Shanghai Henlius Biotech, Inc. - Proxy Solicitation & Information Statement 2009

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.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim 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 A SHARE ISSUE
(2) PROPOSED GRANT OF AUTHORITY TO THE BOARD TO DETERMINE AND DEAL WITH ISSUES RELATING TO THE PROPOSED A SHARE ISSUE
(3) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION, THE RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING AND THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED
(4) PROPOSED GRANT OF GUARANTEE FOR BANKING FACILITIES GRANTED TO SUBSIDIARIES OF THE COMPANY
(5) PROPOSED APPOINTMENT OF ACCOUNTANTS FOR THE PROPOSED A SHARE ISSUE
(6) NOTICES OF EXTRAORDINARY GENERAL MEETING AND CLASS MEETINGS

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 3 to 10 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.

24 July 2009

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix I — Proposed amendments to Articles of Association . . . . . . . . . . . . . . . . . . . . .	11
Appendix II — Proposed amendments to Rules and Procedures of
Shareholders’ General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	78
Appendix III — Proposed amendments to The Usage Management System
of Funds Raised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	84
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	94
Notice of H Shares Class Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	101
Notice of Domestic Shares Class Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	106

— 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 Shenzhen Stock Exchange

“A Share Issue” the proposed issue of not more than 100,000,000 A Shares to natural persons, legal persons and investors recognised by CSRC, who maintain A Share accounts with the Shenzhen Stock Exchange, by way of public offering and placing of new shares and/or such other manner as shall be permitted by the Relevant Authorities
“Articles of Association” the articles of association of the Company from time to time “Board” the board of Directors of the Company
“Class Meetings” the class meeting of the H Shareholders and the class meeting of the Domestic Shareholders to be held on Tuesday, 8 September 2009 to approve certain matters referred to in this circular
“Company” BYD Company Limited, a joint stock limited company incorporated in the PRC and the H 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 “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 Shareholders to be held on Tuesday, 8 September 2009 to approve 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

— 1 —

DEFINITIONS

“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 and subscribed for in Hong Kong dollars
“Latest Practicable Date”	23 July 2009, 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
“PRC”	the People’s Republic of China, excluding, for the purpose of
	this announcement only, the Hong Kong Special
	Administrative Region, the Macau Special Administrative
	Region, and Taiwan
“RMB”	Renminbi, the lawful currency of the PRC
“Relevant Authorities”	competent authorities in the PRC for approving the A Share
	Issue
“Shareholders”	Domestic Shareholders and H Shareholders
“Shares”	Domestic Shares and H Shares
“Strategic Investment and	the strategic investment and subscription agreement entered
Subscription Agreement”	into between the Company and MidAmerican Energy
	Holdings Company on 26 September 2008 in relation to the
	subscription of 225,000,000 new H Shares

— 2 —

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 Director Yan An Road Mr. Wang Chuan-fu Kuichong Longgang District Non-executive Directors Shenzhen Mr. Lu Xiang-yang Guangdong Province Mr. Xia Zuo-quan The PRC Independent Non-executive Directors Principal Place of Business in Hong Kong: Mr. Li Dong Unit 1712, 17th Floor Mr. Lin You-ren Tower 2 Mr. Wu Chang-qi Grand Central Plaza No.138 Shatin Rural Committee Road Shatin, New Territories Hong Kong

24 July 2009

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED A SHARE ISSUE
(2) PROPOSED GRANT OF AUTHORITY TO THE BOARD TO DETERMINE AND DEAL WITH ISSUES RELATING TO THE PROPOSED A SHARE ISSUE
(3) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION, THE RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING AND THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED
(4) PROPOSED GRANT OF GUARANTEE FOR BANKING FACILITIES GRANTED TO SUBSIDIARIES OF THE COMPANY
(5) PROPOSED APPOINTMENT OF ACCOUNTANTS FOR THE PROPOSED A SHARE ISSUE
(6) NOTICES OF EXTRAORDINARY GENERAL MEETING AND CLASS MEETINGS

— 3 —

LETTER FROM THE BOARD

1. INTRODUCTION

On 15 July 2009, the Board announced that subject to the approvals of the Relevant Authorities in the PRC, the Company proposed to allot and issue not more than 100,000,000 A Shares to natural persons, legal persons or other investors recognised by CSRC, who maintain A Share accounts with the Shenzhen Stock Exchange but excluding those who are prohibited under the PRC laws, regulations or other regulatory requirements applicable to the Company, by way of public offering and placing of new shares or such other manner as shall be permitted by CSRC. 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 EGM and the Class Meetings will be held to consider and, if thought fit, approve, among other things, the A Share Issue and the grant to authority to 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, number of A Shares to be issued, method of issue, issue price, issue targets, the number and proportion of A Shares to be issued to respective issue targets and the use of proceeds, and adjustments on the project amounts, timing and method of the implementation within the scope of the usage of proceeds approved by Shareholders’ general meeting) under the proposal of the A Share Issue considered and approved by the Shareholders’ general meeting and permitted by CSRC.

Amendments to the Articles of Association, the Rules and Procedures of Shareholders’ General Meeting and the Usage Management System of Funds Raised of BYD Company Limited are proposed primarily as a result of the A Share Issue in compliance with applicable PRC laws and regulations. The amendments to the Articles of Association, the Rules and Procedures of Shareholders’ General Meeting and the Usage Management System of Funds Raised of BYD Company Limited will be adopted and implemented with effect from the date on which the A Shares first trade on the relevant stock exchange and, if applicable, the Articles of Association shall be reviewed by the PRC government authorities on commerce for approval.

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

The Company proposed to appoint Ernst & Young Hua Ming as the accountants for the purpose of the A Share Issue, which will issue audit report and other reports as required by the PRC accounting principles and regulations, for a term commencing from the approval of its appointment by the Shareholders at general meeting and ending on the completion of the A Share Issue.

The purpose of this circular is to give the Shareholders details of the proposed A Share Issue, the proposed grant of authority to the Board to detemine and deal with matters relating to the A Share Issue, the proposed amendments to the Articles of Association, the Rules and Procedures of Shareholders’ General Meeting and the Usage Management System of Funds Raised of BYD Company

— 4 —

LETTER FROM THE BOARD

Limited, and the proposed grant of guarantee in respect of banking facilities granted to subsidiaries of the Company and the proposed appointment of the accountants for the purpose of the A Share Issue, 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 A SHARE ISSUE

A. Background

The Company issued an announcement on 28 January 2008 in respect of, among other things, a proposed issue and allotment of A Shares to be listed on the Shenzhen Stock Exchange or Shanghai Stock Exchange. The proposed issue was approved by Shareholders at the extraordinary general meeting and class meetings of holders of Domestic Shares and H Shares held on 20 March 2008. However, due to the unsatisfactory performance of the A Share market in the PRC in 2008, the above proposed issue did not proceed. The approval granted at the extraordinary general meeting and the class meetings expired on 19 March 2009.

At the Board meeting held on 15 July 2009, it was resolved that the Company shall apply to the Relevant Authorities for the allotment and issue of not more than 100,000,000 A Shares to natural persons, legal persons or other investors recognised by CSRC, who maintain A Share accounts with the Shenzhen Stock Exchange but excluding those who are prohibited under the PRC laws, regulations or other regulatory requirements applicable to the Company.

B. Structure of the A Share Issue

Type of securities to be issued: Renminbi denominated ordinary shares (A Shares) Number of A Shares to be issued: Not more than 100,000,000 A Shares. The final number of A Shares to be issued will be determined by the Board (taking into account the then market condition upon the A Share Issue) as authorised by the Shareholders at the EGM

Nominal value: RMB1.00 each Issue targets: natural persons, legal persons or other investors recognised by CSRC, who maintain A Share accounts with the Shenzhen Stock Exchange 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 target investors, and issue at fixed price for subscription by online fund, or such other method(s) as approved by CSRC

— 5 —

LETTER FROM THE BOARD

Issue price:

The issue price of the A Share Issue will be determined by negotiation between the Board and the lead underwriter taking into account the condition of the securities market. Further announcement will be made upon determination of the issue price

Use of proceeds:

The proceeds from the proposed A Share Issue will be invested in the following projects:

(i) production project on lithium-ion batteries;
(ii) the project on research, development and manufacturing base for automobiles in Shenzhen;
(iii) the expansion project on automobile products and accessories of BYD Auto Company Limited; and
(iv) the second phase of the project on solar energy batteries manufacturing facilities with a production capacity of 300 MW per year for the second phase and a target production capacity of 1 GW per year after all phases.

In the event that the proceeds raised are insufficient, the Board will determine the actual usage of the proceeds according to the significance and urgency of the above investment projects and any shortfall will be raised by the Company itself; in the event that such proceeds exceed the total investment amount of these projects, the surplus will be applied as working capital. Before receiving such proceeds, the Company will finance the above investment projects with its existing funds and bank loans based on the individual progress of the above investment projects. Upon receiving such proceeds, these existing funds so applied will be replaced by the proceeds and bank loans will be repaid

The Board has conducted an analysis to ascertain the feasibility, profitability and future prospects of the above investment projects

Rights attached to A Share:

Once the A Share Issue is completed, both the new and existing Shareholders will be entitled to share the retained earnings accumulated before the A Share Issue

— 6 —

LETTER FROM THE BOARD

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.

C. Shareholders’ approval and other approvals

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 Shenzhen Stock Exchange as to the listing and dealings in the A Shares is also required.

It is proposed that the Shareholders’ approval in respect of the A Share Issue, if obtained from the EGM and the Class Meetings, will be effective for a period of 12 months from the date of such Shareholders’ 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. The Board believes that the A Share Issue will benefit the Company and the Shareholders as a whole.

E. Effect of 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 A Share Issue (based on the assumption that (1) an aggregate of 225,000,000 new H Shares will be issued under the Strategic Investment and Subscription Agreement and (2) an aggregate of 100,000,000 new A Shares will be issued under the A Share Issue):

							Immediately after	Immediately after
				Immediately after			completion of	the
				completion of	the		Strategic Investment and
	As at the date	of		Strategic Investment		and	Subscription Agreement
	this announcement			Subscription Agreement			and the A Share	Issue
	Number of			Number of			Number of
	Shares		%	Shares		%	Shares	%
(1)Domestic Shares	1,482,000,000	72.29		1,482,000,000	65.14		1,582,000,000	66.61
— Existing Domestic Shares
issued	1,482,000,000	72.29		1,482,000,000	65.14		1,482,000,000	62.40
— A Shares to be Issued	—		—	—		—	100,000,000	4.21
(2)H Shares	568,100,000	27.71		793,100,000	34.86		793,100,000	33.39
(3)Total number of Shares	2,050,100,000	100		2,275,100,000		100	2,375,100,000	100

The Company expects that the A Share Issue will not reduce the public float of the Company’s total issued share capital as required under the Listing Rules.

— 7 —

LETTER FROM THE BOARD

3. PROPOSED GRANT OF AUTHORITY TO THE BOARD TO DETERMINE AND DEAL WITH MATTERS RELATING TO THE A SHARE ISSUE

In connection to the proposed A Share Issue, the Company proposed 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, number of A Shares to be issued, method of issue, issue price, issue targets, the number and proportion of A Shares to be issued to respective issue targets and the use of proceeds, and adjustments on the project amounts, timing and method of the implementation within the scope of the usage of proceeds approved by Shareholders’ general meeting) under the proposal of the A Share Issue considered and approved by the Shareholders’ general meeting and permitted by CSRC. The authorisation of the Board to determine and deal with matters relating to the A Share Issue is subject to approvals by (a) the Shareholders at the EGM and (b) the H Shareholders and Domestic Shareholders at the respective Class Meetings.

4. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION, THE RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING AND THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

Amendments to the Articles of Association in light of the then proposed issue of A Shares to be listed on the Shenzhen Stock Exchange, and the sets of procedural rules for, among other things, meetings of Shareholders, the Board and the supervisory committee of the Company, which were disclosed in the circulars of the Company dated 4 February 2008 and 25 April 2008, were approved by the Shareholders at the general meetings held on 20 March 2008 and 10 June 2008. Further amendments to the Articles of Association, the Rules and Procedures of Shareholders’ General Meeting and the Usage Management System of Funds Raise by BYD Company Limited are required to be made in order to satisfy the A Share Issue and to comply with the relevant PRC laws and regulations. The amendments to the above documents are respectively set out in Appendices I, II and III to this circular will be proposed at the EGM for Shareholders’ approval and, if applicable, the amended Articles of Association, which comply with the applicable requirements of the Listing Rules, shall be reviewed by the PRC governmental authorities on commerce for approval. These amendments will be adopted and implemented with effect from the date on which the A Shares of the Company are listed on the Shenzhen Stock Exchange.

5. PROPOSED GRANT OF 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 to the Company’s domestic subsidiaries. The Company’s existing domestic 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 such subsidiaries as at the Latest Practicable Date which 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.

— 8 —

LETTER FROM THE BOARD

6. PROPOSED APPOINTMENT OF ACCOUNTANTS FOR THE PROPOSED A SHARE ISSUE

The Company proposed to appoint Ernst & Young Hua Ming as the accountants for the purpose of the A Share Issue, which will issue auditor’s report and other reports in accordance with the requirements under the PRC accounting principles and regulations, for a term commencing from the approval of its appointment by the Shareholders at the EGM and ending on the completion of the A Share Issue.

7. CLOSURE OF REGISTER OF MEMBERS

In order to determine the list of Shareholders who will be entitled to attend and vote at the EGM and the Class Meetings, the register of members of the Company will be closed from Saturday, 8 August 2009 to Tuesday, 8 September 2009, 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 at 4:30 p.m. on Friday, 7 August 2009 shall be entitled to attend and vote at the EGM and the Class Meetings. In order for the H Shareholders to qualify to attend and vote at the EGM and the Class Meetings of H Shareholders, 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 Friday, 7 August 2009 for registration.

8. EXTRAORDINARY GENERAL MEETING AND CLASS MEETINGS

Special resolutions to approve the proposed A Share Issue, the proposed grant of authority to the Board to determine and deal with matters relating to the A Share Issue, the proposed amendments to the Articles of Association and the Rules and Procedures of Shareholders’ General Meeting will be proposed at the EGM and to the extent applicable, the Class Meetings. Ordinary resolutions to approve the amendments to the Usage Management System of Funds Raised of BYD Company Limited, the proposed grant of guarantee in respect of banking facilities granted to domestic subsidiaries of the Company, and the proposed appointment of Ernst & Young Hua Ming as accountants for the purpose of the A Share Issue 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 Tuesday, 8 September 2009, at 10 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 94 to 100 of this circular.

A notice convening the class meeting for holders of the H Shares of the Company to be held on Tuesday, 8 September 2009, at 11 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 101 to 105 of this circular.

— 9 —

LETTER FROM THE BOARD

A notice convening the class meeting for holders of the Domestic Shares of the Company to be held on Tuesday, 8 September 2009 at 11:30 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 106 to 110 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 meetings should you so wish.

9. RECOMMENDATION

The Directors consider that the proposed A Share Issue, the proposed grant of authority to the Board in connection to the A Share Issue, the proposed amendments to the Articles of Association, the Rules and Procedures of Shareholders’ General Meeting and the Usage Management System of Funds Raised of BYD Company Limited as respectively set out in Appendices I, II and III to this circular, the proposed grant of guarantee in respect of banking facilities granted to domestic subsidiaries of the Company, and the proposed appointment of the accountants for the purpose of the A Share Issue 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 at the Class Meetings.

10. GENERAL

There is no assurance that 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 PRC when the A Share Issue materialises and appropriate disclosure will be made by the Company in Hong Kong concurrently in accordance with the Listing Rules.

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

— 10 —

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Please note that the following proposed amendments to the 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.

CHAPTER 1 GENERAL PROVISIONS

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 Stock 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 registration No. is 440301501127941.

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, 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.

is amended as:

Article 1 To protect the legitimate interests of the Company, shareholders and creditors and regulate the organization and acts of the Company, the Articles of Association (hereinafter referred to as the “Articles of Association”) have been formulated in accordance with 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”) and other relevant regulations.

Guideline 1 of Articles of Association

The Company is a joint stock limited company incorporated in accordance with Company Law, “The Special Regulations of the State Council on the Overseas Offering and Listing of Shares by Joint Stock Limited Companies” (hereinafter referred as the “Special Regulations”) and other relevant laws and administrative regulations of the State.

— 11 —

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

The Company was established on 18 March 2002 by way of conversion approved by the State Economic and Trade Commission of the PRC through “an approval in relation to the conversion of BYD Company Limited into an overseas public subscription company 《關於同意比亞迪股份有限公( 司轉為境外募集公司的批復》（國經貿企) [2002]153號）(Guo Jing Mao Qi [2002] No. 153) “ and “an approval in relation to the adjustment of share capital structure of BYD Company Limited” 《關於同( 意比亞迪股份有限公司調整股本結構的覆函》（國經貿廳企改) [2002] 348號）(Guo Jing Mao Ting Qi Gai [2002] No. 348)) on 10 June 2002.The company was registered with Shenzhen Administration of Industry and Commerce and obtained its Business License on 11 June 2002. The number of the Company’s Business License is: 0857080.

The name of promoter shareholders of the Company, the number of shares subscribed by them and the shareholding percentage in the Company upon its establishment are as follows:

	Mandatory Provision 1	Mandatory Provision 1
	Number of	Percentage of
Name of shareholders	shares held	shareholding
	(0000)	(%)
Wang Chuan-fu	15,016.91	38.5046
Lu Xiang-yang	6,295.49	16.1423
Guangzhou Youngy Management &
Investment Group Co., Ltd.	4,480.07	11.4874
Xia Zuo-quan	3,288.87	8.4330
Yang Long-zhong	2,071.73	5.3121
Mao De-he	725.85	1.8612
Wang Nian-qiang	569.73	1.4608
Dai Chang	458.58	1.1758
Liu Wei-ping	422.51	1.0834
Gu Wei-ni	318.80	0.8174
Jia Yan-xiu	318.80	0.8174
Li Ke	312.75	0.8019
Li Wei	296.86	0.7612
Fang Fang	284.86	0.7304
Li Yong-guang	284.86	0.7304
Liu Huan-ming	284.86	0.7304
Lun Xu-feng	284.86	0.7304
Sun Yi-zao	284.86	0.7304
Wang Chuan-fang	284.86	0.7304
Wu Chang-hui	284.86	0.7304
Wu Jing-sheng	284.86	0.7304
Xiao Ping-liang	284.86	0.7304
Zhang Yi	284.86	0.7304

— 12 —

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

	Number of	Percentage of
Name of shareholders	shares held	shareholding
	(0000)	(%)
Yan Yue-qing	199.40	0.5113
Lu Guo-zhi	142.43	0.3652
He Zhi-qi	98.48	0.2525
Qu Bing	88.95	0.2281
Wan Qiu-yang	88.95	0.2281
Wang Hai-tao	88.95	0.2281
Xia Zhi-bing	88.95	0.2281
Xie Qiong	88.95	0.2281
Liu Wei-hua	88.95	0.2281
Wang Hai-quan	88.95	0.2281
Zhu Ai-yun	73.07	0.1874
Li Zhu-hang	73.07	0.1874
Zhang Jin-tao	73.07	0.1874
Xiao-feng	73.07	0.1874
Chen Gang	73.07	0.1874
He Long	73.07	0.1874
Deng Guo-rui	73.07	0.1874
Total	39000	100

On 11 June 2002, Shenzhen BYD Battery Company Limited (深圳市比亞迪實業有限公司 () was converted into a joint stock company with limited liability and the Company was established. The above promoters contributed to the Company with net assets they held in Shenzhen BYD Battery Company Limited in one lump sum on such establishment.

CHAPTER 2 BUSINESS OBJECTIVES AND SCOPE

The former Article 10 The scope of operations of the Company shall be defined by the projects approved by the companies registration authorities.

The business scope of the Company includes manufacture and sale of lithium batteries and other batteries, chargers, electronic devices, appliance charts, flexible printed circuits, hardware products, LCD screens, handset components, molds, plastic products, and their respective relevant accessories; general land cargo transportation as well as import and export of commodities and technologies (excluding distribution of imports).

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

is amended as:

Article 11 The scope of operations of the Company shall be defined by the projects approved by the companies registration authorities.

Mandatory Provision 10

The business scope of the Company includes manufacture and sale of lithium batteries and other batteries, chargers, electronic devices, appliance charts, flexible printed circuits, hardware products, LCD screens, handset components, molds, plastic products, and their respective relevant accessories; import and export of commodities and technologies (excluding distribution of imports) as well as general land cargo transportation.

Guideline 13 of Articles of Association

CHAPTER 3 SHARES, SHARE TRANSFERS AND REGISTERED CAPITAL

The former Article 11 There must at all times be ordinary shares in the Company. Subject to the approval from the companies approving department authorized by the State Council, the Company may create other classes of shares according to its requirements.

is amended as:

Article 12 The shares of the Company are evidenced by share certificates. There must at all times be ordinary shares in the Company. Subject to the approval from the companies approving department authorized by the State Council, the Company may create other classes of shares according to its requirements.

Guideline 14 of Articles of Association Mandatory Provision 11

Additions:

Article 14 The shares of the Company are issued on an open, fair and equitable basis. Shares of the same class shall rank pari passu in all respects among each other. For the same class of shares issued at the same time, the conditions and price of issue for each share shall be the same. For shares subscribed for by any entity or individual, each share shall have the same price.

Guideline 15 of Articles of Association

The subsequent Articles will be renumbered accordingly.

The former 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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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

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

is amended as:

Article 16:

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)”. Both holders of Domestic Shares and holders of Foreign Shares are ordinary shareholders enjoying identical rights and undertaking identical obligations.

Domestic Shares of the Company are centrally held in custody with the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited. All issues or transfers of Foreign Shares of the Company will be registered in the register of members of overseas listed foreign shares kept as required by Article 40 of the Articles of Association.

The former 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.

Mandatory Provision 16

Upon completion of the issue of the aforesaid Overseas Listed Foreign Shares, and subject to the approval at 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 completion of the above capitalisation of the capital common reserves, subject to the approval at the shareholders’ general meeting and the approval by the relevant regulatory authorities, the Company further issued an additional 225,000,000 overseas listed foreign shares. Upon completion of such capital increment and issue, the Company’s share capital structure was: 2,275,100,000 ordinary shares, of which 1,482,000,000 shares were held by holders of non-overseas listed foreign shares, representing 65.14% of the Company’s total ordinary shares in issue; 793,100,000 shares were held by holders of overseas listed foreign shares, representing 34.86% of the total ordinary shares in issue.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Upon completion of the above capital increment and issue, subject to the approval by way of a special resolution at the shareholders’ general meeting, and verification by the Securities Regulatory Authority 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, [●] ordinary shares are held by holders of non-overseas listed foreign shares prior to the current issue, representing [●]% of the Company’s total ordinary shares in issue; and 149,500,000 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.

is amended as:

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 , subject to the approval by way of a special resolution at the shareholders’ general meeting, and verification by the Securities Regulatory Authority of the State Council, the Company issued [●] shares of Domestic Shares.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Company’s total ordinary shares in issue; and 793,100,000 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 35 The directors, supervisors, president, vice president and other senior management officers of the Company shall within their terms of office regularly report to the Company and the stock exchanges 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.

is amended as:

Article 18 Shares of the Company held by the promoters shall not be transferred within one year commencing from the establishment of the Company. Shares issued prior to the initial public offering of Domestic Shares (A shares) of the Company shall be transferred in accordance with laws, administrative regulations and requirements under the relevant listing rules.

Directors, supervisors and senior administrative officers of the Company shall report to the Company shares of the Company held by them and any changes thereof, and shall not transfer more than 25% of the total number of shares held by them each year during their term of office, while shares of the Company held by them shall not be transferred within one year commencing from the date on which the shares of the Company were listed. The aforesaid persons shall not transfer the shares of the Company held by them within six months commencing from the termination of their service.

Within twelve months after six months from the date of submission of resignation by Directors, supervisors and senior administrative officers of the Company, the number of shares of the Company sold through listing on a stock exchange shall not be more than 50% of the total number of shares they held in the Company.

The former 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.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

is amended as:

Article 19 If the directors, supervisors, senior management officers, and Domestic 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 failed to perform in compliance with the above provision, the responsible directors shall be jointly and severally liable for such default.

The subsequent Articles will be renumbered accordingly.

The former Article 19 The registered capital of the Company is RMB2,275,100,000.

is amended as:

Article 24 The registered capital of the Company is RMB[●].

Note: [ ● ] above will be filled out with the actual registered capital of the Company after the A Share Issue.

Mandatory Provision 19

The former Article 21 All overseas listed foreign shares of the Company which are listed in Hong Kong shall observe the following provisions:

(I) All transfers of overseas listed foreign shares which are listed in Hong Kong shall be effected by written instruments of transfer in any usual or common form or in any other form acceptable to the board of directors. Such instrument of transfer shall be executed under hand or by machine imprinted signature without company seal.
(II) No transfer may be made to a minor or to a person of unsound mind or under other legal disability.
(III) Save as stipulated under the relevant laws, administrative rules and regulations, shares of the Company shall be free from any restriction on the right of transfer and shall also be free from all lien.

Save as stipulated under the relevant laws, administrative rules and regulations, shares of the Company shall be free from any restriction on the right of transfer and shall also be free from all lien.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

is amended as:

Article 26 All overseas listed foreign shares of the Company shall observe the following provisions:

Mandatory Provision 21

(I) All transfers of overseas listed foreign shares shall be effected by written instruments of transfer in any usual or common form or in any other form acceptable to the board of directors. Such instrument of transfer shall be executed under hand or by machine imprinted signature without company seal.
(II) No transfer may be made to a minor or to a person of unsound mind or under other legal disability.
(III) Save as stipulated under the relevant laws, administrative rules and regulations, shares of the Company shall be free from any restriction on the right of transfer and shall also be free from all lien.

The Special Regulations of Shenzhen Stock Exchange on companies listed on the SME Board.

All domestic listed RMB common shares shall observe the following provisions: Should such shares be de-listed on the domestic stock exchange, the domestic shares of the Company will continue to be traded under the agency share transfer system. The Company shall not amend this Article in the Articles of Association.

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 23

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 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.

Article 178 of Company Law

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

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

is amended as:

Article 28 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 the date of the Company’s resolution for reduction of capital and shall publish an announcement in one or more newspaper(s) designated by the securities regulatory authority of the State Council 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 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.

Article 178 of Company Law

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 Company;
(3) The Company awards its employees with shares;
(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;

is amended as:

Article 29 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:

Mandatory Provision 24

(1) Cancellation of shares for reduction of its capital;

Guideline 23 of Articles of Association

(2) Merging with another company that holds shares in the Company;

— 20 —

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Article 143 of Company Law

(3) The Company awards its employees with shares;
(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 Company shall not engage in the trading of its shares save for the circumstances specified above.

The former Article 27 After the repurchase of shares in accordance with the laws, the Company shall cancel or transfer such portion of shares within the time limit as provided under the laws and 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.

is amended as:

Article 32 After the repurchase of shares in accordance with the laws, the Company shall cancel or transfer such portion of shares within the time limit as provided under the laws and 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 29 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 shall not exceed 5% of the total number of shares of the Company in issue; the capital used for its purchase shall be derived from the after-tax profit of the Company; the shares purchased shall 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.

Mandatory Provision 27 Article 143 of Company Law Guideline 25 of Articles of Association

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

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

CHAPTER 6 SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS

The former Article 37 The Company shall maintain a register of shareholders as a record of the following matters:

(i) the name (title), address (residential) and occupation or nature of occupation of each shareholder;
(ii) the class(es) and number of shares held by each shareholder;
(iii) the amount(s) paid up or payable on the shares held by each shareholder;
(iv) the serial numbers of the shares held by each shareholder;
(v) the date on which each shareholder registers to be a shareholder;
(vi) the date on which each shareholder ceases to be a shareholder.

The register of shareholders shall be the due evidence for the holding of shares of our Company by a shareholder, except in cases with contrary evidence.

is amended as:

Article 39 The Company shall maintain a register of shareholders as a record of the following matters based on the proof provided by the securities registration authority:

Mandatory Provision 34

(i) the name (title), address (residential) and occupation or nature of occupation of each shareholder;

Guideline 30 of Articles of Association

(ii) the class(es) and number of shares held by each shareholder;
(iii) the amount(s) paid up or payable on the shares held by each shareholder;
(iv) the serial numbers of the shares held by each shareholder;
(v) the date on which each shareholder registers to be a shareholder;
(vi) the date on which each shareholder ceases to be a shareholder;
(vii) the number of shares held by shareholders that are subject to restrictions such as pledge, freezing and other restrictions.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

The register of shareholders shall be the due evidence for the holding of shares of our Company by a shareholder, except in cases with contrary evidence.

The former Article 40 The various parts of the register of shareholders shall not overlap one another. The transfer of shares registered in a certain part of the register of shareholders shall not, during the continuance of the registration of such shares, be registered in any other part of the register.

Mandatory Provision 37

All paid-up Overseas Listed Foreign Shares listed in Hong Kong can be transferred freely in accordance with the Articles of Association, however, the board of directors may refuse to recognize any instrument of transfer without stating any reason thereof unless the same meets the following conditions:

(1) a fee of HK$2.50 or such higher amount as agreed by the Hong Kong Stock Exchange has been paid to the Company for the registration of the instrument of transfer or other documents relating to or which will affect the ownership of the shares;
(2) the instrument of transfer only deals with Overseas Listed Foreign Shares which are listed in Hong Kong;
(3) the stamp duty payable for the instrument of transfer has been paid;
(4) the relevant share certificates and such other evidence as reasonably requested by the board of directors for evidencing the authority of the transferor to transfer the relevant shares are provided;
(5) in the event of transfer to joint holders, the number of joint holders shall not be more than four; and
(6) the relevant shares shall be free of any lien on the Company.

Changes and corrections to each part of the register of shareholders shall be carried out in accordance with the laws of the place where each part is kept.

is amended as:

Mandatory Provision 37

Article 42 The various parts of the register of shareholders shall not overlap one another. The transfer of shares registered in a certain part of the register of shareholders shall not, during the continuance of the registration of such shares, be registered in any other part of the register.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

All paid-up Overseas Listed Foreign Shares can be transferred freely in accordance with the Articles of Association, however, the board of directors may refuse to recognize any instrument of transfer without stating any reason thereof unless the same meets the following conditions:

(1) a fee of HK$2.50 or such higher amount as agreed by the Hong Kong Stock Exchange or such other stock exchange where the shares of the Company are listed has been paid to the Company for the registration of the instrument of transfer or other documents relating to or which will affect the ownership of the shares;
(2) the instrument of transfer only deals with Overseas Listed Foreign Shares which are listed in Hong Kong or other overseas regions;
(3) the stamp duty payable for the instrument of transfer has been paid;
(4) the relevant share certificates and such other evidence as reasonably requested by the board of directors for evidencing the authority of the transferor to transfer the relevant shares are provided;
(5) in the event of transfer to joint holders, the number of joint holders shall not be more than four; and
(6) the relevant shares shall be free of any lien on the Company.

Changes and corrections to each part of the register of shareholders shall be carried out in accordance with the laws of the place where each part is kept.

CHAPTER 7 SHAREHOLDERS’ RIGHTS AND OBLIGATIONS

The former Article 48 Shareholders of the Company’s ordinary shares enjoy the following rights:

(I) Receive dividends and division of earnings in other forms depending on its shares;
(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, regulations and the stipulations in the Articles of Association;
(V) Obtain relevant information in line with the Articles of Association, including:
obtain the Articles of Association after paying the cost;

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

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);
  - (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 other laws and administrative regulations and departmental rules and regulations;
(IX) Other rights conferred by laws, Administrative regulations and the Articles of Association.

— 25 —

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

is amended as:

Article 50 Shareholders of the Company’s ordinary shares enjoy the following rights:

Mandatory Provision 45

(I) Receive dividends and division of earnings in other forms depending on its shares;
```
    - Guideline 32 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:
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, president 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;

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

(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.

A shareholder who requests to inspect aforesaid information or to get materials shall produce written supporting documents to the Company to prove the category and number of the Company’s shares held by him. The Company shall provide the relevant information as requested by the shareholder upon certifying his capacity as a shareholder.

Additions:

Article 51 where a director or a senior administrative officer of the Company violates the laws, administrative regulations or the stipulations in the Articles of Association during the discharge of the Company’s duties causing damages to the Company, shareholders severally or jointly holding 1% or more of the Company’s shares for more than 180 consecutive days have the right to request the Supervisory Committee to initiate court proceedings at a people’s court; where the Supervisory Committee violates the laws, administrative regulations or the stipulations in the Articles of Association of the Company during the discharge of the Company’s duties causing damages to the Company, Shareholders may request in writing the Board of Directors to initiate court proceedings at a people’s court.

Where the Supervisory Committee or the Board of Directors refuses to initiate such court proceedings after receiving the request of the shareholders described in the preceding paragraph or does not initiate court proceedings within 30 days after receiving such request or fails to initiate court proceedings immediately for the emergencies, which will cause unrecoverable damages to the Company, the shareholders described in the preceding paragraph may initiate court proceedings directly in their names for the Company’s interests.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Where others infringe the Company’s lawful interests causing damages to the Company, the shareholders described in Paragraph 1 of this Article may initiate court proceedings according to the requirements in the preceding two paragraphs.

Where a director or a senior administrative officer of the Company violates the laws, administrative regulations or the stipulations in the Articles of Association of the Company and causing damages to the interests of shareholders, shareholders may initiate court proceedings at a people’s court.

Adjusted in sequence.

The former 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 shares subscribed and the method of subscription;
(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;
(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.

is amended as:

Article 52 Shareholders of the Company’s ordinary shares shall assume the following obligations:

Guideline 37 of Articles of Association

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

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Mandatory Provision 46

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

Where shareholders of the Company abuse shareholders’ rights causing damages to the Company or other shareholders, they should assume the obligation of compensation pursuant to law.

Where shareholders of the Company abuse the Company’s independent status as a legal person and shareholders’ limited liability to evade debts and seriously damage the interests of the Company’s creditors, they should assume the joint liability for the Company’s debts.

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

CHAPTER 8 SHAREHOLDERS’ GENERAL MEETINGS

The former 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:

(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 AMENDMENTS TO 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 at the general meeting. The aforesaid item (2) must be approved by two-thirds of the voting shares of the shareholders (including proxies) present at 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 are 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 are listed shall apply.

is amended as:

Article 59 Any external guarantee of the Company shall be considered and passed by the Board of Directors or the general meeting; the Company shall not provide guarantee before obtaining approvals of the Board of directors or the shareholder’s general meeting. 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%;
(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;

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Guideline 37 of Small and Medium Enterprise Board investors’ interests protection

Additions:

Article 61 Except for the cumulative voting system, all resolutions proposed at the shareholders’ general meeting shall be voted one by one, and for different motions on the same matter, voting will be conducted according to the time sequence these motions are put forward. Other than special reasons such as force majeure which results in the interruption of the meeting or makes it impossible to come to resolution, the shareholders’ general meeting shall not postpone the motions and shall vote on them.

Guideline 83 of Articles of Association

Adjusted in sequence.

The former 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 the Company’s important operation to such people.

is amended as:

Article 62 Except for special circumstances such as the Company being in a crisis, without approval by the shareholders’ general meeting in special resolution, 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 the Company’s important operation to such people.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

The former 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.

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, t the stock exchange on which the Company’s shares are listed or the Articles of Association.

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

is amended as:

Article 63 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, provided that the legality and effectiveness of the shareholders’ general meeting can be secured. Shareholders who attend shareholders’ general meetings in the aforesaid manners shall be deemed as present.

Any of the following matters considered at the general meeting shall be arranged through such ways as the trading system of the stock exchange and the online voting system for the convenience of shareholders’ attending the general meeting.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Guideline 25 of Small and Medium Enterprise Board investors’ interests protection

(I) Material asset reorganization of the Company, where the total price of the assets purchased represents a premium of 20% or above over the audited net carrying amount of the assets purchased;
(II) The material assets purchased or sold or amount guaranteed by the Company in a year is 30% higher than the latest audited total assets of the Company;
(III) Shareholders repay the debts due to the Company with the equity or assets in kind of the Company they hold;
(IV) A subsidiary that has significant influence over the Company goes public overseas;
(V) Relevant matters that have a significant impact on the interest of small and medium investors.

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;

Guideline 43 of 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 Supervisor 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 calculated as required in writing by the shareholder(s).

The former Article 65 A notice of meeting of shareholders shall:

(1) be in writing;
(2) specify the place, the date and time of the meeting;

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

(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 another, to repurchase shares, to reorganize 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.

is amended as:

Article 69 A notice of meeting of shareholders shall:

Mandatory Provision 53

(1) be in writing;
(2) specify the place, the date and time of the meeting;

Mandatory Provision 56

(3) state the matters to be considered at the meeting;
(4) provide such information and explanation as required by the stock exchange on which the Company’s shares are listed and are necessary for the shareholders to make an informed

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

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 reorganize 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.

If the election of directors, supervisors is proposed to be considered at the general meeting, the detailed information on the director, supervisor candidates shall be fully disclosed in the notice of general meeting which shall at least includes the following:

Guideline 56 of Articles of Association

(I) personal particulars such as education background, working experience and part-time posts etc.;
(II) whether there is any connected relationship with the Company or the controlling shareholder and effective controller of the Company;
(III) disclosure of shares held in the Company;
(IV) Whether they have been subject to the punishment of the securities regulatory authority of the State council and other relevant authorities and the reprimand of the stock exchange;
(V) Other information as required by the stock exchange on which the Company’s shares are listed.

Except for electing directors, supervisors under the cumulative voting system, each candidate for directors, supervisors shall be nominated by a single motion.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

The former 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.

is amended as:

Article 70 The notice of shareholders’ meeting shall be delivered to the holders of overseas-listed foreign shares (with or without voting power at the shareholders’ meeting) by the Company in person or by mail with postage paid to the addresses as recorded in the register of shareholders.

Mandatory Provision 57

For holders of Domestic Shares, such notice can be made in the form of a declaration.

After the notice of the general meeting is sent out, the general meeting shall not be postponed or cancelled, nor shall the proposals listed in the notice of the general meeting be withdrawn without proper reasons. In case the general meeting is postponed or cancelled, the convener shall make an announcement with reasons provided at least two working days prior to the original date of the shareholders’ general meeting.

Guideline 57 of Articles of Association

Any meeting and resolutions of such meeting shall not be invalidated in the event of any accidental omission in sending the notice of meeting to persons entitled to receive the same or that such persons have not received the notice of meeting.

Additions:

Article 71 The Board of Directors of the Company and other conveners shall take necessary steps to ensure the normal order of the shareholders’ general meeting. For any acts of causing disturbance to the meeting, picking a quarrel and causing trouble and acts infringing on the lawful interests of the shareholders, they shall take steps to restrain such acts and report such to the relevant authorities in a timely manner so as to investigate and deal with the matter.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Guideline 58 of Articles of Association

The former Article 68 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:

(I) the same right as such shareholder to speak at the shareholders’ general meeting;
(II) authority to demand or join in demanding a poll;
(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.

is amended as:

Article 72 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:

Mandatory Provision 59

必備條

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

The former Article 69 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 Chairman or an authorized person duly appointed.

is amended as:

Article 73 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 Chairman or an authorized person duly appointed.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Mandatory Provision 60

The proxy form for the appointment of a proxy to attend any general meeting by a shareholder shall contain the following:

Guideline 61 of Articles of Association

(i) Name of the proxy;
(ii) Indication of whether voting power is granted;
(iii) Instruction of voting “for”, “against” or “abstention” for each item for consideration included in the agenda of the general meeting;
(iv) Date of appointing a proxy and the effective period for such appointment;
(v) The appointer shall sign (or seal) the proxy form. If the appointer is a corporation, the proxy form must be affixed with the common seal.

Individual shareholders are entitled to attend any general meeting by presenting their identity cards or other valid credentials or supporting documents evidencing their identity and share account cards; proxies on behalf of shareholders are entitled to attend any general meeting by presenting their identity cards and powers of attorney.

The legal person shareholder is entitled to appoint a legal representative or a proxy on behalf of such legal representative to attend any general meeting. The legal representative is entitled to attend any general meeting by presenting his identity card, valid supporting documents evidencing his legal representative capacity; his proxy is entitled to attend any general meeting by presenting his identity card, power of attorney granted by the legal representative on behalf the legal person shareholder.

The Company is responsible for compiling the signatures of the personnel attending the meeting. The signature list states clearly names of personnel (or unit names) attending the meeting, ID card numbers, abode addresses, numbers of shares with voting rights held and represented and names of the appointers (or unit names).

The convener and the legal advisers retained by the Company shall verify the legal eligibility of the shareholders based on the register of shareholders provided by the securities registration and clearing authority and shall register the names of the shareholders together with the numbers of shares with voting rights in their possession. Before the chairman of the meeting declares the number of shareholders and proxies present at the meeting as well as the total number of shares with voting rights in their possession, registration for the meeting shall be ended.

The former Article 74 Resolutions passed at a shareholders’ general meeting are divided into ordinary resolutions and special resolutions.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

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.

is amended as:

Article 78 Resolutions passed at a general meeting are divided into ordinary resolutions and special resolutions.

Ordinary resolutions shall be passed by votes representing more than half of the voting rights held by shareholders (including shareholder proxies) present at the general meeting.

Special resolutions shall be passed by votes representing more than two-thirds of the voting rights held by the shareholders (including shareholder proxies) present at the general meeting.

Company Law 104

The former Article 75 When voting in the shareholders’ general meeting, a shareholder (including shareholder’s attorney) shall exercise its voting right with the number of voting stock represented by it, with one vote for each share, except that Directors and Supervisors are elected through the cumulative voting system under Article 79 of the Articles of Association. 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 based 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 such part of shares shall be excluded from the total number of voting shares represented by the shareholders attending the general meeting.

is amended as:

Article 79 When voting in the shareholders’ general meeting, a shareholder (including shareholder’s proxy) shall exercise its voting right with the number of voting stock represented by it, with one vote for each share, except that Directors and Supervisors are elected through the cumulative voting system under Article 83 of the Articles of Association. 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

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Stock Exchange Limited”(hereinafter referred to as “Hong Kong Listing Requirements”) or the listing rules of other stock exchange(s) on which the shares of the Company are listed, any of its schedules or any listing agreements, other contractual agreements entered into based on the above documents and decisions of The Hong Kong Stock Exchange Limited or other stock exchange(s) on which the shares of the Company are listed, 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 Board of Directors, independent directors and shareholders who satisfy relevant required conditions may collect voting rights from shareholders. The public collection of voting rights from shareholders of the Company shall comply with the provisions of the relevant regulatory authority and the stock exchange(s) on which the shares of the Company are listed.

Guideline 78 of the Articles of Association

Mandatory Provision 65

Guideline 78 of the Articles of Association

The former 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 Requirements or the following persons so request before or after voting by a show of hands:

(I) Chairman of the meeting;
(II) At least two shareholders or proxies of shareholders with voting rights;
(III) 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 80 The voting of resolutions put forward at a general meeting shall be conducted by open ballot.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Before a resolution is voted on at a general meeting, two representatives of the shareholders shall be elected as vote counters and scrutineers. Any shareholder who is interested in the matter under consideration and proxies of such shareholder shall not participate in vote counting or scrutinizing.

When the shareholders are voting on the resolutions, lawyers, shareholder proxies and representatives of the Supervisors shall count and scrutinize the votes jointly, and the voting results shall be announced forthwith. Voting results on the resolutions shall be recorded in the minutes of meeting.

Shareholders of the listed company or their proxies that vote online or by other ways shall have the right to check and inspect their voting results through the corresponding voting systems.

The end time for on-site general meeting shall not be earlier than the general meeting via internet or by other ways. The convener shall announce the voting results on each resolution, and announce whether the resolution is passed pursuant to the voting results.

Prior to the announcement of the voting results, any listed company, vote counter, scrutineer, substantial shareholder, network voting service provider and other relevant parties involving in the voting at on-site general meeting, via internet or other ways, hall bear the confidentiality responsibility for the voting results.

The same voting right shall only be exercised by one of the means including on-site, via internet or by other ways. In the event that the same voting right has been exercised twice, the results of the first voting shall prevail.

Shareholders attending the general meeting shall submit their voting in the following ways: “for”, “against” or “abstain from voting”.

Voting papers that are left blank, unduly completed or illegible or that have not been used, are deemed as void votes to mean that the voter has waived his rights, and the voting results corresponding to the shares in their possession shall be treated as “abstain from voting’’.

Mandatory Provision 66

Guideline 78 of the Articles of Association

The former Article 80 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.

Mandatory Provision 69

is amended as:

Article 84 In the event of equality of votes, the chairman of the meeting shall be entitled to an additional vote.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Mandatory Provision 69

The former 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;
(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.

is amended as:

Article 85 The following matters are required to be approved through an ordinary resolution at the general meeting:

(1) Working reports made by the Board of Directors and the 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 the Supervisory Committee, including any directors who are also the general manager of the Company or taking up other positions and their remunerations and payment methods;
(4) The Company’s annual budget and final account reports, balance sheet, profit and loss statement and other financial statements;
(5) The Company’s annual report;
(6) Matters other than those that should be adopted through a special resolution as required by laws, administrative regulations, departmental regulations or rules of the stock exchange(s) on which the shares of the Company are listed and the Articles of Association.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

The former Article 82 The following are adopted at the general meeting through a special 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 the Company’s debentures;
(3) Division, merge, dissolution and liquidation of the Company;
(4) Revision of the Articles of Association;
(5) The Company’s acquisition or disposal of major assets within one year with the transaction amount exceeding 30% of the latest audited total assets of the Company;
(6) Approval of equity incentive scheme;
(7) Other matters as required by laws, administrative regulations or the Articles of Association, or adopted at 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 Hong Kong Listing Rules.

is amended as:

Article 86 The following matters are required to be approved through a special resolution at the general meeting:

(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 the Company’s debentures;
(3) Division, merge, dissolution and liquidation of the Company;
(4) Amendments to the Articles of Association;
(5) The Company’s acquisition or disposal of major assets within one year with the transaction amount exceeding 30% of the latest audited total assets of the Company;
(6) Approval of equity incentive scheme;
(7) Other matters required to be approved through a special resolution as required by laws, administrative regulations or the Articles of Association, or are considered to exert great influence on the Company through an ordinary resolution at the general meeting;

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

(8) Other matters as required by the Listing Rules of the stock exchange(s) on which the shares of the Company are listed and other regulatory documents.

Mandatory Provision 71

Guideline 77 of the Articles of Association

The former 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:

(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 resolution 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 resolution 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 resolution made by the shareholders to convene the shareholders’ extraordinary general meeting, shareholders shall make a written resolution to the Supervisory Committee for convening such meeting.

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 resolution shall be made without the prior consent of the proposing shareholders.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

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.

is amended as:

Article 87 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 by the following procedures:

(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.

Independent directors are entitled to propose to the Board of Directors the convening of an extraordinary general meeting. The Board of Directors shall, in accordance with laws, administrative regulations and the Articles of Association, furnish a written reply stating its agreement or disagreement to the convening of an extraordinary general meeting within 10 days after receiving such proposal from the independent directors.

The Supervisory Committee is entitled to propose the convening of an extraordinary general meeting to the Board of Directors, provided that such proposal shall be made in writing. The Board of Directors shall, in accordance with laws, administrative regulations and the Articles of Association, furnish a written reply stating its agreement or disagreement to the convening of an extraordinary general meeting within 10 days after receiving such proposal

(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 resolution for the consent of the original proposer.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

(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 resolution 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 resolution made by the shareholders to convene the shareholders’ extraordinary general meeting, shareholders shall make a written resolution to the Supervisory Committee for convening such meeting.

If the Supervisory Committee 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. The convening shareholder(s) shall submit relevant evidence to the local office of the securities regulatory authority of the State Council at the locality of the Company and the stock exchange(s) upon the issuance of the notice of general meeting and the announcement on the resolutions of the general meeting.

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 shall report to the local office of the securities regulatory authority of the State Council at the locality of the Company and the stock exchange(s) for record. The Board of Directors and Board secretary shall be cooperative in relation to the meeting, and the Board of Directors 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.

Guideline 46-51 of the Articles of Association

Addition:

Article 89 At the annual general meeting, the Board of Directors and the Supervisory Committee shall report to the general meeting for their work over the previous year, and each of the independent directors shall also submit his/her work report.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Guideline 69 of the Articles of Association

Article 91 The chairman of the meeting shall before voting declare the total number of shareholders and proxies present at the meeting in person, as well as the total number of shares carrying voting rights held by them, which shall be based on the register of the meeting.

Guideline 71 of the Articles of Association

Article 92 The Company shall formulate the rules of procedures for general meetings, which stipulate procedures for convening the general meeting and voting procedures, including notice, registration, consideration of resolutions, voting, vote counting, announcement of voting results, resolutions of the meeting, the meeting minutes and signing thereof, announcement etc., and the principles for the general meeting authorizing the Board of Directors and the scope of authorization shall be clear and specific. The rules of procedures for general meetings shall be an appendix to the Articles of Association, which shall be drawn up by the Board of Directors and approved at the general meeting.

Guideline 68 of the Articles of Association

The former Article 85 The chairman of the meeting decides whether a resolution of the shareholders’ general meeting has been approved or not, with such decision being final, and shall announce it and enter it in the minutes of the meeting.

is amended as:

Article 93 The chairman of the general meeting shall decide whether a resolution put forward at the meeting has been approved or not, with such decision being final, and shall announce it and enter it in the minutes of the meeting.

Resolutions passed at a general meeting shall be announced timely, and the announcement shall contain the number of shareholders and proxies present, the total number of shares carrying voting rights held by them and their percentage to the total number of shares carrying voting rights of the Company, means of voting, the voting result for each resolution and the details of each of the resolutions, and statistics in relation to the attendance of the holders of domestic shares and the holders of foreign shares at the meeting and their voting shall be compiled and announced.

If a resolution is not passed, or if a resolution of the previous general meeting is changed by the present general meeting, special notes in connection therewith shall be made in the announcement on the resolutions of the general meeting.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Mandatory Provision 74

Mandatory Provision 91

Addition:

Article 94 In the event that a resolution in relation to the election of Directors or Supervisors is passed at a general meeting, those newly elected shall assume office on the date on which the resolution is passed or at the time specified at the general meeting.

Guideline 93 of the Articles of Association

Article 95 Should a general meeting pass a resolution regarding cash distribution, bonus issue or the transfer of surplus reserve into share capital, a specific plan shall be implemented within 2 months after the end of the general meeting or such shorter period as required by the applicable laws, administrative regulations and departmental regulations and the stock exchange(s) on which the shares of the Company are listed.

Guideline 94 of the Articles of Association

Addition:

Article 97 If the Company convenes a general meeting, it shall engage a lawyer to issue legal
opinions on the following matters and make an announcement in respect thereof: (1) whether the convening of the general meeting and its procedures are in compliance with the requirements of laws, administrative regulations and the Articles of Association;
(2) whether the qualification of the attendants and convener is legal and valid;
(3) whether the procedures and results of voting of the meeting are legal and valid;
(4) legal opinions on other relevant matters at the request of the Company.

Guideline 45 of the Articles of Association

The former Article 87 If the votes are counted at a shareholders’ general meeting, the result of such counting shall be recorded in the minutes of the meeting.

Shareholders’ general meetings shall have minutes, which shall be recorded by the Board secretary and signed by the 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.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

is amended as:

Article 99 If the votes are counted at a shareholders’ general meeting, the result of such counting shall be recorded in the minutes of the meeting.

The minutes of the meeting shall specify:

(1) the time, venue and agenda of the meeting, and the name of the convener;
(2) the names of the chairman, and the directors, supervisors, president and other senior executives attending or present at the meeting;
(3) the number of shareholders and proxies attending the meeting, the total number of shares carrying voting rights held by the them, and their percentage to the total number of shares of the Company;
(4) the consideration process of each resolution, summaries of speeches, and the voting results in relation to each resolution;
(5) details of the inquiries or suggestions made by the shareholders, and the responses or explanations given;
(6) the names of the lawyer, the vote counter and the scrutineer;
(7) the number of shares carrying voting rights held by holders of domestic shares (including proxies thereof) and holders of domestic listed foreign shares (including proxies thereof) attending the general meeting, and their percentage to the total shares of the Company; the results of voting by holders of domestic shares and holders of domestic listed foreign shares on each resolution.
(8) Anything else to be included in the minutes as required by the Articles of Association.

Mandatory Provision 76

Guideline 73 of the Articles of Association

Guideline 72 of the Articles of Association

Addition:

Article 100 The convener should ensure the truthfulness, accuracy and completeness of the minutes of the meeting. The Directors, Supervisors, the secretary to the Board, the convener or his/her

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

representative and the chairman of the meeting shall sign on the minutes of the meeting. The minutes of the meeting should be maintained together with the book of signatures of shareholders present in person and powers of attorney of their proxies, and valid information on voting via the Internet and other means at the residence of the Company for a period of not less than 10 years

Guideline 73 of the Articles of Association

Article 101 When a resolution is considered at the general meeting, no change shall be made thereto; otherwise, the relevant change shall be treated as a new resolution which shall not be voted at the then general meeting.

The convener shall ensure the general meeting is held without adjournment until the final resolution is reached. Where special reasons such as force majeure have led to the suspension of the meeting or no resolution can be made, necessary measures shall be taken to resume the meeting, or to end the meeting directly with a timely announcement. Meanwhile, the convener shall report to the local office of the securities regulatory authority of the State Council at the locality of the Company and the stock exchange(s).

Guideline 84 of the Articles of Association

CHAPTER 10 BOARD OF DIRECTORS

The former Article 98 The Board of Directors shall be elected by the shareholder’s general meeting. The term of office of a director shall be of three years. A director may serve consecutive terms if re-elected upon the expiration of his/her term.

The chairman and deputy chairman shall be elected and removed by more than half of all members of the Board. The term of office of the chairman and deputy chairman shall be for three years, renewable upon re-election.

The intention of candidates being nominated as directors and the written notice of candidates expressing their willingness to accept the nomination shall be delivered to the Company on or after the day of notice of the relevant shareholders’ general meeting and seven days prior to the shareholders’ general meeting.

is amended as:

Article 112 A director shall be elected or removed by the shareholders’ general meeting and his/her term of office shall be three years. A director may serve consecutive terms if re-elected upon the expiration of his/her term.

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Guideline 96 of Articles of Association

The term of office of a director shall commence from the date on which he/she takes his/her position to the expiration of the term of the current board. If no re-election is timely carried out upon the expiration of a director’s term of office, the incumbent director shall perform his/her duties as a director in accordance with laws, administrative regulations, departmental regulations and the Articles of Association until a substitute director is elected and takes his/her position.

The President or other senior officers may concurrently serve as a director, provided that the aggregate number of the directors who concurrently serve as President or other senior officers shall not exceed one half of all the directors of the Company.

The chairman and deputy chairman shall be elected and removed by more than half of all members of the Board. The term of office of the chairman and deputy chairman shall be three years, renewable upon re-election.

Additions:

Article 114 The Board of Directors shall give explanations at the shareholders’ general meeting on the modified audit opinions issued by the certified public accountant on the Company’s financial reports.

Guideline 108 of Articles of Association

Article 115 The Board of Directors shall formulate rules of procedures of its meetings to ensure that the Board of Directors have put into action the resolutions passed at the shareholders’ general meeting so as to promote work efficiency and make scientific decisions. This rule provides the procedures for convening and voting of Board meetings shall be drawn up by the Board of Directors for approval at the shareholders’ general meeting.

Guideline 109 of Articles of Association

The former Article 122 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.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

is amended as:

Article 116 The Board of Directors shall establish strict examination and decision making procedures by setting the scope of authority for overseas investment, acquisition and disposal of assets, asset pledge, external guarantee, entrusted wealth management and related party transactions. In respect of major investment projects, the Board of Directors shall organize relevant experts and professionals to make assessments, and submit them to the shareholders’ general meeting for approval.

Guideline 110 of Articles of Association

For any of the Company’s transactions (except the Company accepting donation of any assets in cash) meeting one of the following criteria, it shall be submitted to the shareholders’ general meeting for consideration. Save as those that need to be considered at the shareholders’ general meeting, any other transactions shall be considered and approved by the Board of Directors, or decided by the President within his/her authority.

(i) Total assets (book value or assessed value, whichever is higher) involved in a transaction exceed 50% of the latest audited total assets of the Company;
(ii) The operating revenue for the latest accounting year generated by the target (such as equity) of the transaction exceeds 50% of the audited operating revenue of the Company for the latest accounting year, and the absolute amount exceeds RMB50 million;
(iii) The net profit for the latest accounting year generated by the target (such as equity) of the transaction exceeds 50% of the audited net profit of the Company for the latest accounting year, and the absolute amount exceeds RMB5 million;
(iv) The consideration (including liabilities and expenses) exceeds 50% of the latest audited net assets of the Company and the absolute amount exceeds RMB50 million;
(v) The profit generated from the transaction exceeds 50% of the audited net profit of the Company for the latest accounting year, and the absolute amount exceeds RMB5 million;

Should any of the figures used in the calculation of indicators as mentioned above is negative, its absolute value shall be used for calculation.

For the acquisition and disposal of any assets, which represent more than 30% of the latest audited total assets of the Company, by the Company within one year, it shall be submitted to the shareholders’ general meeting for consideration and approval by a special resolution after consideration and approval by the Board of Directors. However, for such transactions wherein only the amount stated in (iii) or (v) above reaches or exceeds 50%, and the absolute value of earnings per share of the Company is less than RMB0.05 for the latest accounting year, it may not be submitted to the shareholders’ general meeting for consideration, but shall be considered and determined by the Board of Directors.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Other than guarantees that need to be submitted to the shareholders’ general meeting for consideration as provided in Article 59, any other external guarantees provided by the Company shall be approved by the Board of Directors.

In the event that a connected transaction between the Company and a connected party involves a transaction amount of more than RMB30 million, accounting for more than 5% of the absolute value of the latest audited net assets of the Company, it shall be submitted to the shareholders’ general meeting for consideration after consideration and approval by the Board of Directors. Other connected transactions may be conducted in accordance with relevant laws, regulations, rules, requirements of the stock exchange where shares of the Company are listed, and the system otherwise formulated by the Company.

In the event there are special requirements imposed by laws, administrative regulations, departmental regulations, the securities regulatory authority of the State Council and the stock exchange where shares of the Company are listed on the authority of examination and approval in respect of overseas investment, acquisition or disposal of assets, entrusted wealth management, asset pledge and external guarantees, such transactions shall be conducted in accordance with the requirements of the securities regulatory authority of the State Council and the stock exchange where shares of the Company are listed.

The former 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.

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 shareholders’ 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.

is amended as:

Article 119 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. The Board of Directors shall disclose relevant information within two (2) days.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Guideline 100 of Articles of Association

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

On a Director’s resignation becoming effective or termination of the tenure of his/her office, the Director shall complete all handover procedures to the Board of Directors.

Shareholders individually or collectively holding more than 1% of shares of the Company may challenge or propose removal against the independent directors to the Board of the Directors under the belief that such independent directors have no qualification or competency to discharge their duties or fail to perform their duties or fail to safeguard the lawful interest of the Company and the middle and small investors therein. The subject independent directors shall promptly explain their matters being challenged and disclose relevant information. The Board of Directors of the Company shall convene a special meeting for discussion promptly after its notice of any challenge or removal proposals, and disclose the outcome of discussion.

Article 32 of the “Guidelines on the Protection of the Rights and Interests of Investors on the SME Board”

Additions:

Article 123 The Vice Chairman shall assist the Chairman with his/her work. If the Chairman fails to or does not perform his/her duties, such duties and powers shall be exercised by the Vice Chairman (where there are two or more Vice Chairmen present, the Vice Chairman nominated by half or more directors shall take over the role) on his/her behalf as designated by the Chairman. If the Vice Chairman fails to or does not perform his/her duties, the duties shall be performed by a director collectively elected by a majority of directors.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Guideline 113 of Articles of Association

The former Article 108 Notices of Board meetings and extraordinary Board meetings shall be delivered by: telephone and facsimile; and time limit of notice shall be: regular Board meetings: 14 days before the convening of the meeting; extraordinary Board meetings: 2 days before the convening of the meeting.

is amended as:

Article 125 Notices of Board meetings and extraordinary Board meetings shall be delivered by: telephone and facsimile; and time limit of notice shall be: regular Board meetings: 14 days before the convening of the meeting; extraordinary Board meetings: 2 days before the convening of the meeting.

Guideline 117 of Articles of Association

The notice of Board meetings shall include the following:

(i) Meeting Date and Venue;
(ii) Meeting Duration;
(iii) Contents and Topics;
(iv) Date of Notice.

The former Article 109 A Board meeting can only be convened if more than half of the directors are present.

Each director shall have one vote. A resolution of the Board of Directors must be passed by more than half of all the 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.

is amended as:

Article 126 A Board meeting may not be held unless a majority of the directors are present.

Each director shall have one vote. A resolution of the Board of Directors must be passed by more than half of all the directors.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Company Law 112

In the event of equal pros and cons, the chairman shall be entitled to one additional vote.

A 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 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 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.

is amended as:

Article 128 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 meeting 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.

Mandatory Provision 95

Minutes of Board meetings shall include the following:

Guideline 123 of Articles of Association

(i) session and the time, venue and form of the meeting;
(ii) sending of the notice of meeting;
(iii) persons convening and presiding at the meeting;

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

(iv) attendance and proxy attendance of directors;
(v) procedure and process of the meeting;
(vi) the proposals considered at the meeting, major 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.

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

Delete the former Article 115 to Article 121.

Additions:

Article 132 The independent directors shall act according to the relevant laws, administrative regulations, departmental regulations and the requirements of the stock exchange where shares of the Company are listed.

CHAPTER 11 SECRETARY TO THE BOARD OF DIRECTORS OF THE COMPANY

The former Article 123 The board secretary of the Company shall be a natural person who has the requisite professional knowledge and experience, and shall be appointed by the Board of Directors. The primary responsibilities of the board secretary are:

(i) to ensure that Company has maintain complete constitution documents and records;
(ii) to ensure that the Company prepares and delivers in accordance with law those reports and documents required by competent authorities entitled thereto (including but not limited to the Administration of Industry and Commerce);
(iii) to ensure that the Company’s registers of shareholders are properly maintained, and that persons entitled to the Company’s records and documents are furnished with such records and documents without delay;
(iv) to perform the responsibilities and obligations (including all those as reasonably required by the Board of Directors) that a board secretary is held responsible for by laws, the regulatory body of the jurisdiction where the Company is listed and/or the provisions in this Articles.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

is amended as:

Article 134 The secretary to the board of the Company shall be a natural person who has the requisite professional knowledge and experience, and shall be appointed by the Board of Directors. The primary responsibilities of the secretary to the board are:

(i) to ensure that the Company has maintained complete constitution documents and records;
(ii) to ensure that the Company prepares and delivers in accordance with law those reports and documents required by competent authorities entitled thereto (including but not limited to the Administration of Industry and Commerce);
Mandatory Provision 97
(iii) to ensure that the Company’s registers of shareholders are properly maintained, and that persons entitled to the Company’s records and documents are furnished with such records and documents without delay;

Guideline 133 of Articles of Association

(iv) to prepare for shareholders’ general meetings and board meetings of the Company, keep documents and manage shareholders’ information of the Company, and arrange for information disclosure and other affairs;
(v) to perform the responsibilities and obligations (including all those as reasonably required by the Board of Directors) that a secretary to the board is held responsible for by laws, the regulatory body of the jurisdiction where the Company is listed and/or the provisions in the Articles of Association.

CHAPTER 12 PRESIDENT OF THE COMPANY

The former Article 125 The Company shall have one president, who is appointed or dismissed by the Board of Directors.

The Company shall have several vice presidents, who is appointed or dismissed by the Board of Directors.

Guideline 124 of Articles of Association

is amended as:

Article 136 The Company shall have one president, who is first nominated by the Chairman, and appointed or dismissed by the Board of Directors.

The Company shall have several vice presidents and one chief financial officer, who are first nominated by the President, and appointed or dismissed by the Board of Directors.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Guideline 124 of Articles of Association

Additions:

Article 141 The president shall draw up “Work Regulations for the President” upon the approval of the Board of Directors.

Guideline 129, 130 of Articles of Association

The Work Regulations for the President shall include:

(i) requirements and procedures for the convening of a president’s meeting and the officers attending;
(ii) the respective specific duties of the President and other senior officers and the division of such duties;
(iii) use of the Company’s funds and assets, authority to sign major contracts and the system to report to the Board of Directors and the supervisory committee;
(iv) other matters as the Board of Directors may consider necessary.

The President may resign before his term of office expires. The procedure and rules for the resignation of the President shall be specified in the labor contract between the President and the Company.

CHAPTER 13 SUPERVISORY COMMITTEE

The former Article 133 Independent supervisors and Shareholder representative Supervisor shall be elected and removed by the shareholders’ 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/her 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 not made responsively or if any supervisor resigns during his 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.

is amended as:

Article 144 Independent supervisors and shareholder representative supervisors shall be elected and removed by the shareholders’ general meeting, while staff representatives shall be elected and removed by the staff of the Company democratically.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Mandatory Provision 105

The Supervisory Committee shall have one chairman. His/her appointment and dismissal shall be adopted by over two thirds of the supervisors.

If the term of office of a supervisor expires but re-election is not made responsively or if any supervisor resigns during his 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 a supervisor pursuant to relevant laws, administrative regulations and the Articles of Association until a new supervisor is elected.

Guideline 138 of Articles of Association

The supervisors shall ensure the information disclosed by the Company is true, accurate and complete.

Guideline 139 of Articles of Association

The former Article 135 The Supervisory Committee shall convene a meeting at least twice a year. The meetings shall be convened by the chairman of the Supervisory Committee.

is amended as:

Article 147 Meetings of the Supervisory Committee shall be held at least every six months, and shall be convened and presided over by the chairman of the Supervisory Committee. Should the chairman of the Supervisory Committee be unable to, or fail to perform his/her duties, the vice chairman thereof shall convene and preside over the meeting; Should the vice chairman of the Supervisory Committee be unable to, or fail to perform his/her duties, a supervisor elected by more than half of the supervisors shall convene and preside over the meeting. Under justifiable reasons, supervisors are entitled to request the chairman of the Supervisory Committee to convene an extraordinary meeting of the Supervisory Committee.

Company Law 120

The Supervisory Committee shall give notices by way of telephone or facsimile. The notices shall include the date, venue, duration, contents, topics of the meeting and the date on which the notice is sent. The time limits for notifications are: regular meetings: fourteen (14) days before convening the meeting; extraordinary meetings: two (2) days before convening the meeting.

Additions:

Article 149 The Supervisory Committee shall formulate rules of procedures of its meetings and define the discussion methods and voting procedure of Supervisory Committee to assure the work

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

efficiency of and scientific decision-making by Supervisory Committee. The rules of procedures for Supervisory Committee meetings specify the convening and voting procedure of Supervisor Committee meetings, and as an appendix to the Articles of Association shall be formulated by the Supervisory Committee and approved at the shareholders’ general meeting.

Guideline 146 of Articles of Association

The former Article 138 The Supervisory Committee shall maintain records of its meetings. The supervisors shall be entitled to make particular illustrative statements regarding their opinions expressed at the meeting recorded in the minutes. The minutes of a meeting shall be signed by the attending supervisors and the recorder.

is amended as:

Article 150 The Supervisory Committee shall maintain records of its meetings. The supervisors shall be entitled to make particular illustrative statements regarding their opinions expressed at the meeting recorded in the minutes. The minutes of a meeting shall be signed by the attending supervisors and the recorder.

Guideline 147 of Articles of Association

Minutes of the meetings of the Supervisory Committee shall be kept as records of the Company for a period of at least ten years.

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

The former 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;

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APPENDIX I PROPOSED AMENDMENTS TO 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 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:
disclosure is required by the law;
the interests of the public require disclosure;
the interests of the relevant director, supervisor, general manager or other senior administrative officers require disclosure.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

is amended as:

Article 161 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;
(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;

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

(12) Not to take advantage of their connected relationship with the Company to act in detriment to the interests of the Company;
(13) 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;
the interests of the relevant director, supervisor, general manager or other senior administrative officers require disclosure.
(14) Other duties as required by laws, administrative regulations, departmental regulations and the Articles of Association.

Save as disclosed above, the Company’s directors, president and other senior management officers shall also perform the following duties of loyalty and diligence:

(1) Faithfully sign confirmation opinion in writing for periodic reports of the Company and ensure the truthfulness, accuracy and completeness of the information disclosed by the Company;
(2) Provide faithfully the relevant information and materials to the supervisory committee, and not impede the supervisory committee or supervisors from exercising their functions and powers;
(3) Other duties of loyalty and diligence as required by laws, administrative regulations, departmental regulations and the Articles of Association.

The directors shall also exercise cautiously, conscientiously and diligently the rights granted by the Company, so as to ensure that the Company’s business acts are in line with the national laws, administrative regulations as well as the requirements of various national economic policies and that business activities are within the business scope prescribed in the business licence, and gain a timely insight into the business operation and management position of the Company.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

The former 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.

is amended as:

Mandatory Provision 117

Article 163 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:

(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;

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

(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 Hong Kong Listing Rules or rules of other stock exchange(s) on which the Company’s shares are listed) of such directors, supervisors, president and other senior administrative officers.

CHAPTER 15 FINANCIAL ACCOUNTING SYSTEMS AND PROFIT DISTRIBUTION

The former Article 172 The Company shall issue four financial reports in every accounting year, i.e. the firstly quarterly financial report 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.

is amended as:

Article 184 The Company shall issue four financial reports in every accounting year, i.e. the firstly quarterly financial report 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. Such reports shall be submitted to the securities regulatory authority of the State Council and the stock exchange on which the Company’s shares are listed in accordance with relevant regulations.

Guideline 150 of Articles of Association

These financial reports shall be prepared in accordance with the relevant laws, administrative regulations and departmental rules.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

The former Article 177 The Company may distribute the dividends in the following forms (or adopting both forms at the same time):

(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.

is amended as:

Article 189 The Company’s profit distribution policy is: profits shall be distributed in proportion to the shareholdings of shareholders; profits may be distributed in cash or in the form of shares; the Company adopts an aggressive profit distribution policy which focuses on generating reasonable returns for investors and the sustainable development of the Company and maintains the continuity and stability of its profit distribution policy; the Company shall give priority to cash dividends and the board of directors is responsible for formulating the distribution plan; in case the board of directors does not prepare any cash profit distribution plan, the Company shall disclose the reason thereof in periodic reports and the independent directors shall issue an independent opinion in this regard.

Mandatory Provision 139 Decision of the China Securities Regulatory Commission on Revising Certain Regulations for the Distribution of Cash Dividends by Listed Companies

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 the period specified in Article 95 of the Articles of Association. Those payable to holders of Overseas Listed Foreign Shares shall be declared and calculated in RMB, and paid in foreign currency within the period specified in Article 95 of the Articles of Association. 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.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

The former 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.

is amended as:

Article 194 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.

Guideline 152 of Articles of Association

In case the shareholders’ meeting violates the provisions of the preceding paragraph by distributing profits to shareholders before the Company covers its losses and makes allocations to its statutory common reserve fund, shareholders must refund the profits so distributed to the Company.

CHAPTER 16 APPOINTMENT OF ACCOUNTANT FIRM

The former Article 187 The accountant firm appointed by the Company shall hold office from the conclusion of the annual general meeting until the conclusion of the next annual general meeting. Upon expiry, the appointment may be renewed.

is amended as:

Article 199 The accountant firm appointed by the Company shall hold office from the conclusion of the annual general meeting until the conclusion of the next annual general meeting. Upon expiry, the appointment may be renewed.

Guideline 160 of Articles of Association

The Company guarantees the accountant firm appointed will be provided true and complete accounting certificates, accounting books, financial and accounting reports and other accounting information, without refusal, concealment and false reports.

Guideline 161 of Articles of Association

Audit fees of the accountant firm shall be determined at the general meeting.

The former 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.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

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.
(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.

is amended as:

Article 203 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.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Mandatory Provision 147

Guideline 159 of Articles of Association

(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 PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Mandatory Provision 146

The former Article 191 The remuneration of the accountant firm or the method for determining the remuneration shall be determined at the general meeting. The remuneration of the accountant firm retained by the board of directors shall be determined by the board of directors.

is amended as:

Article 205 Where an accountant firm is appointed by the board of directors to fill up a vacancy, its remuneration shall be determined by the board of directors and reported to the general meeting for approval. Save for the appointment of an accountant firm provided in Article 198 of the Articles of Association, the remuneration of other accountant firms retained by the board of directors shall be determined by the board of directors.

CHAPTER 17 MERGER AND DIVISION OF THE COMPANY

The former Article 194 In the event of any merger or division of the Company, the board of directors shall submit proposals to be approved in accordance with the procedures as stipulated in the Articles of Association, before going through the relevant examination and approval procedures as required by laws. Shareholders who object to the proposal of merger or division are entitled to request the Company or shareholders who agree to the proposal to purchase their shares at a fair price. Resolutions on merger or division shall be taken as a special document for inspection by shareholders.

The aforesaid document shall also be sent by mail to the holders of overseas listed foreign shares in a company listed in Hong Kong.

is amended as:

Article 206 In the even of any merger or division of the Company, the board of directors shall submit proposals to be approved in accordance with the procedures as stipulated in the Articles of Association, before going through the relevant examination and approval procedures as required by laws. Shareholders who object to the proposal of merger or division are entitled to request the Company or shareholders who agree to the proposal to purchase their shares at a fair price. Resolutions on merger or division shall be taken as a special document for inspection by shareholders.

The aforesaid document shall also be sent by mail to the holders of overseas listed foreign shares.

The former 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 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.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

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.

is amended as:

Article 207 The merger of the Company may take the form of either merger by consolidation or by new establishment.

Mandatory Provision 150

In the case of merger by consolidation, a company acquires another company and the company acquired is dissolved; in the case of merger by new establishment, two or more companies consolidate together to form a new company, and all parties involved in consolidation are dissolved.

Guideline 171 of Articles of Association

In the event of merger of the Company, the parties involved in the merger shall execute a merger agreement and prepare a balance sheet and a list of assets. The Company shall notify the creditors within 10 days from the date of the merger resolution and shall make announcements for at least three times in one or more newspapers designated by the securities regulatory authority of the State Council within 30 days therefrom. The creditors may, within 30 days after receipt of notice or within 45 days from the announcement of any merger if the creditors have not received any notice, demand repayment of debts in full or a guarantee to be provided by the Company.

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 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 a list of assets. The Company shall notify its creditors within ten days of the date of the Company’s resolution to divide and shall make announcements in one or more newspapers designated by the securities regulatory authority of the State Council within thirty days of the date of the Company’s resolution to divide.

Company Law 177

Debts of the Company prior to division shall be assumed by the company which exists after the division, except provided otherwise in the agreement reached between the Company and the creditors relating to the repayment of debt before the division.

is amended as:

Article 208 When the Company is divided, its assets shall be split up accordingly.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

In the event of division of the Company, the parties to such division shall execute a division agreement and prepare a balance sheet and a list of assets. The Company shall notify its creditors within ten days of the date of the Company’s resolution to divide and shall make at least three announcements in one or more newspapers designated by the securities regulatory authority of the State Council within thirty days of the date of the Company’s resolution to divide.

The former Article 197 Changes in registration particulars of the Company caused by merger or division shall be registered with the company registration authorities in accordance with law. Registration of a company shall be cancelled in accordance with law when a company is dissolved. Incorporation of a company shall be registered when a new company is incorporated in accordance with law.

is amended as:

Article 209 Changes in registration particulars of the Company caused by merger or division shall be registered with the company registration authorities in accordance with law. Registration of a company shall be cancelled in accordance with law when a company is dissolved. Incorporation of a company shall be registered when a new company is incorporated in accordance with law.

Guideline 177 of Articles of Association

In the event of any increase or reduction in its registered capital, the Company shall complete formalities for changes in particulars of registration with the company registration authorities in accordance with law.

CHAPTER 18 DISSOLUTION AND LIQUIDATION OF THE COMPANY

The former 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;

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APPENDIX I PROPOSED AMENDMENTS TO 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 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.

is amended as:

Article 210 The Company shall be dissolved and liquidated under any of the following circumstances:

Mandatory Provision 153

(1) Expiry of the operation term or occurrence of other causes of dissolution provided in the Articles of Association;
(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 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.

The former Article 200 Where the Company is dissolved under clause (1), (2), (5) and (6) of Article 196, 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 (2) of Article 196, the parties involved in the consolidation or division shall carry out liquidation procedures in accordance with the contract entered into upon consolidation or division.

Where the Company is dissolved under clause (3) of Article 196, the relevant governing authorities shall organise the shareholders, the relevant authorities and relevant professional personnel to establish a liquidation committee to carry out liquidation procedures.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

is amended as:

Article 212 Where the Company is dissolved under clause (1), (2), (5) and (6) of Article 210, 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. If a liquidation committee is not established within the stipulated period, the creditors can apply to the People’s Court, requesting the court to appoint relevant personnel to form the liquidation committee to carry out liquidation procedures.

Mandatory Provision 154

Guideline 180 of Articles of Association

Where the Company is dissolved under clause (3) of Article 210, the parties involved in the consolidation or division shall carry out liquidation procedures in accordance with the contract entered into upon consolidation or division.

Where the Company is dissolved under clause (4) of Article 210, the relevant governing authorities shall organise the shareholders, the relevant authorities and relevant professional personnel to establish a liquidation committee to carry out liquidation procedures.

The former Article 202 The liquidation committee shall within ten days of its establishment send notice to creditors, and shall within sixty days of its establishment publish a public notice in a newspaper. A creditor shall within thirty days of receiving the 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.

is amended as:

Article 214 The liquidation committee shall within ten days of its establishment send notice to creditors, and shall within sixty days of its establishment make announcements for at least three times in one or more newspapers designated by the securities regulatory authority of the State Council. A creditor shall within thirty days of receiving the 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.

Mandatory Provision 156

When registering creditors’ rights, creditors shall provide an explanation of matters relevant to their creditors’ rights and shall provide supporting materials. 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.

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Guideline 182 of Articles of Association

CHAPTER 19 PROCEDURES FOR AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Additions:

Article 221 The Board of Directors shall amend the Articles of Association according to the resolution on amending the Articles of Association of the General Meeting and the examination and approval opinions of the relevant competent authorities.

Guideline 190 of Articles of Association

Article 222 Should the items amended in the Articles of Association be required by laws and regulations to be disclosed, an announcement shall be made accordingly.

Guideline 191 of Articles of Association

CHAPTER 21 SUPPLEMENTAL PROVISIONS

Additions:

Article 227 Notice of the Company shall be served by the following means:

Guideline 163 of Articles of Association

(1) by designated person;
(2) by mail;
(3) by announcement;
(4) by any other means stipulated in the Articles of Association.

Article 228 Should any notice be served in the form of announcements, once the announcement is made, it is considered that all related persons have been notified.

Guideline 164 of Articles of Association

For notices served by designated person, the receiver shall sign (or stamp) the return receipt, the date of acknowledgement of receipt is regarded as the day the notification is served; for notices served by mail, the fifth business day following delivery to the post office is regarded as the day the notification is served; for notices served in the form of announcements, the first day of publication of the announcement is considered as the day the notification is served;

Article 229 Definitions

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APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Guideline 192 of Articles of Association

(1) An “actual controller” refers to anyone who is not a shareholder but is able to exercise actual control over the acts of the Company by means of investment relations, agreements or any other arrangements.
(2) “Connected relationship” refers to the relationship between the controlling shareholders, actual controllers, directors, supervisors or senior management officers of the Company and the enterprise directly or indirectly controlled thereby and any other relationship that may lead to the transfer of any interest of the Company. However, enterprises controlled by the state do not have a connected relationship with one another simply because they are under the control of the state.

Article 230 The Board of Directors may formulate detailed rules of the Articles of Association in accordance with the provisions thereof. Such detailed rules shall not contravene the provisions in the Articles of Association.

The Articles of Association is written in Chinese. In case of any discrepancy between versions in other languages or different versions and the Articles of Association, the latest Chinese version approved for registration with the Shenzhen Municipal Administration for Industry & Commerce shall prevail.

The board of directors of the Company shall be responsible for interpreting the Articles of Association.

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APPENDIX II

PROPOSED AMENDMENTS TO RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

Please note that the following proposed amendments to the 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.

The former Article 18 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:

(1) 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.
(2) 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.

is amended as:

Article 18 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:-

(1) 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. The Board of Directors shall give a written reply as to whether it agrees to convene an extraordinary general meeting or a class meeting within 10 days upon the receipt of the aforesaid written request. 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.
(2) Where the Board of Directors refuses to convene an extraordinary general meeting, shareholders shall propose to the Supervisory Committee in writing to convene such meeting.

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APPENDIX II PROPOSED AMENDMENTS TO RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

Where the Supervisory Committee agrees to convene an extraordinary general meeting, it shall dispatch a notice of such meeting within 5 days upon receipt of such request. No amendments to the original proposal shall be made without the prior consent of the proposing shareholders.

(3) If the Supervisory Committee 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 and preside over the meeting by himself/themselves, provided that prior to the announcement of the resolutions of the general meeting the shares held by the convening shareholder(s) shall not be less than 10% of the shares of the Company. The procedures for convening the meeting should be similar to those of convening a general meeting by the Board of Directors as far as possible. The convening shareholder(s) shall submit relevant evidence to the local office of the Securities Supervisory and Regulatory Authority of the State Council and the stock exchange(s) at the locality of the Company upon the issuance of the notice of general meeting and the announcement of the resolutions of the general meeting.

If the Supervisory Committee or the shareholder(s) himself/ themselves convene(s) a meeting as provided in the preceding clause, they shall notify the Board of Directors in writing. Any reasonable expenses incurred 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.

The former Article 28 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.

is amended as:

Article 28 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 2 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.

The former Article 30 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:

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

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APPENDIX II PROPOSED AMENDMENTS TO RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

(II) authority to demand or join in demanding a poll;
(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 authorize 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.

is amended as:

Article 30 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:

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

Other matters realting to the voting on behalf of the shareholders shall be implemented in accordance with laws, regulations, departmental rules and listing rules of stock exchange in where the shares of the Company are listed as well as other regulatory documents.

The former Article 50 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:

(I) the chairman of the meeting;

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APPENDIX II PROPOSED AMENDMENTS TO RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

(II) at least two members present in person or by proxy having the right to vote on the resolution;
(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.

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.

is amended as:

Article 50 Voting in shareholders’ general meeting shall be carried out by poll.

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.

Delete former Article 51 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.

The former Article 53 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.

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APPENDIX II

PROPOSED AMENDMENTS TO RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

is amended as:

Article 52 In the event of equality of votes, the chairman of the meeting shall be entitled to an additional vote.

The former Article 56 The following matters shall be approved by special resolutions at general meetings:

(1) increase or reduction in share capital of the Company and the issue of shares of any class, warrants and other similar securities;
(2) issue of debt securities of the Company;
(3) demerger, merger, dissolution and liquidation of the Company;
(4) amendments to the Articles of Association;
(5) 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;
(6) share option scheme;
(7) any other issues specified by laws, administrative regulations or 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;
(8) other matters required by the Hong Kong Listing Rules.

is amended as:

Article 55 The following matters shall be approved by special resolutions at general meetings:

(1) increase or reduction in share capital of the Company and the issue of shares of any class, warrants and other similar securities;
(2) issue of debt securities of the Company;
(3) demerger, merger, dissolution and liquidation of the Company;
(4) amendments to the Articles of Association;
(5) 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;
(6) share option scheme;

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APPENDIX II PROPOSED AMENDMENTS TO RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING

(7) any other issues specified by laws, administrative regulations, rules issued by China Securities Regulatory Commission or 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;
(8) other matters required by the listing rules of the stock exchange(s) on which the shares of the Company are listed and other regulatory documents.

Addition Section IX Principles for authorities given to the Board of Directors at a general meeting

Article 72 The Board of Directors shall define the scope of authority for external investments, acquisition or disposal of assets, pledge of assets, external guarantee issue, appointment of financial consultant and connected transactions, and establish strict review and decision-making procedures. Specialists and professionals shall be arranged to assess major investment projects and seek shareholders’ approval in general meeting.

Article 73 The authority granted to the Board of Directors at a general meeting in relation to transactions out of the ordinary course of business, such as external investments, acquisition or disposal of assets (excluding acquisition or disposal of assets in the ordinary course of business), appointment of financial consultant and pledge of assets, shall be implemented in accordance with the relevant provisions of the Articles of Association.

Article 74 Save for external guarantees which are expressively provided in the Articles of Association to be considered and approved at a general meeting, other external guarantees of the Company shall be approved by the Board of Directors with their authority granted at the general meeting.

Article 75 The authority granted to the Board of Directors at a general meeting relating to the approval of connected transactions shall be implemented in accordance with laws and regulations, the rules of China Securities Regulatory Commission and the relevant provisions of the stock exchange(s) on which the shares of the Company are listed, the Articles of Association, and the Rules for Decision-making in relation to Connected Transactions formulated by the Company.

Article 76 Save as Rules 72, 73, 74 and 75, an authority given to the Board of Directors shall be based on the following principles:

(1) The authority shall be granted through a resolution approved at a general meeting;
(2) The subject to the authority and its scope shall be specific and feasible;
(3) The Board of Directors shall not be authorized to determine its own authority;
(4) The Board of Directors shall not be authorized to exercise, on behalf of the shareholders at the general meeting, the authority specifically provided for in the Articles of Association to be exercised at the general meeting.

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APPENDIX III PROPOSED AMENDMENTS TO THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

Please note that the following proposed amendments to 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 III is for reference only. In case of any inconsistency between the English and Chinese versions, the Chinese version shall prevail.

CHAPTER 1 GENERAL RULES

Article 1 In order to regulate the management and the use of the proceeds raised by BYD Company Limited (hereinafter referred to as the “Company”) and protect the interests of all investors, these measures are formulated according to the “Company Law of the People’s Republic of China”, the “Securities Law of the Peoples Republic of China”, the “Listing Rules of Shenzhen Stock Exchange” (hereinafter referred to as the “Listing Rules”), and the “Articles of Association of BYD Company Limited” (hereinafter referred to as the “Articles of Association”).

Article 2 The proceeds referred to herein are funds raised by the Company from investors through public offering of securities in the stock markets in China (including initial public offering of shares, rights issue, placement and issue of convertible bonds, issue of bonds cum warrants and issue of warrants) and private placing of shares for special purposes. The use of proceeds raised by the Company through placement of foreign shares to foreign investors for increase in capital shall be subject to other relevant rules.

Article 3 The use of proceeds shall adhere to the principle of careful planning, lawful operation, openness and transparency. Where the investment projects using the proceeds are implemented through subsidiaries of or other entities controlled by the Company, the Company shall ensure that such subsidiaries of or other entities controlled by the Company have complied with the Company’s administrative measures regarding raised proceeds.

Article 4 No one has the power to change the use of proceeds publicly disclosed by the Company unless shareholders have passed a resolution in respect thereof at the shareholders’ general meeting in accordance with the law.

CHAPTER 2 DEPOSIT OF PROCEEDS

Article 5 Deposit of proceeds raised by the Company shall be on a centralized basis to facilitate supervision of the use of the proceeds.

Article 6 The Company shall establish a specific system for the deposit of the proceeds and the proceeds shall be deposited in a special account (hereinafter referred to as the “special account”) as approved by the board of directors for centralized management. In principle, the number of special accounts (including the special accounts established by the subsidiaries of or other entities controlled by the Company) shall not exceed the number of projects utilizing the proceeds. Where the Company intends to increase the number of special accounts due to, among others, inadequacy of the number of projects utilizing the proceeds, it shall obtain prior approval from the Shenzhen Stock Exchange.

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APPENDIX III PROPOSED AMENDMENTS TO THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

If the Company has undertaken two or more fund raising activities, it shall establish separate special accounts for the raised proceeds.

Article 7 The Company shall sign a three-party supervision agreement (hereinafter referred to as the “agreement”) with the sponsor and the commercial bank (hereinafter referred to as the “commercial bank”) with which the raised proceeds are deposited within one month after the raised proceeds are in place. The agreement shall at least contain the following:

(1) The Company shall centrally deposit the raised proceeds in the special account;
(2) In case the Company draws from the special account an aggregate of more than RMB10 million or 5% of the total amount of raised proceeds net of issue expenses (hereinafter referred to as the “net proceeds”) in one time or in any consecutive 12 months, the Company and the commercial bank shall notify the sponsor in time;
(3) The commercial bank shall issue a statement of account movements to the Company on a monthly basis, with a copy to the sponsor;
(4) The sponsor may inquire the information of the special account in the commercial bank at any time;
(5) The liability of the Company, the commercial bank and the sponsor for breaching the agreement.

After the signing of all the agreements, the Company shall report to the Shenzhen Stock Exchange for filing, and shall announce the major contents of the agreements.

In case the above-mentioned agreements terminate before the period of validity due to, inter alia , change of sponsor or commercial bank, the Company shall enter into new agreements with related parties within one month from the date of termination, and shall timely report to the Shenzhen Stock Exchange for filing before making an announcement.

The Company shall actively procure the commercial bank to perform the agreements. In case the commercial bank fails to timely issue statement of account movements or give notice of large amounts withdrawals in the special accounts to the sponsor for three consecutively times, or fails to cooperate with the sponsor in its enquiry about and investigating into information of the special account, the Company may terminate the agreements and cancel the special account.

Article 8 The proceeds raised by the Company shall be used for special purposes and the finance department of the Company shall establish and properly maintain related accounting records and books for activities utilizing such proceeds.

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APPENDIX III PROPOSED AMENDMENTS TO THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

CHAPTER 3 USE OF PROCEEDS

Article 9 The Company shall use the proceeds in strict accordance with the proceeds investment plan approved at the shareholders’ general meeting and the proceeds investment plan stated in the offering application documents. The proceeds investment projects shall not be financial investments such as holding of financial assets for trading and financial assets for sale, borrowing to third parties or entrusted finance management, and shall not be direct or indirect investment in companies whose principal businesses are securities trading.

Article 10 The Company shall not use the proceeds in charge, entrust loans, or other investments that indirectly change the intended use of proceeds.

Article 11 The Company shall ensure the truthfulness and fairness of the use of proceeds to avoid misuse and misappropriation by related parties, and shall take effective measures to prevent related parties from gaining improper interests through proceeds investment projects.

Article 12 The proceeds raised by the Company shall be used specifically in accordance with the proceeds utilization plan or the resolutions of the board of directors. The proceeds utilization plan shall be prepared and approved in accordance with the following procedures: (1) To be prepared by the investment management department of the Company in line with the implementation progress of the proceeds investment plan;

(2) To be considered by the president;
(3) To be approved by the board of directors.

To utilize the proceeds, the department (or unit) shall fill in an application form in accordance with the proceeds utilization plan, which shall be reviewed and jointly signed by the president and the head of the finance department and implemented by the finance department.

Article 13 The proceeds shall be utilized in strict accordance with the requirements of the Company in respect of financial management. The Company shall disclose in regular reports the utilization of the proceeds, the approval and implementation progress of related investment project with regard to the proceeds.

Article 14 Where the proceeds are used to acquire assets or equity interests of any individual, corporation or other entities having effective control over the Company and any of their respective associates, the Company shall abide by the following principles: (1) The acquisition can effectively avoid horizontal competition and reduce connected transactions subsequent to the acquisition.

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APPENDIX III PROPOSED AMENDMENTS TO THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

(2) Decision makings at board meetings or shareholders’ general meetings shall follow the procedures and avoidance systems concerning decision making and information disclosure on connected transactions, and the connected transactions shall be disclosed to shareholders in a true, accurate and complete manner. In the event that required disclosures are not made or there exists any false or misleading statement or material omission, the Company shall re-convene a shareholders’ general meeting to discuss the decisions involved.

Article 15 The Company shall fully examine the progress of the proceeds investment project subsequent to the end of each accounting year.

In case the difference between the raised proceeds actually used on an annual basis and the estimated amounts to be used in the year as disclosed in the latest proceeds investment plan exceeds 30%, the Company shall adjust the proceeds investment plan and disclose in a special report regarding the utilization of the proceeds the latest annual investment plan for the raised proceeds, the current actual progress of investments, the estimated annual investment plan after adjustment and the reasons for changes in the investment plan and so on.

Article 16 For any project financed by raised proceeds, the Company shall assess the feasibility and estimated earnings of the project and decide whether to continue to implement the project, and shall disclose in the latest regular report the progress of the project, reasons for any abnormality and the adjusted investment plan (if any) for raised proceeds in case of any of following circumstances:

(i) Any material changes in the market environment related to projects financed by raised proceeds;
(ii) A delay in project financed by raised proceeds for over one year;
(iii) Where the completion period of the latest investment plan financed by raised proceeds is over but the raised proceeds used is less than 50% of the amount under the relevant plan;
(iv) Any other abnormality in the projects financed by raised proceeds.

Where there is a difference of more than 20% between the actual progress and benefit and the planned progress and benefit of the project using the raised proceeds, the Company shall disclose in the regular report the progress of the project financed by raised proceeds and the reason for such difference.

Article 17 In case the Company decides to terminate any original project financed by raised proceeds, new projects to be financed by raised proceeds shall be selected scientifically as soon as possible.

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APPENDIX III PROPOSED AMENDMENTS TO THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

Article 18 In case the Company injects raised proceeds to replace self-raised funds invested in a project financed by raised proceeds in advance, the replacement shall be implemented subject to consideration and approval by the board of directors, provision of a verification report by a registered accountant, the expressed consent of the independent directors, the supervisory committee and the sponsor, and the performance of information disclosure obligations on the part of the Company. The time of replacement shall not be more than 6 months from receipt of the raised funds.

In case replacement by raised proceeds for the self-raised funds invested in advance has been already disclosed in the offering application documents and the amount invested in advance has been determined, the replacement shall be reported to the Shenzhen Stock Exchange and announced within 2 trading days following completion of the replacement.

Article 19 Any proposed change in the implementation location of the project financed by raised proceeds is subject to consideration and approval by the board of directors of the Company, and be reported to the Shenzhen Stock Exchange and announced within 2 trading days for the reasons of change and the opinions of the sponsor.

Any proposed change in the implementation subject and the purchase method for substantial assets of the project financed by raised proceeds by the Company shall, subject to opinions of the independent directors and the supervisory committee, proposed to the shareholders’ general meeting for consideration.

Article 20 The Company may use disposable raised proceeds to temporarily make up working capital. Any temporary use of the disposable proceeds as current funds shall be limited to production and operation relating to principal businesses, and shall not be utilized, through direct or indirect arrangement, for placement or subscription of new shares or transactions of shares and their derivatives as well as convertible corporate bonds. Also, the following conditions shall be fulfilled:

(i) Use of raised proceeds shall not be changed covertly;
(ii) Normal progress of the investment plan for the raised proceeds shall not be affected;
(iii) The amounts used to make up working capital on an individual basis shall not be more than 50% of the net proceeds raised;
(iv) Duration for making up working capital on an individual basis shall not exceed 6 months;
(v) The proceeds previously used to temporarily make up working capital (if applicable) have been repaid;
(vi) The sponsor, independent directors and the supervisory committee shall express their consents.

The matters above shall be considered and passed by the board of directors of the Company, and reported to the Shenzhen Stock Exchange and announced within 2 trading days.

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APPENDIX III PROPOSED AMENDMENTS TO THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

Where disposable proceeds in excess of 10% of the net proceeds are used to make up working capital, it shall be considered and approved by the shareholders’ general meeting and on-line voting shall be provided. Independent directors and the sponsor shall produce and disclose their independent opinions.

Prior to the maturity date of the supplemental working capital, the Company shall return such funds to the special account for raised proceeds and report to the Shenzhen Stock Exchange and make an announcement within 2 trading days after the funds are repaid in full.

CHAPTER 4 CHANGE IN USE OF PROCEEDS

Article 21 The proceeds shall be invested in the projects as stated in the new issue prospectus of the Company and not otherwise in principle. If changes have to be made to the use of proceeds due to market changes, such changes have to be reviewed by the board of directors of the Company and approved by shareholders at general meeting according to legal procedures.

Article 22 The raised proceeds for altered usage by the Company shall be invested in its principal business in principle.

Article 23 The board of directors of the Company shall prudently analyse the feasibility of new project(s) to be financed by raised proceeds with altered usage, ensure that the investment project(s) have promising market prospects and profitability, and effectively avoid investment risks and enhance the efficiency for utilisation of the proceeds.

Article 24 Where the Company proposes to change the use of proceeds, it shall refer the same to the board of directors of the Company for consideration, and within 2 trading days thereof report the proposed change to the Shenzhen Stock Exchange and announce the followings:

(i) Basic information of the original project and specific reasons for the alteration;
(ii) Basic information of the new project and feasibility analysis and risk warning;
(iii) Investment plan for the new project;
(iv) Explanation on the approval obtained or to be obtained from the relevant authorities (if applicable) in respect of the new project;
(v) Opinions of independent directors, the supervisory committee, and the sponsor on the change in use of proceeds;
(vi) Explanation that the altered projects to be financed by raised proceeds are subject to consideration of the shareholders’ general meeting;
(vii) Other information as required by the Shenzhen Stock Exchange.

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APPENDIX III PROPOSED AMENDMENTS TO THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

Article 25 Where the Company proposes to change the operation of a project from being financed by raised proceeds to operation through joint venture, it shall prudently consider the necessity of the joint venture based on informed understanding of the partners, and shall be the controlling shareholder of the joint venture to ensure the effective control over the projects financed by raised proceeds.

Article 26 Where the Company changes the usage of proceeds into acquiring assets (including interests) of its controlling shareholder and de facto controller, it shall ensure effective avoidance of horizontal competition and reduced connected transactions after the acquisition.

The Company shall disclose reasons for the transactions with its controlling shareholder and de facto controller, pricing policies and pricing basis of connected transactions, impact of connected transactions on the Company and solutions to relevant problems.

Article 27 Where the Company proposes to transfer or replace the projects financed by raised proceeds (other than any projects financed by raised proceeds which have been fully transferred or exchanged prior to the Company’s implementation of substantial asset restructuring), it shall report to the Shenzhen Stock Exchange and announce the followings within 2 trading days after the proposal is submitted to the board of directors for consideration:

(i) Detailed reasons for the transfer or exchange of such projects financed by raised proceeds;
(ii) The amount of raised proceeds invested in the project;
(iii) Completion progress and realized benefit of the project;
(iv) Basic information and feasibility analysis and risk warning (if applicable) of the project replaced;
(v) Pricing basis and related earnings for the transfer or replacement;
(vi) Opinions of independent directors, the supervisory committee, and the sponsor on the transfer or replacement of the projects financed by raised proceeds;
(vii) Explanation that the transfer or replacement of the projects financed by raised proceeds is subject to consideration at shareholders’ general meeting;
(viii) Other information as required by the Shenzhen Stock Exchange.

The Company shall closely monitor the reception and use of the consideration for the proposed transfer, change in the title of the exchanged assets and the continuous operation of such assets.

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APPENDIX III PROPOSED AMENDMENTS TO THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

Article 28 Where the Company proposes to use residual funds (including interest income) upon completion of an individual project financed by raised proceeds for the purpose of other projects financed by raised proceeds, the proposal shall be subject to consideration and approval by the board of directors and the express consent of the sponsor.

Where the residual funds (including interest income) is less than ＄500,000 or 1% of the committed investment amount of such project, implementation of the above-mentioned procedures may be waived and the use of these funds shall be disclosed in the annual report.

Where the Company uses the residual proceeds (including interest income) of such project for projects not financed by raised funds (including supplemental working capital), the Company shall perform relevant procedures and disclosure obligations according to the provisions for the altering projects financed by raised funds.

After all of the projects to be financed by the proceeds are completed, if the residual proceeds (including interest income) exceeds 10% of the net proceeds, the Company shall use the residual proceeds subject to the following conditions:
(1) Independent directors and the supervisory committee have expressed their opinions;
(2) The sponsor has issued its express consent;
(3) The use has been considered and approved by the board of directors and the shareholders at shareholders’ general meeting.

In the event that the remaining proceeds (including interest income) is less than 10% of the net proceeds, its use shall be subject to consideration and approval of the board of directors and the express consent of the sponsor.

In the event that the remaining proceeds (including interest income) is less than RMB3 million or 1% of the net proceeds, its use may be exempted from the preceding clause, and shall be disclosed in the Company’s annual report.

Where the implementation of the projects to be financed by the proceeds differs from that disclosed in the legal documents, including the Prospectus, of the Company in the following manner, it shall be treated as a change in the use of proceeds, and shall be approved and disclosed in accordance with the procedures for changes in the use of proceeds;
(1) The giving up or addition of a project to be financed by proceeds ;
(2) The change in investment amount of a single project to be financed by proceeds exceeds 20% of the proposed investment amount;
(3) Other circumstances determined by China Securities Regulatory Commission or Shenzhen Stock Exchange.

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APPENDIX III PROPOSED AMENDMENTS TO THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

CHAPTER 5 MANAGEMENT AND SUPERVISION OF PROCEEDS

The internal auditing department of the Company shall at least on a quarterly basis inspect the deposit and use of the proceeds, and timely report the inspection results to the Audit Committee.

With respect to the management of proceeds, the audit committee shall timely report to the board of directors any material non-compliance, material risk or failure on the part of the internal auditing department to submit the inspection results as provided for in the preceding clause as it believes. The board of directors shall report to Shenzhen Stock Exchange and make an announcement within 2 trading days upon the receipt of the report. The announcement shall specify the material non-compliance or material risk in management of the proceeds, consequences caused or likely to be caused and measures taken or to be taken.

The board of directors shall on an annual basis issue a special report on the deposit and use of the proceeds, and shall appoint a certified public accountant to conduct a special audit on the deposit and use of the proceeds and issue a certified audit report.

The certified public accountant appointed shall provide a certified opinion concluding whether the special report prepared by the board of directors has been prepared in compliance with related format guidelines and whether it gives a true view of the deposit and use of the proceeds for the year.

In the event of certified opinion of “Qualified opinion”, “Negative opinion” of “Unable to form an opinion”, the board of directors shall analyse the reasons of such certified opinion given by the certified public accountant, take measures of rectification and disclose in the annual report of the Company. The sponsor shall conduct an on-site investigation into the deposit and the use of proceeds and shall issue a special inspection report, which carefully analyses the reasons for giving such opinion by the certified public accountant and states a clear inspection opinion, within 10 trading days upon the disclosure of the audit report.

Where the Company purchases an asset or raises proceeds for purchase of an asset from specific targets through share-based payment, it shall disclose the operation of the asset purchased and the performance of related undertakings in its annual reports for at least three consecutive years following the change of ownership of the asset.

The disclosure of the operation of the asset shall include, among others, the change of the asset’s attached value, the production and management of the asset, the contribution made by the asset, and if the profit projection, if any, has been met.

Where the period for which the Company has undertaken to make disclosure is longer than the aforesaid required period for disclosure, the Company shall continuously disclose the operation of the asset in its annual reports for the future periods, until its undertaking has been fully honoured.

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APPENDIX III PROPOSED AMENDMENTS TO THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

Independent directors shall pay attention to any material discrepancy between the use of the proceeds and the Company’s disclosure thereof. With the consent from more than half independent directors, an accounting firm may be appointed to issue an audit report on the use of proceeds. The Company shall be fully cooperative on the audit and bear necessary expenses.
The supervisory committee has the right to inspect the use of the proceeds.
The sponsor shall agree with the Company in the sponsorship agreement that the sponsor shall at least on a quarterly basis conduct an on-site investigation into the deposit and use of the proceeds of the Company. The sponsor shall timely report to the Shenzhen Stock Exchange any material non-compliance or material risk identified in the investigation in the management of proceeds of the Company.
If any director, supervisor or senior management of the Company fails to comply with these Rules, in addition to the penalty imposed by the securities regulatory bodies, they may be sanctioned by the Company depending on specific conditions, including the reduction of remuneration packages and the removal of office, and the Company may claim its loss incurred as a result according to law.

CHAPTER 6 SUPPLEMENTARY PROVISIONS

These Rules are conditional upon the approval at a shareholders’ general meeting, and shall become effective on the date of listing of the domestic shares of the Company issued through initial public offering. The amendments to these Rules are subject to the approval at the shareholders’ general meeting.
The board of directors is responsible for the interpretation of these Rules.
In the event that there is any contradiction between the provisions of these Rules, the relevant laws and regulations, the rules of China Securities Regulatory Commission, the Listing Rules and its related rules and the Articles of Association, the relevant laws and regulations, the relevant provisions of China Securities Regulatory Commission, the Listing Rules and its related rules and the Articles of Association shall prevail. In the absence of relevant provisions in these Rules, the relevant laws and regulations, the rules of China Securities Regulatory Commission, the Listing Rules and its related rules and the Articles of Association shall apply.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [85 x 53] intentionally omitted <==

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 Tuesday, 8 September 2009 at 10 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

“ THAT , this “Resolution in respect of the Company’s initial public offering and listing of A Shares” be and is hereby resolved, the Company be and is hereby approved to issue domestic listing Renminbi denominated ordinary shares (“A Shares”) and apply for the listing of A Shares on the Shenzhen Stock Exchange (the “A Share Issue”) subject to the following conditions:
Type of shares to be issued: Renminbi denominated ordinary shares (A Shares);
Nominal value of the A Shares: RMB 1.00 each;
Number of A shares to be issued: Not more than 100,000,000 A Shares. The Board be and is hereby authorised to determine the actual number of A Shares to be issued after taking into account the then market condition upon the A Share Issue;
Issue targets: natural persons, legal persons or other investors recognised by the China Securities Regulatory Commission (“CSRC”), who maintain A Share accounts with the Shenzhen Stock Exchange but excluding those who are prohibited under the PRC laws, regulations or other regulatory requirements which the Company shall comply with;
Method of issue: to be conducted via a combination of placement through offline offering to target investors, and issue at fixed price for subscription by online fund, or such other method(s) as permitted by CSRC;
Issue price: to be determined by negotiation between the Board and the lead underwriter based on the condition of the securities market.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Use of proceeds: The total investment amount of the proceeds from the proposed A Share Issue will be approximately RMB2,850,000,000 and invested in the following projects:
i) production project on lithium-ion batteries;
(ii) the project on the research, development and manufacturing base for automobiles in Shenzhen;
(iii) the expansion project on automobile products and accessories of BYD Auto Company Limited; and
(iv) the second phase of the project on solar energy batteries manufacturing facilities with a production capacity of 300 MW per year for the second phase and a target production capacity of 1 GW per year after all phases.

Place of listing: the Shenzhen Stock Exchange;
Time for offering and listing: to be determined after discussion and agreement between the Board and the relevant regulatory authorities, following the approval by CSRC and the stock exchange;
Distribution arrangements with regard to accumulated profits prior to the offering: all shareholders of the Company after the offering will be entitled to share the undistributed profits accumulated prior to the A Share Issue;
Validity of the resolutions: 12 months from the date of passing of the resolution by the Shareholders’ general meeting.”
“ THAT this “Resolution in respect of the grant of authority to the Board of Directors to deal with the matters for the initial public offering and listing of A Shares” be and is hereby resolved, the Board of Directors be and is hereby authorised to deal with the matters in respect of the A Share Issue at its discretion and with full authority subject to and as stipulated by the relevant laws and regulations, including but not limited to the following:
to implement all procedures in connection with the A Share Issue, including the submission of the application for the A Share Issue to the CSRC and after the approval of the said

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NOTICE OF EXTRAORDINARY GENERAL MEETING

application, the submission of the application for listing of the A Shares to the stock exchange; to propose amendments, supplements, explanations and clarifications in respect of relevant documents to regulatory authorities such as CSRC on behalf of the Company;

to determine and deal with at its discretion and with full authority, matters relating to the A Share Issue: under the proposal of the A Share Issue considered and approved by the Shareholders’ general meeting and permitted by CSRC, to formulate and execute the proposal of the A Share Issue, including but not limited to determine the time of issue, number of A Shares to be issued, method of issue, issue price, issue targets, quantity and proportion of A Shares to be issued to corresponding issue targets, and other relevant matters relating to the A Share Issue, and to make alterations to the above in accordance with actual circumstances;
to formulate, review, amend and execute all application documents, other necessary documents and agreements in respect of the A Share Issue in accordance to the requirements of relevant regulatory authorities, stock exchange and approving authorities, including but not limited to prospectus and other relevant documents; to publish relevant documents to the media and provide explanations, illustration and clarifications on behalf of the Company;
within the scope of the usage of proceeds approved by the Shareholders’ general meeting and in accordance with the actual circumstances, to make analysis and reasonable adjustments on the projects, investment amounts, timing and method of the implementation, etc. under the usage of proceeds from the A Share Issue;
upon the completion of A Share Issue, to deal with the relevant registration and settlement matters with the China Securities Depository and Clearing Corporation Limited and its branch companies based on the actual conditions of the A Share Issue;
based on the conditions of the A Share Issue, to make supplementary amendments to the Articles of Association of the Company accordingly and undertake the relevant procedures such as application for approval and changes of business registration, and to make amendments to the Articles of Association of the Company within the scope of the proposal of the A Share Issue and in accordance with the requirements of the supervisory authorities;
to determine specific account(s) for proceeds prior to the A Share Issue according to the needs of the Company;
to amend the proposal of the issue and continue to deal with the matters of the A Share Issue, in the event of changes in the policies on share issues during the offering period;
to take any other actions or deal with any other matters which are not specified but are necessary for the A Share Issue;

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NOTICE OF EXTRAORDINARY GENERAL MEETING

subject to compliance with all regulatory requirements and based on actual circumstances, the Board of Directors be approved to delegate the aforesaid authorities to Wang Chuan-fu, Lu Xiang-yang or Xia Zuo-quan, being Directors of the Company, and the authorized person be entitled to deal with procedures such as examination and approval, registration, filing, etc. with relevant governments or institutions in respect of the A Share Issue, execute, implement, amend, complete documents for submission to relevant governments, institutions, organizations and individuals, and undertake all acts and matters relating to the A Share Issue be deems necessary and expedient.
The validity of the resolution in respect of the grant of authority for the A Share Issue: 12 months from the date of the passing of the resolution by the Shareholders’ general meeting.”
“ THAT this “Resolution in respect of the amendments to the Articles of Association of the Company and the schedule thereto” be and is hereby resolved, the amended “Articles of Association of BYD Company Limited” and the “Rules and Procedures of Shareholders’ General Meeting of BYD Company Limited” be and are hereby approved, such amended Articles of Association and schedule thereto be effective after the approval of the A Share Issue by CSRC and from the date on which the A Shares are listed on the stock exchange, provided that the Articles of Association shall be submitted to the authorities on commerce for approval.

The relevant resolutions resolved at the Company’s First Extraordinary General Meeting in 2008 held on 20 March 2008 approving the “Rules and Procedures of Board of Director Resolutions of BYD Company Limited”, “Rules and Procedures of Supervisory Committee Resolutions of BYD Company Limited”, “Regulations on Independent Non-executive Directors of BYD Company Limited”, “Regulations on Connected Transactions Strategies of BYD Company Limited” and “Regulations on External Guarantee of BYD Company Limited” remain to be valid, and the abovementioned will be effective after the approval of the A Share Issue by CSRC and from the date on which the A Shares are listed on the stock exchange.”

AS ORDINARY RESOLUTIONS

“ THAT this “Resolution in respect of the engagement of accountants for specific purpose” be and is hereby resolved, the engagement of Ernst & Young Hua Ming as the specific accountants for the purpose of the A Share Issue, which will produce audited reports and other specialist reports in accordance with the accounting principles and regulations in the PRC, be and is hereby approved and the term of engagement shall commence from the date on which this resolution is passed until the completion of the works for the A Share Issue, and the Board of Directors be and is hereby authorised to fix the remuneration of the above accountants based on actual circumstances.”
“ THAT this “Resolution in respect of the provision of guarantees for the Company’s domestic subsidiaries” be and is hereby resolved, the Company be and is hereby approved to, from the date on which this resolution is passed until the date of the conclusion of the 2009 annual general

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NOTICE OF EXTRAORDINARY GENERAL MEETING

meeting of the Shareholders to be held in 2010, and under the credit amount signed off by banks and the Company, provide joint liability guarantees for its domestic subsidiaries in respect of bank loans to such subsidiaries within such credit amount.”

“ THAT this “Resolution in respect of the amendments to Usage Management System of Funds Raised of BYD Company Limited” be and is hereby resolved, the amendments to “Usage Management System of Funds Raised of BYD Company Limited” be and are hereby approved, and the amended “Usage Management System of Funds Raised of BYD Company Limited” be effective after the approval of the A Share Issue by CSRC and from the date on which the A Shares issued under the A Share Issue are listed on the stock exchange.”

By Order of the Board BYD Company Limited WANG Chuan-fu Chairman

Hong Kong, 24 July 2009

Notes:

(A) The Company will not process registration of transfers of H Shares from Saturday, 8 August 2009, to Tuesday, 8 September 2009, (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 Friday, 7 August 2009 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 Friday, 7 August 2009. 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 Saturday, 8 August 2009 to Tuesday, 8 September 2009 (both days inclusive). Holders of Domestic Shares whose names appear on the register of Shares of the Company after 4:30 p.m. on Friday, 7 August 2009, 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.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

(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 Tuesday, 18 August 2009).

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 Tuesday, 18 August 2009).

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.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

(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.
(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 H SHARES CLASS MEETING

==> picture [85 x 53] intentionally omitted <==

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 Tuesday, 8 September 2009 at 11:00 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 resolution:

AS SPECIAL RESOLUTION

“ THAT , this “Resolution in respect of the Company’s initial public offering and listing of A Shares” be and is hereby resolved, the Company be and is hereby approved to issue domestic listing Renminbi denominated ordinary shares (“A Shares”) and apply for the listing of A Shares on the Shenzhen Stock Exchange (the “A Share Issue”) subject to the following conditions:
Type of shares to be issued: Renminbi denominated ordinary shares (A Shares);
Nominal value of the A Shares: RMB 1.00 each;
Number of A shares to be issued: Not more than 100,000,000 A Shares. The Board be and is hereby authorised to determine the actual number of A Shares to be issued after taking into account the then market condition upon the A Share Issue;
Issue targets: natural persons, legal persons or other investors recognised by the China Securities Regulatory Commission (“CSRC”), who maintain A Share accounts with the Shenzhen Stock Exchange but excluding those who are prohibited under the PRC laws, regulations or other regulatory requirements which the Company shall comply with;
Method of issue: to be conducted via a combination of placement through offline offering to target investors, and issue at fixed price for subscription by online fund, or such other method(s) as permitted by CSRC;
Issue price: to be determined by negotiation between the Board and the lead underwriter based on the condition of the securities market.

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NOTICE OF H SHARES CLASS MEETING

Use of proceeds: The total investment amount of the proceeds from the proposed A Share Issue will be approximately RMB2,850,000,000 and invested in the following projects:
i) production project on lithium-ion batteries;
(ii) the project on the research, development and manufacturing base for automobiles in Shenzhen;
(iii) the expansion project on automobile products and accessories of BYD Auto Company Limited; and
(iv) the second phase of the project on solar energy batteries manufacturing facilities with a production capacity of 300 MW per year for the second phase and a target production capacity of 1 GW per year after all phases.

Place of listing: the Shenzhen Stock Exchange;
Time for offering and listing: to be determined after discussion and agreement between the Board and the relevant regulatory authorities, following the approval by CSRC and the stock exchange;
Distribution arrangements with regard to accumulated profits prior to the offering: all shareholders of the Company after the offering will be entitled to share the undistributed profits accumulated prior to the A Share Issue;
Validity of the resolutions: 12 months from the date of passing of the resolution by the H Shareholders’ class meeting.”
“ THAT this “Resolution in respect of the grant of authority to the Board of Directors to deal with the matters for the initial public offering and listing of A Shares” be and is hereby resolved, the Board of Directors be and is hereby authorised to deal with the matters in respect of the A Share Issue at its discretion and with full authority subject to and as stipulated by the relevant laws and regulations, including but not limited to the following:
to implement all procedures in connection with the A Share Issue, including the submission of the application for the A Share Issue to the CSRC and after the approval of the said

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NOTICE OF H SHARES CLASS MEETING

to determine and deal with at its discretion and with full authority, matters relating to the A Share Issue: under the proposal of the A Share Issue considered and approved by the Shareholders’ general meeting and permitted by CSRC, to formulate and execute the proposal of the A Share Issue, including but not limited to determine the time of issue, number of A Shares to be issued, method of issue, issue price, issue targets, quantity and proportion of A Shares to be issued to corresponding issue targets, and other relevant matters relating to the A Share Issue, and to make alterations to the above in accordance with actual circumstances;
to formulate, review, amend and execute all application documents, other necessary documents and agreements in respect of the A Share Issue in accordance to the requirements of relevant regulatory authorities, stock exchange and approving authorities, including but not limited to prospectus and other relevant documents; to publish relevant documents to the media and provide explanations, illustration and clarifications on behalf of the Company;
within the scope of the usage of proceeds approved by the Shareholders’ general meeting and in accordance with the actual circumstances, to make analysis and reasonable adjustments on the projects, investment amounts, timing and method of the implementation, etc. under the usage of proceeds from the A Share Issue;
upon the completion of A Share Issue, to deal with the relevant registration and settlement matters with the China Securities Depository and Clearing Corporation Limited and its branch companies based on the actual conditions of the A Share Issue;
based on the conditions of the A Share Issue, to make supplementary amendments to the Articles of Association of the Company accordingly and undertake the relevant procedures such as application for approval and changes of business registration, and to make amendments to the Articles of Association of the Company within the scope of the proposal of the A Share Issue and in accordance with the requirements of the supervisory authorities;
to determine specific account(s) for proceeds prior to the A Share Issue according to the needs of the Company;
to amend the proposal of the issue and continue to deal with the matters of the A Share Issue, in the event of changes in the policies on share issues during the offering period;
to take any other actions or deal with any other matters which are not specified but are necessary for the A Share Issue;
subject to compliance with all regulatory requirements and based on actual circumstances, the Board of Directors be approved to delegate the aforesaid authorities to Wang Chuan-fu,

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NOTICE OF H SHARES CLASS MEETING

Lu Xiang-yang or Xia Zuo-quan, being Directors of the Company, and the authorized person be entitled to deal with procedures such as examination and approval, registration, filing, etc. with relevant governments or institutions in respect of the A Share Issue, execute, implement, amend, complete documents for submission to relevant governments, institutions, organizations and individuals, and undertake all acts and matters relating to the A Share Issue be deems necessary and expedient.

The validity of the resolution in respect of the grant of authority for the A Share Issue: 12 months from the date of the passing of the resolution by the H Shareholders’ class meeting.”

By Order of the Board BYD Company Limited WANG Chuan-fu Chairman

Hong Kong, 24 July 2009

Notes:

(A) The Company will not process registration of transfers of H Shares from Saturday, 8 August 2009 to Tuesday, 8 September 2009 (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 Friday, 7 August 2009 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 Tuesday, 18 August 2009. 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 Tuesday, 18 August 2009).
(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.

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NOTICE OF H SHARES CLASS MEETING

(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) 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 DOMESTIC SHARES CLASS MEETING

==> picture [85 x 53] intentionally omitted <==

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 Tuesday, 8 September 2009 at 11:30 a.m. (or as soon as the H 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 resolutions:

AS SPECIAL RESOLUTIONS

“ THAT , this “Resolution in respect of the Company’s initial public offering and listing of A Shares” be and is hereby resolved, the Company be and is hereby approved to issue domestic listing Renminbi denominated ordinary shares (“A Shares”) and apply for the listing of A Shares on the Shenzhen Stock Exchange (the “A Share Issue”) subject to the following conditions:
Type of shares to be issued: Renminbi denominated ordinary shares (A Shares);
Nominal value of the A Shares: RMB 1.00 each;
Number of A shares to be issued: Not more than 100,000,000 A Shares. The Board be and is hereby authorised to determine the actual number of A Shares to be issued after taking into account the then market condition upon the A Share Issue;
Issue targets: natural persons, legal persons or other investors recognised by the China Securities Regulatory Commission (“CSRC”), who maintain A Share accounts with the Shenzhen Stock Exchange but excluding those who are prohibited under the PRC laws, regulations or other regulatory requirements which the Company shall comply with;
Method of issue: to be conducted via a combination of placement through offline offering to target investors, and issue at fixed price for subscription by online fund, or such other method(s) as permitted by CSRC;
Issue price: to be determined by negotiation between the Board and the lead underwriter based on the condition of the securities market.

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NOTICE OF DOMESTIC SHARES CLASS MEETING

Use of proceeds: The total investment amount of the proceeds from the proposed A Share Issue will be approximately RMB2,850,000,000 and invested in the following projects:
i) production project on lithium-ion batteries;
(ii) the project on the research, development and manufacturing base for automobiles in Shenzhen;
(iii) the expansion project on automobile products and accessories of BYD Auto Company Limited; and
(iv) the second phase of the project on solar energy batteries manufacturing facilities with a production capacity of 300 MW per year for the second phase and a target production capacity of 1 GW per year after all phases.

Place of listing: the Shenzhen Stock Exchange;
Time for offering and listing: to be determined after discussion and agreement between the Board and the relevant regulatory authorities, following the approval by CSRC and the stock exchange;
Distribution arrangements with regard to accumulated profits prior to the offering: all shareholders of the Company after the offering will be entitled to share the undistributed profits accumulated prior to the A Share Issue;
Validity of the resolutions: 12 months from the date of passing of the resolution by the Domestic Shareholders’ class meeting.”
“ THAT this “Resolution in respect of the grant of authority to the Board of Directors to deal with the matters for the initial public offering and listing of A Shares” be and is hereby resolved, the Board of Directors be and is hereby authorised to deal with the matters in respect of the A Share Issue at its discretion and with full authority subject to and as stipulated by the relevant laws and regulations, including but not limited to the following:
to implement all procedures in connection with the A Share Issue, including the submission of the application for the A Share Issue to the CSRC and after the approval of the said

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NOTICE OF DOMESTIC SHARES CLASS MEETING

to determine and deal with at its discretion and with full authority, matters relating to the A Share Issue: under the proposal of the A Share Issue considered and approved by the Shareholders’ general meeting and permitted by CSRC, to formulate and execute the proposal of the A Share Issue, including but not limited to determine the time of issue, number of A Shares to be issued, method of issue, issue price, issue targets, quantity and proportion of A Shares to be issued to corresponding issue targets, and other relevant matters relating to the A Share Issue, and to make alterations to the above in accordance with actual circumstances;
to formulate, review, amend and execute all application documents, other necessary documents and agreements in respect of the A Share Issue in accordance to the requirements of relevant regulatory authorities, stock exchange and approving authorities, including but not limited to prospectus and other relevant documents; to publish relevant documents to the media and provide explanations, illustration and clarifications on behalf of the Company;
within the scope of the usage of proceeds approved by the Shareholders’ general meeting and in accordance with the actual circumstances, to make analysis and reasonable adjustments on the projects, investment amounts, timing and method of the implementation, etc. under the usage of proceeds from the A Share Issue;
upon the completion of A Share Issue, to deal with the relevant registration and settlement matters with the China Securities Depository and Clearing Corporation Limited and its branch companies based on the actual conditions of the A Share Issue;
based on the conditions of the A Share Issue, to make supplementary amendments to the Articles of Association of the Company accordingly and undertake the relevant procedures such as application for approval and changes of business registration, and to make amendments to the Articles of Association of the Company within the scope of the proposal of the A Share Issue and in accordance with the requirements of the supervisory authorities;
to determine specific account(s) for proceeds prior to the A Share Issue according to the needs of the Company;
to amend the proposal of the issue and continue to deal with the matters of the A Share Issue, in the event of changes in the policies on share issues during the offering period;
to take any other actions or deal with any other matters which are not specified but are necessary for the A Share Issue;

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NOTICE OF DOMESTIC SHARES CLASS MEETING

subject to compliance with all regulatory requirements and based on actual circumstances, the Board of Directors be approved to delegate the aforesaid authorities to Wang Chuan-fu, Lu Xiang-yang or Xia Zuo-quan, being Directors of the Company, and the authorized person be entitled to deal with procedures such as examination and approval, registration, filing, etc. with relevant governments or institutions in respect of the A Share Issue, execute, implement, amend, complete documents for submission to relevant governments, institutions, organizations and individuals, and undertake all acts and matters relating to the A Share Issue be deems necessary and expedient.
The validity of the resolution in respect of the grant of authority for the A Share Issue: 12 months from the date of the passing of the resolution by the Domestic Shareholders’ class meeting.”

By Order of the Board BYD Company Limited WANG Chuan-fu Chairman

Hong Kong, 24 July 2009

Notes:

(A) The Company will not process registration of transfers of Domestic Shares from Saturday, 8 August 2009 to Tuesday, 8 September 2009 (both days inclusive). Holders of Domestic Shares whose names appear on the register of Shares of the Company after 4:30 p.m. on Friday, 7 August 2009 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 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 Tuesday, 18 August 2009).

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

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NOTICE OF DOMESTIC SHARES CLASS MEETING

(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.
(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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Shanghai Henlius Biotech, Inc. — Proxy Solicitation & Information Statement 2009

50763_rns_2009-07-23_22460388-b4b4-4d6d-a8c1-32e55165df66.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

比亞迪股份有限公司 BYD COMPANY LIMITED

CONTENTS

DEFINITIONS

DEFINITIONS

LETTER FROM THE BOARD

比亞迪股份有限公司 BYD COMPANY LIMITED

LETTER FROM THE BOARD

1. INTRODUCTION

LETTER FROM THE BOARD

2. PROPOSED A SHARE ISSUE

A. Background

B. Structure of the A Share Issue

LETTER FROM THE BOARD

LETTER FROM THE BOARD

C. Shareholders’ approval and other approvals

D. Reasons for and benefits of the A Share Issue

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

LETTER FROM THE BOARD

3. PROPOSED GRANT OF AUTHORITY TO THE BOARD TO DETERMINE AND DEAL WITH MATTERS RELATING TO THE A SHARE ISSUE

4. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION, THE RULES AND PROCEDURES OF SHAREHOLDERS’ GENERAL MEETING AND THE USAGE MANAGEMENT SYSTEM OF FUNDS RAISED

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

LETTER FROM THE BOARD

6. PROPOSED APPOINTMENT OF ACCOUNTANTS FOR THE PROPOSED A SHARE ISSUE

7. CLOSURE OF REGISTER OF MEMBERS

8. EXTRAORDINARY GENERAL MEETING AND CLASS MEETINGS

LETTER FROM THE BOARD

9. RECOMMENDATION

10. GENERAL

CHAPTER 1 GENERAL PROVISIONS

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

CHAPTER 2 BUSINESS OBJECTIVES AND SCOPE

CHAPTER 3 SHARES, SHARE TRANSFERS AND REGISTERED CAPITAL

Article 16:

is amended as:

CHAPTER 4 CAPITAL REDUCTION AND REPURCHASE OF SHARES

CHAPTER 6 SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

CHAPTER 7 SHAREHOLDERS’ RIGHTS AND OBLIGATIONS

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Additions:

CHAPTER 8 SHAREHOLDERS’ GENERAL MEETINGS

Guideline 37 of Small and Medium Enterprise Board investors’ interests protection

Additions:

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Additions:

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Guideline 77 of the Articles of Association

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Addition:

Guideline 71 of the Articles of Association

Addition:

Guideline 73 of the Articles of Association

Guideline 84 of the Articles of Association

CHAPTER 10 BOARD OF DIRECTORS

Guideline 110 of Articles of Association

Additions:

CHAPTER 11 SECRETARY TO THE BOARD OF DIRECTORS OF THE COMPANY

CHAPTER 12 PRESIDENT OF THE COMPANY

CHAPTER 13 SUPERVISORY COMMITTEE

Additions:

Guideline 146 of Articles of Association

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

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

CHAPTER 15 FINANCIAL ACCOUNTING SYSTEMS AND PROFIT DISTRIBUTION

CHAPTER 16 APPOINTMENT OF ACCOUNTANT FIRM

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

CHAPTER 17 MERGER AND DIVISION OF THE COMPANY

Guideline 171 of Articles of Association

APPENDIX I PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

CHAPTER 18 DISSOLUTION AND LIQUIDATION OF THE COMPANY

CHAPTER 19 PROCEDURES FOR AMENDMENTS TO THE ARTICLES OF ASSOCIATION

CHAPTER 21 SUPPLEMENTAL PROVISIONS

APPENDIX II

Shanghai Henlius Biotech, Inc. Proxy Solicitation & Information Statement 2009