days preceding the date on which such dividends or other payments are declared. Foreign currency needed by the Company to pay cash dividends and other monies to holders of Overseas Listed Foreign Shares shall be obtained pursuant to relevant state regulations on the administration of foreign exchange. Subject to authorization by the shareholders’ general meeting, the Board of Directors may decide distribution of interim dividends or bonus dividends.

The former Article 150 The Company’s profits, after paying relevant taxes, shall be distributed in the following sequence:

• (1) make up losses;

• (2) allocations to statutory common reserve fund;

• (3) allocations to statutory public welfare fund;

• (4) allocations to discretionary common reserve fund;

• (5) pay dividends for ordinary shares.

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The actual proportion of distribution of items (4) and (5) in this Article in any particular year shall be determined by the Board of Directors basing on the operation situation and the needs of development, and submitted for approval by the shareholders’ general meeting. is amended as: Article 178 The Company’s profits, after paying relevant taxes, shall be distributed in the following sequence: (1) make up losses; (2) allocations to statutory common reserve fund; (3) allocations to discretionary common reserve fund; (4) pay dividends for ordinary shares. The actual proportion of distribution of items (3) and (4) in this Article in any particular year shall be determined by the Board of Directors basing on the operation situation and the needs of development, and submitted for approval by the shareholders’ general meeting. The former Article 151 The Company shall not distribute any dividend prior to making up losses, allocations to statutory common reserve and statutory public welfare funds. is amended as: Article 179 The Company shall not distribute any dividend prior to making up losses, allocations to statutory common reserve and statutory public welfare funds. The former Article 152 The Company shall withdraw 10% of the profits after tax as the statutory common reserve fund of the Company. Such withdrawal may be stopped when the statutory common reserve fund of the Company has accumulated to more than 50% of the registered capital of the Company. is amended as: Article 180 The Company shall withdraw 10% of the profits after tax as the statutory common reserve fund of the Company. Such withdrawal may be stopped when the statutory common reserve fund of the Company has accumulated to more than 50% of the registered capital of the Company.

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APPENDIX I

If the statutory common reserve fund is insufficient to make Company Law up for the losses of the preceding year, the profits of the 167 current year shall first be used to make up for the said losses before any statutory common reserve fund is withdrawn as per the preceding paragraph.

Delete former Article 153 The Company shall withdraw 5%-10% of the profits after tax as statutory common reserve fund.

The subsequent Article will be renumbered accordingly.

Delete former Article 155 Capital common reserve fund includes the following:

(1) Premium on shares issued at a premium price; (2) Any other income designated for the capital common reserve fund by the regulations of the finance regulatory department of the State Council.

Addition:

Article 182 After the Company has recovered its losses and made allocations to its common reserve fund, the remaining profits shall be distributed to the shareholders in proportion to their respective shareholdings. No profit shall be distributed in respect of the shares held by the Company.

The subsequent Article will be renumbered accordingly.

Additions:

Article 184		The Company shall conduct internal audit and assign
		full-time auditors to conduct internal audit and supervision on
		the revenues/expenditures and economic activities of the
		Company.
Article 185		The internal audit system and duties of the auditors shall be	Guideline 157
		subject to the approval of the Board. The auditors shall be	of Articles of Association
		accountable to the Board and report his work to the same.
	CHAPTER 16 APPOINTMENT OF ACCOUNTING FIRM
**The former **	Article 157	The Company shall appoint independent accounting firm
		which is qualified under the relevant regulations of the State
		to audit the Company’s annual financial reports and review
		Company’s other financial reports.

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	The first accounting firm of the Company may be appointed	Mandatory
	by the inauguration meeting before the first annual general	Provision 141
	meeting. The accountant firm so appointed shall hold office
	until the conclusion of the first annual general meeting.
	If the inauguration meeting fails to exercise its powers under
	the preceding paragraph, those powers shall be exercised by
	the Board of Directors.
is amended as:
Article 186	The Company shall appoint independent accounting firm
	which is qualified under the relevant regulations of the State
	to audit the Company’s annual financial reports and review
	Company’s other financial reports.
	The first accounting firm of the Company may be appointed
	by the inauguration meeting before the first annual general
	meeting. The accountant firm so appointed shall hold office
	until the conclusion of the first annual general meeting.
	If the inauguration meeting fails to exercise its powers under	Mandatory
	the preceding paragraph, those powers shall be exercised by	Provision 141
	the Board of Directors.
The former Article 158	The accountant firm appointed by the Company shall hold	Mandatory
	office from the conclusion of the annual general meeting until	Provision 142
	the conclusion of the next annual general meeting.
is amended as:
Article 187	The accountant firm appointed by the Company shall hold	Guideline 158
	office from the conclusion of the annual general meeting until	of Articles of Association
	the conclusion of the next annual general meeting. Upon
	expiry, the appointment may be renewed.
The former Article 159	The accountant firm appointed by the Company shall have the
	following rights:
	(1) A right to inspect the books, records and vouchers of the
	Company at any time, the right to require the directors,
	general manager, vice president or other senior
	administrative officers of the Company to supply
	relevant information and explanation;

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	(2)	A right to require the Company to take all reasonable
		steps to obtain from its subsidiaries such information
		and explanation as are necessary for the purpose of
		discharging its duties;
	(3)	A right to attend shareholders’ general meetings and to	Mandatory
		receive all notices of, and other communications relating	Provision 143
		to, any shareholders’ general meeting which any
		shareholder is entitled to receive, and to speak at any
		shareholders’ general meeting in relation to matters
		concerning its role as the Company’s accountant firm.
is amended as:
Article 188	The	accountant firm appointed by the Company shall have the
	following rights:
	(1)	A right to inspect the books, records and vouchers of the
		Company at any time, the right to require the directors,
		president, vice president or other senior administrative
		officers of the Company to supply relevant information
		and explanation;
	(2)	A right to require the Company to take all reasonable
		steps to obtain from its subsidiaries such information
		and explanation as are necessary for the purpose of
		discharging its duties;
	(3)	A right to attend shareholders’ general meetings and to
		receive all notices of, and other communications relating
		to, any shareholders’ general meeting which any
		shareholder is entitled to receive, and to speak at any
		shareholders’ general meeting in relation to matters
		concerning its role as the Company’s accountant firm.

All subsequent Articles will be renumbered accordingly.

The former Article 163 The Company’s appointment, removal and non-reappointment of an accountant firm shall be resolved upon by shareholders in shareholders’ general meeting. The resolution of the shareholders’ general meeting shall be filed with the securities governing authority of the State Council.

Mandatory Provision 147

Where it is proposed that any resolution be passed at a shareholders’ general meeting concerning the appointment of an accountant firm which is not an incumbent firm to fill a

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PROPOSED REVISED ARTICLES OF ASSOCIATION

casual vacancy in the office of the accountant firm, re-appointment of a retiring accountant firm which was appointed by the Board of Directors of the Company to fill a casual vacancy, or removal of the accountant firm before the expiration of its term of office, the following provisions shall apply:

• (1) Before the notice of the shareholders’ general meeting is delivered, the proposal about the appointment or dismissal shall be sent to the accountant firm, or to the accountant firm which has left its post in the relevant accounting year (leaving includes leaving by removal, resignation and retirement).

• (2) If the accountant firm leaving its post makes a statement in writing and requests the Company to notify such statement to the shareholders, the Company shall adopt the following measures (unless the statement is received too late):

• (i) in the notice to shareholders for the purpose of making a resolution, state that the leaving accountant firm has made a statement;

• (ii) send the duplicate of such statement as an attachment to the notice to shareholders in the methods as specified in these Articles of Association.

• (3) If the statement of the accountant firm is not sent in accordance with item (2) of this Article, the relevant accountant firm may require that the statement be read out at the shareholders’ meeting, and may make further complaints.

• (4) An accountant firm which is leaving its post shall be entitled to attend the following meetings:

• (i) the shareholders’ general meeting at which its term of office would otherwise have expired;

• (ii) any shareholders’ general meeting at which it is proposed to fill the vacancy caused by its removal;

• (iii) any shareholders’ general meeting convened on account of the firm’s resignation.

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APPENDIX I

An accountant firm which is leaving its post shall be entitled to receive all notices of, and other communications relating to, any such meetings, and to speak at any such meetings in relation to matters concerning its role as the former accountant firm of the Company.

is amended as: Article 192 The Company’s appointment, removal and non-reappointment of an accountant firm shall be resolved upon by shareholders in shareholders’ general meeting. The resolution of the shareholders’ general meeting shall be filed with the securities regulatory authority of the State Council.

Mandatory Provision 147

Where it is proposed that any resolution be passed at a shareholders’ general meeting concerning the appointment of an accountant firm which is not an incumbent firm to fill a casual vacancy in the office of the accountant firm, re-appointment of a retiring accountant firm which was appointed by the Board of Directors of the Company to fill a casual vacancy, or removal of the accountant firm before the expiration of its term of office, the following provisions shall apply:

• (1) Before the notice of the shareholders’ general meeting is delivered, the proposal about the appointment or dismissal shall be sent to the accountant firm, or to the accountant firm which has left its post in the relevant accounting year (leaving includes leaving by removal, resignation and retirement).

• (2) If the accountant firm leaving its post makes a statement in writing and requests the Company to notify such statement to the shareholders, the Company shall adopt the following measures (unless the statement is received too late):

• (i) in the notice to shareholders for the purpose of making a resolution, state that the leaving accountant firm has made a statement;

• (ii) send the duplicate of such statement as an attachment to the notice to shareholders in the methods as specified in these Articles of Association.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

• (3) If the statement of the accountant firm is not sent in accordance with item (2) of this Article, the relevant accountant firm may require that the statement be read out at the shareholders’ meeting, and may make further complaints.

• (4) An accountant firm which is leaving its post shall be entitled to attend the following meetings:

• (i) the shareholders’ general meeting at which its term of office would otherwise have expired;

• (ii) any shareholders’ general meeting at which it is proposed to fill the vacancy caused by its removal;

• (iii) any shareholders’ general meeting convened on account of the firm’s resignation.

An accountant firm which is leaving its post shall be entitled to receive all notices of, and other communications relating to, any such meetings, and to speak at any such meetings in relation to matters concerning its role as the former accountant firm of the Company.

The former Article 164

Prior to the removal or the non-renewal of the appointment of the accountant firm, notice of such removal or non-renewal shall be given to the accountant firm and such firm shall be entitled to make a statement at the shareholders’ general meeting. Where the accountant firm resigns its post, it shall make clear to the shareholders’ general meeting whether there has been any impropriety on the part of the Company.

Mandatory Provision 148

• (1) An accountant firm may resign its office by depositing at the Company’s legal address a resignation notice. Such notice shall include the following:

• (i) 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; or

• (ii) A statement of any such circumstances.

Such resignation notice shall become effective on the date of such deposit or on such later date as may be stipulated in such notice

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PROPOSED REVISED ARTICLES OF ASSOCIATION

(2) The Company shall within 14 days upon receipt of the notice as mentioned in clause (1) in this Article, send of copy of the notice to the relevant competent authority. If the notice contains a statement under clause (1) (ii) of this Article, a copy of such statement shall be placed at the Company for the inspection of shareholders. The Company shall also send a copy of such statement by prepaid mail to every holder of Overseas Listed Foreign Shares at the address registered in the register of shareholders. (3) Where the accountant firm’s notice of resignation contains a statement as mentioned in clause (1) (ii) of this Article, it may require the Board of Directors to convene an extraordinary general meeting for the purpose of receiving an explanation of the circumstances connected with its resignation.

is amended as:

Article 193 Prior to the removal or the non-renewal of the appointment of the accountant firm, notice of such removal or non-renewal shall be given to the accountant firm 10 days in advance. In voting the resolution in relation to removal of the accountant firm in the shareholders’ general meeting, such firm shall be entitled to make a statement at the shareholders’ general meeting. Where the accountant firm resigns its post, it shall make clear to the shareholders’ general meeting whether there has been any impropriety on the part of the Company.

Mandatory Provision 148

Guideline 162 of Articles of Association

• (1) An accountant firm may resign its office by depositing at the Company’s legal address a resignation notice. Such notice shall include the following:

• (i) 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; or

• (ii) A statement of any such circumstances.

Such resignation notice shall become effective on the date of such deposit or on such later date as may be stipulated in such notice

• (2) The Company shall within 14 days upon receipt of the notice as mentioned in clause (1) in this Article, send of

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APPENDIX I

copy of the notice to the relevant competent authority. If the notice contains a statement under clause (1) (ii) of this Article, a copy of such statement shall be placed at the Company for the inspection of shareholders. The Company shall also send a copy of such statement by prepaid mail to every holder of Overseas Listed Foreign Shares at the address registered in the register of shareholders.

(3) Where the accountant firm’s notice of resignation contains a statement as mentioned in clause (1) (ii) of this Article, it may require the Board of Directors to convene an extraordinary general meeting for the purpose of receiving an explanation of the circumstances connected with its resignation.

CHAPTER 17 MERGER AND DIVISION OF THE COMPANY

The subsequent Article will be renumbered accordingly.

The former Article 166 The merger of the Company may take the form of either merger by consolidation or by new establishment.

In the event of a merger, the merging parties shall execute a merger agreement and prepare a balance sheet and an inventory of assets. The Company shall notify its creditors within ten days of the date of the Company’s merger resolution and shall publish a public notice in a newspaper at least three times within thirty days of the date of the Company’s merger resolution to merge.

After the merger, rights in relation to debtors and indebtedness of each of the merged parties shall be assumed by the company which survives the merger or the newly established company.

Mandatory Provision 150

is amended as:

Article 195 The merger of the Company may take the form of either merger by consolidation or by new establishment.

In the event of a merger, the merging parties shall execute a merger agreement and prepare a balance sheet and an inventory of assets. The Company shall notify its creditors

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APPENDIX I

	within ten days of the date of the Company’s merger
	resolution and shall publish a public notice in a newspaper
	three times within thirty days of the date of the Company’s
	merger resolution to merge.
	After the merger, rights in relation to debtors and
	indebtedness of each of the merged parties shall be assumed
	by the company which survives the merger or the newly
	established company.
The former Article 167	When the Company is divided, its assets shall be split up
	accordingly.
	In the event of division of the Company, the parties to such
	division shall execute a division agreement and prepare a
	balance sheet and an inventory of assets. The Company shall
	notify its creditors within ten days of the date of the
	Company’s resolution to divide and shall publish a public
	notice in a newspaper at least three times within thirty days of
	the date of the Company’s resolution to divide.
	Debts of the Company prior to division shall be assumed by	Mandatory
	the company which exists after the division.	Provision 151
is amended as:
Article 196	When the Company is divided, its assets shall be split up
	accordingly.
	In the event of division of the Company, the parties to such
	division shall execute a division agreement and prepare a
	balance sheet and an inventory of assets. The Company shall
	notify its creditors within ten days of the date of the
	Company’s resolution to divide and shall publish a public
	notice in a newspaper at least three times within thirty days of
	the date of the Company’s resolution to divide.
	Debts of the Company prior to division shall be assumed by	Mandatory
	the company which exists after the division, except provided	Provision 177
	otherwise in the agreement reached between the Company and
	the creditors relating to the repayment of debt before the
	division.

The subsequent Article will be renumbered accordingly.

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CHAPTER 18 DISSOLUTION AND LIQUIDATION OF THE COMPANY

The former Article 169 The Company shall be dissolved and liquidated under any of the following circumstances:

• (1) Expiry of the operation term;

• (2) A resolution for dissolution is passed by shareholders at the shareholders’ general meeting;

• (3) Dissolution is necessary on account of a merger or Mandatory division of the Company; Provision 153

• (4) The Company is declared as bankrupt according to the law on account of its failure to repay due debts;

• (5) The Company is ordered to close down or withdraw because of its violation of laws and administrative regulations.

is amended as:

Article 198 The Company shall be dissolved and liquidated under any of the following circumstances:

• (1) Expiry of the operation term;

• (2) A resolution for dissolution is passed by shareholders at the shareholders’ general meeting;

• (3) Dissolution is necessary on account of a merger or division of the Company;

• (4) The Company is declared as bankrupt according to the law on account of its failure to repay due debts;

• (5) The Company’s business license is cancelled or is ordered to close down or revoked according to the law;

• Guideline 178 of Articles of Association

• (6) If the Company gets into serious trouble in operations and management and continuation may incur material losses of the interests of the shareholders, and no solution can be found through any other channel, and is

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	requested by shareholders holding more than 10% of the
	total voting rights of the Company to the people’s court
	to dissolve the Company, and the people’s court
	dissolves the Company pursuant to law.
Addition:
Article 199	Under the circumstances of item (i) in Article 197, the
	Company may continue to exist through amendments to these
	Articles of Association.
	Amendments to these Articles of Association pursuant to the	Guideline 179
	preceding paragraph shall be passed by more than two thirds	of Articles of Association
	of the voting rights of shareholders attending in the
	shareholders’ general meeting.
The former Article 170	Where the Company is dissolved under clause (1), (2) of the
	preceding Article, liquidation committee must be set up
	within 15 days. Members of the liquidation committee shall
	be appointed by the shareholders in a shareholders’ general
	meeting.
	Where the Company is dissolved under clause (4) of the
	preceding Article, the People’s Court shall in accordance with
	provisions of the relevant laws organise the shareholders, the
	relevant authorities and relevant professional personnel to
	establish a liquidation committee to carry out liquidation
	procedures.
	Where the Company is dissolved under clause (5) of the	Mandatory
	preceding Article, the relevant governing authorities shall	Provision 154
	organise the shareholders, the relevant authorities and
	relevant professional personnel to establish a liquidation
	committee to carry out liquidation procedures.
is amended as:
Article 200	Where the Company is dissolved under clause (1), (2), (5) and	Mandatory
	(6) of Article 198, liquidation committee must be set up	Provision 154
	within 15 days. Members of the liquidation committee shall
	be appointed by the shareholders in a shareholders’ general
	meeting.
	Where the Company is dissolved under clause (2) of Article	Guideline 180
	198, the People’s Court shall in accordance with provisions of	of Articles of Association
	the relevant laws organise the shareholders, the relevant
	authorities and relevant professional personnel to establish a
	liquidation committee to carry out liquidation procedures.

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Where the Company is dissolved under clause (3) of Article Mandatory 198, the relevant governing authorities shall organise the Provision 155 shareholders, the relevant authorities and relevant professional personnel to establish a liquidation committee to carry out liquidation procedures.

The subsequent Article will be renumbered accordingly.

The former Article 172 The liquidation committee shall within ten days of its Mandatory establishment send notice to creditors, and shall within sixty Provision 156 days of its establishment publish a public notice in a newspaper at least three times. The liquidation committee shall carry out registration of creditors’ rights. is amended as: Article 202 The liquidation committee shall within ten days of its Mandatory establishment send notice to creditors, and shall within sixty Provision 156 days of its establishment publish a public notice in a newspaper. A creditor shall within thirty days of receiving the Company Law 186 notice, or for any creditors who do not receive the notice, within forty-five days of the date of the first public notice, report his creditors’ rights to the liquidation committee. The liquidation committee shall carry out registration of creditors’ rights. During the period of registration of creditors’ rights, the liquidation committee shall not repay the debt to creditors. The former Article 173 During the liquidation period, the liquidation committee shall exercise the following functions and powers: (1) To sort out the Company’s assets and prepare a balance sheet and an inventory of assets respectively; (2) To send notices to creditors or notify them by public notice; (3) To dispose of and liquidate any relevant unfinished business matters of the Company; (4) To pay all outstanding taxes; (5) To settle claims and debts;

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• (6) To deal with the assets remaining after the Company’s Mandatory debts have been repaid; Provision 157

• (7) To represent the Company in any civil litigation proceedings.

• is amended as: Article 203 During the liquidation period, the liquidation committee shall exercise the following functions and powers: (1) To sort out the Company’s assets and prepare a balance sheet and an inventory of assets respectively;

• (2) To send notices to creditors or notify them by public notice;

• (3) To dispose of and liquidate any relevant unfinished business matters of the Company;

• (4) To pay all outstanding taxes and taxes incurred in the Company Law process of liquidation; 185

• (5) To settle claims and debts; (6) To deal with the assets remaining after the Company’s debts have been repaid;

• (7) To represent the Company in any civil litigation proceedings.

The former Article 174 After sorting out the Company’s assets and the preparation of the balance sheet and an inventory of assets, the liquidation committee shall formulate a liquidation plan and represent it to the shareholders’ general meeting or the competent authority for confirmation.

The liquidation expenses, including remunerations for the members and consultants of liquidation, shall be paid from the Company’s assets in priority before repayment of the debts of other creditors.

After the resolution of the shareholders’ general meeting to dissolve the Company or after the Company’s declaration as bankrupt or ordered to close down in accordance with the law, no one shall distribute the Company’s assets without the approval of the liquidation committee.

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The Company assets shall be distributed for repayments in the following sequence: payment of liquidation expenses, staff wages and labour insurance expenses, payment of outstanding taxes, and payment of company debts.

The Company’s residual assets after repayment of its debts in accordance with the provisions of the preceding paragraph shall be distributed to its shareholders according to the class and proportion of their shareholdings. Distribution shall be made in priority to holders of preferred shares as per the par values of the preferred shares, and shall be distributed to holders of preferred shares as per the percentages of preferred shares held by the said holders if the remaining assets are insufficient to repay the preferred shares; and to distribute to holders of ordinary shares in their proportions held.

During the period of liquidation, the Company shall not carry out new business activities. Members of the liquidation committee shall perform their duty honestly and discharge the obligation of liquidation in accordance with laws. Members of the liquidation committee shall not take personal advantage of their posts to take bribes, receive other illegal incomes, or misappropriate assets of the Company. Members of the liquidation committee shall compensate the losses of the Company or the creditors made due to their intent or gross negligence.

is amended as: Article 204 After sorting out the Company’s assets and the preparation of the balance sheet and an inventory of assets, the liquidation committee shall formulate a liquidation plan and represent it to the shareholders’ general meeting or the competent authority for confirmation. The liquidation expenses, including remunerations for the members and consultants of liquidation, shall be paid from the Company’s assets in priority before repayment of the debts of other creditors.

Mandatory Provision 158 Mandatory Provision 158

After the resolution of the shareholders’ general meeting to dissolve the Company or after the Company’s declaration as

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APPENDIX I

bankrupt or ordered to close down in accordance with the law, no one shall distribute the Company’s assets without the approval of the liquidation committee.

The Company assets shall be distributed for repayments in the Company Law following sequence: payment of liquidation expenses, staff 187 wages and social insurance expenses and statutory compensation, payment of outstanding taxes, and payment of company debts.

The Company’s residual assets after repayment of its debts in accordance with the provisions of the preceding paragraph shall be distributed to its shareholders according to the proportion of their shareholdings.

During the period of liquidation, the Company shall not carry out new business activities.

Members of the liquidation committee shall perform their duty honestly and discharge the obligation of liquidation in accordance with laws.

Members of the liquidation committee shall not take personal advantage of their posts to take bribes, receive other illegal incomes, or misappropriate assets of the Company. Members of the liquidation committee shall compensate the losses of the Company or the creditors made due to their intent or gross negligence.

All subsequent Articles will be renumbered accordingly.

CHAPTER 19 PROCEDURES FOR AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The former Article 177 The Company may amend its Articles of Association in Mandatory accordance with the requirement of laws, administrative Provision 161 regulations and the Articles of Association.

is amended as:

Article 207 The Company may amend its Articles of Association in accordance with the requirement of laws, administrative regulations and the Articles of Association. Under any of the following circumstances, amendments shall be made to the Articles of Association:

Mandatory Provision 161

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PROPOSED REVISED ARTICLES OF ASSOCIATION

	(1) Following amendments to the Company Law or relevant
	laws and administrative regulation, the matters as
	stipulated in these Articles of Assiciation are in
	contradiction with those as required in the amended
	laws, administrative regulations;
	(2) There have been changes in the situation of the
	Company, rendering it inconsistent with the matters as
	recorded in these Articles of Association;
	(3) The shareholders’ general meeting decided to make
	amendments to these Articles of Association.
The former Article 178	Where the revision of the Articles of Association involves
	contents of the Mandatory Provisions for the Articles of
	Association of Companies Seeking a Listing Outside the PRC
	(“Mandatory provisions”), it will become effective after
	approval by the companies approving department as
	authorized by the State Council and by the Securities
	Governing Committee of the State Council. Where registered
	items of the Company are involved, registration for the
	changes shall be made in accordance with the law.
is amended as:
Article 208	Where the revision of the Articles of Association involves	Mandatory
	contents of the Mandatory Provisions for the Articles of	Provision 162
	Association of Companies Seeking a Listing Outside the PRC
	(“Mandatory provisions”), it will become effective after
	approval by the companies approving department as
	authorized by the State Council and by the Securities
	Regulatory Committee of the State Council. Where registered
	items of the Company are involved, registration for the
	changes shall be made in accordance with the law.

CHAPTER 20 SETTLEMENT OF DISPUTES The former Article 179 The Company shall act according to following principles to settle disputes: (1) Whenever any disputes or claims arising between holders of Overseas Listed Foreign Shares and the Company, between holders of Overseas Listed Foreign Shares and the Company’s directors, supervisors, general manager or other senior administrative officers, or between holders of Overseas Listed Foreign Shares

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PROPOSED REVISED ARTICLES OF ASSOCIATION

and holders of Domestic Shares based on these Articles of Association or any rights or obligations conferred or imposed by the Company Law or any other relevant PRC laws and administrative regulations concerning the affairs of the Company, such disputes or claims shall be referred by the relevant parties to arbitration.

Where a dispute or claim of rights just mentioned is referred to arbitration, the entire claim or dispute must be referred to arbitration, and all parties who have a cause of action based on the same facts giving rise to the dispute or claim or whose participation is necessary for the resolution of such dispute or claim shall abide by the arbitration, provided that such parties shall be the Company or the Company’s shareholder, director, supervisor, general manager or other senior administrative officer.

Disputes in relation to the definition of shareholders and disputes in relation to the shareholders’ register need not be resolved by arbitration.

• (2) A claimant may elect arbitration at either the China International Economic and Trade Arbitration Commission in accordance with its Arbitration Rules or the Hong Kong International Arbitration Center in accordance with its Securities Arbitration Rules. Once a claimant refers a dispute or claim to arbitration, the other party must submit to the arbitral body elected by the claimant.

If a claimant elects arbitration at Hong Kong International Arbitration Center, any party to the dispute or claim may apply for a hearing to take place in Shenzhen in accordance with the Securities Arbitration Rules of the Hong Kong International Arbitration Center.

• (3) If any disputes or claims of rights are settled by way of arbitration in accordance with clause (1), the laws of the People’s Republic of China shall apply, save as otherwise provided by laws and administrative regulations.

Mandatory Provision 163

• (4) The award of an arbitration body shall be final and conclusive and binding on all parties.

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PROPOSED REVISED ARTICLES OF ASSOCIATION

is amended as:

Article 209

The Company shall act according to following principles to settle disputes:

• (1) Whenever any disputes or claims arising between holders of Overseas Listed Foreign Shares and the Company, between holders of Overseas Listed Foreign Shares and the Company’s directors, supervisors, president or other senior administrative officers, or between holders of Overseas Listed Foreign Shares and holders of Domestic Shares based on these Articles of Association or any rights or obligations conferred or imposed by the Company Law or any other relevant PRC laws and administrative regulations concerning the affairs of the Company, such disputes or claims shall be referred by the relevant parties to arbitration.

Where a dispute or claim of rights just mentioned is referred to arbitration, the entire claim or dispute must be referred to arbitration, and all parties who have a cause of action based on the same facts giving rise to the dispute or claim or whose participation is necessary for the resolution of such dispute or claim shall abide by the arbitration, provided that such parties shall be the Company or the Company’s shareholder, director, supervisor, president or other senior administrative officer.

Disputes in relation to the definition of shareholders and disputes in relation to the shareholders’ register need not be resolved by arbitration.

• (2) A claimant may elect arbitration at either the China International Economic and Trade Arbitration Commission in accordance with its Arbitration Rules or the Hong Kong International Arbitration Center in accordance with its Securities Arbitration Rules. Once a claimant refers a dispute or claim to arbitration, the other party must submit to the arbitral body elected by the claimant.

If a claimant elects arbitration at Hong Kong International Arbitration Center, any party to the dispute or claim may apply for a hearing to take place in Shenzhen in accordance with the Securities Arbitration Rules of the Hong Kong International Arbitration Center.

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APPENDIX I

(3) If any disputes or claims of rights are settled by way of arbitration in accordance with clause (1), the laws of the People’s Republic of China shall apply, save as otherwise provided by laws and administrative regulations. (4) The award of an arbitration body shall be final and conclusive and binding on all parties.

CHAPTER 21 SUPPLEMENTARY PROVISIONS

The subsequent Article will be renumbered accordingly.

Article 211 In these Articles of Association, the terms “above”, “within”, “below” are inclusive of the figure itself. “less than”, “other than”, “lower than”, “more than” are exclusive of the figure itself. “including” refers to including but not limited to the related matter, issue. Delete former Article 181 After the successful issue of the Overseas Listed Foreign Shares by the Company, BYD Company Limited was converted into a foreign invested joint stock limited company in accordance with the relevant laws and regulations.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

Please note that the following Rules and Procedures of Shareholders’ General Meeting are written in Chinese and there is no official English translation in respect thereof. The translation into English language in this Appendix II is for reference only. In case of any inconsistency between the English and Chinese versions, the Chinese version shall prevail.

CHAPTER I GENERAL PRINCIPLES

1. In order to protect the legitimate interests of BYD Company Limited (hereinafter referred to as the “Company”) and its shareholders, to specify the duties and authorities of the shareholders’ general meetings, to ensure the proper, efficient and smooth operation of the shareholders’ general meetings and to ensure the shareholders’ general meetings exercise their functions and powers legally, these Rules and Procedures have been formulated in accordance with China’s prevailing laws and regulations, rules, regulatory documents, provisions of the securities regulatory authorities and the listing rules of the jurisdiction(s) in which the Company’s shares are listed the “Company Law of the People’s Republic of China” (hereinafter referred to as the “Company Law”), “Mandatory Provisions for the Articles of Association of Companies Listed Overseas”, “Guidelines of the Articles of Association of Listed Companies (as amended in 2006)”, “Rules and Procedures of the Shareholders’ General Meeting of Listed Companies”, and the Articles of Association of BYD Company Limited (hereinafter referred to as the “Articles of Association”).

2. The Rules and Procedures apply to the shareholders’ general meetings of the Company and shall be binding on the Company, all shareholders, authorized proxies of the shareholders, the Company’s directors, supervisors, chief executives, other senior officers and other relevant personnel present at the meeting.

3. Shareholders’ general meetings consist of annual general meetings (hereinafter referred to as “AGM”) and extraordinary general meetings, or shareholders’ general meeting and class meetings.

4. The AGM shall be held once every year and within six months from the end of the last financial year.

5. The shareholders’ general meetings convened for a year are extraordinary general meetings except AGMs. Extraordinary general meetings should be held in the order specified for the convening years.

6. Those shareholders who hold different classes of shares are class shareholders. Holders of different classes of shares are shareholders of their respective classes. Except for other classes of shareholders, holders of domestic shares and those of H shares are deemed to be shareholders of different classes. To vary or abrogate the rights of the class shareholders, the Company must approve it by a special resolution in a shareholders’ general meeting in accordance with the Articles of Association and convening class meetings. Only class shareholders may attend class meetings.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

1. The Board of the Company shall strictly comply with the provisions of the Company Law and the provisions of other relevant laws and regulations on the convening of shareholders’ general meeting, and shall properly organize the shareholders’ general meeting in a conscientious manner and on schedule. All directors of the Company have fiduciary duties to ensure that the shareholder’s general meeting is convened in order, and shall not obstruct the shareholders’ general meeting from carrying out its duties and exercising its functions and powers pursuant to law. The directors present at the meeting shall perform their duties and responsibilities in good faith, and shall ensure that the contents of the resolutions passed at the meeting are true, accurate and complete, and that words and expressions which are open to different interpretations shall not be used.

2. Any shareholder who holds the shares of the Company legally and validly is entitled to personally or authorize a proxy to attend a shareholders’ general meeting, and shall have various legal rights including the right to be informed of the Company’s affairs, the right to speak, the right to raise questions and the right to vote according to the law and these Rules and Procedures. Shareholders and their proxies attending a shareholders’ general meeting shall comply with the provisions of the relevant laws and regulations, Articles of Association and the Rules and Procedures, and shall take initiative to maintain the order of the meeting and shall not infringe the legitimate rights and interests of other shareholders.

3. The secretary to the Board is responsible for all works of preparation for and organization of the shareholders’ general meetings.

4. In convening a shareholders’ general meeting, the principle of cost-saving and simplicity shall be adhered to. No extra economic benefits shall be given to the shareholders (or their authorized proxies) present at the meeting.

CHAPTER II FUNCTIONS AND POWERS OF THE SHAREHOLDERS’ GENERAL MEETING

1. The shareholders’ general meeting is the organization of the Company’s authority and exercises the following legitimate rights:

2. (I) to determine the business policies and investment plans of the Company;

3. (II) to elect and replace directors and to determine the remuneration of the directors;

4. (III) to elect and replace supervisors who are representatives of the shareholders and to determine the remuneration for such supervisors;

5. (IV) to consider and approve the reports of the Board;

6. (V) to consider and approve the reports of the supervisory committee;

7. (VI) to consider and approve the annual financial budgets and final accounts;

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

• (VII)to consider and approve the plan for profit distribution and plan for recovery of losses;

• (VIII) to decided on the increase in or reduction of the registered capital of the Company;

• (IX) to decide on the merger, division, dissolution, liquidation and transformation of the Company;

• (X) to decide on the issue of bonds of the Company;

• (XI) to decide on the appointment, dismissal and discontinuation of re-appointment of the accountants firm;

• (XII)to amend the Articles of Association;

• (XIII) to consider the motion put forward by shareholders holding 3 per cent (inclusive) or more of the shares of the Company carrying voting rights;

• (XIV) to resolve on the Company’s transaction of purchase or sale of major assets within one year with the transaction amount exceeding 30% of the audited total assets of the Company for the latest period;

• (XV)to resolve on the Company’s external guarantees which shall be approved by a shareholders’ general meeting as required by laws, administrative regulations and the Articles of Association;

• (XVI) to consider and approve the change of the use of funds raised;

• (XVII) to consider the share option incentive scheme;

• (XVIII) to resolve on other matters which, in accordance with the laws, administrative regulations, authorities’ rules and the Articles of Association, should be approved by the shareholders’ general meeting.

CHAPTER III CONVOCATION PROCEDURES OF THE SHAREHOLDERS’ GENERAL MEETING

Section I Proposal, Collection and Auditing of Motions

1. Motions of the shareholders’ general meetings are detailed discussion documents prepared in respect of matters needed to be discussed by the shareholders’ general meetings, the contents of which shall be within the authority of the shareholders’ general meeting with clear subjects and concrete resolutions and comply with the relevant provisions of the laws, administrative regulations and the Articles of Association.

2. The Board, supervisory committee and the shareholders individually or jointly holding 3% or more of the shares may propose motions to the Company in a shareholders’ general meeting.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

The shareholders individually or jointly holding 3% or more of the total voting shares of the Company shall submit the provisional motion in writing to the convener 10 days prior to the shareholders’ general meeting. The convener shall send supplemental notice to shareholders within two days after receiving the motion, publish the content of the provisional motion by way of announcement and submit the provisional motion for consideration at the shareholders’ general meeting.

Except for the circumstances stipulated in the foregoing provision, the convener shall not amend any motion which has been included in the notice of general meeting or propose any new motion after such notice has been issued.

Any proposal which is not included in the notice of general meeting or does not comply with the Articles of Association herein shall not be voted on or resolved at the shareholders’ general meeting.

1. Motions relating to the following circumstances shall be deemed to be variation or abrogation of the rights attaching to a particular class of shares, and the Board shall propose to the class meeting to consider:

2. (I) to increase or decrease the number of shares of that class, or to increase or decrease the number of shares of a class having voting or equity rights or privileges equal or superior to those of shares of that class;

3. (II) to exchange all or part of the shares of that class for shares of another class or to exchange or to create a right to exchange all or part of the shares of another class for shares of that class;

4. (III) to remove or reduce rights to accrued dividends or rights to cumulative dividends attached to shares of that class;

5. (IV) to reduce or remove preferential rights attached to shares of that class to receive dividends or to the distribution of assets in the event that the Company is liquidated;

6. (V) to add, remove or reduce conversion privileges, options, voting rights, transfer or pre-emptive rights, or rights to acquire securities of the Company attached to shares of that class;

7. (VI) to remove or reduce rights to receive payment payable by the Company in particular currencies attached to shares of that class;

8. (VII)to create a new class of shares having voting or equity rights or privileges equal or superior to those of the shares of that class;

9. (VIII) to restrict the transfer or ownership of shares of that class or to increase the types of restrictions attaching thereto;

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

• (IX) to allot and issue rights to subscribe for, or to convert the existing shares into, shares in the Company of that class or another class;

• (X) to increase the rights or privileges of shares of another class;

• (XI) to restructure the Company in such a way so as to result in the disproportionate distribution of obligations between the various classes of shareholders;

• (XII)to amend or abrogate the provisions of Chapter 9 of the Articles of Association “Special Procedures for Voting by a Class of Shareholders”.

Section II Convocation and Notice of Meetings

1. Shareholders’ general meetings shall be convened by the Board, shareholder(s) individually or jointly holding 10 per cent. or more of the shares of the Company carrying voting rights and the supervisory committee of the Company;

The Board shall convene an extraordinary general meeting within two (2) months of the occurrence of any one of the following events:

• (I) where the number of the directors is less than the number stipulated in the Company Law or two-thirds of the number specified by the Company’s Articles of Association;

• (II) where the unrecovered losses of the Company amount to one-third of the total amount of its share capital;

• (III) where shareholder(s) individually or jointly holding 10% or more of the Company’s issued and outstanding voting shares request(s) in writing for the convening of an extraordinary general meeting;

• (IV) wherever the Board deems necessary or the supervisory committee so requests;

• (V) other circumstances stipulated in laws, administrative regulations, authorities’ rules or the Articles of Association.

• Independent directors are entitled to propose to the Board to convene an extraordinary general meeting.

In respect of the proposal of convening an extraordinary general meeting made by independent shareholder(s), the Board shall, according to law, administrative regulations and the Articles of Association, give a reply in writing, as to whether it agrees to convene an extraordinary general meeting within 10 days after receiving the proposal.

Where the Board agrees to convene an extraordinary general meeting, it should issue the notice of extraordinary general meeting within 5 days after the resolution has been made by the Board. Where the Board refuses to convene an extraordinary general meeting, it should explain the reason and make an announcement thereof.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

1. The supervisory committee is entitled to propose to the Board in writing to convene an extraordinary general meeting. The Board shall, according to laws, administrative regulations and the Articles of Association, give a reply in writing as to whether it agrees, to convene an extraordinary general meeting within 10 days after receiving the proposal.

Where the Board agrees to convene an extraordinary general meeting, it should issue the notice of general meeting within 5 days after the resolution has been made by the Board. Where the original proposal needs to be varied in the notice, the approval of the supervisory committee is required.

Where the Board refuses to convene an extraordinary general meeting, or did not give any reply with 10 days after receiving the proposal, the Board is deemed to be unable or to have failed to fulfill its responsibility to convene general meetings, and, the supervisory committee is entitled to convene and preside over the shareholders’ general meeting on its own.

1. The procedures for convening an extraordinary general meeting or a class meeting of the shareholders at the request of the shareholders shall be as follows:-

2. (I) Two or more shareholders who hold individually or jointly an aggregate of 10 per cent. or more of the shares carrying voting rights at such meeting may sign one or several written requests in the same form requesting the Board to convene an extraordinary general meeting or a class meeting of the shareholders, specifying the objects of the meeting. Upon receipt of the said written request, the Board shall convene an extraordinary general meeting or a class meeting of shareholders as soon as possible. The number of the shares held as aforesaid shall be calculated based on those shares held by the shareholders as at the date of the written request.

3. (II) Where the Board fails to give notice to convene the meeting within 30 days upon the receipt of the said written request, the requesting shareholders may themselves convene a meeting within four months upon the receipt of the said request by the Board. A meeting convened by the requesting shareholders shall be convened in accordance with the same procedures, as nearly as possible, as that in which meetings are to be convened by the Board.

Any reasonable expenses incurred by the requesting shareholders by reason of the failure of the Board to duly convene a meeting shall be borne by the Company and the same amount shall be deducted from the amount payable by the Company to the directors in default of their obligations.

1. Where the supervisory committee and shareholders decide to convene the shareholders’ general meeting on their own, they should inform the Board in writing, and report to the local office of the securities regulatory authority of the State Council where the Company is located and stock exchange.

The convening shareholders shall provide the relevant evidence to the local office of the securities regulatory authority of the State Council where the Company is located and stock exchange at the same time as sending the notice of general meeting and announcing the passed resolutions at the shareholders’ general meeting.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

1. As for the shareholders’ general meeting convened by the supervisory committee or shareholders, the Board and the secretary to the Board shall coordinate accordingly. The Board shall provide the register of members as at the registered date for entitlements of shares.

2. The reasonable costs and expenses incurred in convening the shareholders’ general meeting by supervisory committee and the shareholder shall be borne by the Company.

3. The notice of shareholders’ general meeting shall be issued by the convener of the meeting.

4. Where the Company convenes a shareholders’ general meeting, a notice of meeting shall be given by the convener 45 days prior to the date of the meeting (excluding the day of the meeting) to notify the shareholders recorded in the register of members of the motions to be considered at the meeting, and the date and venue of the meeting. The notice of a shareholders’ general meeting shall be delivered to shareholders (whether or not they are entitled to vote at the shareholders’ general meeting) by hand or by pre-paid mail to their addresses as shown in the register of members. For holders of domestic shares, the notice of meeting may be issued in the form of public notice. Public notices referred to in the preceding paragraph shall be published in one or more newspapers designated by the securities regulatory authority of the State Council during the period between 45 days to 50 days prior to the date of the meeting. Once the announcement is made, holders of domestic shares shall be deemed to have received the notice of the shareholders’ general meeting. If the Company is unable to issue the notice of meetings within the period as provided and, as a result, the AGM cannot be held within six months after the conclusion of the previous financial year, the Company shall report and explain to the stock exchange of its listing place as soon as possible and make an announcement thereof.

5. The notice of a class meeting shall be delivered only to shareholders entitled to vote at the class meeting.

6. The notice of a general meeting shall meet the following requirements:

7. (I) be in written form;

8. (II) specify the venue, term, date and time of the meeting;

9. (III) state matters to be discussed at the meeting; and fully disclose the contents of any motion. Where there is any change in issues covered by resolutions passed by the previous general meeting, full details of the motion, and not just the contents of the change, shall be stated. Items included under “other business” without specific contents shall not be deemed as a motion and the same shall not be voted on at a general meeting;

10. (IV) provide shareholders with such information and explanation as necessary to enable them to make an informed decision on issues to be discussed. Such principle includes (but is not limited to) the situation where a proposal is made to merge the Company, to repurchase shares of the Company, to reorganize its share capital or to make any other reorganization of the Company, and detailed conditions of the proposed transaction shall be provided together with contracts (if any) and the cause and effect of any such proposal shall also be properly explained;

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

• (V) contain a disclosure of the nature and extent of the material interests of any director, supervisor, chief executive, deputy chief executive, financial controller and the secretary to the Board in relation to the matters to be discussed. Where the effect of the matters to be discussed on any director, supervisor, chief executive, deputy chief executive, financial controller and the secretary to the Board in their capacity as shareholders is different from the effect on other shareholders of the same class, the difference shall be clearly explained;

• (VI) contain the full text of any special resolution to be proposed at the meeting;

• (VII)contain a clear statement that all shareholders are entitled to attend the shareholders’ general meetings and a shareholder entitled to attend and vote at such meeting is entitled to appoint one or more proxies to attend and vote at such meeting on his behalf and that such proxy need not be a shareholder;

• (VIII) specify the time and venue for lodging proxy forms for the meeting.

• The accidental omission to give a notice of meeting to or the non-receipt of notice of meeting by any person who is entitled to receive notice shall not invalidate the meeting and the resolutions passed at such general meeting.

• Shareholders and their authorized proxies intending to attend a general meeting shall deliver to the Company their written replies concerning their attendance at such meeting 20 days prior to the date of the meeting. The Company shall, based on the written replies received from shareholders 20 days prior to the date of the shareholders’ general meeting, calculate the number of voting shares held by shareholders and their authorized proxies intending to attend the meeting. Where the number of voting shares represented by shareholders intending to attend the meeting amounts to more than one-half of the Company’s voting shares, the Company may convene the shareholders’ general meeting; if not, the Company shall, within 5 days, notify shareholders of the issues to be considered, the date and venue of the meeting again in the form of a public notice. The Company may then convene the shareholders’ general meeting after the publication of such notice.

• After the convener of the meeting has issued a notice of a shareholders’ general meeting, the meeting shall not be advanced, nor shall it be deferred without reason. Where a shareholder’s general meeting is postponed for special reason, the convener of the meeting shall publish a notice to announce the deferment at least 5 working days prior to convening of the shareholders’ general meeting. The convener of the meeting shall state the reason for the deferment and announce the postponed date of the meeting.

• Where the company adjourns to convene a shareholders’ general meeting, no change shall be made to the registered date for entitlements of shares which entitle shareholders to attend the shareholders’ general meeting as specified by the original notice.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

Section III Appointment of Proxy

1. Any shareholder who is entitled to attend the shareholders’ general meeting and to vote thereat shall be entitled to appoint one or more persons (whether a shareholder) as his proxy to attend and vote on his behalf. Such proxy or proxies shall exercise the following rights pursuant to the appointment made by the appointing shareholder:-

2. (I) the same right as such shareholder to speak at the shareholders’ general meeting;

3. (II) authority to demand or join in demanding a poll;

4. (III) the right to vote by show of hands or on a poll; however, where more than one proxy has been appointed by shareholders, the proxies may only vote on a poll.

Where the shareholder is a recognised clearing house within the meaning of Securities and Futures (Clearing Houses) Ordinance (Cap.420 of the Laws of Hong Kong), it may authorise such person or persons as it thinks fit to act as its representative at any shareholders’ general meeting or any meeting of any class of shareholders provided that, if more than one person is so authorised, the authorisation must specify the number and class of shares in respect of which each such person is so authorised. The person so authorised will be entitled to exercise the same power on behalf of the recognised clearing house (or its nominees) if it were an individual shareholder of the Company.

1. Any shareholder’s instrument appointing a proxy shall be prepared in written form and signed under the hand of the principal or his agent duly authorized in writing. Where the principal is a legal person, the proxy form shall bear its seal or be signed by its director or an authorized person duly appointed. The proxy form shall specify the number of shares represented by the proxy. Where a shareholder appoints more than one proxy, he shall specify the number of shares represented by each proxy in the proxy form.

2. The proxy form shall be lodged with the Company’s premises or such other place as specified in the notice of the meeting at least 24 hours prior to the relevant meeting for which the proxy is appointed to vote or 24 hours prior to the scheduled voting time. Where the proxy form is signed by a person authorized by the principal, the power of attorney or any other authorization document for signing shall be notarized. The notarized power of attorney or any other authorization document, together with the proxy form, shall be lodged with the Company’s premises or such other place as specified in the notice of the meeting.

In the event the appointer is a body corporate, such shareholder shall be represented in the shareholders’ meeting of the company by the legal representative or such person authorized by the resolution of the Board or decision-making body of such appointer.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

1. Any form issued to a shareholder by the Board for use by such shareholder for the appointment of a proxy to attend and vote at the meetings of the Company shall be such as to enable the shareholder to freely instruct the proxy to vote for or against the motions, such instructions being given in respect of each individual matter to be voted at the meeting. Such a form shall contain a statement that in the absence of specific instructions from the shareholder, the proxy may vote at his discretion.

The Company has the right to require a proxy attending the shareholders’ general meeting on behalf of a shareholder to produce the proof of his identity.

If a corporate shareholder appoint a representative to attend the meeting, the Company has the right to require that representative to produce the proof of his identity as well as the notarially certified copy of the resolution or the power of attorney if the representative is designated by the Board or other competent organization of that corporate shareholder.

1. A vote given in accordance with the terms of a proxy shall be valid, notwithstanding the death or loss of capacity of the appointer or revocation of the proxy or the authority under which the proxy was executed, or the transfer of the shares in respect of which the proxy is given, provided that the Company did not receive any written notice in respect of any such matters prior to the commencement of the relevant meeting.

Section IV Registration of the Meeting

1. A shareholder may attend and vote at a shareholders’ general meeting in person or by proxy. The directors, supervisors, chief executive and other senior officers of the Company and Chinese lawyers engaged shall attend the meeting. In order to ensure the solemnity and proper order of the shareholders’ general meeting, people other than those mentioned above, the Company shall have the right to refuse venue entry to the meeting venue.

2. The Company shall be responsible for preparing an attendance register to be signed by those attending the shareholders’ general meeting. The attendance register shall state information such as the names (and/or names of the entities), identification document number, information for identifying the shareholder’s identity (e.g. shareholder’s account number), the number of voting shares held or represented, names of the principal (or names of the entity).

3. The registration for a shareholder or his proxy attending a shareholders’ general meeting includes:

4. (I) confirmation of the identity of the shareholder or his proxy;

5. (II) speaking to request and recording the content of that speech (if any);

6. (III) receiving votes based on the number of shares held by a shareholder or represented by his proxy;

7. (IV) registering new motions (if any).

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

1. Shareholders who attend the shareholders’ general meeting shall complete registration procedures. The following documents shall be provided for registration purposes:

2. (I) For individual shareholders: an individual shareholder shall produce his identification proof and provide the Company with such information as to enable the Company to confirm his identity as a shareholder. Where a proxy is appointed to attend the meeting, the proxy shall produce his identification proof, the proxy form and provide the Company with such information as to enable the Company to confirm the identity of his principal as a shareholder.

3. (II) For corporate shareholders: if a legal representative is appointed to attend the meeting, the legal representative shall produce his identification proof and proof of his qualification as a legal representative, and he shall provide the Company with such information as to that will enable the Company to confirm the identity of the corporate shareholder. Where a proxy is appointed to attend the meeting, the proxy shall produce his identification proof, the proxy form issued by the corporate shareholder’s legal representative, a notarized copy of the power of attorney issued by the legal representative of the corporate shareholder unit or a notarized copy of the resolution on authorization adopted by the Board or other decision-making organ of the corporate shareholders, and provide the Company such information as to enable the Company to confirm the identity of the principal as a shareholder.

4. A shareholder or a proxy who requests to speak at the shareholders’ general meeting shall register with the Company prior to the meeting. The number of speakers shall be limited to ten. If there are more than ten speakers, the first ten shareholders who have the largest shareholding shall have the right to speak in an order according to the size of their shareholding.

Section V Holding of the Meeting

1. A shareholders’ general meeting shall be chaired by the chairman who acts as chairman of the meeting. If the chairman cannot attend the meeting, the vice-chairman shall preside over the meeting and act as the chairman of the meeting. Where the vice-chairman is unable to or fails to perform his duties, a director recommended by more than half of the directors shall preside over the meeting and act as the chairman of the meeting.

2. Where the supervisory committee itself convenes the shareholders’ general meeting, the chairman of the supervisory committee shall preside over the meeting and act as the chairman of the meeting. If the chairman of the supervisory committee is unable to or fails to perform his duties, the deputy chairman of the supervisory committee shall preside over the meeting and act as the chairman of the meeting. If the vice-chairman of the supervisory committee is unable to or fails to perform his duties, a supervisor recommended by more than half of the supervisors shall preside over the meeting.

Where the shareholders themselves convene the shareholders’ general meeting, the shareholder recommended by convener(s) shall preside over the meeting and act as the chairman of the meeting.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

Where the shareholders’ general meeting cannot proceed due to the chairman of the meeting violating the rules and procedures of the meeting, a person elected by the majority of the shareholders present at the shareholders’ general meeting shall act as chairman and continue the shareholders’ general meeting.

1. The chairman shall declare that the meeting commences at the scheduled time after he has been informed that the participants are in compliance with legal requirements and motions and speakers are registered. In any of the following circumstances, the meeting may be declared open later than the time scheduled:

2. (I) when any venue equipment is out of order in such a way that the meeting cannot proceed as usual;

3. (II) when any matters of material importance take place that prevents the proceeding of the meeting.

4. Motions included in the agenda shall be examined before voting. Reasonable time shall be given at the shareholders’ general meeting for each motion to be discussed, and the chairman shall ask the shareholders attending the meeting orally for whether they have been completed the examination procedures. Approval procedures shall be regarded as completed if there are no objections by shareholders attending the meeting.

5. No shareholder shall speak for more than two times at the meeting without the approval by the chairman. A shareholder is allowed to speak for no more than five minutes for the first time, and no more than 3 minutes for the second time. When a shareholder requests to speak, he shall only do so where he does not interrupt report that are in the process of being made by the meeting reporter or speeches that are in the process of being made by other shareholders.

6. Shareholders may query the Company management at the shareholders’ general meeting. The chairman of the meeting shall direct directors, supervisors, general manager and other senior officers to answer to such queries, unless such queries are connecting with the Company’s trade secret and can not be open.

Section VI Voting and Resolutions

1. The shareholders’ general meeting shall resolve on any specific motions. The chairman of the meeting shall put forward a separate resolution in respect of each actually independent matter in the shareholders’ general meeting.

2. The proposals shall not be amended when being considered by the shareholders’ general meeting. If a proposal is amended, it shall be deemed a new proposal and shall not be voted on at this general meeting.

3. Resolutions passed at a shareholders’ general meeting are divided into ordinary resolutions and special resolutions.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

Ordinary resolutions shall be passed by votes exceeding one-half of voting rights represented by shareholders (including proxies) attending the shareholders’ general meeting.

Special resolutions of a shareholders’ general meeting shall be passed by more than two-thirds of the voting rights held by the shareholders (including their proxies) present at the meeting.

1. For the purpose of voting at the shareholders’ general meeting, a shareholder (including proxy) shall exercise voting rights in accordance with the number of shares carrying voting rights represented by him. Each share shall have one vote.

Pursuant to the applicable laws and regulations and the listing rules of the stock exchange in which the company’s shares are listed, when any shareholder is obliged to abstain from voting on a motion or when any shareholder is restricted to either vote in favor of or against a motion, any vote of such shareholder or its proxy which violates the relevant requirement or restriction shall not be counted in the voting result.

1. The chairman of a meeting should ensure disclosure in the Company’s circulars to shareholders of the procedures for and the rights of shareholders to demand a poll in compliance with the requirements about voting by poll contained in Rule 13.39(4) of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited. In particular, pursuant to Rule 13.39(3), the chairman of a meeting and/or directors who, individually or collectively, hold proxies in respect of shares representing 5% or more of the total voting rights at a particular meeting shall demand a poll in certain circumstances where, on a show of hands, a meeting votes in the opposite manner to that instructed in those proxies. If a poll is required under such circumstances, the chairman of the meeting should disclose to the meeting the total number of votes represented by all proxies held by directors indicating an opposite vote to the votes cast at the meeting on a show of hands. Unless voting by poll is required as stipulated by the listing rules of the stock exchange of the Company’s listed shares, or unless required by the following persons to vote by poll before or after voting by a show of hands, any voting at a shareholders’ general meeting shall be conducted by a show of hands;

2. (I) the chairman of the meeting;

3. (II) at least two members present in person or by proxy having the right to vote on the resolution;

4. (III) a member or members present in person or by proxy holding, singly or in aggregate, more than 10% (including 10%) shares conferring the right to attend and vote at the meeting.

Unless a poll is demanded, a declaration (including both affirmative votes and dissenting votes) by the presider of the meeting in respect of the voting results by show of hands in relation to a resolution and a record of the same in the minutes of the meeting shall serve as conclusive evidence of the passing of a resolution, without requiring evidence of the number of affirmative and dissenting votes cast or their respective proportions.

A demand for a poll may be withdrawn by the person making such demand.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

The chairman of the meeting shall ensure that the following matters have been explained before the meeting:

• (I) procedures for a shareholder proposing to vote on a resolution by poll before the resolution is voted by a show of hands;

• (II) detailed procedures for voting by poll upon request for so voting and for answering questions raised by shareholders.

Shareholders must not be put under pressure to vote or abstain from voting at any general meeting and, where their votes are solicited, must be encouraged to consult their professional advisers.

1. Where the matter requested to be voted in a poll is to elect the chairman of the meeting or to suspend the meeting, the poll shall be immediately conducted. For other matters requested to be voted in a poll, the chairman shall determine the time for the poll. The meeting shall continue to discuss other issues. The voting results shall be deemed to be the resolution passed during the meeting.

2. On a poll, shareholders (including proxies) entitled to two or more votes need not cast all his votes as either affirmative votes or dissenting votes.

3. In the event of equality of votes, whether by a show of hands or by poll, the chairman of the meeting shall be entitled to an additional vote.

4. Special procedures for voting by a class of shareholders shall be implemented in accordance with Chapter IX of the Articles of Association.

5. The following matters shall be approved by ordinary resolutions at a general meeting:

6. (I) working reports of the Board and the supervisory committee;

7. (II) profit distribution plans and loss recovery plans formulated by the Board;

8. (III) removal of directors and supervisors, including any director acting concurrently as the chief executive or other management functions of the Company and his remuneration and the method of payment thereof;

9. (IV) annual budgets, final accounts, balance sheets and profit and loss accounts and other financial statements of the Company;

10. (V) annual report of the Company;

11. (VI) other matters, except for those required by law, administrative regulations or the Articles of Association to be passed by special resolutions.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

1. The following matters shall be approved by special resolutions at general meetings:

2. (I) increase or reduction in share capital of the Company and the issue of shares of any class, warrants and other similar securities;

3. (II) issue of debt securities of the Company;

4. (III) demerger, merger, dissolution and liquidation of the Company;

5. (IV) amendments to the Articles of Association;

6. (V) the Company’s transactions of purchase or sale of major assets or guarantees within one year with the amount exceeding 30% of the audited total assets of the Company for the latest period;

7. (VI) share option scheme;

8. (VII)any other issue specified by laws, administrative regulations and the Articles of Association and resolved by an ordinary resolution at a shareholders’ general meeting that may have material impact on the Company and accordingly shall be approved by a special resolution;

9. (VIII) other matters required by the Hong Kong Listing Rules.

10. If the chairman of the meeting has any doubt as to the result of a resolution which has been put to vote at a shareholders’ general meeting, he may have the votes re-counted. If the chairman of the meeting has not counted the votes, any shareholder who is present in person or by proxy and who objects to the result announced by the chairman of the meeting may, immediately after the declaration of the result, demand that the votes be counted and the chairman of the meeting shall have the votes counted immediately.

11. If the vote is requested to be re-counted at a shareholders’ general meeting, the result thereof shall be recorded in the minutes book.

12. Minutes together with, among other things, the shareholders’ attendance lists and instruments appointing proxies shall be kept at the seat of the Company.

13. The shareholders may inspect the copies of minutes of the meetings during the office hours of the Company free of charge. At any shareholder’s request for the copies of minutes of the meetings, the Company should deliver the copies within 7 days upon receipt of a reasonable fee.

14. When a connected transaction is considered at a general meeting, connected shareholders shall abstain from voting, and the voting shares held by them shall not be counted toward the total number of shares with voting rights. The poll results of non-connected shareholders shall be adequately disclosed in the announcement of the resolutions passed at the shareholders’ general meeting.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

1. Shareholders (or their proxies) shall fill in the ballot as required and put the ballot in the ballot box. For ballots that are left blank, incorrectly filled out, illegible or not cast, the shareholder shall be deemed to have waived his voting rights, and the shares represented by the shareholder shall not be counted in the total number of valid votes.

2. The counting of votes on each matter under consideration at any general meeting shall be supervised and undertaken by two representatives of shareholders before voting begins. Shareholders and their proxies shall not participate in the counting of votes and supervision of the counting if the shareholders are interested in the transaction under consideration.

During voting at the shareholders’ general meeting, the appointed lawyers, shareholders’ proxies and supervisor representatives shall jointly count and supervise the counting of votes, and the voting results shall be announced at the meeting. The voting results of the resolutions shall be recorded in the minutes.

1. The chairman of the meeting shall determine whether the resolution of the shareholders’ general meeting is passed according to the counting results of the resolution by the persons counting the votes. His decision shall be final and conclusive and shall be announced in the meeting and included in the minutes.

2. Minutes shall be made for each shareholders’ general meeting and shall be signed by the directors present in the meeting and the person responsible for taking the minutes. Where no directors are present in the meeting, the minutes shall be signed by the shareholder (or his proxy) presiding the meeting and the person responsible for taking the minutes. Minutes shall include:

3. (I) the date and venue of the meeting, the agenda and the name of the convener;

4. (II) the name of the chairman of the meeting and the names of attending directors, supervisors, secretary of the Board, chief executive and other senior officers;

5. (III) the number of attending shareholders and proxies, the total number of voting shares represented by the shareholders and proxies, and their percentage in the total share of the Company;

6. (IV) the summary of each course of consideration, attendee’s opinion on motions and the voting result of each matter voted on;

7. (V) the inquiries and suggestions of shareholders and the corresponding answers and explanations;

8. (VI) the name of lawyers, staff responsible for counting the votes and supervisors;

9. (VII)other matters that shall be recorded in the minutes in accordance with the Articles of Association.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

Directors attending the meeting, the secretary of the Board, the convener or his proxy and presider of the meeting shall sign on the minutes of the shareholders’ general meeting, and shall ensure the minutes real, accurate and complete. The minutes of the shareholders’ general meeting shall be kept with the register of attendees, power of attorneys, and effective materials of voting statistics on net or in other forms for at least ten (10) years.

1. In the extraordinary general meeting presided by the proposing shareholder, the proposing shareholder shall employ a lawyer to issue certified legal opinions as provided by the foregoing provisions in accordance with the laws, and the procedures for convening the meeting shall meet the requirements of the relevant regulation and these Rules and Procedures.

Section VII Adjournment

1. The Board shall ensure the shareholders’ general meeting be held continuously within a reasonable timeframe until the resolutions are finally voted on.

2. Where there is any unsolved dispute on any participating shareholder’s identity or the results of counting votes during the meeting which disturbs the order of the meeting and prevents the meeting to proceed, the chairman of the meeting shall declare the adjournment of the meeting. Where the aforesaid events no longer exist, the chairman of the meeting shall notify the shareholders to continue the meeting as soon as possible.

3. Where a shareholders’ general meeting is adjourned for more than one working day owing to force majeure or any other extraordinary reasons, in which case the meeting cannot be convened properly or no resolution can be voted on, the Board shall submit a written report to the stock exchange concerned and make proper announcements. The Board shall be obliged to take all necessary means to resume the shareholders’ general meeting as soon as possible.

Section VIII Subsequent Matters and Announcements

1. The Secretary to the Board shall be responsible for submitting the minutes, resolutions and all other relevant materials to the supervisory organ and make proper announcements in designated media in accordance with the pertinent laws and regulations and the provisions of the securities regulatory authority of the State Council and the stock exchange where the shares of the Company are listed.

2. The announcement of the resolutions passed at the shareholders’ general meeting shall include the number of shareholders (or shareholders’ proxies) present, the aggregate number of shares held by such shareholders and nominees, the percentage of such shares out of the total voting shares of the Company, the mode of voting and the voting result of each motion. For any successful motion proposed by shareholders, the names of the proposing shareholders, the percentage of shares held and the details of the motion shall also be recorded. Where a shareholder’s motion is not included in the agenda of the shareholders’ general meeting, the details of the motion and the explanation given by the Board or the chairman at the meeting shall be published together with the resolutions adopted at the AGM.

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APPENDIX II RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

The Board or the chairman of the meeting shall explain and elaborate on any decision not to include in the agenda of the shareholders’ general meeting any emotion put forward by the supervisory committee or shareholders, and the details of the motion and the explanation given by the Board shall be published together with the resolutions adopted at the AGM after the conclusion of the AGM.

Any proposal not passed, or any changes made to the resolutions of former shareholders’ general meeting should be explained by the Board in the announcement of the resolutions of the shareholders’ general meeting.

The announcement of the resolutions of the shareholders’ general meeting shall be published in the specified newspaper and the Company’s website.

1. The secretary to the Board shall be responsible for keeping such written information as the register of the attendees, power of attorneys, voting statistical sheet, minutes of meeting and resolution announcements.

CHAPTER IV BY-LAWS

1. These Rule and Procedures shall come into effect upon passing in the shareholders’ general meeting after consideration. Any amendment to the Rules and Procedures shall be proposed in the shareholders’ general meeting for approval.

2. These Rules and Procedures shall be interpreted by the Board.

3. Should there be any matter not covered herein or in the event that these Rules and Procedures contravene the laws, administrative regulations, other related regulatory documents promulgated from time to time and the Articles of Association, the laws, administrative regulations, other related regulatory documents and the Articles of Association shall prevail.

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APPENDIX III RULES OF PROCEDURE OF MEETINGS OF THE BOARD OF DIRECTORS

Please note that the following Rules of Procedure of Meetings of the Board of Directors are written in Chinese and there is no official English translation in respect thereof. The translation into English language in this Appendix III is for reference only. In case of any inconsistency between the English and Chinese versions, the Chinese version shall prevail.

Chapter 1 General Provisions

Article 1 Objectives

In order to regulate the operational and decision making procedures of the Board of Directors of the Company, enable the directors and the Board to perform their duties effectively, and enhance the standard operation and scientific decision-making of the Board, these Rules are formulated in accordance with China’s prevailing laws and regulations, rules, regulatory documents, provisions of the securities regulatory authorities and the listing rules of the jurisdiction(s) in which the Company’s shares are listed, inter alia, the “Company Law of the People’s Republic of China” (hereinafter referred to as the “Company Law”), “Mandatory Provisions for the Articles of Association of Companies Listed Overseas”, “Guidelines of the Articles of Association of Listed Companies (as amended in 2006)”, “Rules and Procedures of the Shareholders’ General Meeting of Listed Companies”, and the Articles of Association of BYD Company Limited (hereinafter referred to as the “Articles of Association”).

Article 2 Duties of the Board

The Board is the executive body of the Company, lawfully manages the operations of the Company as authorized by the general meeting and the Articles of Association , and is accountable to and report to the general meeting.

Article 3 Applications of the Rules

The Rules shall apply to the Board, the special committees under the Board, directors, and relevant departments and persons of the Company involved in the Rules.

Chapter 4 Office of the Board

The Board shall have an office for handling the daily affairs of the Board.

The secretary of the Board or securities affairs representative shall serve concurrently as the officer in charge of the office of the Board and keep the seals of the Board and the office of the Boards.

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APPENDIX III RULES OF PROCEDURE OF MEETINGS OF THE BOARD OF DIRECTORS

Chapter 2 Convening of Board Meetings

Article 5 Regular Meetings

Board meetings include regular meetings and provisional meetings.

At least four regular Board meetings shall be held every year.

Article 6 Proposal for Regular Meetings

Before serving the notice of regular meeting of the Board, the office of the Board shall adequately consult with the directors, and shall accordingly formulate a preliminary proposal for meeting and submit the same to the chairman of the Board for consideration.

Before deciding a proposal, the chairman shall, where necessary, seek opinions of the chief executive and other senior executives.

Article 7 Provisional Meetings

In any of the following circumstances, the Board shall hold a provisional meeting:

• (I) proposed by shareholders representing 10% of the voting rights;

• (II) proposed by more than one third of the directors jointly;

• (III) proposed by the Supervisory Committee;

• (IV) deemed necessary by the Board;

• (V) jointly proposed by half of the independent directors;

• (VI) proposed by the chief executive;

• (VII) required by the securities regulatory authority; and

• (VIII) in any other circumstance so specified in the Articles of Association.

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APPENDIX III RULES OF PROCEDURE OF MEETINGS OF THE BOARD OF DIRECTORS

Article 8 Procedure for Proposing Provisional Meetings

A proposal for convening a provisional Board meeting as specified in the preceding article shall be in written form and affixed with the signature (seal) of the proposer and submitted to the office of the Board or directly to the chairman. A written proposal shall specify:

• (I) Name of the proposer;

• (II) Reasons for the proposal or objective circumstances forming the basis of the proposal;

• (III) Time or duration, venue or form of the meeting proposed;

• (IV) Well-defined and specific proposal; and

• (V) Means to contact the proposer, date of proposal, etc.

The contents of the proposal shall be within the power of the Board specified in the Articles of Association, and the documents relating to the proposal shall be submitted together with the proposal itself. The office of the Board shall transfer to the chairman the aforesaid proposal and related documents on the day of receipt of the same.

Where the chairman deems the proposal not well-defined or specific or the relevant documents inadequate, the chairman may require the proposer to amend or supplement the proposal.

The chairman shall convene and preside over a board meeting within 10 days after receipt of the proposal or requirement of the securities regulatory authorities.

Article 9 Convening and Presiding of Meetings

Board meetings shall be convened and presided over by the chairman; where the chairman cannot or does not fulfill the duty thereof, the vice chairman shall convene and preside; where even the vice chairman cannot or does not fulfill the duty thereof, more than half of the directors may elect a director to convene and preside.

Article 10 Notice of meeting

The office of the Board shall notify all the directors and supervisors 14 days before a regular Board meeting; the office of the Board shall notify all the directors and supervisors two days in advance before a provisional Board meeting. The notice of meeting shall be communicated by telephone or facsimile.

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APPENDIX III RULES OF PROCEDURE OF MEETINGS OF THE BOARD OF DIRECTORS

Article 11 Contents of the Notice of Meeting

A written notice of meeting shall include at least the following details:

• (I) time and venue of the meeting;

• (II) the form of the meeting;

• (III) issues (proposals) to be considered;

• (IV) coordinator and means of contact;

• (V) date on which the notice is sent.

Article 12 Change of the Notice of Meeting

If, after the written notice of a regular Board meeting is sent, it is necessary to change the time, place, etc. of the meeting or add, change or cancel proposals to the meeting, a written notice of change shall be sent 3 days before the original designated date for convening the meeting, to explain the situation and provide materials and documents relating to the new proposals. Where the notice of change is sent in less than 3 days in advance, the date of meeting shall be postponed accordingly or convened as scheduled if approved by all the attending directors. If, after the notice of a provisional Board meeting is sent, it is necessary to change the time, place, etc. of the meeting or add, change or cancel proposal for the meeting, then it shall be necessary to seek the prior consent of all the attending directors and record the same accordingly.

Article 13 Holding of Meeting

A Board meeting shall be attended by more than half of the directors. Where any relevant director refuses or fails to attend the meeting so that the number of attendants falls short of the quorum required for convening the meeting, the chairman and the secretary of the Board shall responsively report to the local office of the securities regulatory authority under the State Council and the stock exchange.

Supervisors may attend Board meetings without voting rights; the chief executive and the secretary of the Board who are not serving concurrently as director shall attend Board meetings without voting rights. The chairman of the meeting may, where he deems necessary, notify other relevant persons to attend Board meetings without voting rights.

Article 14 Attendance in Person or by Proxy

In principle, the directors shall attend Board meetings in person. Where a director is unable to attend a meeting for any reason, he shall peruse the meeting documents in advance, form definite opinions, and appoint another director in writing to attend the meeting on his behalf.

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The power of attorney shall specify the name of the proxy director, matters to be represent by the proxy, the scope of authorisation and the validity period, and signed or sealed by the authorising director.

Where any director signs the regular reports by proxy, the said director shall specify such authorization in a special power of attorney.

The proxy director shall submit the power of attorney in writing to the chairman of the meeting.

The authorised director attending the meeting by proxy shall exercise his rights as granted by the authorising director. If a director fails to attend a Board meeting in person nor by proxy, the said director shall be deemed as having waived his right to vote at the meeting.

Article 15 Restriction on Proxy Attendance

Proxy attendance at Board meetings shall follow the principles below:

• (I) Where connected transactions are considered, a non-connected director shall not appoint a connected director to attend the meeting on his behalf, and a connected director shall also not accept the appointment of a non-connected director;

• (II) An independent director shall not appoint a non-independent director to attend the meeting on his behalf, and a non-independent director shall also not accept the appointment of an independent director;

• (III) A director shall not give any other director carte blanche to attend the meeting and vote on his behalf without providing his own opinions and voting intent on the proposals, and the relevant director shall also not accept the carte blanche or any appointment not well defined;

• (IV) One director shall not accept appointment by more than two directors, and a director shall also not appoint any other director who has been appointed by two other directors to attend the meeting and vote on his behalf.

Article 16 Form of Meeting

Board meetings shall generally be held onsite, or where necessary, via videoconference, conference call, fax or email voting provided that the directors can adequately express their views and the convener (presider) and proposer grant approval. Board meetings may also be held onsite and off-site simultaneously.

Where a Board meeting is held offsite, the number of attending directors shall be counted according to the directors shown at the videoconference, the directors expressing their views at the conference call, valid votes such as faxes or emails received within the prescribed period, or written acknowledgements submitted after the meeting by the directors for attending the meeting.

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APPENDIX III RULES OF PROCEDURE OF MEETINGS OF THE BOARD OF DIRECTORS

Chapter 3 Procedure of Consideration and Resolution of Board Meetings

Article 17 Consideration Procedure of Meeting

The presider of the meeting shall ask the attending directors to provide definite opinions on respective proposals. For any proposal requiring prior acknowledgements of independent directors, the presider shall, before discussing the relevant proposal, appoint one independent director to read out the written acknowledgements of independent directors.

The presider shall stop any director from hindering the normal progress of the meeting or affecting the speech of other directors.

The Board meeting shall not vote on any proposal not included in the notice of the meeting unless with the unanimous consent of the attending directors. A proxy director shall not vote on any proposal not included in the notice of the meeting.

Article 18 Expression of Opinions

The directors shall carefully read documents relating to the meeting and shall express well-informed, independent and discreet opinions.

The directors may, before the meeting, inquire about information needed for decision making from relevant persons or institutions such as the office of the Board, the convener of the meeting, the chief executive and other senior executives, special committees, the accountancy firm and the law firm, or may, while the meeting is in progress, propose to the chairman of the meeting to request the aforesaid persons or institutions present at the meeting to make relevant explanations.

Article 19 Voting at Meeting

After adequate discussion of each proposal, the chairman of the meeting shall submit it to voting by the attending directors.

Each attendant shall cast one vote, by open ballot or in writing or otherwise.

The voting intent of a director may be pro, con or abstention. Every attending director shall choose one out of the aforesaid intents. Where any director does not make any option or makes two or more options, the presider shall require the said director to make an option again, otherwise the said director shall be deemed as having abstained from voting; any director who has left the meeting midway without coming back and has not made any option shall be deemed as having abstained from voting.

If the pros and cons are the same, the chairman of the Board shall be entitled to an additional vote.

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APPENDIX III RULES OF PROCEDURE OF MEETINGS OF THE BOARD OF DIRECTORS

Article 20 Statistics of Voting Results

After voting of the attending directors, the securities affairs representative and the office of the Board shall responsively collect ballots cast by the directors, which ballots shall be counted by the Board secretary under supervision of a supervisor or independent director.

Where the meeting is held onsite, the presider shall announce the statistics onsite; in other circumstances, the presider shall require the secretary of the Board to announce the voting result within a workday after the prescribed voting deadline.

The ballots cast by directors after the presider announces the voting result or after the prescribed voting deadline shall not be counted.

Article 21 Forming of Resolutions

Saved as specified in Article 22 of the Rules, adoption of or resolution on any proposal shall be subject to approval of more than half of all the directors of the Company. Where the relevant laws, administrative regulations and the Articles of Association have any provisions on approval by more directors, such provisions shall apply.

Any resolution made by the Board on any guarantee within its range of authority under the Articles of Association shall be subject to the approval of more than half of all the directors of the Company and more than two thirds of the attending directors.

If different resolutions conflict with each other in contents and meanings, the resolutions formed later in time shall prevail.

Article 22 Abstention from Voting

In any of the following circumstances, the directors shall abstain from voting on the relevant proposals:

• (I) Listing Rules of [ ● ] Stock Exchange or Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited provide for abstention of the directors from voting;

• (II) The directors themselves think they should abstain from voting; and

• (III) The directors are connected with the enterprises involved by the proposals and shall therefore abstain from voting pursuant to the Articles of Association.

Where any director abstains from voting, the Board meeting may be held when more than half of the non-connected directors attend the meeting. The resolution of the Board meeting shall be passed by more than half of the non-connected directors. If the number of non-connected attending directors is smaller than 3, the relevant proposal shall not be voted on but shall be submitted to the general meeting for deliberation.

Note: “[●]” above, the name of the relevant stock exchange will be inserted once the Company has decided which stock exchange the A Shares are to be listed.

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APPENDIX III RULES OF PROCEDURE OF MEETINGS OF THE BOARD OF DIRECTORS

Article 23 Not Acting Beyond Authority

The directors shall act as authorized by the general meetings and the Articles of Association, and shall not make any resolution beyond authority.

Article 24 Processing of Proposals not Passed

Where any proposal is not passed, any Board meeting shall not deliberate any proposal with the same contents within one month if the relevant conditions and factors have not changed significantly.

Article 25 Suspension of Voting

Where more than one fourth of the attending directors or more than two independent directors think they cannot make judgments on relevant issues because the relevant proposal is not clear or specific or the meeting documents are inadequate, the presider shall require the meeting to suspend voting on the said proposal.

The director proposing suspension of voting shall provide definite requirements for the conditions to be met for resubmitting the said proposal for deliberation.

Article 26 Recordings of Meetings

Board meetings held onsite or via video or telephone may be recorded where necessary.

Article 27 Minutes of Meetings

The secretary of the Board shall arrange a clerk of the office of the Board to record the minutes of the Board meeting. The minutes shall include the following information:

• (I) the time, venue and form of the meeting;

• (II) sending of the notice of meeting;

• (III) convener and presider of the meeting;

• (IV) attendance and proxy attendance of directors;

• (V) procedure and process of the meeting;

• (VI) The proposals considered at the meeting, chief comments and opinions of directors on relevant issues, and intents of the directors for voting on the motions;

• (VII) the voting method and result for each proposal (the voting result shall set out the respective numbers of pros, cons and abstentions); and

• (VIII) Other issues that the attending directors think should be recorded.

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APPENDIX III RULES OF PROCEDURE OF MEETINGS OF THE BOARD OF DIRECTORS

The decisions on the issues considered on Board meetings convened or not convened shall be recorded as minutes in Chinese. The independent directors’ opinions shall be set out in the resolutions of the Board meetings. The minutes of each Board meeting shall be provided to the directors as soon as possible. Directors who wish to make supplementary amendments to the minutes shall report their opinions on the proposed amendment to the chairman within a week after receipt of the minutes. After the minutes are finalized, all the attending directors and persons recording the minutes shall sign on the minutes. Minutes of Board meetings shall be kept at the domicile of the Company in China, and a complete copy shall be sent to every director as soon as possible. The meeting minutes shall be kept for at least 10 years.

Article 28 Summary of Meeting and Records of Resolutions

Besides the meeting minutes, the Board secretary may where necessary arrange a clerk of the secretariat of the Board to make a summary of the meeting, and make separate records of the resolutions according to the voting results.

Article 29 Signatures of Directors

The attending directors shall sign the minutes of the meeting, summary of the meeting and records of the resolutions in person or on behalf of the directors appointing them to attend the meeting. Where the directors disagree over the minutes of the meeting, summary of the meeting or the records of the resolutions, they may attach written remarks when signing the said minutes, summary or records. Where necessary, they shall responsively report to the local office of the securities regulatory authority under the State Council and the stock exchange or announce public statements.

Where any director neither signs as per the preceding paragraph nor provides his different opinions in writing, reports to the local office of the securities regulatory authority under the State Council and the stock exchange or announces public statement, the said director shall be deemed as agreeing with the minutes of the meeting, summary of the meeting or the records of the resolutions.

Article 30 Announcement of Resolutions

Resolutions made by the Board shall be announced by the Board secretary pursuant to the relevant provisions of the listing rules of the stock exchange where the shares of the Company and listed. Before announcement of the resolutions, the attending directors, other attendants, and the recording and supporting staff shall be obliged to keep the contents of the resolutions confidential.

Article 31 Execution of Resolutions

The chairman shall urge the relevant personnel to execute the resolutions of the Board, supervise such execution, and report at future Board meetings how the resolutions are executed.

Article 32 Keeping of Meeting Archives

Archives of Board meetings include notices of meeting, meeting documents, attendance book, powers of attorney for proxy directors, meeting recordings, votes, meeting minutes signed by the attending directors, meeting summaries, records of the resolutions, announcements of the resolutions, etc., which shall be kept by the Board secretary. Archives of Board meetings shall be kept for at least 10 years.

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APPENDIX III RULES OF PROCEDURE OF MEETINGS OF THE BOARD OF DIRECTORS

Chapter 4 Special Committees under the Board

Chapter 33 Special Committees under the Board

The Board may establish in accordance with its needs special committees such as strategy committee, audit committee, remuneration committee, and nomination committee, which shall be accountable to the Board. The special committees shall all consist of directors and shall each have at least 3 members. The Audit Committee, Remuneration Committee and Nomination Committee shall each comprise a majority of independent directors who shall also be conveners; and the Audit Committee shall at least comprise one professional accountant as independent director. The Board shall formulate rules of procedure for respective special committees.

Chapter 5 Supplementary Provisions

Article 34 Supplementary Provisions

In the Rules, “more than” is inclusive.

“Securities regulatory authority” in the Rules refers to the securities regulatory authority or its local office of China or the location where the Company is listed, and the stock exchange exercising the regulatory function.

The Rules are formulated by the Board and submitted to the general meeting for approval, and shall be an appendix to the Articles of Association. The Rules shall take effect at the same time as the Articles of Association amended in accordance with the requirements for the issue of A Shares by listed companies. Any amendment shall be subject to approval at the general meeting before taking effect.

The Rules shall be subject to the interpretation of the Board.

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APPENDIX IV

PROPOSED SYSTEM OF INDEPENDENT DIRECTOR OF BYD COMPANY LIMITED

Please note that the following Proposed System of Independent Director of BYD Company Limited are written in Chinese and there is no official English translation in respect thereof. The translation into English language in this Appendix IV is for reference only. In case of any inconsistency between the English and Chinese versions, the Chinese version shall prevail.

Chapter One General Principles

• Article 1 To further strengthen the corporate governance structure of BYD Company Limited (hereinafter referred to as “the Company”), to promote the Company’s operation in accordance with relevant regulations, to ensure that Independent Directors perform their duties, this System is formulated in accordance with relevant provisions of the Company Law of the People’s Republic of China (hereinafter referred to as “the Company Law”), the “Guidance Opinions on the establishment of the system of Independent Directors in Listed Companies” (hereinafter referred to as “the Guidance Opinions”), the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (hereinafter referred to as the “Listing Rules of SEHK”), “Standards of Corporate Governance of Listed Companies” and the “Articles of Association of BYD Company Limited (hereinafter referred to as the “Articles of Association”).

• Article 2 Independent directors refer to directors who do not take up any post other than as a director or a member of a special committee of the Board in the Company and do not have any relationship with the Company and the Company’s major shareholder which may prevent them from exercising independent and objective judgments. At least one of the independent directors shall be a finance or accounting professional. The independent directors referred to herein also satisfy the independent directors requirements under the Listing Rules of SEHK.

• Article 3 Provisions on directors contained in the Articles of Association are applicable to independent directors, except for those provided otherwise in this System.

Chapter Two Qualifications for Independent Directors

Article 4 To become an Independent Director , the following basic qualifications are required:

• (I) possess the qualifications for directors of listed company in accordance with laws, administrative regulations and other relevant regulations of the place of listing;

• (II) possess the independency required by Article 7 contained herein;

• (III) possess basic knowledge on the operation of listed companies, familiar with relevant laws, rules and administrative regulations;

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APPENDIX IV PROPOSED SYSTEM OF INDEPENDENT DIRECTOR OF BYD COMPANY LIMITED

• (IV) possess more than five years’ legal, economic or other working experience required to perform directors’ duties;

• (V) possess other qualifications stipulated by the Articles of Association.

• Article 5 At least one third of the members of the company’s Board of Directors shall be independent directors, and the number shall not be less than three, of which at least one must be an accounting professional. The accounting professional referred to in this article means a professional with senior title or certified public accountant qualification.

• Article 6 Independent Directors and persons intending to act as Independent Directors shall, in accordance with the China Securities Regulatory Commission’s request, participate in training organized by the China Securities Regulatory Commission and the organizations authorized by the China Securities Regulatory Commission.

Chapter Three The Independence of Independent Directors

• Article 7 Independent Directors must be independent, comply with the requirement for independence of Independent Directors in the Guidance Opinions, and the requirements for independence of Independent Non-Executive Directors in the Listing Rules of SEHK and by the Hong Kong Stock Exchange. The following persons are not allowed to become Independent Directors:

• (I) persons employed by the Company or its affiliated company (excluding Independent Directors); immediate families; main social relations (immidiate families refer to spouses, parents, sons and daughters, etc.; main social relations refer to brothers, sisters, fathers-in-law, mothers-in-law, daughters-in-law, sons-in-law, spouses of brothers or sisters, brothers or sisters of spouses, etc.);

• (II) persons directly or indirectly holding 1% or more than 1% of the shares of the Company or the company’s top ten natural person shareholders and their immidiate families;

• (III) persons employed by Shareholders holding 5% or more than 5% of the Shares of the Company or the top five shareholders of the Company as well as those persons’ immidiate families;

• (IV) persons who fall in any of the above three situations set forth above during the most recent year;

• (V) persons who provide financial, legal or consultancy services to the Company or its affiliated companies;

• (VI) other persons specified in the Articles of Association

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PROPOSED SYSTEM OF INDEPENDENT DIRECTOR OF BYD COMPANY LIMITED

(VII)other persons recognised by the Hong Kong Stock Exchange.

Chapter Four Nomination, Election or Replacement of Independent Directors

• Article 8 The Company’s Board of Directors, Supervisory Committee, shareholders alone or jointly holding more than 1% of the shares of the Company can nominate candidates for Independent Directors, whose appointment shall be subject to the election and decision of Shareholders’ General Meetings.

• Article 9 The nominators of Independent Directors should obtain the consent of nominees before the nomination. A nominator should have full knowledge of the occupation, academic qualification, professional title, detailed working experience, all part-time jobs of the nominee, as well as express opinions on the nominee’s qualifications and independence as an independent director. The nominee should also make a public declaration that there is not any relationship between him or herself and the Company that affects his or her independent and objective judgment.

The Company’s Board of Directors shall declare the above-mentioned contents before convening a Shareholders’ General Meeting for the election of Independent Directors.

• Article 10 Before convening Shareholders’ General Meetings for the election of Independent Directors, the Company shall submit relevant information on all the nominees to the China Securities Regulatory Commission, the representative office of the China Securities Regulatory Commission at the place where the Company’s shares are listed and the [●] Stock Exchange. When there is any dissent from the Company’s Board of Directors concerning the nominee’s information, the Board shall submit its written opinion as well.

During the election of Independent Directors at a Shareholder’s General Meeting, the Company’s Board of Directors shall make a statement on whether the China Securities Regulatory Commission has expressed dissents on any candidates for independent directorship.

• Note: “[●]” above, the name of the relevant stock exchange will be inserted once the Company has decided which stock exchange the A Shares are to be listed.

• Article 11 The term of office for Independent Directors is the same as that of other directors of the Company. At the expiration of a term of office, directors can continue in office provided they are re-elected, provide that the consecutive terms of office shall not exceed 6 years. Each Independent Director shall retire by rotation at least once every three years.

• Article 12 If an Independent Director abstains from attending Board Meetings in person for three times in succession, the Board of Directors shall propose a replacement of the director to Shareholders’ General Meeting.

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APPENDIX IV

PROPOSED SYSTEM OF INDEPENDENT DIRECTOR OF BYD COMPANY LIMITED

Except for the conditions mentioned above and the situations in which a person shall not act as director under the Company Law, the office of an Independent Director cannot be terminated without any reason before expiration. In case of termination of a Director’s office prior to expiration, it shall be disclosed as a special issue by the Company. If the Independent Director whose office is terminated before expiration considers that the reason for termination is not proper, he or she can make a public declaration.

• Article 13 An Independent Director may tender resignation before expiration of the term of office by submitting a written resignation application to the Board of Directors; providing an explanation of any conditions which are related to his or her resignation or which is considered by him/her as necessary to draw the attention of shareholders and creditors of the Company. The Independent Director should continue performing his or her duty before obtaining approval from the Board of Directors for his resignation. An Independent Director shall immediately submit his latest contact to the Hong Kong Stock Exchange after his resignation.

If the proportion of Independent Directors in the Board of Directors is lower than the number required by the Guidance Opinions due to the resignation of the Independent Director, the resignation report of this Independent Director shall only come into effect when the next Independent Director fill his vacancy.

• Article 14 If an Independent Director does not meet the independence qualification or there is other circumstance which render him or her unsuitable to perform the duties of an Independent Director, resulting in the number of Independent Directors of the Company falling below that required by the Guidance Opinions and Listing Rules of SEHK, the Company shall make up the numbers of Independent Directors according to relevant regulations and notify the [●] Stock Exchange and the SEHK, make a public announcement and appoint new Independent Directors.

Note: “[●]” above, the name of the relevant stock exchange will be inserted once the Company has decided which stock exchange the A Shares are to be listed.

Chapter Five Duties and Authority of Independent Directors

Article 15 In order to bring Independent Directors’ functions into full play, besides the duties and authorities endowed by the Company Law, the Listing Rules of SEHK and other relevant laws and regulations, the Company shall delegate the following specific authorities to Independent Directors:

• (I) Significant connected transactions shall be submitted to the Board of Directors for discussion after confirmation by Independent Directors. Independent Directors engage an intermediary to issue an independent financial advisor’s report as the basis of their judgment.

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PROPOSED SYSTEM OF INDEPENDENT DIRECTOR OF BYD COMPANY LIMITED

• (II) Make proposals to the Board of Directors for the appointment or dismissal of accounting firms;

• (III) Make proposals to the Board of Directors to hold Shareholders’ Meeting;

• (IV) Make proposals to hold Board Meetings;

• (V) Appoint an external auditor or consultancy firms independently;

• (VI) collect voting rights from shareholders in public before the convening of Shareholders’ General Meeting.

To exercise the above authorities, Independent Directors must obtain the approval of half of all Independent Directors. The fees of engaging intermediate companies by Independent Directors and other fees incurred in the process of exercising their authorities shall be borne by the Company.

If the above proposals are not adopted or the above authorities cannot be exercised normally, the company should disclose relevant circumstances.

Independent Directors should form a majority and act as the chairman of the Audit Committee, Nomination Committee and Remuneration Committee set up under the Board of Directors of the Company. At least one Independent Director in the Remuneration Committee shall be a professional accountant.

• Article 16 Independent Directors should perform the above duties and responsibilities as well as various duties stipulated in Appendix 14A 5.2 of the Hong Kong Listing Rules of SEHK and [●] Listing Rules. In addition, they should express independent opinions to the Board of Directors and Shareholders’ General Meeting on the following issues:

• (I) nomination, appointment and dismissal of directors;

• (II) appointment or dismissal of senior management;

• (III) remuneration of directors and senior management of the Company;

• (IV) Any existing or new borrowings or payables and receivables by shareholders, actual controller or their connected enterprises with an amount exceeding and including Rmb 3 million (inclusive) or 5% (inclusive) of the lastest audited net assets and whether the Company has adopted any effective measure to recover the debts;

• (V) issues which in the opinion of Independent Director may harm the interests of small or medium shareholders;

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APPENDIX IV PROPOSED SYSTEM OF INDEPENDENT DIRECTOR OF BYD COMPANY LIMITED

• (VI) other issues stipulated in the Articles of Association and the Listing Rules of SEHK.

Note: “[ ● ]” above, such information to be inserted once the Company has decided which stock exchange the A Shares are to be listed.

• Article 17 Independent Directors should express one of the following opinions on the issues under Article 16 above: consent, qualified opinion and its reason; dissent and its reason, unable to express an opinion and its hindrance.

• Article 18 If the relevant issues under Article 16 above are issues required to be disclosed, the Company shall make a public announcement of Independent Directors’ opinions. If the Independent Directors have different opinions and cannot reach consensus, the Board of Directors should disclose opinions of each Independent Director separately.

Chapter VI Obligations of Independent Directors

• Article 19 Independent Directors owe the duty of faithfulness and diligence to the Company and the shareholders as a whole. Independent Directors should perform their responsibilities according to requirements of relevant laws, rules, the Guidance Opinions, the Listing Rules of SEHK and the Articles of Association, perform their duties earnestly, protect the interest of the Company as a whole and, in particular, attention to ensure that legal rights and interests of small or medium shareholders shall not be harmed. Independent Directors should perform their obligations independently without being influenced by major shareholders, actual controller of the Company or other companies or persons that have interest in the Company.

• Article 20 In principle, an Independent Directors can as act an Independent Director for at most five listed companies and should make sure that there is enough time and energy to discharge his duties as an Independent Director effectively.

• Article 21 Independent Director should attend Board Meetings on time, understand the business and operation of the Company, investigate to obtain information for strategic decision making. Independent Directors should submit annual work reports to the Annual General Meeting of the Company and explain the performance of their duties.

• Independent Directors shall comply with provisions of the Model Code of Appendix 10 of the Listing Rules of SEHK

Chapter VII Protection for Independent Directors in the Performance of Duties

• Article 22 The Company should ensure that Independent Director have equal rights to know the truth which are the same as other Directors. All resolutions of the Board of Directors shall be notified to Independent Directors in advance by the Company within the time limit according to the legal requirements and adequate information must be provided. If an Independent Director considers the information provided is insufficient, he can require information to be supplemented. When two or more Independent Directors

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PROPOSED SYSTEM OF INDEPENDENT DIRECTOR OF BYD COMPANY LIMITED

think that information provided is insufficient or the basis of argument is not clear, they can submit a joint written request to the Board of Directors to postpone the Board Meeting or postpone deliberation of the issue. The Board of Directors should adopt such proposals.

Information provided by the Company to Independent Directors should be kept by the Company and Independent Directors for at least 5 years.

• Article 23 The Company should provide necessary working conditions for Independent Directors to discharge their duties. The Secretary of the Board of Directors should assist Independent Directors to discharge their duties, such as providing information or supplying documents, etc. If any announcement is required to be made in respect of any independent opinions, proposals and written statements of Independent Directors, the secretary of the Board of the Company shall promptly so through the matters relating to the announcement with the stock exchange.

• Article 24 When the Independent Directors exercise their rights, the relevant personnel of the Company shall actively co-operate, and shall not refuse, hinder or conceal any matter, and shall not interfere in the exercise of directors’ rights.

• Article 25 The Company shall pay all expenses for intermediaries engaged by Independent Directors and other necessary expenses they incur in the exercise of their rights.

• Article 26 The Company shall grant Directors an appropriate amount of allowances. Proposals on the level of allowances shall be prepared by the Board of Directors, approved by a Shareholders’ General Meeting, and to be disclosed in the Company’s annual report.

• Besides the above-mentioned allowances, the Independent Directors shall not obtain any additional, undisclosed benefits from the Company, its major Shareholders or any organization or personnel in which it has an interest.

• Article 27 The Company can set up a necessary insurance system for the Independent Directors to reduce the risk involved in normal performance of duties by Independent Directors.

Chapter Eight Legal Liabilities of Independent Directors

• Article 28 The followings are considered as major dereliction of duties by Independent Directors:

• (I) leaking of the Company’s confidential commercial information, resulting in damage to the Company’s legal interests;

• (II) Accepting illicit benefits during the course of performance of duties, or seeking personal profits by taking advantage of his position as an Independent Director.

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APPENDIX IV PROPOSED SYSTEM OF INDEPENDENT DIRECTOR OF BYD COMPANY LIMITED

• (III) Refrain from raising objection to Board Resolutions that, within his knowledge, violate the laws, administrative regulations or the Company’s Articles of Association.

• (IV) Where connected transactions result in major losses to the Company, the Independent Director has not exercised his veto power.

• Article 29 If resolution of Directors’ Meeting violate laws, administrative regulations or the Articles of Association of the Company resulting in great losses of the Company, and an Independent Director knows the violation but has not expressed his opposition, or where an Independent Director engages in illegal acts prohibited by the Company Law, administrative regulations and regulatory documents, resulting in great losses to the Company, he/she will be liable for payment of compensation for the losses.

Chapter Nine Supplementary Provisions

• Article 30 Unless specified otherwise, the terms used herein shall have the same meanings as defined in the Articles of Association.

• Article 31 This system and its amendment are proposed by the Board of the Company, and shall come into effect on the date of listing of the Company’s domestic IPO shares. Any amendment hereof shall come into effect after approval at the general meeting.

• Article 32 In case of conflict between this System and the laws and regulations or the Listing Rules of the stock exchange of the place of listing, its implementation shall be in accordance with the laws and regulations of the place of listing. Any matters not covered herein shall be handled in compliance with the domestic and overseas laws, regulations, normative documents, Listing Rules of the stock exchange where the Company’s shares are listed and the Articles of Association.

• Article 33 The Regulations shall be subject to the interpretation of the Board.

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APPENDIX V

PROPOSED FAIR DECISION-MAKING SYSTEM FOR CONNECTED TRANSACTIONS

Please note that the following Fair Decision-Making System for Connected Transactions are written in Chinese and there is no official English translation in respect thereof. The translation into English language in this Appendix V is for reference only. In case of any inconsistency between the English and Chinese versions, the Chinese version shall prevail.

Chapter 1 General Provisions

• Article 1 In order to regulate the connected transactions of BYD Company Limited (“the Company”), ensure the fairness of connected transactions, protect the interests of small and medium investors, these Regulations are formulated pursuant to Company Law of the People’s Republic of China, Securities Law of the People’s Republic of China , other prevailing laws, regulations and regulatory documents of China, relevant securities or stock listing rules (“Listing Rules”) of the stock exchanges (including but not limited to the Stock Exchange of Hong Kong Limited and [●] Stock Exchange, hereinafter referred to as “SEHK” and “[●] Stock Exchange” respectively) with which the Company’s shares are listed, and Articles of Association of BYD Company Limited (“Articles of Association”) .

• Article 2 The Regulations shall apply to the connected transactions between the Company and its connected parties. The connected transactions of the Company shall also be governed by the listing rules of SEHK and [●] Stock Exchange; in the event of discrepancy between the Listing Rules of the two stock exchanges, the stricter shall prevail.

• Article 3 The transactions between the Company and its connected parties shall be examined in accordance with the Regulations and disclosed in China and overseas at the same time, unless such examination and disclosure are exempt as for connected transactions in accordance with the Listing Rules of SEHK and [●] Stock Exchange.

• Note: “[●]” above, the name of the relevant stock exchange will be inserted once the Company has decided which stock exchange the A Shares are to be listed.

Chapter 2 Basic Principles for Connected Transactions

Article 4 The connected transactions of the Company shall follow the principles below:

• (I) honesty, equality, free will, equal price and benefit;

• (II) fair, just and impartial quotation;

• (III) market-oriented and open operation;

• (IV) in the interests of the Company and its shareholders;

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APPENDIX V

PROPOSED FAIR DECISION-MAKING SYSTEM FOR CONNECTED TRANSACTIONS

• (V) If a connected party (or a non-connected party and coordinator thereof (as defined in the Listing Rules of SEHK) with material interest in the transactions to be voted on under special circumstances pursuant to the Listing Rules of SEHK) has the right to vote at the general meeting of the Company, the said connected party shall abstain from voting, and the voting at the said general meeting shall be conducted by ballot;

• (VI) The director with any interest relation with the connected party shall abstain from voting on the said issue;

• (VII) The Board of directors shall objectively judge whether the said connected transaction is beneficial to the Company, and shall if necessary engage professional valuators and independent financial consultants;

• (VIII) compliance with the relevant laws, regulations and listing rules of [●] Stock Exchange and the Listing Rules of SEHK.

Note: The name of the stock exchange of “[●]” above will be inserted once the Company has decided which stock exchange the A shares are to be listed.

Article 5 The Company shall take effective measures to prevent connected persons from interfering in the operations and infringing upon the interests of the Company by such means as monopolizing the purchase and sale channels. The prices or charging of connected transactions shall not deviate from the price or charging standards of the independent third party on the market. The Company shall adequately disclose the quotation basis for the connected transactions.

Article 6 The Company shall take effective measures to prevent its shareholders and connected parties from transferring the capital, assets and other resources of the Company by any means.

Chapter 3 Connected Parties and Connected Transactions

Article 7 The connected parties of the Company include the connected legal persons and connected natural persons of the Company, and potential connected parties, including specifically various legal persons and natural persons as specified in the Notice on 38 Specific Principles Related to the Publication of “Corporate Accounting Principle No. 1 - Inventory” [Cai Kuai (2006) No. 3] by the Ministry of Finance and the Listing Rules of SEHK and [●] Stock Exchange.

• (I) A connected legal person is:

• a legal person having direct or indirect control over the Company;

• a legal person under the direct or indirect control of a legal person described in sub-clause 1 aforesaid, other than the Company itself and its subsidiaries;

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APPENDIX V

PROPOSED FAIR DECISION-MAKING SYSTEM FOR CONNECTED TRANSACTIONS

1. a legal person in which a connected natural person has direct or indirect control or acts as a director or senior management personnel, other than the Company itself and its subsidiaries;

2. a legal person holding more than 5% of shares in the Company;

3. a subsidiary of the Company;

4. any other legal persons which the China Securities Regulatory Commission, the [●] Stock Exchange or the Company regards under the principle of “substance over form” as having any special relationship that might result in the Company being in favour of such legal person’s interests.

5. (II) A connected natural person is:

6. a natural person directly or indirectly holding more than 5% of shares in the Company;

7. a director, supervisor or senior management personnel of the Company;

8. a director, supervisor or senior management personnel of a legal person having direct or indirect control over the Company;

9. the immediate family of the persons listed under sub-clauses 1 and 2 aforesaid, which include their spouse, children having attained the age of 18 and their spouse, their parents and the parents of their spouse, siblings and their spouse, the siblings of their spouse, and the parents of their children’s spouse;

10. any other natural persons which the CSRC, the [●] Stock Exchange or the Company regards under the principle of “substance over form” as having any special relationship that might result in the Company being in favour of such natural persons’ interests.

Note: “[●]” above, the name of the relevant stock exchange will be inserted once the Company has decided which stock exchange the A Shares are to be listed.

Article 8

The connected transactions as mentioned in the Regulations mainly refer to the transactions between the Company or its subsidiaries and the connected parties of the Company, specifically, the transactions specified in the Listing Rules of SEHK and [●] Stock Exchange. The transactions between the Company and its subsidiaries are not subject to approval under this system.

Note: “[●]” above, the name of the relevant stock exchange will be inserted once the Company has decided which stock exchange the A Shares are to be listed.

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APPENDIX V

PROPOSED FAIR DECISION-MAKING SYSTEM FOR CONNECTED TRANSACTIONS

Chapter 4 Right to Making Decisions on Connected Transactions

• Article 9 Connected transactions meeting any of the following conditions shall be examined and approved by the general meeting:

• (I) the connected transaction is conducted as per the general business terms and conditions and any of the assets ratio, revenue ratio, consideration ratio and equity capital ratio of the transaction specified in the Listing Rules of SEHK is more than 2.5%; or

• (II) the value of the connected transaction accounts for more than 5% of the absolute value of the latest audited net assets of the Company (excluding external guarantee and donated cash assets of the Company); or

• (III) the value of acquisition or disposal of major assets including the connected transaction within one year exceeds 30% of the total assets of the Company.

• Article 10 The Board shall have the right to approve any connected transaction meeting the following conditions:

• (I) the connected transaction is conducted as per the general business terms and conditions and any of the assets ratio, revenue ratio, consideration ratio and equity capital ratio of the transaction specified in the Listing Rules of SEHK is less than 2.5%; and

• (II) the value of the connected transaction accounts for less than 5% of the absolute value of the latest audited net assets of the Company (excluding external guarantee and donated cash assets of the Company); and

• (III) the value of acquisition or disposal of major assets including the connected transaction within one year is less than 30% of the total assets of the Company.

Article 11 The president shall have the right to approve any connected transaction meeting the following two conditions at the same time:

• (I) the connected transaction is conducted as per the general business terms and conditions and any of the assets ratio, revenue ratio, consideration ratio and equity capital ratio of the transaction specified in the Listing Rules of SEHK is less than 0.1%; and

• (II) the value of acquisition or disposal of major assets including the connected transaction within one year is less than 30% of the total assets of the Company.

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PROPOSED FAIR DECISION-MAKING SYSTEM FOR CONNECTED TRANSACTIONS

• Article 12 Any guarantee, regardless of its value, provided by the Company shall be disclosed responsively after approval by the Board and submitted to the general meeting for consideration; any transaction provided for a shareholder holding less than 5% shares of the Company shall be treated pursuant the preceding provision, and the said shareholder shall abstain from voting at the general meeting.

Chapter 5 Procedure for Making Decisions on Connected Transactions

• Article 13 Written agreements shall be concluded for the connected transactions between the Company and its connected parties. Where the Company and the connected party enter into an agreement involving connected transaction, the following measures shall be taken:

• (I) Any individual can sign the connected transaction agreement only on behalf of one party;

• (II) The connected party shall not interfere in any form in the decisions made by the company.

• Article 14 The general meeting , the Board and the president’s meeting are the decision makers in relation to connected transactions and shall examine and approve connected transactions in their respective terms of reference.

• Article 15 Unless the Articles of Association otherwise required, where the Board is considering a connected transaction, the connected directors shall abstain from voting for themselves or on behalf of other directors and shall not be counted in the quorum of the meeting. The Board meeting may be held when more than half of the non-connected directors attend the meeting. The resolution of the Board meeting shall be passed by more than half of the non-connected directors. Any issue which requires the approval of more than two thirds of the directors pursuant to the Articles of Association shall be subject to the approval of more than two thirds of non-connected directors. If the number of non-connected directors attending the meetings is less than 3, the issue shall be submitted to the general meeting for examination.

• Article 16 The non-connected directors as referred to in the preceding paragraph shall be as defined in the Listing Rules of [●] Stock Exchange or SEHK and shall include but are not limited to the directors in any of the following circumstances:

• (I) the other party of the transaction;

• (II) direct or indirect controller of the other party of the transaction;

• (III) holding a post in the other party of the transaction or in a legal person directly or indirectly controlling the other party of the transaction;

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PROPOSED FAIR DECISION-MAKING SYSTEM FOR CONNECTED TRANSACTIONS

• (IV) closely related family member of the other party of the transaction or direct or indirect controller thereof (as defined in the Listing Rules of [●] Stock Exchange);

• (V) closely related family member of any director, supervisor or senior executive of the other party of the transaction or direct or indirect controller thereof (as defined in the Listing Rules of [●] Stock Exchange);

• (VI) other director specified by domestic and overseas regulatory authorities, [●] Stock Exchange and SEHK or the Listing Rules thereof;

• (VII) director whose independent business judgment is likely to be affected as determined by domestic and overseas regulatory authorities, [●] Stock Exchange and SEHK or the Company on other grounds.

Note: “[●]” above, the name of the relevant stock exchange will be inserted once the Company has decided which stock exchange the A Shares are to be listed.

• Article 17 A resolution on the Company’s connected transaction shall not be valid until it is approved by the non-connected directors and signed by the independent directors of the Company.

• Article 18 Unless the connected director has disclosed to the Board, the Board does not include the said director into the quorum, and the said transaction is approved at the meeting at which the said director does not vote, the Company shall have the right to require the said director or other enterprise in which the said director holds a post to cancel the related contract, transaction or arrangement, unless the said director or other enterprise in which the said director holds a post is a goodwill third person.

• Article 19 Any connected transaction requiring consideration and approval at a general meeting shall first be approved by the independent directors and then submitted to the general meeting for consideration and resolution.

• Before making a judgment, the independent directors may appoint an intermediary to provide independent financial and advisory reports as a basis for their judgment.

• Article 20 When a connected transaction considered at a general meeting is put to vote, the connected shareholders shall not vote and should excuse themselves, and the voting shares held by them shall not be counted in the total number of shares with voting rights Where the connected shareholders are unable to excuse themselves under special circumstances, they can only vote after the Company has obtained approval from the stock exchange in accordance with the Listing Rules of the place where the Company’s shares are listed; and the Company should give detailed explanation in respect of this in the resolution of the general meeting, compile statistics on the votes of non-connected shareholders and disclose such information in the announcement related to the resolution.

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APPENDIX V

PROPOSED FAIR DECISION-MAKING SYSTEM FOR CONNECTED TRANSACTIONS

The connected shareholders as referred to in the preceding paragraph shall be as defined in the Listing Rules of [●] Stock Exchange or SEHK and shall include but are not limited to the shareholders in any of the following circumstances:

• (I) the other party of the transaction;

• (II) direct or indirect controller of the other party of the transaction;

• (III) directly or indirectly controlled by the other party of the transaction;

• (IV) together with the other party of the transaction, directly or indirectly controlled by the same legal person or natural person;

• (V) a shareholder whose voting right is restricted because of incomplete performance of equity transfer agreement or other agreement with the other party of the transaction or connected person thereof;

• (VI) other shareholder specified by domestic and overseas regulatory authorities or the Listing Rules of [●] Stock Exchange or SEHK;

• (VII) shareholders who are likely to enjoy more interests of the Company as determined by domestic and overseas regulatory authorities, [●] Stock Exchange and SEHK.

• Note: “[●]” above, the name of the relevant stock exchange will be inserted once the Company has decided which stock exchange the A Shares are to be listed.

• Article 21 Resolution at a general meeting on a connected transaction shall be passed by votes exceeding half of the voting rights represented by the attending shareholders other than the connected shareholders.

• Article 22 Independent directors shall have the right to express opinions to the Board or at general meetings on the existing material loans or other capital transactions of the Company’s shareholders and effective controllers and connected parties thereof, and whether the Company has taken effective action to recover the arrears.

Chapter 6 Supplementary Provisions

• Article 23 After adoption at the general meeting, the Rules shall come into effect on the date of listing of the Company’s domestic IPO shares. Any amendment hereof shall come into effect after approval at the general meeting.

• Article 24 The Regulations shall be subject to the interpretation of the Board.

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APPENDIX V PROPOSED FAIR DECISION-MAKING SYSTEM FOR CONNECTED TRANSACTIONS

• Article 25 Any matters not covered herein shall be handled in compliance with the domestic and overseas relevant laws, regulations, normative documents, Listing Rules of the stock exchange where the Company’s shares are listed and the Articles of Association.

Article 26 The phrases “more than” and “less than” are inclusive while “majority” and “exceed” are exclusive.

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APPENDIX VI

PROPOSED RULES OF PROCEDURE OF MEETINGS OF THE SUPERVISORY COMMITTEE

Please note that the following Rules of Procedure of Meetings of the Supervisory Committee are written in Chinese and there is no official English translation in respect thereof. The translation into English language in this Appendix VI is for reference only. In case of any inconsistency between the English and Chinese versions, the Chinese version shall prevail.

Chapter 1 General Provisions

Article 1 Objectives

In order to regulate the rules of procedure and decision making of the Supervisory Committee of the Company, to make the supervisors and the Supervisory Committee effectively perform their supervisory duties, and to improve the governance structure of the Company, these Rules are formulated in accordance with the relevant laws, regulations, statutes and normative documents currently in force in China such as the Company Law of the People’s Republic of China (“the Company Law”), Mandatory Provisions for the Articles of Association of Companies Listed Overseas, Guidelines for the Articles of Association of Listed Companies (as amended in 2006), Rules for the General Meetings of Shareholders of Listed Companies, the regulations by the securities regulator and the Listing Rules at the place of listing of the shares of the Company, and the Articles of Association of BYD Company Limited (herein after referred to as “Articles of Association”).

Article 2 Duties of the Supervisory Committee

The Supervisory Committee is a standing organization of the Company responsible for supervising the Board and its members, the President and the Vice-President, chief financial officer and other senior executives, and preventing the same from abusing their powers to infringe upon the legitimate rights and interests of the shareholders, the Company and employees thereof.

Article 3 The Affairs of the Supervisory Committee

The chief supervisor may ask the securities affair representative or other officer of the Company to help him handle the daily affairs of the Supervisory Committee.

Article 4 Supervisors’ Right to Know

The Company shall take measures to guarantee the supervisors’ right to know and responsively provide the supervisors with necessary information to enable the Supervisory Committee to effectively supervise, inspect and evaluate the financial position and operations management of the Company. All the supervisors may attend Board meetings without voting rights and if necessary, attend meetings of the President’s meeting without voting rights.

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APPENDIX VI PROPOSED RULES OF PROCEDURE OF MEETINGS OF THE SUPERVISORY COMMITTEE

Chapter 2 Convening of Meetings of the Supervisory Committee

Article 5 Regular and Provisional Meetings of the Supervisory Committee

Meetings of the Supervisory Committee include regular meetings and provisional meetings.

Regular meetings of the Supervisory Committee shall be held once every 6 months. In any of the following circumstances, the Supervisory Committee shall hold a provisional meeting within 10 days:

• (I) Any supervisor proposes to hold such a meeting;

• (II) The general meeting or Board meeting has passed any resolution which runs counter to relevant laws, regulations, rules, provisions and requirements of the regulatory authority, the Articles of Association, resolutions of the general meeting or any other relevant provisions;

• (III) Improper acts of the directors and senior executives may possibly give rise to material damages to the Company or bad impacts on the markets;

• (IV) The shareholders lodge a legal action against the Company, directors, supervisors or senior executives;

• (V) The Company, directors, supervisors or senior executives are punished by the securities regulating authority or condemned in public by stock exchange on which the shares of the Company are listed;

• (VI) The securities regulatory authority requires holding such a meeting; and

• (VII) Any other circumstance so specified in the Articles of Association occurs.

Article 6 Proposal for Regular Meetings

Before sending the notice of regular meeting of the Supervisory Committee, the Supervisory Committee shall collect proposals from all the supervisors and shall spend at least two days seeking opinions from the staff of the Company. In collecting proposals and seeking opinions, the Supervisory Committee shall state that the Supervisory Committee focuses on supervising the operations of the Company and the conduct of the directors and senior executives.

Procedure for Proposing Provisional Meetings

Any proposal of any supervisor for convening a provisional meeting of the Supervisory Committee shall be made in written form, affixed with the signature (seal) of himself/herself and submitted to the chief supervisor. A written proposal includes (but not limited to):

• (I) the name of the proposing supervisor;

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APPENDIX VI

PROPOSED RULES OF PROCEDURE OF MEETINGS OF THE SUPERVISORY COMMITTEE

• (II) Reason for the proposal;

• (III) Time or duration, venue or form of the meeting proposed;

• (IV) Well-defined and specific proposal; and

• (V) Means to contact the proposing supervisor, date of proposal, etc.

The Supervisory Committee shall issue the notice of provisional meeting of the Supervisory Committee within 3 days after chief supervisor receives the written proposal of the supervisor.

Where the Supervisory Committee fails to issue the notice of meeting, the proposing supervisor shall responsively report to the local office of the securities regulatory authority under the State Council and the stock exchange.

Article 8 Convening and Presiding of Meetings

The chief supervisor shall convene and preside over meetings of the Supervisory Committee; where the chief supervisor cannot or does not fulfill the duty thereof, more than half of the supervisors may elect a supervisor to convene and preside over the meetings of the Supervisory Committee.

Article 9 Notice of Meeting

The Supervisory Committee shall send the notice of meeting to all the supervisors by phone and by fax before a regular meeting and a provisional meeting of the Supervisory Committee. The notice shall include the date and place of the meeting, meeting duration, topic for discussion and the date of the notice. Notice for regular meetings and provisional meetings of the Supervisory Committee shall be given at least 14 days and 2 days before the meetings, respectively.

Article 10 Contents of the Notice of Meeting

A written notice of meeting shall include at least the following details:

• (I) Time and venue of the meeting;

• (II) matters (proposals) to be considered;

• (III) Convener and presider of the meeting, proposer of and written proposal for the provisional meeting;

• (IV) Documents needed for voting of supervisors;

• (V) The requirement for the supervisor to attend the meeting in person;

• (VI) Coordinator and means of contact; and

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PROPOSED RULES OF PROCEDURE OF MEETINGS OF THE SUPERVISORY COMMITTEE

APPENDIX VI

• (VII)date on which the notice is sent.

A verbal notice of meeting shall at least include (I) and (II) above, and explanation for a provisional meeting of the supervisory committee in emergency.

Article 11 Form of Meeting

Meetings of the Supervisory Committee shall be held onsite.

In emergency, a meeting of the Supervisory Committee allows voting by means of telecommunications, but the convener (presider) of the meeting shall explain to the attending supervisors the particulars about the emergency. In the case of voting by correspondence, the supervisors shall fax to the chief supervisor of the Supervisory Committee their written and signed opinions and voting intents on the issues to be considered.

Article 12 Holding of Meeting

A supervisors’ meeting can only be held when over half of the supervisors can attended.

Where a supervisor is unable to attend a meeting for any reason, he shall peruse the meeting documents in advance, form definite opinions, and appoint another supervisor in writing to attend the meeting on his behalf.

The power of attorney shall specify:

• (I) the names of the principal and proxy;

• (II) outline opinions of the principal on respective proposals;

• (III) the principal’s range of authorization and instructions about voting intent in relation to respective proposals;

• (IV) signature of the principal, date, etc.

The secretary of the Board and the securities affair representative shall be present at meetings of the Supervisory Committee.

Chapter 3 Procedure of Consideration and Resolution of Meetings of the Supervisory Committee

Article 13 Procedure of Consideration of Meeting

The presider of the meeting shall ask the attending supervisors separately to provide definite opinions on respective proposals.

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APPENDIX VI PROPOSED RULES OF PROCEDURE OF MEETINGS OF THE SUPERVISORY COMMITTEE

The presider shall, as proposed by supervisors, require directors, senior executives, other members of staff of the Company or relevant intermediary to stand on inquiry.

Article 14 Resolutions of the Supervisory Committee

At meetings of the Supervisory Committee, each attendant shall cast one vote, by open ballot or in writing or otherwise.

The voting intent of a supervisor may be pro, con or abstention. Every attending supervisor shall choose one out of the aforesaid intents. Where any supervisor does not make any option or makes two or more options, the presider shall require the said supervisor to make an option again, otherwise the said supervisor shall be deemed as having abstained from voting; any supervisor who has left the meeting midway without coming back and has not made any option shall be deemed as having abstained from voting.

Resolutions made at a meeting of the Supervisory Committee shall be approved by more than half of all the supervisors.

Article 15 Recordings of Meetings

Meetings of the supervisory committee may be recorded on audiotape where necessary.

Article 16 Minutes of Meetings

Staff of the Supervisory Committee shall keep minutes of onsite meetings. The minutes shall include the following information:

• (I) the time, venue and form of the meeting;

• (II) sending of the notice of meeting;

• (III) convener and presider of the meeting;

• (IV) attendance of the meeting;

• (V) procedure and process of the meeting;

• (VI) The proposals considered at the meeting, chief comments and opinions of supervisors on relevant issues, and intents of the supervisors for voting on the motions;

• (VII) the voting method and result for each proposal (the voting result shall set out the respective numbers of pros, cons and abstentions); and

• (VIII) other issues that the attending supervisors think should be included into the minutes.

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PROPOSED RULES OF PROCEDURE OF MEETINGS OF THE SUPERVISORY COMMITTEE

APPENDIX VI

For a meeting held by correspondence, the chief supervisor of the Supervisory Committee shall arrange to sort out the meeting minutes as per the preceding provision.

Article 17 Signatures of Supervisors

The attending supervisors shall sign and confirm the meeting minutes. If any supervisor has different opinions on the minutes, the said supervisor may make a written explanation when signing the minutes and may have an explanatory note made in the minutes regarding his speech at the meeting. Where necessary, they shall responsively report to the local office of the securities regulatory authority under the State Council and the stock exchange or announce public statements.

Where any supervisor neither signs as per the preceding paragraph nor provides his different opinions in writing, reports to the local office of the securities regulatory authority under the State Council and the stock exchange or announces public statement, the said supervisor shall be deemed as agreeing with the minutes of the meeting.

Article 18 Announcement of Resolutions

Resolutions made by the Supervisory Committee shall be announced by the Board secretary pursuant to the Listing Rules of the stock exchange at the place of listing of the shares of the Company.

Article 19 Execution of Resolutions

The supervisors shall urge relevant personnel to execute the resolutions of the Supervisory Committee. The chief supervisor shall report at future meetings of the supervisory committee how the resolutions are executed.

Article 20 Keeping of Meeting Archives

Archives of meetings of the Supervisory Committee including notices of meeting, meeting documents, attendance book, meeting recordings, votes, meeting minutes signed by the attending supervisors, summaries of meetings, announcements of the resolutions, etc., shall be kept by a person designated by the chief supervisor.

Archives of meetings of the supervisory committee shall be kept for at least 10 years.

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APPENDIX VI

PROPOSED RULES OF PROCEDURE OF MEETINGS OF THE SUPERVISORY COMMITTEE

Chapter 4 Supplementary Provisions

Article 21 Supplementary Provisions

Matters not covered herein shall be handled with reference to Rules of Procedure for Meetings of the Board of Directors .

In the Rules, “more than” is inclusive.

“Regulatory authority” in the Rules refers to the securities regulatory authority or its local office of China or the location where the Company is listed, and the stock exchange exercising the regulatory function.

The Rules are formulated by the Supervisory Committee and submitted to the general meeting for approval, and shall be an appendix to the Articles of Association. The Rules shall take effect at the same time as the Articles of Association is amended for the listing of A Shares by the Company. Any amendment shall be subject to adoption at the general meeting.

The Rules shall be subject to the interpretation of the Supervisory Committee.

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APPENDIX VII

SYSTEM OF SECURITIES IN FAVOUR OF EXTERNAL PARTIES OF BYD COMPANY LIMITED

Please note that the following System of Securities in favour of External Parties of BYD Company Limited are written in Chinese and there is no official English translation in respect thereof. The translation into English language in this Appendix VII is for reference only. In case of any inconsistency between the English and Chinese versions, the Chinese version shall prevail.

Chapter 1 General Principles

Article 1 To safeguard the interests of shareholders of the Company and investors, regulate the Company’s acts concerning the issue of securities and promote the healthy and stable development of the Company, this System has been formulated in accordance with the relevant laws and regulations such as the Company Law of the People’s Republic of China (hereinafter referred to as “the Company Law”), the Securities Law of the People’s Republic of China (hereinafter referred to as “the Securities Law”), the Security Law of the People’s Republic of China (hereinafter referred to as “the Security Law” and the “Articles of Association of BYD Company Limited” (hereinafter referred to as the “Articles of Association”.

Article 2 This system shall apply when a third party applies to the Company for issuing a security in its favour for reasons of obtaining a loan from a financial institution, note discount and finance lease.

Article 3 The objective of the formulation of this system by the Company is to strengthen the internal control of the Company, improve the advance evaluation, in-process monitoring, recovery after issuance and handling mechanism in respect of the issuance of a security by the Company so as to minimize the risk of potential debt service liabilities caused to the company due to reasons such as the worsening of the financial position of the guarantee and reasonably avoid and reduce losses that may be incurred.

Chapter 2 Basic Principles for Issuing Securities in favour of External Parties

Article 4 Scope of securities issued by the Company in favour of external parties: Upon review and approval by an institution authorized by the Company as required in this system, the Company can provide a security in favour of a qualified third party with its own assets or reputation.

Article 5 The Company shall improve its internal control system. Without approval of the shareholders’ meeting and the Board of the Company by resolution, Directors, President and branches of the Company shall not enter into any security contract on behalf of the Company on their own.

Article 6 For the issuance of securities in favour of external parties by the Company, the guaranteed party shall be requested to provide a counter-guarantee in the form of pledge or charge, or a third party recommended by it and approved by the Company shall provide a counter-guarantee to the Company in forms such as a guarantee, and the party providing the counter-guarantee shall have the actual ability to assume such responsibilities.

Article 7 The Company shall earnestly perform the information disclosure obligation in respect of securities in favour of external parties in strict accordance with the “Securities Law”, rules

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APPENDIX VII

SYSTEM OF SECURITIES IN FAVOUR OF EXTERNAL PARTIES OF BYD COMPANY LIMITED

governing the listing of stocks of the stock exchange on which shares of the Company are listed, “Articles of Association” and the relevant requirements of China Securities Regulatory Commission. The Company shall provide details of all securities issued in favour of external parties by the Company to the certified public accountant according to facts.

Article 8 Independent directors of the Company shall give a special description of and issue independent opinions on the accumulated and current securities issued in favour of external parties by the Company and the implementation of this system in the annual report.

Article 9 All directors of the Company shall prudently manage and strictly control the liability risks arising from securities in favour of external parties and shall accept joint and several liability for damages arising from securities in favour of external parties which involve contravention or irregularity. Controlling shareholders and other connected parties shall not force the Listed Company to provide securities in favour of others.

Chapter 3 Procedure for Providing Securities in favour of External Parties

Article 10 The functional departments which are ordinarily responsible for securities in favour of external parties include: the Finance Department.

Article 11 After receiving an application for issuing a security from the guaranteed enterprise, the Company shall start to evaluate the credit status of the guaranteed enterprise. The Company shall request the following information from the guaranteed enterprise: Including relevant information such as balance sheet, income statement and cash flow statement of the guaranteed party for the last three years, financial forecast for the next year, breakdown of the loans secured and repaid (including the payment of interest) and the relevant contracts, a profile of senior management of the Company, bank credit, breakdown of securities in favour of external parties, asset pledge/charge breakdown, the relevant contract for the investment project and the feasibility analysis report.

Article 12 Upon receipt of the application and survey data from the guaranteed enterprise by the Company, the Finance Department of the Company shall conduct a comprehensive analysis of the credit status of the guaranteed enterprise, the benefits and risks of the security, and shall conduct an on-site inspection on the production and operating conditions, financial position and staffing of the guaranteed enterprise and evaluate the profitability, solvency and growth potential of the guaranteed enterprise based on various indicators for performance appraisal and disclose the details in the relevant announcement published by the Board.

Article 13 The Finance Department shall make recommendations on whether to issue the security, the actual way of providing the counter-guarantee and the guaranteed amount based on the result of the evaluation on the credit status of the guaranteed enterprise and report to the Board upon obtaining consent from the President.

Article 14 The provision of a security in favour of a third party by the Company with its assets or credit shall be approved by the Board or Shareholders’ Meeting.

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APPENDIX VII SYSTEM OF SECURITIES IN FAVOUR OF EXTERNAL PARTIES OF BYD COMPANY LIMITED

Article 15 The issuance of securities in favour of external parties by the Company as described below shall be considered and approved at the Shareholders’ Meeting.

• (1) Any security provided after the total amount of securities issued in favour of external parties by the Company and holding subsidiaries of the Company reaches or exceeds 50% of the latest audited net assets;

• (2) Any security provided after the total amount of securities issued in favour of external parties by the Company reaches or exceeds 30% of the latest audited total assets;

• (3) Securities provided for guaranteed objects with a gearing ratio of above 70%;

• (4) Securities in which the single guaranteed amount exceeds 10% of the latest audited net assets;

• (5) Securities in favour of shareholders, the actual controller and its connected parties.

Article 16 Securities in favour of external parties subject to approval by the Board shall be considered and approved by more than two third of directors attending the Board meeting with the passing of a resolution.

Article 17 In the event that the amount of securities issued in favour of external parties by the Company within one year exceeds 30% of the latest audited total assets, this shall be approved by the Shareholders’ meeting with the passing of a special resolution.

Article 18 When a resolution is being passed by the Shareholders’ Meeting or the Board, shareholders or directors who have an interest in the security shall abstain from voting. The Secretary to the Board shall record the details of discussion and voting at the Board meeting and Shareholders’ Meeting. The relevant resolution passed by the Board and Shareholders’ Meeting shall be published.

Article 19 After a resolution on the security has been passed by the Shareholders’ Meeting or the Board of the Company, the Intellectual Property and Legal Department shall review legal documents such as contract for the principal creditor’s right, guarantee contract and counter-guarantee contract. The Finance Department shall enter into a written guarantee contract with the principal creditor on behalf of the Company and enter into a written counter-guarantee contract with the provider of the counter-guarantee.

Article 20 The Finance Department of the Company shall send the guarantee contract and the counter-guarantee to the Document Control Centre Department for filing within two days from the date of the guarantee contract and the counter-guarantee.

Chapter 4 Risk Control in respect of Securities

Article 21 The Company shall adhere to the principle of risk control in the process of providing a security and shall strictly control the limit of security liabilities to the guaranteed enterprise while conducting risk evaluation on the guaranteed enterprise.

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APPENDIX VII

SYSTEM OF SECURITIES IN FAVOUR OF EXTERNAL PARTIES OF BYD COMPANY LIMITED

Article 22 The Company shall strengthen the management of guarantee contracts. A written contract shall be entered into for securities in favour of others. The guarantee contract shall be properly kept in accordance with the internal management provisions of the Company and shall be promptly reported to the Supervisory Committee, Secretary to the Board and the Finance Department.

Article 23 For a project loan granted to the guaranteed enterprise, the Company shall request to open a joint account with the guaranteed enterprise so as to earmark funds for its specified purposes.

Article 24 The Company shall request the guaranteed enterprise to provide effective assets, including fixed assets, equipment, machinery and real estate for pledge or charge to faithfully implement the counter-guarantee measures.

Article 25 During the guarantee period, the Company shall track and monitor any change in the financial position and assets pledged/charged of the guaranteed enterprise and shall pay visits to the guaranteed enterprise on a regular or irregular basis. The Finance Department shall issue a repayment reminder to the guaranteed enterprise one month before the expiry of the debts of the guaranteed enterprise.

Article 26 If the guaranteed party fails to perform its repayment obligation within 10 days after expiry of its debts, the Finance Department, in conjunction with the Intellectual Property and Legal Department, of the Company shall implement the counter-guarantee measures within 10 days after expiry of the debts. During the guarantee period, if the guaranteed party is subject to organizational change, cancellation, bankruptcy or liquidation, the Company shall exercise its right of recourse in accordance with the relevant laws.

Article 27 The Intellectual Property and Legal Department shall send the recourse situation to the Finance Department within five working days after starting the recourse procedure and two working days after the end of the recourse.

Article 28 If the guaranteed party fails to perform its repayment obligations within 15 working days after expiry of its debts, or the guaranteed party is subject to bankruptcy or liquidation or the creditor requests the guarantor to perform its guarantee obligation, the Listed Company has obligations to promptly understand the repayment of debts by the guaranteed party and shall promptly disclose the relevant information after being aware of the same.

Chapter 5 Supplementary Articles

Article 29 Matters not addressed in this system shall be handled in accordance with the relevant laws, regulations and regulatory documents applicable in China and overseas, rules governing the listing of stocks of the stock exchange on which shares of the Company are listed and the “Articles of Association”.

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APPENDIX VII SYSTEM OF SECURITIES IN FAVOUR OF EXTERNAL PARTIES OF BYD COMPANY LIMITED

Article 30 This system shall be implemented from the date of initial public offering and listing of shares of the Company on the domestic stock exchange after being considered and approved by the Shareholders’ Meeting of the Company. Any amendment to this regulation shall be effective after being approved by the Shareholders’ Meeting.

Article 31 This regulation shall be construed by the Board.

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APPENDIX VIII THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED OF BYD COMPANY LIMITED

Please note that the following the Usage Management System of Funds Raised of BYD Company Limited are written in Chinese and there is no official English translation in respect thereof. The translation into English language in this Appendix VIII is for reference only. In case of any inconsistency between the English and Chinese versions, the Chinese version shall prevail.

Chapter 1 General Principles

Article 1 In order to strengthen the management of funds raised by BYP Company Limited (hereinafter referred to as the “Company”) and regulate the usage of funds raised and earnestly protect the benefits of investors at large, this system has been formulated in accordance with the relevant laws and regulations such as the “Company Law of the People’s Republic of China” (hereinafter referred to as “Company Law” and “Securities Law of the People’s Republic of China” (hereinafter referred to as “Securities Law”, the listing rules of the place where the Company is listed and the Articles of Association of BYD Company Limited (hereinafter referred to as the “Articles of Association”).

Article 2 The funds raised referred to in this system include the funds which the Company raised by issuance via initial public offering in China, placement of shares after listing in China and overseas, issue of additional shares, issue of convertible corporate bonds and non-public offering of shares to investors for specific purposes.

Article 3 After the funds have been raised, the Company shall promptly proceed with the verification procedure to obtain a verification report from an accounting firm qualified in the securities business. The Company shall adopt the principles of deposit in a special account, regulated usage, disclosure according to facts and strict management for the management of the funds raised.

Article 4 When drawing up a plan for the funds raised, the Company shall prudently consider its own ability to apply the funds and the gearing structure. The funds raised each time shall comply with the requirements on regulatory documents of CSRC and other listing places.

Article 5 The Board of the Company shall be responsible for the usage and management of the funds raised. The Supervisory Committee, independent directors and sponsors of the Company shall exercise supervisory rights over the management and usage of the funds raised.

Chapter 2 The Deposit of Funds Raised

Article 6 The Company shall choose a financial institution with good reputation and services and convenient access for opening a special account to deposit the funds raised. The opening of the special account and the deposit of the funds raised shall be handled by the Finance Department of the Company.

Article 7 The Finance Department of the Company shall regularly verify the deposit balance of the funds raised to ensure consistency between the book value and the actual amount of funds used.

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APPENDIX VIII

THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED OF BYD COMPANY LIMITED

Chapter 3 The Usage and Management of Funds Raised

Article 8 The funds raised by the Company shall not be used for placement and subscription of new shares through direct or indirect arrangements, or for uses prohibited by securities regulatory authorities such as shares and its derivatives and convertible corporate bonds or other investments collateral to the stated use of the funds raised. However, the ultimate use of funds shall be in line with that revealed in the fundraising document. In the event that the use of funds needs to be changed according to the actual situation of the Company, the Company shall go through the corresponding approval procedure in accordance with the regulatory requirements. If idle funds representing more than 10% of the funds raised are used to replenish the liquidity, this shall be considered and approved at the shareholders’ meeting and an online voting option shall be provided. Independent directors and sponsors shall separately express and disclose their opinions.

Article 9 The Company shall ensure the truthfulness of the use of the funds raised and shall prevent the funds raised from being illegally used or embezzled by connected parties and shall take effective actions to prevent connected parties from deriving illegal benefits from the investment project for which the funds were raised.

Article 10 The decision making in respect of the investment projects for which the funds were raised undertaken by the Company shall strictly comply with the relevant laws and regulations, the listing rules of the place where the Company is listed and the corresponding approval procedure as stipulated in the “Articles of Association”.

Article 11 The shareholders’ meeting is the highest authority for decision making in respect of the objective use of the funds raised by the Company. The Board performs duties related to decision making in respect of the objective use of the funds raised as authorized by the “Articles of Association” and the shareholders’ meeting. The Chairman performs duties related to decision making in respect of the objective use of the funds raised as authorized by the “Articles of Association” and the Board. The President performs duties related to decision making in respect of the objective use of the funds raised as authorized by the “Articles of Association” and the Board.

Article 12 When the Company invests the funds raised in the project, the funds must be used in strict accordance with the Company’s system for the management of funds and the procedures for approval.

Article 13 Independent directors shall pay attention to whether there is a significant discrepancy between the actual use of the funds raised and the information disclosed by the Company. Upon obtaining consent from more than half of the independent directors, independent directors can engage an accounting firm to conduct a special audit on the use of the funds raised. The Company shall offer full cooperation in the special audit and bear the necessary audit expenses.

Article 14 The Supervisory Committed of the Company shall be entitled to supervise the use of the funds raised.

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APPENDIX VIII THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED OF BYD COMPANY LIMITED

Article 15 The Finance Department of the Company shall examine the management of the funds raised by the Company on an annual basis and shall promptly report the examination result to the Audit Committee under the Board.

Article 16 If the Audit Committee under the Board considers that there are irregularities associated with the management of the funds raised or the Finance Department of the Company fails to submit a report on the examination result as required, this shall be reported to the Board promptly.

Chapter 4 Information Disclosure

Article 17 The Company shall disclose the use of the funds raised in accordance with the relevant laws and regulations.

Article 18 If the Company changes the investment project for which the funds were raised and requires approval from the shareholders’ meeting, the relevant announcement shall include the following contents:

• (1) A brief description of the original project and exact reasons for the change;

• (2) A brief description of the new project, market prospects and risk indications;

• (3) A description of the fact that the new project has obtained or yet to obtain approval the relevant authorities (where applicable);

• (4) A description of the fact that the change in the investment project for which the funds were raised is still pending consideration at the shareholders’ meeting;

• (5) Other contents as required by the stock exchange of the place where the Company is listed.

Chapter 5 Supplementary Provisions

Article 19 This system shall be effective from the date of initial public offering of shares and the listing of the Company in China upon consideration and approval at the shareholders’ meeting of the Company. Any change in this system shall take effect upon approval at the shareholders’ meeting.

Article 20 Any matter not dealt with in this system (or measure) shall be administered in accordance with the relevant laws, regulations and regulatory documents applicable in China and overseas, the rules governing the listing of shares of the stock exchange where shares of the Company are listed and the “Articles of Association”.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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比亞迪股份有限公司 BYD COMPANY LIMITED

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

(Stock Code: 1211)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ Meeting ”) of BYD Company Limited (the “ Company ”) will be held at the Company’s Conference Room at No. 3001, Hengping Road, Pingshan, Longgang, Shenzhen, Guangdong Province, the People’s Republic of China on 20 March, 2008, Thursday at 9:00 a.m. (or any adjournment thereof) for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolutions:

AS SPECIAL RESOLUTIONS

1. “ THAT conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (“Stock Exchange”) granting or agreeing to grant the listing of, and permission to deal in, the H shares of the Company of RMB1 each of the Company (“ H Shares ”) to be issued under the Bonus Issue, the approval of the holders of H shares (“ H Shareholders ”) and the approval of the holders (“ Domestic Shareholders ”, together with the H Shares, the “ Shares ”) of domestic shares of RMB1 each of the Company (“ Domestic Shares ”) at the respective class meetings and the approval of the Ministry of Commerce of the People’s Republic of China (the “ PRC ”):

2. (a) the registered capital of the Company be increased from RMB539,500,000 to RMB2,050,100,000 by capitalising an amount of RMB1,510,600,000 of the capital reserve fund of the Company, and that a total of 1,510,600,000 new ordinary shares of RMB1 each (“ Bonus Shares ”), comprising 418,600,000 new H Shares and 1,092,000,000 new Domestic Shares be allotted and issued, credited as fully paid and ranking pari passu to the existing shares of the Company (except that the H Shares to be issued under the Bonus Issue are to be listed on The Stock Exchange of Hong Kong Limited), to the H Shareholders and the Domestic Shareholders respectively pursuant to the capitalisation on the basis of 28 Bonus Shares for every 10 Shares held by the Shareholders on 20 March, 2008 (the “ Bonus Issue ”);

3. (b) the Board be and is hereby authorised to take all actions or sign all documents as they consider necessary or expedient in connection with the Bonus Issue and the transactions contemplated thereunder.”

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NOTICE OF EXTRAORDINARY GENERAL MEETING

1. “ THAT , subject to the approval by the relevant regulatory authorities, which include the China Securities Regulatory Commission (“ CSRC ”), the allotment and issue of A Shares by the Company in the PRC by way of public offering of new shares and/or such other manner as shall be approved by the relevant authorities (“ A Share Issue ”) be and is approved and that each of the following terms and conditions for the A Share Issue be and is hereby approved one by one:

2. (1) Class of Shares: A Shares;

3. (2) Total number of A Shares to be issued: not more than 58,500,000 A Shares (taking no account of the Bonus Shares which may be issued under the Bonus Issue) or not more than 222,300,000 A Shares (on the basis that the Bonus Issue is completed and that a total of 1,510,600,000 Bonus Shares are issued);

The final number of A Shares to be issued and the structure of the issue are subject to the approval by CSRC and other relevant authorities in the PRC and the adjustments (if any) made by the board of directors;

• (3) Nominal value of the A Shares: RMB1.00 each;

• (4) Target subscribers: natural persons, legal persons or other investors, who maintain A share accounts with the Shanghai Stock Exchange or the Shenzhen Stock Exchange (depending on the Company’s final decision) but excluding those who are prohibited under the PRC laws, regulations or other regulatory requirements applicable to the Company;

• (5) Issue price: the issue price range of the A Share Issue will be determined on the basis of market conditions, the condition prevailing in the PRC securities market at the time of the A Share Issue by way of market consultation or any such other price determination method as approved by CSRC. Market consultation will only be conducted after all the requisite approvals have been obtained;

The price consultation will be undertaken with not less than 20 qualified price enquiry participants recognised by the Securities Association of China. Pursuant to the relevant PRC regulations, the issue price shall not be lower than the net asset value (excluding minority interest per Share) according to the then latest audited financial statements of the Company;

• (6) Place of listing: Shanghai Stock Exchange or the Shenzhen Stock Exchange (depending on the Company’s final decision);

• (7) Use of proceeds: Funds raised from the A Share Issue will be used to fund the Group’s development projects on, among other things, lithium-ion batteries, LED light bars, camera modules, automobiles, electricity-power vehicles, automobile components and parts (including electronic components), mouldings for automobile components. Any surplus will be used as working capital of the Company and/or to repay banking borrowings of the Group;

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (8) A special committee of the board of directors consisting of Mr. Wang Chuan-fu, Mr. Lu Xiang-yang and Mr. Xia Zuo-quan be and is established and subject to all applicable laws and regulations, is authorised to implement the A Share Issue in such manner as it deems appropriate, expedient or necessary, including making final decisions on matters including (without limitation) the specific timing of the issue, the stock exchange on which the A Shares are to be listed, final number of A Shares to be issued, offering mechanism, final pricing mechanism, final issue price, target subscribers, the number and proportion of A Shares to be issued to each subscriber and the use of proceeds; and that the special committee be and is authorised take all actions and sign all documents for the implementation of the A Share Issue as it deems necessary or expedient;

• (9) The board of directors (and its delegates) be and are authorized to, at their discretion and with full authority sign or execute all necessary documents (including but not limited to the preliminary prospectus, the prospectus, underwriting agreement, listing agreement and any related announcements), effect and carry out necessary formalities (including but not limited to procedures for listing of the A Shares on the relevant stock exchange), and take all other necessary actions in connection with the A Share Issue, as well as to handle all registration requirements in relation to changes in the registered capital of the Company following the completion of the A Share Issue,

PROVIDED THAT the approval and authority granted pursuant to this resolution shall cease to have any further effect upon the expiration of a 12 month period from the date of the passing of this resolution.”

1. “ THAT conditional upon the passing of Resolution (12), the amendments to the Articles of Association corresponding to the change in composition of the supervisory committee of the Company be and are approved and adopted effective from the date of the passing of this resolution.”

2. “ THAT conditional upon the passing of Resolution (1), the amendments to the Articles of Association corresponding to the Bonus Issue be and are approved and adopted effective from the date on which the Bonus Issue is completed.”

3. “ THAT conditional upon the passing of Resolution (2), the amendments to the Articles of Association corresponding to the A Share Issue be and are approved and adopted effective from the date on which the A Shares are first traded on the relevant stock exchange.”

AS ORDINARY RESOLUTIONS

1. “ THAT an interim dividend for the six months ended 30 June, 2007 of RMB1.3 per Share be declared and distributed to the shareholders of the Company whose names appear on the register of members on 20 March, 2008; and THAT the board of directors of the Company be and is authorised to take all actions and sign all documents for the declaration of the interim dividend as the board deems necessary or expedient.”

2. “ THAT the resignation of Mr. Li Guo-xun as an independent non-executive director of the Company be and is hereby accepted and approved with effect from the date on which this resolution is passed and THAT any director be and is hereby authorized to sign all documents, agreement and to do all such acts and thing to give effect to such matters.”

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NOTICE OF EXTRAORDINARY GENERAL MEETING

1. “ THAT Madam Li Dong be and is hereby elected as an independent non-executive director of the Company to hold office from the date on which this resolution is passed until the date of the annual general meeting of the Company for a term expiring on 10 June, 2008 and THAT the board of directors be and is hereby authorized to enter into an appointment letter with Madam Li Dong upon such terms and conditions as the board shall think fit and to do all such acts and things to give effect to such appointment.”

2. “ THAT Mr. Mr. Lin You-ren be and is hereby re-elected as an independent non-executive director of the Company with effect from 1 October, 2007 for a term expiring on 10 June, 2008 and THAT the board of directors be and is hereby authorized to enter into an appointment letter with Mr. Lin You Ren upon such terms and conditions as the board shall think fit and to do all such acts and things to give effect to such re-election.”

3. “ THAT subject to the grant of all necessary approvals from, or the endorsement and registration (as applicable) with, the relevant authorities in the PRC, the Sets of Procedural Rules as set out in appendices II to VIII to the circular of the Company dated 4 February, 2008 (a copy of which marked “A” has been signed by the Chairman of the Company for identification purpose) be and are approved and adopted effective from the date on which the A Shares are first traded on the relevant stock exchange upon the grant of an approval by the CSRC.”

4. “ THAT the establishment of a Strategy Committee consists of three directors, namely Mr. Wang Chuan-fu, Mr. Lu Xiang-yang and Mr. Xia Zuo-quan, be and is approved and THAT Mr. Wang Chuan-fu be and is appointed as Chairman of the committee.”

5. 12 “ THAT the number of the supervisors of the Company be and is increased from three to five; and THAT Mr. Zhang Hui-bin (as nominee of the Shareholders) be and is appointed as a supervisor with effect from the passing of this resolution for a term of three years expiring on 19 March, 2011.”

6. “ THAT the grant of guarantees by the Company in respect of banking facilities (if any) granted or to be granted to any subsidiaries of the Company be and is approved in principle and that the board of directors of the Company be and is authorised to handle all matters relating to the grant of such kind of guarantees in accordance with all applicable laws and regulations, including (without limitation) taking all actions or signing all documents as the board of directors may deem necessary, appropriate or expedient.”

By Order of the Board BYD Company Limited WANG Chuan-fu Chairman

Hong Kong, 4 February, 2008

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

• (A) The Company will not process registration of transfers of H Shares from 19 February, 2008, Tuesday, to 20 March, 2008, Thursday, (both days inclusive). Holders of H Shares whose names appear on the register of H Shares of the Company kept at Computershare Hong Kong Investor Services Limited after 4:30 p.m. on 18 February, 2008, Monday, are entitled to attend and vote at the Meeting (or any adjournment thereof) following completion of the registration procedures. To qualify for attendance and voting at the Meeting (or any adjournment thereof), documents on transfers of H Shares must be lodged with the Company’s H Share Registrar and Transfer office, not later than 4:30 p.m. on 18 February, 2008, Monday. The address of the Company’s H Share registrar and transfer office is as follows:

Computershare Hong Kong Investor Services Limited Shops 1712-1716 17th Floor, Hopewell Centre 183 Queen’s Road East Hong Kong

The Company will not process registration of transfers of Domestic Shares from 19 February, 2008, Tuesday to 20 March, 2008, Thursday (both days inclusive). Holders of Domestic Shares whose names appear on the register of Shares of the Company after 4:30 p.m. on 18 February, 2008, Monday, are entitled to attend and vote at the Meeting (or any adjournment thereof) following completion of the registration procedures. Holders of Domestic Shares should contact the secretary to the board (“ Secretary to the Board ”) of directors of the Company (whose contact details are set out in note (B) below) for details concerning registration of transfers of Domestic Shares.

• (B) Holders of H Shares and Domestic Shares intending to attend the Meeting (or any adjournment thereof) should complete and return the reply slip for attending the Meeting (or any adjournment thereof) personally, by facsimile or by post.

Holders of H Shares should complete and return the reply slip to the Company’s H-Share Registrar and Transfer Office by facsimile at (852) 2865 0990 or by post to (or by depositing it at) Shops 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong such that the reply slip shall be received by the Company’s H-Share Registrar and Transfer Office 20 days before the Meeting (i.e. on or before 28 February, 2008, Thursday).

Holders of Domestic Shares should complete and return the reply slip, by personal delivery, by facsimile or by post, to the Secretary to the Board such that the reply slip shall be received by the Secretary to the Board 20 days before the Meeting (i.e. on or before 28 February, 2008, Thursday).

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NOTICE OF EXTRAORDINARY GENERAL MEETING

The contact details of the Secretary to the Board are as follows:

Secretary to the Board No. 3001 Hengping Road Pingshan Longgang Guangdong Province the PRC

• (C) Each holder of H Shares entitled to attend and vote at the Meeting (or any adjournment thereof) may, by completing the form of proxy of the Company, appoint one or more proxies to attend and vote at the Meeting (or any adjournment thereof) on his behalf. A proxy needs not be a shareholder of the Company. With respect to any shareholder of the Company who has appointed more than one proxy, the proxy holders may only vote on a poll.

• (D) Holders of H Shares must use the form of proxy of the Company for appointing a proxy and the appointment must be in writing. The form of proxy must be signed by the relevant shareholder of the Company or by a person duly authorized by the relevant shareholder of the Company in writing (a “ power of attorney ”). If the form of proxy is signed by the person authorized by the relevant shareholder of the Company as aforesaid, the relevant power of attorney and other relevant documents of authorization (if any) must be notarized. If a corporate shareholder of the Company appoints a person other than its legal representative to attend the Meeting (or any adjournment thereof) on its behalf, the relevant form of proxy must be affixed with the company seal/chop of the corporate shareholder of the Company or duly signed by its director or any other person duly authorized by that corporate shareholder of the Company as required by the articles of association of the Company.

• (E) To be valid, the form of proxy and the relevant notarized power of attorney (if any) and other relevant documents of authorization (if any) as mentioned in note (D) above must be delivered to the Company’s H-Share Registrar and Transfer Office, Computershare Hong Kong Investor Services Limited (address: Shop 1806-07, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong), not less than 24 hours before the time appointed for the Meeting (or any adjournment thereof).

• (F) Each holder of Domestic Shares who is entitled to attend and vote at the Meeting (or any adjournment thereof) may also, by completing the form of proxy of the Company, appoint one or more proxies to attend and vote at the Meeting (or any adjournment thereof) on his behalf. A proxy needs not be a shareholder of the Company. Notes (C) and (D) above also apply to the holders of Domestic Shares, except that, to be valid, the form of proxy and the relevant power of attorney (if any) and other relevant documents of authorization (if any) must be delivered to the Secretary to the Board not less than 24 hours before the time appointed for the Meeting (or any adjournment thereof). The address of the Secretary to the Board is stated in note (B) above.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (G) A shareholder of the Company or his proxy should produce proof of identity when attending the Meeting (or any adjournment thereof). If a corporate shareholder’s legal representative or any other person authorized by the board of directors or other governing body of such corporate shareholder attends the Meeting (or any adjournment thereof), such legal representative or other person shall produce his proof of identity, and proof of designation as legal representative and the valid resolution or authorization document of the board of directors or other governing body of such corporate shareholder (as the case may be) to prove the identity and authorization of that legal representative or other person.

• (H) The Meeting (or any adjournment thereof) is expected to last for half a day. Shareholders who attend the Meeting (or any adjournment thereof) shall bear their own travelling and accommodation expenses.

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NOTICE OF DOMESTIC SHARES CLASS MEETING

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比亞迪股份有限公司 BYD COMPANY LIMITED

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

(Stock Code: 1211)

NOTICE OF DOMESTIC SHARES CLASS MEETING

NOTICE IS HEREBY GIVEN that a Domestic Shares class meeting (the “ Meeting ”) of BYD Company Limited (the “ Company ”) will be held at the Company’s Conference Room at No. 3001, Hengping Road, Pingshan, Longgang, Shenzhen, Guangdong Province, the People’s Republic of China on 20 March, 2008, Thursday at 10:00 a.m. (or as soon as the extraordinary general meeting of the Company shall have been concluded or adjourned) or any adjournment thereof for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolutions:

AS SPECIAL RESOLUTIONS

1. “ THAT conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (“ Stock Exchange ”) granting or agreeing to grant the listing of, and permission to deal in, the H shares of the Company of RMB1 each of the Company (“ H Shares ”) to be issued under the Bonus Issue, the approval of the holders of H shares (“ H Shareholders ”) and the approval of the holders (“ Domestic Shareholders ”, together with the H Shares, the “ Shares ”) of domestic shares of RMB1 each of the Company (“ Domestic Shares ”) at the respective class meetings and the approval of the Ministry of Commerce of the People’s Republic of China (the “ PRC ”):

2. (a) the registered capital of the Company be increased from RMB539,500,000 to RMB2,050,100,000 by capitalising an amount of RMB1,510,600,000 of the capital reserve fund of the Company, and that a total of 1,510,600,000 new ordinary shares of RMB1 each (“ Bonus Shares ”), comprising 418,600,000 new H Shares and 1,092,000,000 new Domestic Shares be allotted and issued, credited as fully paid and ranking pari passu to the existing shares of the Company (except that the H Shares to be issued under the Bonus Issue are to be listed on The Stock Exchange of Hong Kong Limited), to the H Shareholders and the Domestic Shareholders respectively pursuant to the capitalisation on the basis of 28 Bonus Shares for every 10 Shares held by the Shareholders on 20 March, 2008 (the “ Bonus Issue ”);

3. (b) the Board be and is hereby authorised to take all actions or sign all documents as they consider necessary or expedient in connection with the Bonus Issue and the transactions contemplated thereunder.”

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NOTICE OF DOMESTIC SHARES CLASS MEETING

1. “ THAT , subject to the approval by the relevant regulatory authorities, which include the China Securities Regulatory Commission (“ CSRC ”), the allotment and issue of A Shares by the Company in the PRC by way of public offering of new shares and/or such other manner as shall be approved by the relevant authorities (“ A Share Issue ”) be and is approved and that each of the following terms and conditions for the A Share Issue be and is hereby approved one by one:

2. (1) Class of Shares: A Shares;

3. (2) Total number of A Shares to be issued: not more than 58,500,000 A Shares (taking no account of the Bonus Shares which may be issued under the Bonus Issue) or not more than 222,300,000 A Shares (on the basis that the Bonus Issue is completed and that a total of 1,510,600,000 Bonus Shares are issued);

The final number of A Shares to be issued and the structure of the issue are subject to the approval by CSRC and other relevant authorities in the PRC and the adjustments (if any) made by the board of directors;

• (3) Nominal value of the A Shares: RMB1.00 each;

• (4) Target subscribers: natural persons, legal persons or other investors, who maintain A share accounts with the Shanghai Stock Exchange or the Shenzhen Stock Exchange (depending on the Company’s final decision) but excluding those who are prohibited under the PRC laws, regulations or other regulatory requirements applicable to the Company;

• (5) Issue price: the issue price range of the A Share Issue will be determined on the basis of market conditions, the condition prevailing in the PRC securities market at the time of the A Share Issue by way of market consultation or any such other price determination method as approved by CSRC. Market consultation will only be conducted after all the requisite approvals have been obtained;

The price consultation will be undertaken with not less than 20 qualified price enquiry participants recognised by the Securities Association of China. Pursuant to the relevant PRC regulations, the issue price shall not be lower than the net asset value (excluding minority interest per Share) according to the then latest audited financial statements of the Company;

• (6) Place of listing: Shanghai Stock Exchange or the Shenzhen Stock Exchange (depending on the Company’s final decision);

• (7) Use of proceeds: Funds raised from the A Share Issue will be used to fund the Group’s development projects on, among other things, lithium-ion batteries, LED light bars, camera modules, automobiles, electricity-power vehicles, automobile components and parts (including electronic components), mouldings for automobile components. Any surplus will be used as working capital of the Company and/or to repay banking borrowings of the Group;

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NOTICE OF DOMESTIC SHARES CLASS MEETING

• (8) A special committee of the board of directors consisting of Mr. Wang Chuan-fu, Mr. Lu Xiang-yang and Mr. Xia Zuo-quan be and is established and subject to all applicable laws and regulations, is authorised to implement the A Share Issue in such manner as it deems appropriate, expedient or necessary, including making final decisions on matters including (without limitation) the specific timing of the issue, the stock exchange on which the A Shares are to be listed, final number of A Shares to be issued, offering mechanism, final pricing mechanism, final issue price, target subscribers, the number and proportion of A Shares to be issued to each subscriber and the use of proceeds; and that the special committee be and is authorised take all actions and sign all documents for the implementation of the A Share Issue as it deems necessary or expedient;

• (9) The board of directors (and its delegates) be and are authorized to, at their discretion and with full authority sign or execute all necessary documents (including but not limited to the preliminary prospectus, the prospectus, underwriting agreement, listing agreement and any related announcements), effect and carry out necessary formalities (including but not limited to procedures for listing of the A Shares on the relevant stock exchange), and take all other necessary actions in connection with the A Share Issue, as well as to handle all registration requirements in relation to changes in the registered capital of the Company following the completion of the A Share Issue,

PROVIDED THAT the approval and authority granted pursuant to this resolution shall cease to have any further effect upon the expiration of a 12 month period from the date of the passing of this resolution.”

AS ORDINARY RESOLUTIONS

1. “ THAT an interim dividend for the six months ended 30 June, 2007 of RMB1.3 per Share be declared and distributed to the shareholders of the Company whose names appear on the register of members on 20 March, 2008; and that the board of directors of the Company be and is authorised to take all actions and sign all documents for the declaration of the interim dividend as the board deems necessary or expedient.”

By Order of the Board BYD Company Limited WANG Chuan-fu Chairman

Hong Kong, 4 February, 2008

Notes:

• (A) The Company will not process registration of transfers of Domestic Shares from 19 February, 2008, Tuesday to 20 March, 2008, Thursday (both days inclusive). Holders of Domestic Shares whose names appear on the register of Shares of the Company after 4:30 p.m. on 18 February, 2008, Monday are entitled to attend and vote at the Meeting (or any adjournment thereof) following completion of the registration procedures.

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NOTICE OF DOMESTIC SHARES CLASS MEETING

Holders of Domestic Shares should contact the secretary to the board (“ Secretary to the Board ”) of directors of the Company (whose contact details are set out in note (B) below) for details concerning registration of transfers of Domestic Shares.

• (B) Holders of Domestic Shares intending to attend the Meeting (or any adjournment thereof) should complete and return the reply slip for attending the Meeting (or any adjournment thereof) personally, by facsimile or by post, to the Secretary to the Board such that the reply slip shall be received by the Secretary to the Board 20 days before the Meeting (i.e. on or before 28 February, 2008, Thursday).

The contact details of the Secretary to the Board are as follows:

Secretary to the Board No. 3001 Hengping Road Pingshan Longgang Guangdong Province the PRC

• (C) Each holder of Domestic Shares who is entitled to attend and vote at the Meeting (or any adjournment thereof) may, by completing the form of proxy of the Company, appoint one or more proxies to attend and vote at the Meeting (or any adjournment thereof) on his behalf. A proxy needs not be a shareholder of the Company. With respect to any shareholder of the Company who has appointed more than one proxy, the proxy holders may only vote on a poll.

• (D) Holders of Domestic Shares must use the form of proxy of the Company for appointing a proxy and the appointment must be in writing. The form of proxy must be signed by the relevant shareholder of the Company or by a person duly authorized by the relevant shareholder of the Company in writing (a “ power of attorney ”). If the form of proxy is signed by the person authorized by the relevant shareholder of the Company as aforesaid, the relevant power of attorney and other relevant documents of authorization (if any) must be notarized. If a corporate shareholder of the Company appoints a person other than its legal representative to attend the Meeting (or any adjournment thereof) on its behalf, the relevant form of proxy must be affixed with the company seal/chop of the corporate shareholder of the Company or duly signed by its director or any other person duly authorized by that corporate shareholder of the Company as required by the articles of association of the Company.

• (E) To be valid, the form of proxy and the relevant notarized power of attorney (if any) and other relevant documents of authorization (if any) as mentioned in note (D) above must be delivered to the Secretary to the Board not less than 24 hours before the time appointed for the Meeting (or any adjournment thereof). The address of the Secretary to the Board is stated in note (B) above.

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NOTICE OF DOMESTIC SHARES CLASS MEETING

• (F) A shareholder of the Company or his proxy should produce proof of identity when attending the Meeting (or any adjournment thereof). If a corporate shareholder’s legal representative or any other person authorized by the board of directors or other governing body of such corporate shareholder attends the Meeting (or any adjournment thereof), such legal representative or other person shall produce his proof of identity, and proof of designation as legal representative and the valid resolution or authorization document of the board of directors or other governing body of such corporate shareholder (as the case may be) to prove the identity and authorization of that legal representative or other person.

• (G) The Meeting (or any adjournment thereof) is expected to last for half a day. Shareholders who attend the Meeting (or any adjournment thereof) shall bear their own travelling and accommodation expenses.

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NOTICE OF H SHARES CLASS MEETING

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比亞迪股份有限公司 BYD COMPANY LIMITED

(a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1211)

NOTICE OF H SHARES CLASS MEETING

NOTICE IS HEREBY GIVEN that an H Shares class meeting (the “ Meeting ”) of BYD Company Limited (the “ Company ”) will be held at the Company’s Conference Room at No. 3001, Hengping Road, Pingshan, Longgang, Shenzhen, Guangdong Province, the People’s Republic of China on 20 March, 2008, Thursday at 11:00 a.m. (or as soon as the Domestic Shares class meeting of the Company shall have been concluded or adjourned) or any adjournment thereof for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolution:

AS SPECIAL RESOLUTION

1. “ THAT conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (“ Stock Exchange ”) granting or agreeing to grant the listing of, and permission to deal in, the H shares of the Company of RMB1 each of the Company (“ H Shares ”) to be issued under the Bonus Issue, the approval of the holders of H shares (“ H Shareholders ”) and the approval of the holders (“ Domestic Shareholders ”, together with the H Shares, the “ Shares ”) of domestic shares of RMB1 each of the Company (“ Domestic Shares ”) at the respective class meetings and the approval of the Ministry of Commerce of the People’s Republic of China (the “ PRC ”):

2. (a) the registered capital of the Company be increased from RMB539,500,000 to RMB2,050,100,000 by capitalising an amount of RMB1,510,600,000 of the capital reserve fund of the Company, and that a total of 1,510,600,000 new ordinary shares of RMB1 each (“ Bonus Shares ”), comprising 418,600,000 new H Shares and 1,092,000,000 new Domestic Shares be allotted and issued, credited as fully paid and ranking pari passu to the existing shares of the Company (except that the H Shares to be issued under the Bonus Issue are to be listed on The Stock Exchange of Hong Kong Limited), to the H Shareholders and the Domestic Shareholders respectively pursuant to the capitalisation on the basis of 28 Bonus Shares for every 10 Shares held by the Shareholders on 20 March, 2008 (the “ Bonus Issue ”);

3. (b) the Board be and is hereby authorised to take all actions or sign all documents as they consider necessary or expedient in connection with the Bonus Issue and the transactions contemplated thereunder.”

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NOTICE OF H SHARES CLASS MEETING

1. “ THAT , subject to the approval by the relevant regulatory authorities, which include the China Securities Regulatory Commission (“ CSRC ”), the allotment and issue of A Shares by the Company in the PRC by way of public offering of new shares and/or such other manner as shall be approved by the relevant authorities (“ A Share Issue ”) be and is approved and that each of the following terms and conditions for the A Share Issue be and is hereby approved one by one:

2. (1) Class of Shares: A Shares;

3. (2) Total number of A Shares to be issued: not more than 58,500,000 A Shares (taking no account of the Bonus Shares which may be issued under the Bonus Issue) or not more than 222,300,000 A Shares (on the basis that the Bonus Issue is completed and that a total of 1,510,600,000 Bonus Shares are issued);

The final number of A Shares to be issued and the structure of the issue are subject to the approval by CSRC and other relevant authorities in the PRC and the adjustments (if any) made by the board of directors;

• (3) Nominal value of the A Shares: RMB1.00 each;

• (4) Target subscribers: natural persons, legal persons or other investors, who maintain A share accounts with the Shanghai Stock Exchange or the Shenzhen Stock Exchange (depending on the Company’s final decision) but excluding those who are prohibited under the PRC laws, regulations or other regulatory requirements applicable to the Company;

• (5) Issue price: the issue price range of the A Share Issue will be determined on the basis of market conditions, the condition prevailing in the PRC securities market at the time of the A Share Issue by way of market consultation or any such other price determination method as approved by CSRC. Market consultation will only be conducted after all the requisite approvals have been obtained;

The price consultation will be undertaken with not less than 20 qualified price enquiry participants recognised by the Securities Association of China. Pursuant to the relevant PRC regulations, the issue price shall not be lower than the net asset value (excluding minority interest per Share) according to the then latest audited financial statements of the Company;

• (6) Place of listing: Shanghai Stock Exchange or the Shenzhen Stock Exchange (depending on the Company’s final decision);

• (7) Use of proceeds: Funds raised from the A Share Issue will be used to fund the Group’s development projects on, among other things, lithium-ion batteries, LED light bars, camera modules, automobiles, electricity-power vehicles, automobile components and parts (including electronic components), mouldings for automobile components. Any surplus will be used as working capital of the Company and/or to repay banking borrowings of the Group;

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NOTICE OF H SHARES CLASS MEETING

• (8) A special committee of the board of directors consisting of Mr. Wang Chuan-fu, Mr. Lu Xiang-yang and Mr. Xia Zuo-quan be and is established and subject to all applicable laws and regulations, is authorised to implement the A Share Issue in such manner as it deems appropriate, expedient or necessary, including making final decisions on matters including (without limitation) the specific timing of the issue, the stock exchange on which the A Shares are to be listed, final number of A Shares to be issued, offering mechanism, final pricing mechanism, final issue price, target subscribers, the number and proportion of A Shares to be issued to each subscriber and the use of proceeds; and that the special committee be and is authorised take all actions and sign all documents for the implementation of the A Share Issue as it deems necessary or expedient;

• (9) The board of directors (and its delegates) be and are authorized to, at their discretion and with full authority sign or execute all necessary documents (including but not limited to the preliminary prospectus, the prospectus, underwriting agreement, listing agreement and any related announcements), effect and carry out necessary formalities (including but not limited to procedures for listing of the A Shares on the relevant stock exchange), and take all other necessary actions in connection with the A Share Issue, as well as to handle all registration requirements in relation to changes in the registered capital of the Company following the completion of the A Share Issue,

PROVIDED THAT the approval and authority granted pursuant to this resolution shall cease to have any further effect upon the expiration of a 12 month period from the date of the passing of this resolution.”

AS ORDINARY RESOLUTIONS

3. “THAT an interim dividend for the six months ended 30 June, 2007 of RMB1.3 per Share be declared and distributed to the shareholders of the Company whose names appear on the register of members on 20 March, 2008; and that the board of directors of the Company be and is authorised to take all actions and sign all documents for the declaration of the interim dividend as the board deems necessary or expedient.”

By Order of the Board BYD Company Limited WANG Chuan-fu Chairman

Hong Kong, 4 February, 2008

Notes:

• (A) The Company will not process registration of transfers of H Shares from 19 February, 2008, Tuesday to 20 March, 2008, Thursday (both days inclusive). Holders of H Shares whose names appear on the register of H Shares of the Company at Computershare Hong Kong Investor Services Limited after 4:30 p.m. on 18 February, 2008, Monday are entitled to attend and vote at the Meeting (or any adjournment thereof) following completion of the registration procedures.

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NOTICE OF H SHARES CLASS MEETING

To qualify for attendance and voting at the Meeting (or any adjournment thereof), documents on transfers of H Shares must be lodged with the Company’s H Share registrar and transfer office, not later than 4:30 p.m. on 18 February, 2008, Monday. The address of the Company’s H Share Registrar and Transfer Office is as follows:

Computershare Hong Kong Investor Services Limited Shops 1712-1716 17th Floor, Hopewell Centre 183 Queen’s Road East Hong Kong

• (B) Holders of H Shares intending to attend the Meeting (or any adjournment thereof) should complete and return the reply slip for attending the Meeting (or any adjournment thereof) personally, by facsimile or by post, to the Company’s H-Share Registrar and Transfer Office by facsimile at (852) 2865 0990 or by post to (or by depositing it at) Shops 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong such that the reply slip shall be received by the Company’s H-Share Registrar and Transfer Office 20 days before the Meeting (i.e. on or before 28 February, 2008, Thursday).

• (C) Each holder of H Shares who is entitled to attend and vote at the Meeting (or any adjournment thereof) may, by completing the form of proxy of the Company, appoint one or more proxies to attend and vote at the Meeting (or any adjournment thereof) on his behalf. A proxy needs not be a shareholder of the Company. With respect to any shareholder of the Company who has appointed more than one proxy, the proxy holders may only vote on a poll.

• (D) Holders of H Shares must use the form of proxy of the Company for appointing a proxy and the appointment must be in writing. The form of proxy must be signed by the relevant shareholder of the Company or by a person duly authorized by the relevant shareholder of the Company in writing (a “ power of attorney ”). If the form of proxy is signed by the person authorized by the relevant shareholder of the Company as aforesaid, the relevant power of attorney and other relevant documents of authorization (if any) must be notarized. If a corporate shareholder of the Company appoints a person other than its legal representative to attend the Meeting (or any adjournment thereof) on its behalf, the relevant form of proxy must be affixed with the company seal/chop of the corporate shareholder of the Company or duly signed by its director or any other person duly authorized by that corporate shareholder of the Company as required by the articles of association of the Company.

• (E) To be valid, the form of proxy and the relevant notarized power of attorney (if any) and other relevant documents of authorization (if any) as mentioned in note (D) above must be delivered to the Company’s H-Share Registrar and Transfer Office, Computershare Hong Kong Investor Services Limited (address: Shop 1806-07, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong), not less than 24 hours before the time appointed for the Meeting (or any adjournment thereof).

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NOTICE OF H SHARES CLASS MEETING

• (F) A shareholder of the Company or his proxy should produce proof of identity when attending the Meeting (or any adjournment thereof). If a corporate shareholder’s legal representative or any other person authorized by the board of directors or other governing body of such corporate shareholder attends the Meeting (or any adjournment thereof), such legal representative or other person shall produce his proof of identity, and proof of designation as legal representative and the valid resolution or authorization document of the board of directors or other governing body of such corporate shareholder (as the case may be) to prove the identity and authorization of that legal representative or other person.

• (G) The Meeting (or any adjournment thereof) is expected to last for half a day. Shareholders who attend the Meeting (or any adjournment thereof) shall bear their own travelling and accommodation expenses.

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