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

If you have sold or transferred all your shares in Holly Futures (a joint stock company incorporated in the People’s Republic of Chinawith limited liability under the Chinese corporate name 弘業期貨股份有限公司 and carrying on business in Hong Kong as Holly Futures), youshould at once hand this circular and the accompanying form of proxy and reply slip to the purchaser(s) or transferee(s) or to the bank,stockbroker or licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser(s)or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of thiscircular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoeverarising from or in reliance upon the whole or any part of the contents of this circular.

Holly Futures(a joint stock company incorporated in the People’s Republic of China with limited liability under the Chinese

corporate name 弘業期貨股份有限公司 and carrying on business in Hong Kong as Holly Futures)

(Stock Code: 3678)

(1) PROPOSALS FOR PROFIT DISTRIBUTION PLAN FOR THE YEAR 2020(2) REMUNERATION PACKAGE FOR DIRECTORS AND SUPERVISORS FOR THE YEAR 2020

(3) PROPOSED A SHARE OFFERING AND RELATED MATTERS(4) PROPOSED AMENDMENTS TO THE EXISTING ARTICLES OF ASSOCIATION

(5) PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURESOF THE BOARD

(6) PROPOSED AMENDMENTS TO THE EXISTING RULESOF PROCEDURES OF THE GENERAL MEETING

(7) PROPOSED CHANGE OF AUDITORS(8) NOTICE OF ANNUAL GENERAL MEETING

(9) NOTICE OF THE 2021 FIRST DOMESTIC SHAREHOLDERS’ CLASS MEETINGAND

(10) NOTICE OF THE 2021 FIRST H SHAREHOLDERS’ CLASS MEETING

A letter from the Board is set out on pages 4 to 37 of this circular.

Notices convening the AGM, the Domestic Shareholders’ Class Meeting and the H Shareholders’ Class Meeting to be held at theConference Room, 9/F, Holly Tower, No. 50 Zhonghua Road, Nanjing, the PRC at 2:00 p.m., 2:30 p.m. and 3:00 p.m. respectively onFriday, 14 May 2021 are set out on pages AGM-1 to AGM-5, DSCM-1 to DSCM-3 and HSCM-1 to HSCM-3 of this circular, respectively.Shareholders who intend to attend the AGM and/or the Class Meeting(s) (as the case maybe) should complete the reply slip and return itby hand or by post to the H Share registrar of the Company (for holders of H Shares) or to the headquarters in the PRC of the Company(for holders of Domestic Shares) on or before Saturday, 24 April 2021 (as the case may be).

Shareholders who are entitled to attend and vote at the AGM and/or the Class Meeting(s) may appoint one or more proxies to attend andvote on their behalves. A proxy need not be a Shareholder. In order to be valid, the form of proxy for the AGM and/or the ClassMeeting(s) must be deposited by hand or post, for holders of H Shares, to the H Share registrar of the Company, Computershare HongKong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, and, for holders ofDomestic Shares, to the headquarters in the PRC of the Company not less than 24 hours before the time for holding the such meeting(s)(or any adjournment thereof) (i.e. by Thursday, 13 May 2021 at 2:00 p.m.) for taking the poll. If the form of proxy is signed by a personunder a power of attorney or other authority, a notarial copy of that power of attorney or authority shall be deposited at the same time asmentioned in the form of proxy. Completion and return of the form of proxy will not preclude Shareholders from attending and voting inperson at the AGM and/or the Class Meeting(s) or any adjourned meetings should they so wish.

Shareholders are reminded that the AGM and the Class Meetings originally scheduled on Wednesday, 12 May 2021 have been postponed toFriday, 14 May 2021, and the closure period of the register of members of the Company has also been changed to the period fromWednesday, 14 April 2021 to Friday, 14 May 2021, both days inclusive.

PRECAUTIONARY MEASURES FOR THE AGMTo safeguard the health and safety of the Shareholders and to prevent the spread of the coronavirus, the followingprecautionary measures will be implemented at the AGM:� Compulsory temperature checks;

� Compulsory wearing of surgical face masks; and

� No provision of refreshments.

Any person who does not comply with the precautionary measures may be denied entry to the AGM venue. The Company would liketo encourage Shareholders to consider appointing the chairman of the AGM as their proxy to vote on the relevant resolutions at theAGM as an alternative to attending the AGM in person.

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

23 April 2021

Page

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

APPENDIX I – THE AUTHORISATION TO THE BOARD TO DEALWITH RELATED MATTERS IN CONNECTIONWITH THE COMPANY’S APPLICATION FORTHE A SHARE OFFERING AND LISTINGOF A SHARES AT ITS FULL DISCRETION . . . . . . . . . I-1

APPENDIX II – FEASIBILITY ANALYSIS REPORT ONTHE INVESTMENT PROJECTS USINGTHE PROCEEDS FROM THE A SHAREOFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

APPENDIX III – IMPACTS AND REMEDIAL MEASURESON DILUTION OF IMMEDIATE RETURNFROM THE A SHARE OFFERING . . . . . . . . . . . . . . . . III-1

APPENDIX IV – PRICE STABILISING PLAN FORTHE A SHARES WITHIN THREE YEARSAFTER THE A SHARE OFFERING . . . . . . . . . . . . . . . IV-1

APPENDIX V – DIVIDEND RETURN PLAN FOR SHAREHOLDERSWITHIN THREE YEARS AFTER THE A SHAREOFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

APPENDIX VI – REPORT OF THE USE OF RAISED FUNDSFROM THE PREVIOUS OFFERING . . . . . . . . . . . . . . . VI-1

APPENDIX VII – PUBLIC UNDERTAKINGS IN DOCUMENTSIN CONNECTION WITH THE A SHAREOFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1

APPENDIX VIII – RELATED PARTY TRANSACTIONSMANAGEMENT SYSTEM TO BE EFFECTIVEUPON THE A SHARE OFFERING ANDTHE LISTING OF THE A SHARES . . . . . . . . . . . . . . . . VIII-1

APPENDIX IX – SYSTEM CONCERNING THE INDEPENDENTDIRECTORS TO BE EFFECTIVE UPON THEA SHARE OFFERING AND THE LISTINGOF THE A SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-1

CONTENTS

– i –

APPENDIX X – ADMINISTRATION SYSTEM OF RAISEDFUNDS TO BE EFFECTIVE UPONTHE A SHARE OFFERING AND THE LISTINGOF THE A SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-1

APPENDIX XI – COMPARISON OF THE EXISTING ARTICLES OFASSOCIATION AGAINST THE ARTICLES OFASSOCIATION TO BE EFFECTIVE UPONTHE A SHARE OFFERING AND THE LISTINGOF THE A SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1

APPENDIX XII – COMPARISON OF THE EXISTING RULES OFPROCEDURES OF THE GENERAL MEETINGSAGAINST THE RULES OF PROCEDURES OFTHE GENERAL MEETINGS TO BE EFFECTIVEUPON THE A SHARE OFFERING ANDTHE LISTING OF THE A SHARES . . . . . . . . . . . . . . . XII-1

APPENDIX XIII – COMPARISON OF THE EXISTING RULES OFPROCEDURES OF THE BOARD OF DIRECTORSAGAINST THE RULES OF PROCEDURESOF THE BOARD OF DIRECTORS TO BEEFFECTIVE UPON THE A SHAREOFFERING AND THE LISTING OFTHE A SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII-1

NOTICE OF ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . AGM-1

NOTICE OF THE 2021 FIRST DOMESTICSHAREHOLDERS’ CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DSCM-1

NOTICE OF THE 2021 FIRST H SHAREHOLDERS’CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HSCM-1

CONTENTS

– ii –

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

“AGM” the annual general meeting of the Company to beconvened and held on Friday, 14 May 2021 at 2:00p.m. at Conference Room, 9/F, Holly Tower, No. 50Zhonghua Road, Nanjing, the PRC, and anyadjournment thereof

“A Share Offering” the Company’s proposed initial public offering of notmore than 120,000,000 A Shares, which are proposedto be listed on the Shenzhen Stock Exchange

“A Share(s)” ordinary share(s) proposed to be issued by theCompany pursuant to the A Share Offering and to besubscribed for in Renminbi

“Articles of Association” the articles of association of the Company, as amendedfrom time to time

“Board” the board of Directors

“Board Meeting” the Board meeting held on 26 March 2021

“Class Meeting(s)” the H Shareholders’ Class Meeting and/or the DomesticShareholders’ Class Meeting (as the case may be)

“Company” Holly Futures Co., Ltd.（弘業期貨股份有限公司）, a jointstock limited company established under the laws ofthe PRC on 29 November 2012, whose H Shares arelisted and traded on the Stock Exchange (stock code:3678)

“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws ofHong Kong), as amended, supplemented or otherwisemodified from time to time

“connected person(s)” has the meaning ascribed to it under the Listing Rules

“CSRC” China Securities Regulatory Commission

“Director(s)” the director(s) of the Company

“Domestic Share(s)” the ordinary share(s) in the capital of the Companywith a nominal value of RMB1.00 each, which aresubscribed for or credited as paid up in Renminbi

“Domestic Shareholder(s)” holder(s) of Domestic Share(s)

DEFINITIONS

– 1 –

“Domestic Shareholders’ ClassMeeting”

the class meeting of the holders of Domestic Shares tobe convened and held on or around Friday, 14 May2021 (or any adjournment thereof) immediately afterthe conclusion of the AGM to be held on the same dateat the same place (or any adjournment thereof)

“Group” the Company and its subsidiaries

“H Share(s)” overseas listed foreign ordinary shares in the sharecapital of the Company with a nominal value ofRMB1.00 each listed on the Main Board of StockExchange

“H Shareholder(s)” holder(s) of H Share(s)

“H Shareholders’ Class Meeting” the class meeting of the holders of H Shares to beconvened and held on or around Friday, 14 May 2021(or any adjournment thereof) immediately after theconclusion of the Domestic Shareholders’ ClassMeeting to be held on the same date at the same place(or any adjournment thereof)

“H Share Offering” the initial public offering of the Company’s H Sharesglobally and the Listing

“Hong Kong” Hong Kong Special Administrative Region of the PRC

“Latest Practicable Date” 20 April 2021, being the latest practicable date prior tothe printing of this circular for ascertaining certaininformation contained herein

“Listing Rules” the Rules Governing the Listing of Securities on TheStock Exchange of Hong Kong Limited

“PRC” the People’s Republic of China which shall, for thepurpose of this circular, excludes Hong Kong, theMacau Special Administrative Region of the PRC andTaiwan

“RMB” Renminbi, lawful currency of the PRC

“Rules of Procedures of theBoard”

the rules of procedures of the Board

“Rules of Procedures of theGeneral Meeting”

the rules of procedures of the general meeting of theCompany

DEFINITIONS

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“Share(s)” share(s) with a nominal value of RMB1 each in theshare capital of the Company

“Shareholder(s)” holder(s) of the Share(s)

“Supervisor(s)” the supervisor(s) of the Company

“Supervisory Committee” the supervisory committee of the Company

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“subsidiary(ies)” has the meaning ascribed thereto under the ListingRules

“Substantial Shareholder(s)” has the meaning ascribed thereto under the ListingRules

“%” per cent.

Certain amounts and percentage figures set out in this circular have been subject torounding adjustments. Accordingly, figures shown as totals in certain tables and thecurrency conversion or percentage equivalents may not be an arithmetic sum of such figures.

DEFINITIONS

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(Stock Code: 3678)

Executive Directors:Mr. Zhou Yong（周勇）(Chairman)Ms. Zhou Jianqiu（周劍秋）

Non-executive Directors:Mr. Xue Binghai（薛炳海）Mr. Shan Bing（單兵）Mr. Jiang Lin（姜琳）

Independent non-executive Directors:Mr. Wang Yuetang（王躍堂）Mr. Lam Kai Yeung（林繼陽）Mr. Huang Dechun（黃德春）

Registered Office and Headquartersin the PRC:

No. 50 Zhonghua RoadNanjing, the PRC

Place of Business in Hong Kongregistered under Part 16 of theCompanies Ordinance:

40th Floor, Dah Sing Financial CentreNo. 248 Queen’s Road EastWanchai, Hong Kong

23 April 2021

To the Shareholders

Dear Sir or Madam,

(1) PROPOSALS FOR PROFIT DISTRIBUTION PLAN FOR THE YEAR 2020(2) REMUNERATION PACKAGE FOR DIRECTORS AND SUPERVISORS

FOR THE YEAR 2020(3) PROPOSED A SHARE OFFERING AND RELATED MATTERS

(4) PROPOSED AMENDMENTS TO THE EXISTING ARTICLES OF ASSOCIATION(5) PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES

OF THE BOARD(6) PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES OF THE

GENERAL MEETING(7) PROPOSED CHANGE OF AUDITORS

(8) NOTICE OF ANNUAL GENERAL MEETING(9) NOTICE OF THE 2021 FIRST DOMESTIC SHAREHOLDERS’ CLASS MEETING

AND(10) NOTICE OF THE 2021 FIRST H SHAREHOLDERS’ CLASS MEETING

LETTER FROM THE BOARD

– 4 –

I. INTRODUCTION

Reference is made to the announcements published by the Company dated 26 March2021 which include certain resolutions to be proposed at the AGM and the Class Meetings(as the case may be) in relation to, among other things, (i) the proposal for the A ShareOffering and other relevant resolutions; (ii) the proposed amendments to the existing Articlesof Association; (iii) the proposed amendments to the existing Rules of Procedures of theBoard; (iv) the proposed amendments to the existing Rules of Procedures of the GeneralMeeting; (v) the proposed change of auditors; (vi) the profit distribution plan for the year2020; and (vii) the remuneration package for Directors and Supervisors for the year 2020.

The Board approved and resolved to submit to the AGM and the Class Meetings (asthe case may be) for the approval of certain matters: (1) the proposal of the A ShareOffering; (2) authorisation to the Board to deal with related matters in connection with theCompany’s application for the A Share Offering and the listing of the A Shares at its fulldiscretion; (3) feasibility analysis report on the investment projects using the raised fundsfrom the A Share Offering; (4) impacts and remedial measures on dilution of immediatereturn from the A Share Offering; (5) price stabilising plan for the A Shares within threeyears after the A Share Offering; (6) dividend return plan for Shareholders within three yearsafter the A Share Offering; (7) report of the use of raised funds from the previous offering;(8) public undertakings in documents in connection with the A Share Offering; (9) proposedformulation of Articles of Association with effect upon the A Share Offering and the listingof the A Shares; (10) proposed formulation of the Rules of Procedures of the GeneralMeeting with effect upon the A Share Offering and the listing of A Shares; (11) proposedformulation of the Rules of Procedures of the Board with effect upon A Share Offering andthe listing of the A Shares; (12) attribution of accumulated undistributed profits oraccumulated uncovered losses prior to the A Share Offering and the listing of the A Shares;(13) proposed formulation of related party transactions management system with effect uponthe A Share Offering and the listing of the A Shares; (14) proposed formulation of thesystem concerning the independent Directors with effect upon the A Share Offering and thelisting of the A Shares; (15) proposed formulation of the administration system of raisedfunds with effect upon the A Share Offering and the listing of A Shares; (16) the proposedamendments to the existing Articles of Association; (17) the proposed amendments to theexisting Rules of Procedures of the Board; (18) the proposed amendments to the existingRules of Procedures of the General Meeting; (19) the proposed change of auditors; (20) theprofit distribution plan for the year 2020; and (21) the remuneration package for Directorsand Supervisors for the year 2020.

The proposals of (1) to (6), (8) to (12), and (16) to (18) above are to be approved bythe Shareholders by way of special resolutions and the proposals of (7), (13) to (15), (19) to(21) above are to be approved by the Shareholders by way of ordinary resolutions at theAGM.

The proposals of (1) to (6), (8) and (12) are also to be approved by way of specialresolutions by the Domestic Shareholders at the Domestic Shareholders’ Class Meeting andby the H Shareholders at the H Shareholders’ Class Meeting, respectively.


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The purpose of this circular is to provide you with the information regarding, amongother things, proposed resolutions of (1) to (21) above to enable you to make an informeddecision on whether to vote for or against the proposed resolutions at the AGM, theDomestic Shareholders’ Class Meeting and the H Shareholders’ Class Meeting (as the casemay be).

II. PROPOSED A SHARE OFFERING AND RELATED MATTERS

The proposed A Share Offering and other related resolutions below are conditional andsubject to market conditions and obtaining Shareholders’ approval as ordinary resolutions orspecial resolutions (as the case may be) at the AGM and the Class Meetings (as the casemay be) and necessary approvals from the CSRC and other relevant regulatory authorities.

A. Proposed A Share Offering

1. Proposed A Share Offering

Classes of Shares: Domestically listed RMB ordinary Shares (AShares)

Nominal value per Share: RMB1.00

Proposed stock exchange for thelisting of the A Shares:

Shenzhen Stock Exchange

Proposed offering size: The total number of A Shares to be issuedwill not exceed 120,000,000, representingapproximately 13.23% of the total existingissued share capital of the Company as at theLatest Practicable Date and before the issue,and approximately 11.68% of the total issuedshare capital of the Company as enlarged bythe issue, assuming that there are no otherchanges to the issued share capital of theCompany between the Latest PracticableDate and the date of the completion of the AShare Offering.

The actual offering size will be determinedby the Board as authorised by theShareholders at the AGM and the ClassMeetings based on the prevailing marketconditions at the time of the A ShareOffering.


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Target subscriber: The target subscribers of the A ShareOffering are qualified participants in theprice consultation process as well as socialpublic investors (including natural personsand institutional investors) (except those whoare prohibited by the PRC laws, regulationsand regulatory requirements fromsubscribing). It is expected that none of thetarget subscribers of the A Shares is or willbecome a connected person of the Company.If any of the subscribers of the A ShareOffering is or will become a connectedperson of the Company, the Company willcomply with the relevant PRC laws,regulations, regulatory documents andrelevant requirements under Chapter 14A ofthe Listing Rules.

Method of offering: The A Share Offering will be conductedthrough a combination of offline placing toparticipants of the price consultation process,and online offering at a fixed price, orthrough any other methods of offering asapproved by the CSRC and/or otherregulatory authorities.


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Pricing methodology: Pursuant to the applicable laws andregulations, and taking into account theinterests of the existing Shareholders as awhole, the capital market condition at thetime of the A Share Offering and the actualsituation of the Company, the issue price ofA Shares shall be determined through priceconsultation with offline participants, orthrough negotiation between the Companyand the lead underwriters, or any othermethods permitted by the CSRC. The issueprice of the A Shares will be determinedwith reference to, amongst others, (i) thefinancial performance of the Company; (ii)the valuation of the comparable companiesengaging in the same or similar industry;(iii) the then prevailing industry and marketcondition; (iv) the funding need of theCompany; and (v) the risk of underwritingthe A Shares. In any event, according toArticle 127 of the Company Law of thePeople’s Republic of China, the issue priceof the A Shares shall not be less than thenominal value of the Shares, i.e. RMB1.00.

Form of underwriting: The A Share Offering will be underwrittenby a group of underwriters led by the leadunderwriter on a standby commitment basis.

Conversion into a joint stocklimited liability company withdomestic and overseas offeringand listing of shares:

According to the A Share Offering plan andthe actual situation of the issued A Shares,application will be filed to convert theCompany into a joint stock limited liabilitycompany with domestic and overseasoffering and listing of shares.

Conversion of unlisted issuedShares to A Shares:

The unlisted issued Shares will be convertedinto A Shares upon the completion of the AShare Offering and listed on the stockexchange in the PRC.


– 8 –

Valid period of the resolutions: The proposed A Share Offering shall besubject to approval by the Shareholders atthe AGM and the Class Meetings. Upon suchapproval, the proposed A Share Offering andrelated resolutions will be valid for 12months from the date of passing each of theresolutions at the AGM and the ClassMeetings.

As the progress of the application for the AShare Offering is dependent on the approvalprocess of the CSRC and other regulatoryauthorities and is likely to take more timeunder the current market conditions, theDirectors consider a validity of 12 monthsfor the resolutions relating to the A ShareOffering flexible and practical to theapplication of the A Share Offering. In theevent that the resolutions described hereinexpire prior to the completion of the A ShareOffering, the Directors will seek theShareholders’ approval to extend the validityperiod of the resolutions relating to the AShare Offering.

The A Shares will be issued under specific mandate.

This proposal has been approved by the Board, and shall be submitted to theAGM and the Class Meetings for consideration and approval as special resolution.


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2. Authorisation to the Board to deal with related matters in connection with theCompany’s application for the A Share Offering and the listing of the A Shares at itsfull discretion

A special resolution will be proposed at the AGM and the Class Meetings, to authorisethe Board and any individual(s) authorized by the Board (either individually or collectively)to deal with the related matters in connection with the A Share Offering and the listing ofthe A Shares.

Please refer to Appendix I to this circular for the details of the authorisation to theBoard to deal with related matters in connection with the Company’s application for the AShare Offering and the listing of the A shares at its full discretion.

The above authorisation shall be valid for 12 months from the date of passing suchresolution at the AGM and the Class Meetings.

3. Feasibility analysis report on the investment projects using the proceeds from the AShare Offering

After deducting the expenses in connection with the A Share Offering, all of theproceeds will be used for supplementing the capital of the Company, in particular, includingbut not limited to, (i) supplementing the capital of the Company and its domesticsubsidiaries, optimizing the construction of multi-level outlet system and enhancing theCompany’s futures brokerage business and risk management business service capabilities;(ii) supplementing the capital of the Company’s overseas subsidiaries to provide protectionfor their business development; (iii) increasing the investment in research and developmentand investment consulting business as well as promoting the development and deployment ofinnovative business; (iv) enhancing the development of wealth management business andpromoting the corporate transformation and upgrading; (v) strengthening the informationtechnology system construction and improving the service capabilities of the middle andback office; and (vi) actively seeking the opportunity for mergers and acquisitions andreorganisation, increasing the market competitiveness and comprehensive financial servicecapabilities of the Company to realise a leapfrog development.

In preparation for the application of the A Share Offering, the Company has preparedthe feasibility analysis report on the investment projects using the proceeds from the A ShareOffering.

Please refer to Appendix II to this circular for the details of the feasibility analysisreport on the investment projects using the proceeds from the A Share Offering.

This proposal has been approved by the Board, and shall be submitted to the AGM andthe Class Meetings for consideration and approval by way of special resolution.


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4. Impacts and remedial measures on dilution of immediate return from the A ShareOffering

In order to enhance the development of the Company and the protection of the interestsof the Shareholders, the Company has conducted an analysis on the impacts of dilution ofimmediate return arising from the A Share Offering and shall carry out certain relevantremedial measures.

Please refer to Appendix III to this circular for the details of the impacts and remedialmeasures on dilution of immediate return from the A Share Offering.


5. Price stabilising plan for the A Shares within three years after the A Share Offering

In order to strengthen the integrity obligations of the Company, the controllingShareholders and the directors and senior management of the company, as well as toeffectively protect the interests of the small and medium Shareholders, the Company hasformulated a price stabilising plan for the A Shares within three years after the A ShareOffering in accordance with the relevant laws and regulations.

Please refer to Appendix IV to this circular for the details of the price stabilising planfor the A shares within three years after the A Share Offering.


6. Dividend return plan for Shareholders within three years after the A Share Offering

In order to further improve Shareholders’ returns, strengthen and improve the cashdividend distribution policy and offer clarity on the investment returns to the Shareholdersand transparency on the decision-making process of the Company relating to dividenddistribution, the Company has formulated the dividend return plan for Shareholders withinthree years after the A Share Offering in accordance with the relevant laws and regulationsand the Articles of Association after taking into account various factors. The plan will alsobe proposed at the AGM to authorise the Board to adjust the plan based on any changes inlaws, regulations, regulatory documents and related policies or the opinions of domestic andoverseas regulatory authorities.

Please refer to Appendix V to this circular for the details of the dividend return planfor shareholders within three years after the A Share Offering.



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7. Report of the use of raised funds from the previous offering

The Company has prepared the status report on the use of proceeds from the H ShareOffering as of 31 December 2020 in accordance with the relevant laws and regulations ofthe PRC. The Company issued in total 249,700,000 Shares in the H Share Offering, and theaggregate proceeds raised after deducting the underwriting and sponsor fee and the offeringexpenses pre-paid by the sponsor were approximately HK$591,300,000.

Please refer to Appendix VI to this circular for the details of the report of the use ofraised funds from the previous offering.

This report has been approved by the Board, and shall be submitted to the AGM forconsideration and approval by way of ordinary resolution.

8. Public undertakings in documents in connection with the A Share Offering

In accordance with the Opinions Regarding Further Promotion of Structural Reforms onIssue of New Shares（《關於進一步推進新股發行體制改革的意見》）issued by CSRC as well asother related laws, regulations and regulatory documents, the Company shall issue the publicundertakings in documents in connection with the A Share Offering.

Please refer to Appendix VII to this circular for the details of the public undertakingsin documents in connection with the A Share Offering.


9. Proposed formulation of the related party transactions management system witheffect upon the A Share Offering and the listing of the A Shares

To perfect its corporate governance, manage its related party transactions and otheroperational risks and in accordance with the relevant laws and regulations, the Company hasformulated the related party transactions management system, which will be effective uponthe A Share Offering and the listing of the A Shares.

Please refer to Appendix VIII to this circular for the details of the related partytransactions management system to be effective upon the A Share Offering and the listing ofthe A Shares.

This proposal has been approved by the Board, and shall be submitted to the AGM forconsideration and approval by way of ordinary resolution.


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10. Proposed formulation of the system concerning the independent Directors with effectupon the A Share Offering and the listing of the A Shares

In accordance with the related laws, regulations and regulatory documents, the Boardhas formulated the system concerning the independent Directors, which will be effectiveupon the A Share Offering and the listing of the A Shares.

Please refer to Appendix IX to this circular for the details of the system concerning theindependent directors to be effective upon the A Share Offering and the listing of the AShares.

This proposal has been approved by the Board, and shall be submitted to the AGM forconsideration and approval by way of ordinary resolution.

11. Proposed formulation of the administration system of raised funds with effect uponthe A Share Offering and the listing of the A Shares

In accordance with the related laws, regulations and regulatory documents, the Boardhas formulated the system concerning the administration of raised funds, which will beeffective upon the A Share Offering and the listing of the A Shares.

Please refer to Appendix X to this circular for the details of the administrative systemof raised funds to be effective upon the A Share Offering and the listing of the A Shares.

This proposal has been approved by the Board and shall be submitted to the AGM forconsideration and approval by way of ordinary resolution.

12. Attribution of accumulated undistributed profits or accumulated uncovered lossesprior to the A Share Offering and the listing of the A Shares

The Board has resolved that the Company’s accumulated undistributed profits oraccumulated uncovered losses prior to the A Share Offering and the listing of the A Sharesshall be shared or borne by all of the Shareholders in proportion to their shareholding in theCompany by then upon the completion of the A Share Offering.

This proposal has been approved by the Board, and shall be submitted to the AGM andthe Class Meetings for consideration and approval by way of special resolution

13. Proposed formulation of Articles of Association with effect upon the A ShareOffering and the listing of the A Shares

In accordance with the related laws, regulations and regulatory documents, theCompany has formulated the Articles of Association, which will be effective upon the AShare Offering and the listing of the A Shares.

Please refer to Appendix XI to this circular for the details of the comparison of theexisting Articles of Association against the Articles of Association to be effective upon the AShare Offering and the listing of the A Shares.


– 13 –

This proposal has been approved by the Board, and shall be submitted to the AGM forconsideration and approval by way of special resolution.

14. Proposed formulation of the rules of procedures of the general meeting and theBoard with effect upon the A Share Offering and the listing of the A Shares

In accordance with the related laws, regulations and regulatory documents, the Boardhas formulated the rules of procedures of the general meeting and the Board, which will beeffective upon the A Share Offering and the listing of the A Shares.

Please refer to Appendix XII and XIII to this circular for the details of the comparisonof the existing rules of procedures of the general meeting and the Board against the rules ofprocedures of the general meeting and the Board to be effective upon the A share Offeringand the listing of the A Shares.

This proposal has been approved by the Board, and shall be submitted to the AGM forconsideration and approval by way of special resolution.

B. Reasons and Benefits of the A Share Offering

The Directors consider that the A Share Offering will enable the Company to meet itscapital needs for its continuous development, to implement its strategical development planand to enhance its financing platforms.

Therefore, the Directors consider that the A Share Offering is in the interest of theCompany and the Shareholders as a whole.

C. Fund Raising Activities in the Past Twelve Months

The Company has not conducted any fund-raising activities in relation to the issue ofequity securities of the Company in the period of 12 months immediately preceding theLatest Practicable Date.


– 14 –

D. Public Float

As at the Latest Practicable Date, based on the publicly available information and tothe best of the Directors’ knowledge, approximately 26.61% of the total issued Shares areheld by the H-share public, and the Company has maintained a public float above theminimum requirements as prescribed in the Listing Rules.

The Company undertakes that it will continue to comply with the public floatrequirement as prescribed in the Listing Rules during the application process and after thecompletion of the A Share Offering.

E. Effects of the A Share Offering on the Shareholding Structure of the Company

For reference and illustration purposes only, assuming that (i) a total of 120,000,000 AShares are to be issued under the A Share Offering, and (ii) there are no other changes tothe issued share capital of the Company between the Latest Practicable Date and the date ofthe completion of the A Share Offering, the shareholding structure of the Company (a) as atthe Latest Practicable Date and (b) immediately after completion of the A Share Offering areset out as follows:

As at the LatestPracticable Date

Immediately aftercompletion of theA Share Offering

Number ofShares

Approximate%

Number ofShares

Approximate%

NON-PUBLICSHAREHOLDERS– Domestic Shares 657,300,000 72.47 657,300,000 64.00– H Shares 8,300,000 0.92 8,300,000 0.81

PUBLICSHAREHOLDERS– A Shares under the

proposedA Share Offering – – 120,000,000 11.68– H Shares 241,400,000 26.61 241,400,000 23.51

Total907,000,000 100.00 1,027,000,000 100.00

Note: Certain amounts and percentage figures set out in the table above have been subject to roundingadjustments. Accordingly, figures shown as totals in the table above and the currency conversion orpercentage equivalents may not be an arithmetic sum of such figures.


– 15 –

III. PROPOSED AMENDMENTS TO THE EXISTING ARTICLES OF ASSOCIATION

As disclosed in the announcements of the Company dated 26 March 2021, the Boardresolved at the Board Meeting to make certain amendments to the existing Articles ofAssociation. A special resolution will be proposed at the AGM to approve the amendmentsof the existing Articles of Association.

Details of the amendments are set out as follows:

1. Article 7 which originally reads as:

“Article 7 The Articles of Association shall become effective from the date onwhich the Company conducts overseas initial public offering of shares and islisted on the Stock Exchange of Hong Kong Limited (the Hong Kong StockExchange”).

......”

be amended as follows:

“Article 7 The Articles of Association shall become effective from the date onwhich the Company conducts overseas initial public offering of shares and islisted on the Stock Exchange of Hong Kong Limited (the “Hong Kong StockExchange”) and being approved at the general meeting.

......”


“Article 29 The Company may, in accordance with the requirements under laws,regulations and these Articles of Association, repurchase its shares under thefollowing circumstances:

1) cancelling its shares for the purpose of reducing its registered capital;

2) merging with another company which holds the shares of the Company;

3) granting shares as incentive to the staff of the Company;

4) acquiring the shares of shareholders who vote against any resolution adoptedat the shareholders’ general meeting on the merger or demerger of theCompany and request the Company to acquire their shares; and

5) other circumstances permitted by laws and administrative regulations.

Other than the above-mentioned circumstances, the Company shall not engage inany activities for the purchase or sale of its shares.


– 16 –

Any acquisition of shares by the Company for the purpose of clauses (1) to (3)shall be approved at a shareholders’ general meeting. In the event that theCompany has acquired its shares under the circumstance set out in clause (1),such shares shall be cancelled within 10 days from the date of repurchase, and forcircumstances set out in clauses (2) and (4), such shares shall be transferred orcancelled within six months from the date of repurchase.

Where the Company has repurchased its shares pursuant to clause (3), shares sorepurchased shall not exceed 5% of the total issued shares of the Company. Therepurchase shall be funded by the profit after tax of the Company, and the sharesso repurchased shall be transferred to employees within one year.”


“Article 29 The Company may, in accordance with the requirements under laws,regulations and these Articles of Association, acquire its shares under thefollowing circumstances:

1) reducing its registered capital;

2) merging with another company which holds the shares of the Company;

3) using shares for employee stock ownership plans or equity incentives;

4) acquiring the shares of shareholders who vote against any resolution adoptedat the shareholders’ general meeting on the merger or demerger of theCompany and request the Company to acquire their shares; and

5) using shares for conversion pursuant to the convertible corporate bondsissued by the Company;

6) to maintain corporate value and shareholder’ interests as the Company deemsnecessary.

Other than the above-mentioned circumstances, the Company shall not engage inany activities for the purchase or sale of its shares.

Any acquisition of shares by the Company for the purpose of clauses (1) and (2)shall be approved at a shareholders’ general meeting. Where the Company is toacquire its shares pursuant to clause (3), (5) and (6), shall do so in accordancewith the requirements of these Articles or as authorized at the shareholders’general meeting, resolved at a Board meeting with more than two-third of thedirector present. In the event that the Company has acquired its shares under thecircumstance set out in clause (1), such shares shall be cancelled within 10 daysfrom the date of acquisition, and for circumstances set out in clauses (2) and (4),such shares shall be transferred or cancelled within six months from the date ofacquisition. In the event that the Company has acquired its shares under the


– 17 –

circumstance set out in clauses (3), (5) and (6), the total amount of shares held bythe Company shall not exceed 10% of the total issued shares of the Company, andsuch shares shall be transferred or cancelled within 3 years.”


“Article 44 No registration of changes as a result of share transfers may beentered in the register of shareholders within 30 days prior to the date of ashareholders’ general meeting or within 5 days before the record date set by theCompany for the purpose of distribution of dividends.”


“Article 44 Any laws, regulations and listing rules of the place where the sharesof the Company are listed concerning the book closure period prior to the holdingof a general meeting to dividend distributions by the Company shall be observed.”


“Article 56 In the event of any of the following circumstances, The Companyshall promptly notify all Shareholders in writing or make an announcement, andreport to the local office of the CSRC at its place of domicile:

......

If the Company and its subsidiaries are subject to the regulatory measures andadministrative penalties made by CSRC and its local branch offices according tothe article 56(2) and (4) or article 57 of the Administrative Regulations on FuturesTrading（《期貨交易管理條例》), the Company shall give a written notice to allShareholders or make an announcement.”


“Article 56 In the event of any of the following circumstances, The Companyshall promptly notify all Shareholders in writing or make an announcement, andreport to the local office of the CSRC at its place of domicile:

......

If the Company and its subsidiaries are subject to the regulatory measures andadministrative penalties made by CSRC and its local branch offices according tothe article 55(2) and (4) or article 56 of the Administrative Regulations on FuturesTrading（《期貨交易管理條例》）, the Company shall give a written notice to allShareholders or make an announcement.”


– 18 –


“Article 57 Approval of the CSRC shall be obtained for change of shareholdingsin the Company in any of the circumstances below:

1) Change of controlling shareholder or the largest shareholder;

2) Shareholding of a single shareholder or the aggregate shareholding ofaffiliated shareholders amounts to 100%;

3) Shareholding of a single shareholder or the aggregate shareholding ofaffiliated shareholders amounts to over 5% and foreign shareholders areinvolved.

Besides the above regulations, the approval of the branch office of CSRC at theplace of domicile of the Company is required where the shareholding by singleshareholder or affiliated shareholders of the Company amounts to over 5%.

......”


“Article 57 Approval of the CSRC shall be obtained for change of shareholdingsin the Company in any of the circumstances below:

1) Change of controlling shareholder or the largest shareholder;

2) Shareholding of a single shareholder or the aggregate shareholding ofaffiliated shareholders amounts to over 5% and foreign shareholders areinvolved.

Besides the above regulations, the approval of the branch office of CSRC at theplace of domicile of the Company is required where the shareholding by singleshareholder or affiliated shareholders of the Company amounts to over 5%.

......”


“Article 58 Shareholders holding 5% or more equity or de facto controllers of theCompany shall notify the Company in writing within three working days in any ofthe following circumstances:

1) Shares of the Company they hold have been frozen, sealed up or underenforcement measures;

2) Shares of the Company they hold are pledged;


– 19 –

3) They decide to transfer Shares of the Company they hold;

4) Shareholders are unable to properly exercise the rights or assume theobligations thereof as Shareholders, which may cause significant deficienciesin the governance of the Company;

5) They are under investigation or being subject to compulsory measures takenby competent authorities for alleged grave violations of laws and regulations;

6) They receive administrative or criminal penalty due to serious violations oflaws and regulations;

7) Names are changed;

8) They are involved in merger, division or major asset or debt restructuring;

9) They are subject to regulatory measures including suspension of operationfor recertification, cancellation, takeover or custody, or enter into dissolution,bankruptcy or closure procedure;

10) They are involved in other circumstances that may affect equity changes ofthe Company or operation of the Company as a going concern.

Shareholders holding 5% or more equity of the Company fall under any of thecircumstances prescribed in the preceding paragraph, the Company shall report therelevant information to the local office of the CSRC at its domicile within threeworking days upon receipt of the notice given by the said Shareholders.

De facto controllers of the Company fall under any of the circumstances listed initems 5 to 9 of the preceding paragraph, the Company shall report the relevantinformation to the local office of the CSRC at its domicile within three workingdays upon receipt of the notice given by the de facto controllers.”


“Article 58 Shareholders holding 5% or more equity or and the de factocontrollers of the Company shall notify the Company in writing within threeworking days in a proactive, accurate and complete manner, in any of thefollowing circumstances:

1) Shares of the Company they hold have been frozen, sealed up or underenforcement measures;

2) Shares of the Company they hold are pledged or the pledged shares arereleased;

3) They decide to transfer Shares of the Company they hold;


– 20 –

4) Shareholders are unable to properly exercise the rights or assume theobligations thereof as Shareholders, which may cause significant deficienciesin the governance of the Company;

5) Material changes in equity, business scope and in operation andmanagement;

6) Changes in the chairman, general manager, or directors and seniormanagement who perform corresponding duties on their behalf;

7) Factors such as national laws and regulations, major policy adjustments orforce majeure that may have a material adverse effect on the operation andmanagement of the Company;

8) They are under investigation or being subject to compulsory measures takenby competent authorities for alleged grave violations of laws and regulations;

9) They receive administrative or criminal penalty due to serious violations oflaws and regulations;


11) They are involved in merger, division or major asset or debt restructuring;

12) They are subject to regulatory measures including suspension of operationfor recertification, cancellation, takeover or custody, or enter into dissolution,bankruptcy or closure procedure;

13) They are involved in other circumstances that may affect equity changes ofthe Company or operation of the Company as a going concern.

Shareholders holding 5% or more equity of the Company fall under any of thecircumstances prescribed in the preceding paragraph, the Company shall report therelevant information to the local office of the CSRC at its domicile within threeworking days upon receipt of the notice given by the said Shareholders.

De facto controllers of the Company fall under any of the circumstances listed initems 8 to 12 of the preceding paragraph, the Company shall report the relevantinformation to the local office of the CSRC at its domicile within three workingdays upon receipt of the notice given by the de facto controllers.”


“Article 61 The shareholders’ general meeting shall exercise the followingfunctions and powers:

......


– 21 –

19) to consider any other matters to be resolved by shareholders’ generalmeeting as required by the laws, administrative regulations, departmentalrules and the Articles of Association.”


“Article 61 The shareholders’ general meeting shall exercise the followingfunctions and powers:

......

19) to consider any other matters to be resolved by shareholders’ generalmeeting as required by the laws, administrative regulations, departmentalrules, the listing rules of the place where the Company’s shares are listedand the Articles of Association.”


“Article 65 Where the Company convenes a general meeting, a written noticeshall be given 45 days prior to the date of the meeting to notify all theShareholders in the Shareholders’ register of the issues to be considered at themeeting, and the date and venue of the meeting. Any Shareholder who intends toattend the meeting shall deliver to the Company a written reply stating his or herintention to attend 20 days prior to the meeting.

When calculating the starting date, the date of the meeting shall be excluded.”


“Article 65 Where the Company convenes an annual general meeting, a writtennotice shall be given at least 20 working days prior to the date of the meeting tonotify all the Shareholders; where the Company convenes an extraordinary generalmeeting, a public announcement shall be published at least 10 working days or 15days (whichever is longer) prior to the date of the meeting to notify all theShareholders. Any Shareholder who intends to attend the meeting shall deliver tothe Company a written reply stating his or her intention to attend within theperiod stipulated in the meeting notice.

When calculating the starting date, the date of the meeting shall be excluded.”


“Article 67 The Company shall, based on the written replies received 20 daysbefore the date of convening the shareholders’ general meeting, calculate thenumber of shares with voting right represented by the shareholders who intend toattend the meeting. If the number of shares with voting rights represented by theshareholders who intend to attend the meeting reaches one half or more of theCompany’s total shares with voting rights, the Company may convene the


– 22 –

shareholders’ general meeting. Otherwise, the Company shall within 5 days notifythe shareholders again by way of an announcement of the matters to beconsidered at, and the date and place for, the meeting. After giving notice byannouncement, the Company may convene the meeting.

An extraordinary general meeting shall not make decisions on matters not statedin the notice of meeting.”


“Article 67 Proposals not set out in the notice of general meeting or notcomplying with the provision herein shall not be voted on or resolved at thegeneral meeting.”


“Article 69 ......

The announcement referred to in the preceding paragraph shall be published inone or more newspapers designated by the competent securities authorities of theState Council within the interval between forty-five days and fifty days before thedate of convening the meeting; after the publication of the announcement, allholders of domestic shares shall be taken to have received notice of the relevantshareholders’ meeting.

......”


“Article 69 ......

The announcement referred to in the preceding paragraph shall be published onthe website of the stock exchange and the media that meet the requirements of thesecurities regulatory authority of the State Council within the period stipulated inArticle 65 of this Articles of Association; after the publication of theannouncement, all holders of domestic shares shall be taken to have receivednotice of the relevant shareholders’ meeting.

......”


“Article 85 A general meeting convened by the Board shall be presided over andchaired by the chairman of the Board. If the chairman is unable to attend themeeting for reasons, the Board may designate a director to convene and take thechair of the meeting in his stead. If no chairman of the meeting has beendesignated, shareholders present shall choose one (1) person to be the chairman ofthe meeting. Where the shareholders fail to elect a chairman for any reasons, the


– 23 –

shareholder (including his proxy) presents in person or by proxy who holds thelargest number of shares carrying the right to vote thereat shall be the chairmanof the meeting.

......”


“Article 85 A general meeting convened by the Board, shall be presided over andchaired by the chairman of the Board. If the chairman is unable or fails toperform his duties, the meetings shall be presided over by a director jointlyrecommended by more than half of the directors, and take the chair of themeeting in his stead. If no chairman of the meeting has been designated,shareholders present shall choose one (1) person to be the chairman of themeeting. Where the shareholders fail to elect a chairman for any reasons, theshareholder (including his proxy) presents in person or by proxy who holds thelargest number of shares carrying the right to vote thereat shall be the chairmanof the meeting.

If the Board is unable or fails to fulfil the obligation of convening the generalmeeting, the Supervisory Committee shall convene and preside over such meeting.If the Supervisory Committee does not convene and preside over such meeting,the shareholders individually or jointly holding no less than 10% of the shares forno less than 90 consecutive days may convene and preside over such meeting ontheir own.

......”


“Article 96 In the event that the Company convenes a class meeting, a writtennotice specifying the matters to be considered at, and the date and location for,the meeting shall be issued to the shareholders whose names appear on theregister of shareholders of such class forty-five days before the time appointed forholding such meeting. Shareholders who intend to attend the meeting shall servethe written reply to the Company twenty days prior to the date of the meeting.

Where the number of shares carrying the rights to vote at the meeting held by theshareholders intending to attend the meeting reaches half or more of the totalnumber of shares of such class carrying the rights to vote at the meeting, theCompany may convene the class meeting based thereon, failing which theCompany shall within five days notify the shareholders again, by way of a publicannouncement, of the matters to be considered at, and the place and date for, themeeting before it raised funds to convene the class meeting.”


– 24 –


“Article 96 In the event that the Company convenes a class meeting, it shallnotify all shareholders whose names appear on the register of shareholders of suchclass, specifying the matters to be considered at, and the date and location for, themeeting by way of public announcement before the period stipulated in Article 65of the Articles of Association. Shareholders who intend to attend the meeting shallserve the written reply to the Company within the period stipulated in the meetingnotice.”


“Article 119 Independent directors of the Company shall meet the followingconditions:

......

3) have passed the qualification test accepted by the CSRC;

......”


“Article 119 Independent directors of the Company shall meet the followingconditions:

......

3) are familiar with the laws and administrative regulations of futures and therequirements of the CSRC, and possess professional expertise in futures;

......”


“Article 153 In any of the following circumstances, a person shall not serve asdirector, supervisor, general manager or other senior management of theCompany:

......

4) has served as the legal representative of a company or an enterprise whoseBusiness License was revoked due to illegal activities and was personallyliable for such punishment, and less than three years has elapsed since thedate of revocation of the business license of the company or enterprise;

......”


– 25 –


“Article 153 In any of the following circumstances, a person shall not serve asdirector, supervisor, general manager or other senior management of theCompany:

......

4) has served as the legal representative of a company or an enterprise whoseBusiness License was revoked due to illegal activities or was ordered to bewound-up and was personally liable for such punishment, and less than threeyears has elapsed since the date of revocation of the business license of thecompany or enterprise;

......”


“Article 190 The Company’s appointment, removal and non-reappointment of anaccounting firm shall be decided by a shareholders’ general meeting and filedwith the competent securities authorities of the State Council.

......”


“Article 190 The Company’s appointment, removal and non-reappointment of anaccounting firm shall be decided by a shareholders’ general meeting and reportthe relevant information to the local office of the CSRC as its place of domicilewithin five business days upon decision is made; for removal of an accountingfirm, the Company shall explain the reason.

......”

The existing Articles of Association are written in Chinese without an official Englishversion. Therefore, any English translation is for reference only. In case of inconsistency, theChinese version shall prevail. After incorporating the proposed amendments to the existingArticles of Association as set out above, the numbering of and cross-referencing referred toin the articles will be re-numbered and updated accordingly.

IV. PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES OFTHE BOARD

As disclosed in the announcements of the Company dated 26 March 2021, the Boardresolved at a meeting of the Board on 26 March 2021 to make certain amendments to theexisting Rules of Procedures of the Board. A special resolution will be proposed at the AGMto approve the amendments of the existing Rules of Procedures of the Board.


– 26 –


1. Rule 14 which originally reads as:

“Rule 14 Directors of the Company shall be natural persons. A natural personwho falls into any of the following circumstances shall not serve as Director ofthe Company:

......

4) has served as the legal representative of a company or an enterprise whoseBusiness License was revoked due to illegal activities and was personallyliable for such punishment, and less than three years has elapsed since thedate of revocation of the business license of the company or enterprise;

......”


“Rule 14 Directors of the Company shall be natural persons. A natural personwho falls into any of the following circumstances shall not serve as Director ofthe Company:

......

4) has served as the legal representative of a company or an enterprise whoseBusiness License was revoked due to illegal activities or was ordered to bewound-up and was personally liable for such punishment, and less than threeyears has elapsed since the date of revocation of the business license of thecompany or enterprise;

......”


“Rule 40 Independent directors of the Company shall meet the followingconditions:

......

3) have passed the qualification test accepted by the CSRC;

......”


“Rule 40 Independent directors of the Company shall meet the followingconditions:


– 27 –

......

3) are familiar with the laws and administrative regulations of futures and therequirements of the CSRC, and possess professional expertise in futures;

......”

The existing Rules of Procedures of the Board are written in Chinese without anofficial English version. Therefore, any English translation is for reference only. In case ofinconsistency, the Chinese version shall prevail. After incorporating the proposedamendments to the existing Rules of Procedures of the Board as set out above, thenumbering of and cross-referencing referred to in the rules will be re-numbered and updatedaccordingly.

V. PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES OFTHE GENERAL MEETING

As disclosed in the announcements of the Company dated 26 March 2021, the Boardresolved at a meeting of the Board on 26 March 2021 to make certain amendments to theexisting Rules of Procedures of the General Meeting. A special resolution will be proposedat the AGM to approve the amendments of the existing Rules of Procedures of the GeneralMeeting.



“Rule 6 The Shareholders’ General Meeting is the organ of authority of theCompany and shall exercise the following functions and powers in accordancewith the law:

......

19) to consider any other matters to be resolved by Shareholders’ GeneralMeeting as required by the laws, administrative regulations, departmentalrules and the Articles of Association.”


“Rule 6 The Shareholders’ General Meeting is the organ of authority of theCompany and shall exercise the following functions and powers in accordancewith the law:

......


– 28 –

19) to consider any other matters to be resolved by shareholders’ generalmeeting as required by the laws, administrative regulations, departmentalrules, the listing rules of the place where the Company’s shares are listedand the Articles of Association.”


“Rule 19 Where the Company convenes a general meeting, a written notice shallbe given 45 days prior to the date of the meeting to notify all the Shareholders inthe Shareholders’ register of the issues to be considered at the meeting, and thedate and venue of the meeting. Any Shareholder who intends to attend themeeting shall deliver to the Company a written reply stating his or her intentionto attend 20 days prior to the meeting.

......”


“Rule 19 Where the Company convenes an annual general meeting, a writtennotice shall be given at least 20 working days prior to the date of the meeting tonotify all the Shareholders; where the Company convenes an extraordinary generalmeeting, a public announcement shall be published at least 10 working days or 15days (whichever is longer) prior to the date of the meeting to notify all theShareholders. Any Shareholder who intends to attend the meeting shall deliver tothe Company a written reply stating his or her intention to attend within theperiod stipulated in the meeting notice.

......”


“Rule 20 The Company shall, based on the written replies received twenty daysbefore the date of convening the shareholders’ general meeting, calculate thenumber of shares with voting right represented by the shareholders who intend toattend the meeting. If the number of shares with voting rights represented by theshareholders who intend to attend the meeting reaches one half or more of theCompany’s total shares with voting rights, the Company may convene theshareholders’ general meeting. Otherwise, the Company shall within five daysnotify the shareholders again by way of an announcement of the matters to beconsidered at, and the date and place for, the meeting. After giving notice byannouncement, the Company may convene the meeting.

An extraordinary general meeting shall not make decisions on matters not statedin the notice of meeting.”



– 29 –

“Rule 20 Proposals not set out in the notice of general meeting or not complyingwith the provision herein shall not be voted on or resolved at the generalmeeting.”


“Rule 22 ......

The announcement referred to in the preceding paragraph shall be published inone or more newspapers designated by the competent securities authorities of theState Council within the interval between forty-five days and fifty days before thedate of convening the meeting; after the publication of the announcement, allholders of domestic shares shall be taken to have received notice of the relevantshareholders’ meeting.

......”


“Rule 22 ......

The announcement referred to in the preceding paragraph shall be published onthe website of the stock exchange and the media that meet the requirements of thesecurities regulatory authority of the State Council within the period stipulated inRule 19 of these Rules of Procedures; after the publication of the announcement,all holders of domestic shares shall be taken to have received notice of therelevant shareholders’ meeting.

......”


“Rule 25 Where the Company intends to convene a Shareholders’ generalmeeting, the Board or the convener of the Shareholders’ general meeting shall fixa record date for the registration of the shareholdings, and Shareholders whosename appear on the register of Shareholders at the close of business of the recorddate shall be Shareholders of the Company.

No changes in the Shareholders’ register due to the transfer of shares may bemade within thirty (30) days before the date of a Shareholders’ general meeting orwithin five (5) days before the record date for the Company’s distribution ofdividends.”


– 30 –


“Rule 25 Where the Company intends to convene a Shareholders’ generalmeeting, the Board or the convener of the Shareholders’ general meeting shall fixa record date for the registration of the shareholdings, and Shareholders whosename appear on the register of Shareholders at the close of business of the recorddate shall be Shareholders of the Company.

Any laws, regulations and listing rules of the place where the shares of theCompany are listed concerning the book closure period prior to the holding of ageneral meeting to dividend distributions by the Company shall be observed.”


“Rule 43 A general meeting convened by the Board, shall be presided over andchaired by the chairman of the Board. If the chairman is unable to attend themeeting for reasons, the Board may designate a director to convene and take thechair of the meeting in his stead. If no chairman of the meeting has beendesignated, shareholders present shall choose one (1) person to be the chairman ofthe meeting. Where the shareholders fail to elect a chairman for any reasons, theshareholder (including his proxy) presents in person or by proxy who holds thelargest number of shares carrying the right to vote thereat shall be the chairmanof the meeting.

......”


“Rule 43 A general meeting convened by the Board, shall be presided over andchaired by the chairman of the Board. If the chairman is unable or fails toperform his duties, the meetings shall be presided over by a director jointlyrecommended by more than half of the directors, and take the chair of themeeting in his stead. If no chairman of the meeting has been designated,shareholders present shall choose one (1) person to be the chairman of themeeting. Where the shareholders fail to elect a chairman for any reasons, theshareholder (including his proxy) presents in person or by proxy who holds thelargest number of shares carrying the right to vote thereat shall be the chairmanof the meeting.

If the Board is unable or fails to fulfil the obligation of convening the generalmeeting, the supervisory Committee shall convene and preside over such meeting.If the supervisory Committee does not convene and preside over such meeting,the shareholders individually or jointly holding no less than 10% of the shares forno less than 90 consecutive days may convene and preside over such meeting ontheir own.

......”


– 31 –

The existing Rules of Procedures of the General Meeting are written in Chinesewithout an official English version. Therefore, any English translation is for reference only.In case of inconsistency, the Chinese version shall prevail. After incorporating the proposedamendments to the existing Rules of Procedures of the General Meeting as set out above,the numbering of and cross-referencing referred to in the rules will be re-numbered andupdated accordingly.

VI. PROFIT DISTRIBUTION PLAN FOR THE YEAR 2020

According to the annual results announcement of the Company for the year ended 31December 2020 dated 26 March 2021, in view of the long-term development of theCompany and the interests of the investors, the Company is expected to make the followingprofit distribution plan:

The Board proposed distribution of cash final dividend for the year ended 31 December2020 of RMB0.05 per Share (tax inclusive) (the “2020 Final Dividend”) to Shareholderswhose names appeared on the register of members on the equity registration date (the“Equity Registration Date”) of the distribution of the 2020 Final Dividend, namelyWednesday, 26 May 2021, and who are entitled to such distribution. Based on the totalequity of the Company as of 31 December 2020, the aggregate amount to be distributed willbe RMB45,350,000. The 2020 Final Dividend is subject to the approval by Shareholders atthe AGM. The 2020 Final Dividend is intended to be paid on Friday, 25 June 2021. Thedividend payable to holders of Domestic Shares will be in RMB while those payable toholders of H Shares will be in Hong Kong Dollars. The exchange rate shall be calculated onthe basis of the average benchmark exchange rate between RMB and Hong Kong Dollars asannounced by the People’s Bank of China for the five working days prior to the date of theAGM.

The related resolution was considered and approved by the Board at the BoardMeeting. It is hereby submitted to the AGM for consideration in accordance with theArticles of Association and the Rules of Procedures of the General Meeting.

Subject to the approval of the resolution regarding the declaration of the 2020 FinalDividend at the AGM, the 2020 Final Dividend will be paid to the Shareholders whosenames appear on the register of members of the Company on Wednesday, 26 May 2021, andwho are entitled to such distribution. The share registrar of the Company will be closedfrom Friday, 21 May 2021 to Wednesday, 26 May 2021 (both days inclusive), during whichperiod no transfer of Shares will be registered. In order to qualify for receiving the 2020Final Dividend, all completed share transfer documents accompanied by the relevant sharecertificates must be lodged with the Company’s H Share registrar, Computershare HongKong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183Queen’s Road East, Hong Kong, and in any case no later than 4:30 p.m. on Thursday, 20May 2021. The Company has no obligation and will not be responsible for confirming theidentities of the Shareholders. The Company held no liability in respect of any claimsarising from any delay in, or inaccurate determination of the identity of the Shareholders orany disputes over the mechanism of withholding.


– 32 –

VII. REMUNERATION PACKAGE FOR DIRECTORS AND SUPERVISORS FORTHE YEAR 2020

In accordance with the relevant PRC policies and requirements, the Companyformulated the remuneration package for Directors and Supervisors for the year ended 31December 2020. Such resolution has been considered and approved by the Board at theBoard Meeting, and is hereby submitted to the AGM for consideration in accordance withthe Articles of Association. Details of the remuneration package are as follows:

Name PositionBasic

remuneration Benefits BonusTotal

(before tax)(RMB) (RMB) (RMB) (RMB)

Zhou Yong Chairman andexecutiveDirector

– – – Not havingreceived anyremuneration

from theCompany

Zhou Jianqiu executiveDirector

168,000.00 224,903.99 – 392,903.99

Xue Binghai Non-executiveDirector


from theCompany

Shan Bing Non-executiveDirector


from theCompany

Jiang Lin Non-executiveDirector


from theCompany

Wang Yuetang IndependentNon-executiveDirector

120,697.36 – – 120,697.36

Lam Kai Yeung Non-executiveDirector

130,751.00 – – 130,751.00


– 33 –

Name PositionBasic

remuneration Benefits BonusTotal

(before tax)(RMB) (RMB) (RMB) (RMB)

Huang Dechun IndependentNon-executiveDirector

120,697.36 – – 120,697.36

Yu Hong Chairlady of theSupervisoryCommittee

159,600.00 196,507.37 26,400.00 382,507.37

Yao Aili Supervisor 97,800.00 113,806.43 37,020.00 248,626.43

Wang Jianying Supervisor – – – Not havingreceived anyremuneration

from theCompany

VIII. PROPOSED CHANGE OF AUDITORS

Pursuant to the Administrative Measures for the Appointment of Accounting Firms byState-owned Financial Enterprises （《國有金融企業選聘會計師事務所管理辦法》） (Caijin No.[2020]6) issued by the Ministry of Finance of the People’s Republic of China, the term ofconsecutive engagement of the same accounting firm by a financial enterprise shall inprinciple not exceed five years and the consecutive engagement shall not exceed eight years.KPMG has been engaged by the Company to provide audit services in relation to thedomestic financial statements for approximately six consecutive years. In order to complywith above requirement, the Company has reached a mutual understanding with KPMG onthe non-renewal of its appointment.

KPMG has confirmed that there are no matters in connection with its retirement thatshould be brought to the attention of the Shareholders. The Board and the audit committeeof the Company have also confirmed that there is no disagreement with KPMG and theBoard has no unresolved issue regarding the proposed change of auditors. The Boardconfirms there are no circumstances in respect of the proposed change of auditors that needsto be brought to the attention of the Shareholders.

The Company would like to extend its sincere gratitude to KPMG for its qualityservices provided to the Group in previous years.

The Board proposed to appoint ShineWing Certified Public Accountants as the auditorsof the Company, subject to the approval by the Shareholders at the AGM.


– 34 –

IX. CLOSURE OF REGISTER OF MEMBERS

In order to determine the entitlement to attend and vote at the AGM and the ClassMeetings, the register of members of the Company will be closed from Wednesday, 14 April2021 to Friday, 14 May 2021 (both days inclusive), during which period no transfer ofShares will be effected. In order to be qualified to attend and vote at the AGM and the ClassMeetings, all transfers documents accompanied by the relevant Share certificates must belodged with the H Share registrar of the Company, Computershare Hong Kong InvestorServices Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East,Wanchai, Hong Kong (in respect of H Shares), or to the head office in the PRC of theCompany (in respect of Domestic Shares) no later than 4:30 p.m. on Tuesday, 13 April 2021.

X. NOTICES OF THE AGM AND CLASS MEETINGS

The AGM will be held at the Conference Room, 9/F, Holly Tower, No. 50 ZhonghuaRoad, Nanjing, the PRC at 2:00 p.m. on Friday, 14 May 2021. The Domestic Shareholders’Class Meeting will be held immediately after the conclusion of the AGM at the same place,and the H Shareholders’ Class Meeting will be held immediately after the conclusion of theDomestic Shareholders’ Class Meeting at the same place. Notices dated 26 March 2021convening the AGM and the Class Meetings together with the relevant reply slips and formsof proxy have been despatched to the Shareholders in accordance with the Listing Rules.

XI. REPLY SLIPS AND FORMS OF PROXY

If you are eligible and intend to attend the AGM and/or the Class Meeting(s) (as thecase may be), please complete and return the reply slip(s), in accordance with theinstructions printed thereon as soon as possible and in any event no later than Saturday, 24April 2021 or any adjournment thereof.

Shareholders who are entitled to attend and vote at the AGM and/or the ClassMeeting(s) may appoint one or more proxies to attend and vote on their behalves. A proxyneed not be a Shareholder. In order to be valid, the proxy form for the AGM and/or theClass Meeting(s) must be deposited by hand or post, for holders of H Shares, to the H shareregistrar of the Company, Computershare Hong Kong Investor Services Limited at 17MFloor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong and, for holders ofDomestic Shares, to the headquarters in the PRC of the Company not less than 24 hoursbefore the time for holding such meeting(s) (or any adjournment thereof) for taking the poll(i.e. Thursday, 13 May 2021 at 2:00 p.m.) (as the case may be). If the proxy form is signedby a person under a power of attorney or other authority, a notarial copy of that power ofattorney or authority shall be deposited at the same time as mentioned in the proxy form.Completion and return of the proxy form will not preclude shareholders from attending andvoting in person at the AGM and/or the Class Meeting(s) or any adjourned meetings shouldthey so wish.


– 35 –

XII. VOTING BY POLL AT THE AGM AND THE CLASS MEETINGS

Pursuant to Rule 13.39(4) of the Listing Rules, all votes at the AGM and/or the ClassMeeting(s) will be taken by poll and the Company will announce the results of the poll inthe manner prescribed under Rule 13.39(5) of the Listing Rules. To the best knowledge ofthe Company, no Shareholders are required to abstain from voting in the AGM and the ClassMeeting.

XIII. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept fullresponsibility, includes particulars given in compliance with the Listing Rules for thepurpose of giving information with regard to the Company. The Directors, having made allreasonable enquiries, confirm that to the best of their knowledge and belief the informationcontained in this circular is accurate and complete in all material respects and notmisleading or deceptive, and there are no other matters the omission of which would makeany statement herein misleading.

XIV. RECOMMENDATIONS

The Directors consider that all the proposed resolutions set out in the notice of theAGM and/or the Class Meeting(s) (as the case may be) are in the interests of the Companyand the Shareholders as a whole. Accordingly, the Board recommends the Shareholders tovote in favour of the relevant resolutions to be proposed at the AGM and/or the ClassMeeting(s) (as the case may be).

XV. MISCELLANEOUS

Reference is made to the announcement of the Company dated 30 March 2021 inrelation to the postponement of the AGM, Domestic Shareholders’ Class Meeting and HShareholders’ Class Meeting and the change of book closure period. As disclosed in theannouncement, as further time is required to give notice to the Shareholders concerning theclosure period of the register of members of the Company, the AGM and the Class Meetingsoriginally scheduled on Wednesday, 12 May 2021 has been postponed to Friday, 14 May2021 for the purpose of considering and, if thought fit, passing the resolutions as set out inthe notices convening the AGM, the Domestic Shareholders’ Class Meeting and the HShareholders’ Class Meeting as set out on pages AGM-1 to AGM-5, DSCM-1 to DSCM-3and HSCM-1 to HSCM-3 of this circular, respectively. The register of members of theCompany was originally scheduled to be closed from Sunday, 11 April 2021 to Wednesday,12 May 2021, both days inclusive. Due to the change of the date of the AGM and the ClassMeetings, in order to determine the list of Shareholders who are entitled to attend and voteat the AGM and the Class Meetings, the closure period of the register of members of theCompany has also been changed to the period from Wednesday, 14 April 2021 to Friday, 14May 2021, both days inclusive, during which period no transfer of Shares will be effected.


– 36 –

Save for the change of the date of the AGM and the Class Meetings and thecorresponding changes specified in the abovementioned announcement, all information andcontent set out in the notices dated 26 March 2021 convening the AGM and the ClassMeetings (as set out in this circular) together with the relevant reply slips and forms ofproxy will remain valid.

Save as otherwise indicated, the Chinese text of this circular shall prevail over theEnglish text for the purpose of interpretation.

By order of the BoardMs. Zhou JianqiuExecutive Director


– 37 –

The English version of this appendix is an unofficial translation of its Chinese version.In case of any discrepancies, the Chinese version shall prevail.

To facilitate the initial public offering and listing of A Share (“the Offering andListing”), Holly Futures Co., Ltd. (hereinafter referred to as the “Company”) herebyproposes that the general meeting shall authorise the Board and its delegates, individually orjointly, to handle all the matters relating to the Offering and Listing of the Company at itsfull discretion, including, but not limited to:

1. Formulating and implementing a specific implementation plan for the Offeringand Listing of the Company within the scope of authority granted by the generalmeeting in accordance with the issuance plan considered and approved at thegeneral meeting and the approval of the CSRC and based on the prevailing marketconditions and the actual situation of the Company, including but not limited tothe offer size, offer price (including price range and the final price), time andmethod of the offering, potential strategic placing (including placing ratio andtarget subscribers), proposed alternative of stock exchanges, the specific allocationpercentages for the use of raised funds, and the determination and adjustment onthe specific arrangement of the use of raised funds on the investment projects,significant undertakings of the Company, the listing of the existing unlisted sharesof the Company and other matters relating to the offering and listing; makingcorresponding adjustments (including the suspension, cessation, termination andwithdrawal of the implementation of the offering plan) to matters in relation tothe specific plan for the Offering and Listing as a result of changes in laws,regulations or regulatory documents with respect to the A Share Offering, orchanges in policies of regulatory authorities in connection with the A ShareOffering, or changes in market conditions, save for those matters required to bevoted on again at a general meeting under the requirements of the relevant laws,regulations, regulatory documents and the Articles of Association;

2. Determining and appointing the sponsor, underwriters, law firms, accountingfirms, receiving banks, companies taking charge of financial public relations andother intermediaries in connection with the offering and listing, and determiningand paying the expenses relating thereto;

3. Drafting, producing, amending, supplementing, signing, submitting, presenting,publishing, disclosing, implementing, suspending or terminating any agreementsand documents, relevant announcements, circulars or other documents relating tothe offering and listing (including but not limited to the letter of intent foroffering, prospectus, listing documents, sponsorship agreements, underwritingagreements, listing agreements, intermediary service agreements, report on the useof raised funds from the previous offering, special assurance report on the use ofraised funds from the previous offering and others), and dealing with the mattersrelating to information disclosure in connection with the offering and listing inaccordance with domestic and overseas regulatory requirements;

APPENDIX I THE AUTHORISATION TO THE BOARD TO DEAL WITH RELATED MATTERS INCONNECTION WITH THE COMPANY’S APPLICATION FOR THE A SHARE

OFFERING AND LISTING OF A SHARES AT ITS FULL DISCRETION

– I-1 –

4. Handling the procedures for the review and examination, registration, filing,approval and consent with the regulatory authorities, governmental authorities,stock exchanges and securities registration and clearance authorities in, and outof, the PRC, in connection with matters relating to the offering and listingaccording to the plan for the offering and listing; signing, executing, amendingand perfecting all the documents to be submitted to any governments, authorities,organisations and individuals in, and out of, the PRC, with respect to the offeringand listing; designating an account specifically for the holding of any raised fundsprior to this offering and listing, if required; issuing statements and undertakingsrelating to the offering and listing, and taking all the actions related to theoffering and listing;

5. Adjusting, supplementing, amending and improving the Articles of Associationand the attachments thereto and other corporate governance documents whichhave been considered and approved at Board meetings and general meetings andas amended by the Company for the offering and listing according to any changesin the relevant laws, regulations and other regulatory documents and based on therequirements and advice of the relevant government agencies, regulatoryauthorities and stock exchanges in, and out of, the PRC, and the actual situationof the offering and listing;

6. Making corresponding amendments to the Articles of Association with respect tothe registered capital and shareholding structure of the Company, handling theprocedures in relation to the approval, filing and change of registration inconnection with any change of the registered capital or Articles of Association ofthe Company with such authorities as industrial and commercial administrationauthorities, securities regulation, registration authorities and other competentgovernment authorities, as well as dealing with matters in relation to theapplication for the listing of A Shares on a securities exchange according to theactual situation of the A Share Offering;

7. Analysing, researching and verifying the influences of the offering and listing onthe immediate financial index of the Company and the immediate return of theShareholders in accordance with relevant laws and regulations and therequirements of the regulatory authorities in and out of the PRC; amending,improving and implementing the remedial measures and policies in accordancewith the advice from regulatory authorities and the market situation; and handlingall other matters related thereto at full discretion;

8. Adjusting the planned use of raised funds from the Offering and Listing accordingto the opinions and suggestions of regulatory authorities, including but not limitedto adjusting the progress of investment in the projects to be invested in with theraised funds and the allocation among such projects;



– I-2 –

9. Handling all other matters in connection with the offering and listing to the extentpermitted by the relevant laws, regulations and regulatory documents and theArticles of Association;

10. Delegating any one of the Executive Directors of the Company or other personsdesignated by the Executive Directors to deal with any matters relating to theoffering and listing as and when needed;

11. The aforesaid authorization shall be valid within the 12 months after the date onwhich this proposal is approved at the general meeting of the Company.



– I-3 –


The Company intends to launch the initial public offering of A Share and get listed.According to the Measures for the Administration of Initial Public Offering and Listing ofStocks enacted by China Securities Regulatory Commission (“the CSRC”), the Companyhereby carries out feasibility analysis on the purpose of fund-raising:

I. QUANTITY OF A SHARE FOR INITIAL PUBLIC OFFERING AND ITSPURPOSE

The Company intends to issue no more than 120 million shares of A shares. The raisedfunds from this initial public offering will be completely used to supplement the capital ofthe Company after deducting the offering expenses. The purposes include but are not limitedto the following:

1. Supplementing the capital of the Company and domestic subsidiaries, optimizingthe construction of multi-level outlet system, and enhancing the servicecapabilities of the Company’s futures brokerage business and risk managementbusiness service capabilities;

2. Supplementing the capital of the Company’s overseas subsidiaries and providingguarantees for the overseas subsidiaries’ business development;

3. Increasing investment in the R&D and investment advisory businesses, andstimulating the development of innovative businesses;

4. Enhancing the development of wealth management business, and accelerating thetransformation and upgrading of enterprise;

5. Reinforcing the establishment of information technology system, andstrengthening the service of the mid- and back-office;

6. Seeking mergers and reorganizations, enhancing market competitiveness andintegrated financial services capabilities of the Company, and realizing leapfrogdevelopment.

When the raised funds are available, the Company will develop reasonable fund useplan according to the business development status, approval progress and quota of theinnovative business and the market conditions, in order to achieve good investment benefit.

II. NECESSITY ANALYSIS ON A SHARE INITIAL PUBLIC OFFERING

The futures market in China developed rapidly in recent years. The traditionaldevelopment mode futures company, development based on internal accumulation and capitalincrease from shareholders, cannot meet the rapid development demand of the industry.

APPENDIX II FEASIBILITY ANALYSIS REPORT ON THE INVESTMENTPROJECTS USING THE PROCEEDS FROM THE A SHARE OFFERING

– II-1 –

Through offering and listing, the Company can rapidly increase its capital strength in a shorttime, enhance its risk resistance capacity, and establish a long-term effective capitalsupplementation mechanism.

The raised funds from the offering will be used to supplement the capital of theCompany, which is necessary for the Company to achieve its strategic objectives andincrease the core competitiveness, integrate resources and drive the quick development ofthe businesses.

1. The need for further expanding the net capital, meeting the regulatoryrequirement on capital and facilitating the business development

Administrative Measures on Risk Regulation Index of Futures Company has stipulatedspecific requirements on the capital size of the futures company, linked the business scale ofthe futures company dynamically with the net capital level, and established a risk controlindex system based on net capital for the futures companies. In the future, the scale of allthe businesses of a futures company will be closely related to its net capital size.

2. The need for expanding capital supplementation channels and improving thediversity and flexibility of fund-raising methods

According to Administrative Measures on Risk Regulation Index of Futures Company,the qualification for the futures company to expand its business scale and carry out varioustypes of business is linked to its net capital size. Therefore, expanding net capital hasbecome a top priority for the development of the futures company. Besides, the overallgrowth of the futures industry has made it possible for the futures company to expand itscapital through offering and listing, capital increase and share expansion, and merger andacquisition and restructuring. If the Company succeeds in the A Share listing, it can achieverefinancing flexibly with the domestic capital vehicles, thus laying a solid foundation for thedevelopment and growth of the Company.

3. The need for improving the risk resistance capacity of the Company

As a capital intensive industry, the risk resistance capacity of the futures industry isdirectly linked to its capital size. Through offering and listing, the capital strength of theCompany will be further enhanced, and its risk resistance capacity will be further improved.In this way, the Company can better prevent and mitigate all the risks incurred in theoperation and development.

4. The need for increasing the brand value and enhancing the core competitiveness ofthe Company

With this offering, the Company can attract high-quality investors through the capitalmarket, further improve its corporate government level, expand the business developmentspace, improve the operation management level and core competitiveness, enhance themarket position and regional influence of the Company, improve its brand image andreputation, and increase its comprehensive competitive strength.


– II-2 –

In consideration of the development needs, regulatory requirements, and realization ofshareholder value, this offering complies with the relevant laws, regulations and policies andmeets the long-term development strategy of the Company. It can further enhance the capitalstrength and market competitiveness of the Company, and plays a great role in driving thesustainable and steady growth of the business and promoting the market influence of theCompany.

III. FEASIBILITY ANALYSIS ON THE USE OF THE FUNDS RAISED THROUGHINITIAL PUBLIC OFFERING OF A SHARE

The futures industry shows diversified trends of development after years ofdevelopment and growth, and the Company has eagerly deployed innovative businesseswhile shoring up its traditional brokerage business in the capital market with bothopportunities and challenges. Therefore, it has not only achieved sustained development, butalso accumulated valuable experience.

1. Supplementing the capital of the Company and domestic subsidiaries, optimizingthe construction of multi-level outlet system, and enhancing the service capabilitiesof the Company’s futures brokerage business and risk management businessservice capabilities

The development of financial companies requires continuous capital supplementationand support. Especially, with the quick business growth of the Company, on one hand, theCompany needs the support of strong capital strength to improve the overall risk resistancecapacity and to protect the interests of the investors; on the other hand, the Company alsoneed to supplement the capital to meet the corresponding regulatory requirements and boosttheir business development. The Company and its domestic and overseas subsidiaries areenjoying continuous business growth. The supplementation of capital will help enhance thecapital strength of the Company and its domestic and overseas subsidiaries, improve theirrisk resistance capacity and promote the sustainable development of the Company.

Branches are important channels for the futures companies to serve the customers andexplore the market. After supplementing the capital, the Company will, based on theindustry development trend and the actual situation of the Company, explore the constructionof multi-level outlet system of “headquarters – branches – sales offices” to achieve lightinvestment, innovative operation and differentiated management, gradually determine thedevelopment orientation of the branches, and drive the branches to achieve profit.

The Company develops its risk management businesses through Holly Capital, whichmainly include variation basis trading, cooperative hedging, OTC derivatives business,market making business and warehouse receipt services. Currently, the risk managementbusiness has become a multi-layer service system with “business division-variety service-Holly Capital” as the basis. With the continuous expansion of the business scale and scopeof the risk management business, Holly Capital extremely needs supplementary funds forfurther business development, so as to optimize the business structure and broaden thesource of income, further improve its profitability and strengthen the Company’s overall corecompetitiveness.


– II-3 –

2. Supplementing the capital of the Company’s overseas subsidiaries, and providingguarantees guarantee for the overseas subsidiaries’ business development

It is clearly stated in the Opinion on Further Promoting the Innovative Development ofFutures Business Institutions issued by the CSRC on September 16, 2014 that qualifiedfutures companies are encouraged to carry out collectivized operation, with an aim to build abatch of derivative service groups with international competitiveness. In 2015, the Companyacquired Holly Su Futures (Hongkong) Co., Limited (renamed as Holly InternationalFinancial Holdings Limited in November 2019), which is licensed to carry on Type 1(dealing in securities) and Type 2 (dealing in futures contracts) regulated activities under theSFO.

Going forward, the Company intends to establish domestic and overseas subsidiariesengaged in other derivative services, such as funds, banks and asset management companies,and actively carry out various financial services and businesses to promote the synergy ofvarious businesses, and facilitate the collectivized development of the Company.

3. Increasing investment in the R&D and investment advisory businesses, andstimulating the development of innovative businesses

Traditional brokerage will shift from extensive to intensive, and from providingintermediary services to value added services. The Company turns cooperative innovationinto cohesive innovation. It will put much more effort into the R&D and investmentadvisory businesses. On one hand, it supports the informationalization of the investment andresearch department and expand the R&D team to enhance its overall ability in R&D, andon the other hand, it optimizes the business and operation process of the investment advisorydepartment and strengthens the specialized training to booster the development of innovativebusinesses.

Raising funds through the issuance of A Shares to supplement capital, the Companyprovides adequate capital protection for creating three major innovative business systemsincluding asset management, risk management and international business, andcomprehensively strengthening the pillar construction such as talent, risk control, technologyand research and development.

4. Enhancing the development of wealth management business, and accelerating thetransformation and upgrading of enterprise

Through the issuance and listing of A shares, the Company strengthens its managementwealth business, stimulates the transformation from traditional channel business to anall-rounded wealth management model. The Company gives full play to its advantages inderivatives, establishes a professional investment team, further expands the scope ofinvestment, and improves the ability of comprehensive wealth management.


– II-4 –

The Company promotes the scale transformation of asset management business,accelerates the creation of an active management team, and focuses on launchingcharacteristic active management products in the futures, options and other derivativesmarkets. At the same time, the Company continues to explore and develop productsincluding FOF, MOM, QDII, quantitative arbitrage and FICC.

We speed up the establishment of fund companies, utilize various financial derivativesto create investment portfolios at different levels, and realize integrated services in themarket for hedging products of bonds, equity and derivatives.

5. Reinforcing the establishment of information technology system, and strengtheningthe service of the mid- and back-office

Since financial company requires highly stable and advanced information system, theCompany needs to increase the investment in information system construction, so as to meetthe requirements of relevant laws and regulations, and technically enhance the supportsystem and ensure the robust development of the Company.

On one hand, as the business infrastructure of the Company, the information system isin need of constant investment to ensure the system stability, in order to provide safe andreliable basic information services for the customers; on the other hand, with thedevelopment of science and technology, the information system becomes more and moreimportant to the Company, especially in offering differentiated services to the investors.Therefore, the Company need to continue the construction and investment of informationsystem, in order to meet the personalized demands of the investors.

6. Seeking mergers and reorganizations, enhancing market competitiveness andintegrated financial services capabilities of the Company, and realizing leapfrogdevelopment

Merger and acquisition can further improve the market competitiveness of theCompany and help the Company create an integrated a comprehensive financial serviceplatform. In the future, the Company will further expand its market scale and increase itsmarket share through capital market operation and merger and acquisition of suitableenterprises, in order to promote the leapfrog development of the Company.

IV. INFLUENCE OF THE OFFERING ON THE OPERATION MANAGEMENT ANDFINANCIAL STATUS OF THE COMPANY

When the raised funds from the offering are available, the following direct influencewill be rendered to the financial status and operation results of the Company:

1. When the raised funds are available, the size of the capital and net assets of theCompany will be greatly increased. The A Share listing can provide more optionsand facilities for the refinancing of the Company in the capital market of China.


– II-5 –

With sufficient capital, the Company will have more initiatives and flexibilities inthe operation management, which is good for the business development of theCompany.

2. When the raised funds are available, the net capital of the Company will begreatly increased, the risk control indexes of the Company will be optimized, itsrisk resistance capacity will be enhanced significantly, and the development spaceof the businesses linked to the net capital size will be expanded.

3. Because it takes time to increase the business size, the direct benefit of theoffering may not be reflected in a short time. However, in the long run, the raisedfunds from the offering will be completely used to increase the capital of theCompany, which helps to enhance the capital strength of the Company, facilitatethe long-term development of its businesses, optimize its strategic developmentlayout, improve its continuous profitability and accelerate the achievement of itsstrategic development targets.

To sum up, the raised funds from the offering net of the offering expenses will becompletely used to supplement the capital of the Company. It complies with therelevant laws, regulations and the national industry policies; the offering can improvethe operation management of the Company, promote its long-term healthy development,improve its brand awareness and influence, and provide capital support to theachievement of its strategic targets. It meets the interests of the Company and all theshareholders, and it is necessary and feasible.


– II-6 –


According to Opinion on Further Strengthening the Protection of Minority Investors’Legitimate Rights and Interests in Capital Market (Guo Ban Fa [2013] No. 110) andInstructions on Issues Related to Immediate Return Dilution Arising from Initial PublicOffering, Refinancing and Major Asset Restructuring (the CSRC Announcement [2015] No.31), the Company has made analysis on the influence of the offering of Renminbi commonshares (A Share) over the immediate return dilution, and proposed mitigation andremediation measures.

I. INFLUENCE OF THE OFFERING OF RENMINBI COMMON SHARES (ASHARE) OVER THE IMMEDIATE RETURN DILUTION

The Company intends to publicly issue no more than 120 million A shares this time. Inthe year when the public offering of A Share (“the Public Offering”) is completed, theweighted average shares will increase significantly compared with that of the end of theprevious year. Besides, the raised funds from the offering may not fully generate benefit inthe offering year. Based on the prudent consideration of the industry development, thePublic Offering may subject the Company to the risk of immediate return dilution. Theearnings per share of the Company in the year when the Public Offering is completed maybe lower than that of last year. The Company has developed and will strictly implement thecorresponding countermeasures for the immediate return dilution that may be caused by thePublic Offering.

II. NECESSITY AND RATIONALITY OF THE OFFERING OF RENMINBICOMMON SHARES (A SHARE)

When the raised funds from the offering are available, the capital strength of theCompany will be enhanced, which facilitates the implementation of the subsequentdevelopment strategies. The Company will achieve reasonable capital return by efficientlyallocate the capital and promptly and effectively using the raised funds from the offering.The Company will use the raised funds from the offering to supplement the capital of theCompany and its domestic and overseas subsidiaries, optimize the construction of multi-leveloutlet system, enhance the Company’s futures brokerage business and risk managementbusiness in terms of service capability, supplement the funds of overseas subsidiaries,provide overseas subsidiaries with guarantee for business development, put much moreefforts in the R&D and investment advisory businesses, promote the development andenhancement of innovative business, strengthen the development of wealth management,speed up the transformation and upgrading of enterprise, reinforce the establishment ofinformation technology system, enhance the service of the mid-and back-office, seek mergersand reorganization, enhance the Company’s market competitiveness and comprehensivefinancial service capabilities and achieve huge development, so as to increase theCompany’s comprehensive competitiveness, improve its competitiveness and achievesustainable development.

APPENDIX III IMPACTS AND REMEDIAL MEASURES ON DILUTION OFIMMEDIATE RETURN FROM THE A SHARE OFFERING

– III-1 –

The Company has achieved good accumulation in HR, technology and marketingthrough the existing businesses. It can ensure the reasonable and efficient use of the raisedfunds from the offering, and drive the sustainable and healthy development of its businesses.

III. MITIGATION AND REMEDIATION MEASURES FOR THE IMMEDIATERETURN DILUTION RESULTING FROM THE OFFERING OF RENMINBICOMMON SHARES (A SHARE)

To reduce the immediate return dilution impact of the Public Offering, protect theinterests of minority shareholders of the Company, and optimize the investment returnmechanism of the Company, the Company will reasonably use the raised funds from thePublic Offering, enhance the sustainable development capacity through the followingmeasures, with an aim to increase the shareholder value in medium and long run andmitigate and remedy the dilution influence of the Public Offering on the immediate return tothe shareholders.

1. To continuously drive the comprehensive development of the businesses, expandand diversify the revenue streams

The Company will, while trying to drive the steady growth of the existing businesses,explore the business innovation opportunities, pay close attention to the development trendof financial industry, drive the comprehensive development of businesses and provideintegrated services for the customers, in order to expand the business areas, explore newprofit growth points and gain the winning advantage in the increasingly competitive market.

2. To standardize the management and use of the funds raised

To standardize the management and use of the funds raised, and protect the interests ofthe investors, the Company has developed the Management System for the Raised Funds ofHolly Futures Co., Ltd. pursuant to relevant laws and regulations, which provides detailedprovisions on the deposit, use, change of use of the raised funds and the supervision on theuse of the raised funds. The Company will enhance the management of the raised funds,reasonably and efficiently use the funds, and prevent the risks in connection with the use offunds.

3. To enhance the operation management and internal control, and improve theoperation efficiency and profitability

The Company will further improve its operation and management level and the overallprofitability in the coming years. The Company will strive to increase the use efficiency ofthe funds, improve and enhance the investment decision-making procedures. The Companywill also enhance the internal control and improve corporate governance. It will drive theoverall budget management, optimize the budget management process, enhance costmanagement, strengthen budget execution supervision, in order to fully and effectivelycontrol the operation and management control risks.


– III-2 –

4. To enhance the risk management measures

The Company will continue to enhance the construction of comprehensive riskmanagement system, constantly improve the risk management capacity for credit risk,market risk, operation risk and liquidity risk, enhance the risk prevention and control in keyfields, ensure proper risk identification, measurement, monitoring, handling and report in keyfields, in order to improve the overall risk management capacity of the Company.

5. To maintain stable shareholder return policy

The Company has specified in the Articles of Association (applicable after A Sharelisting) the cash dividend policy and cash dividend distribution proportions as well as theminimum proportion of profit distribution in cash in normal situation, in order to render astable return expectation for the investors. The Company pays great attention to theprotection of the shareholders’ interests. It will maintain the continuity and stability of theprofit distribution policy, with an aim to create long-term value for the shareholders.

IV. PROMISES OF ALL THE DIRECTORS AND SENIOR EXECUTIVES TOENSURE THE IMPLEMENTATION OF THE MITIGATION ANDREMEDIATION MEASURES

The directors and senior executives of the Company undertake to diligently andhonestly perform their duties and maintain the legal rights and interests of the Company andall the shareholders. To ensure the implementation of the mitigation and remediationmeasures, they have made the following (but not limited to) promises:

1. that they will not transfer profit to other entities or individuals free of charge orwith unfair conditions or otherwise damage the interests of the Company;

2. that they will impose constraints on the position-related consumption of thedirectors and senior executives;

3. that they will not use the assets of the Company in any investment orconsumption activity unrelated to their performance of obligations;

4. that the remuneration system developed by the Board is linked to theimplementation status of the mitigation and remediation measures;

5. that the exercise condition of the stock option incentive of the Company (if any)is linked to the implementation status of the mitigation and remediation measures.


– III-3 –


Pursuant to the requirements of the laws and regulations including the Company Lawof the People’s Republic of China, Securities Law of the People’s Republic of China andOpinions on Further Promoting the Reform of the Initial Public Offering System issued byChina Securities Regulatory Commission (the “CSRC”), the Price Stabilising Plan for the AShares of the Company within Three Years after the A Share Offering (the “Plan”) has beenformulated by Holly Futures Co., Ltd. (“the Company”) in order to strengthen the fiduciaryobligation of the controlling shareholder, directors and senior management of the Company,and safeguard the interest of minority shareholders.

I. CONDITIONS FOR ACTIVATING PRICE STABILISING MEASURES

Within three years from the initial public offering and listing (the “Offering andListing”) of the RMB ordinary shares (A Shares) of the Company, if the closing prices of AShares of the Company are lower than the latest audited net assets per share of the Companyfor 20 consecutive trading days (after the latest auditing date, if any dividend distribution,bonus issue, profit distribution, conversion of capital reserve into share capital, share split,issuance of new shares, placement of shares or reduction of share capital has resulted inchanges to the net assets or the total number of shares of the Company, the net assets pershare shall be adjusted accordingly (same hereinafter)) due to other factors excluding forcemajeure, subject to the relevant laws, regulations and normative documents, the Company,its controlling shareholder, directors (excluding independent directors and the directors whodo not receive any salary from the Company, same hereinafter) and senior management andother relevant parties will adopt measures to stabilise the share price of the Company.

II. SPECIFIC PRICE STABILISING MEASURES

(I) Price stabilising measures for the Company

1. If the closing prices of the A Shares of the Company are lower than the latestaudited net assets per share of the Company for 20 consecutive trading days, theobligation of the Company for implementing price stabilising measures will betriggered. The Board shall formulate and announce the price stabilising proposaland submit the proposal to the general meeting of the Company for considerationand approval within 15 trading days after the trigger of the above obligation. Theprice stabilising proposal of the Company shall include, but not limited to, theproposal of repurchasing the A Shares by the Company or other proposals incompliance with the requirements of the relevant laws, regulations and otherregulatory documents (including the listing rules of the place where the shares ofthe Company are listed). The specific proposal shall be implemented after theexecution of the internal approval procedures of the Company and the applicableexternal approval procedures in accordance with the applicable laws, regulations,regulatory documents and the Articles of Association of the Company.

APPENDIX IV PRICE STABILISING PLAN FOR THE A SHARES WITHINTHREE YEARS AFTER THE A SHARE OFFERING

– IV-1 –

2. If the Company adopts the share repurchase proposal, the share repurchaseproposal shall include, but not limited to: the number of shares to be repurchased,the price range of repurchase, the source of capital for repurchase, and the impactof the repurchase on the share price and the operation of the Company. TheCompany shall implement the share repurchase proposal after completing theinternal approval procedures of the Company and external approval procedures asapplicable in accordance with the applicable laws, regulations, regulatorydocuments and the Articles of Association of the Company.

3. The Company shall repurchase its shares through stock exchanges by way ofcentral bidding, offer or other legitimate approaches to stabilise the share price.The total capital to be used by the Company for share repurchase shall be no lessthan 10% of the net profit attributable to the shareholders of the Company asrecoded in the audited combined financial statements of the Company for theprior year, and shall not exceed the net raised funds from the initial publicoffering of A Shares of the Company.

4. If the Company adopts other price stabilising proposals in compliance with therequirements of the applicable laws, regulations and regulatory documents, suchproposals shall be implemented subject to the internal approval procedures of theCompany and the applicable external approval procedures in accordance with theapplicable laws, regulations, regulatory documents and the Articles of Associationof the Company.

5. In the course of implementing the price stabilising proposal, the Company maydiscontinue the implementation of such proposal if the closing prices of the AShares of the Company remained higher than the latest audited net assets pershare of the Company for 10 consecutive trading days. After the implementationis discontinued, if the closing prices of the A Shares of the Company becomeonce again and remain less than the latest audited net assets of the Company for20 consecutive trading days within 6 months subsequent to the trigger of theaforesaid obligation for increasing shareholding, the Company shall continue toimplement such price stabilising proposal.

(II) Price stabilising measures for the controlling shareholder

1. If the closing prices of the A Shares of the Company are lower than the latestaudited net assets per share of the Company for 20 consecutive trading days, andthe Board of the Company fails to announce the aforesaid price stabilisingproposal, or the price stabilising proposal so announced by the Company is notapproved by the competent regulatory authority, the obligation of the controllingshareholder of the Company for increasing their shareholding in the Company willbe triggered. Subject to compliance with the applicable laws, regulations, andregulatory documents (including the listing rules of the place where the shares ofthe Company are listed), the controlling shareholder shall deliver to the Companyand announce the scheme for increasing shareholding in the Company, includingbut not limited to such information as the number and price of additional shares


– IV-2 –

to be acquired, the deadline for completion of increase in shareholding and theobjects thereof, within 15 trading days after their obligation for increasingshareholding is triggered.

2. The controlling shareholder of the Company will acquire the A Shares of theCompany in an accumulative amount of no less than RMB10 million (the “PriceStabilisation Fund”).

3. In the course of implementing the scheme for increasing shareholding, thecontrolling shareholder may discontinue the implementation of such scheme if theclosing prices of the A Shares of the Company remained higher than the latestaudited net assets per share of the Company for 10 consecutive trading days.After the implementation is discontinued, if the closing prices of the A Shares ofthe Company become once again and remain less than the latest audited net assetsof the Company for 20 consecutive trading days within 6 months subsequent tothe trigger of the aforesaid obligation for increasing shareholding, the controllingshareholder shall continue to implement such scheme for increasing shareholding.

4. The controlling shareholder will not sell the shares so acquired within 6 monthsafter the scheme for increasing shareholding is completed, the equity structure ofthe Company after such increase in shareholding shall meet the conditions forlisting, and such increase in shareholding shall be in compliance with therequirements of relevant laws, regulations and regulatory documents.

(III) Price stabilising measures for the directors and senior management

1. If the closing prices of the A Shares of the Company are lower than the latestaudited net assets per share of the Company for 20 consecutive trading days, andthe price stabilising schemes for the Company and the controlling shareholder setforth in (I) and (II) above are not announced in due time, or the plans soannounced are not approved by the competent regulatory authority, the obligationof the directors and senior management of the Company for increasing theirshareholding in the Company will be triggered. Subject to compliance with theapplicable laws, regulations, and regulatory documents (including the listing rulesof the place where the shares of the Company are listed), the directors and seniormanagement of the Company shall deliver to the Company and announce thescheme for increasing the shareholding in the Company, including but not limitedto such information as the number and price of additional shares to be acquired,the deadline for completion of increase in shareholding and the objects thereofwithin 15 trading days after their obligation for increasing shareholding istriggered.

2. The monetary fund to be used by the directors and senior management of theCompany for acquiring the additional shares of the Company shall be not lessthan 10% of the total remuneration (after tax) received by each of them from theCompany for the prior year.


– IV-3 –

3. In the course of implementing the scheme for increasing shareholding, thedirectors and senior management may discontinue the implementation of suchscheme if the closing prices of the A Shares of the Company remained higher thanthe latest audited net assets per share of the Company for 10 consecutive tradingdays. After the implementation is discontinued, if the closing prices of the AShares of the Company become once again and remain less than the latest auditednet assets per share of the Company for 20 consecutive trading days within 6months subsequent to the trigger of the aforesaid obligation for increasingshareholding, the directors and senior management shall continue to implementsuch scheme for increasing shareholding.

4. The directors and senior management will not sell the shares so acquired within 6months after the scheme for increasing shareholding is completed, the equitystructure of the Company after such increase in shareholding shall meet theconditions for listing, and such increase in shareholding shall be in compliancewith the requirements of relevant laws, regulations and regulatory documents.

(IV) Other price stabilising measures

In accordance with the requirements of the laws, regulations, regulatory documents andthe Articles of Association of the Company prevailing by then, the Company and therelevant parties may adopt other price stabilising measures stipulated in laws, administrativeregulations and regulatory documents, as well as other price stabilising measures approvedby the CSRC after fulfilling the relevant legal procedures.

III. RESTRAINT MEASURES

(I) If the Company fails to formulate and announce the price stabilising proposal bythe required deadline, or fails to implement such proposal as disclosed in theannouncement, then the Company shall disclose specific reasons on theinformation disclosure media designated by the CSRC.

(II) If the controlling shareholder of the Company fails to present a scheme forincreasing shareholding by the required deadline, or fails to implement suchscheme as disclosed, then the Company shall disclose specific reasons on theinformation disclosure media designated by the CSRC.

(III) If the directors and senior management of the Company fail to present a schemefor increasing shareholding by the required deadline, or fail to implement suchscheme as disclosed, then the Company shall disclose specific reasons on theinformation disclosure media designated by the CSRC.


– IV-4 –

IV. OTHERS

(I) The controlling shareholder, the Company and its directors and seniormanagement shall, when performing their respective obligation for pricestabilisation, comply with the requirements of the relevant laws and regulationsand the listing rules of the place where the shares of the Company are listed, takefull consideration of and strive to protect the legitimate interests of domestic andoverseas shareholders, and perform the corresponding obligation for informationdisclosure.

(II) The Plan shall be submitted to the general meeting of the Company forconsideration and approval, and will take effect after the Offering and Listing andremain effective for three years thereafter.

(III) The Plan will automatically apply to any new director or senior management ofthe Company during the term of validity, who shall agree in writing to performthe aforesaid undertakings and obligation before he/she is nominated.

(IV) If relevant laws, regulations and regulatory documents (including the listing rulesof the place where the shares of the Company are listed) provide otherwise whenthe Plan is implemented, the Company shall abide by such provisions.

(V) During the validity of the Plan, the general meeting of the Company shallauthorize the Board to amend the Plan accordingly if amendments have to bemade to the Plan as a result of any new relevant rule promulgated by regulatoryauthorities such as the CSRC and relevant stock exchanges.


– IV-5 –


In accordance with the relevant requirements of the Notice on Further ImplementingMatters Relevant to Cash Dividend Distribution by Listed Companies and the Guideline No.3 on Supervision and Administration of Listed Companies – Cash Dividends of ListedCompanies issued by the CSRC, and other cash dividend distribution guidelines issued byrelevant stock exchanges, and in order to further increase the return of shareholders, improveand implement the cash dividend policy, define the plan of the Company for providingshareholders with reasonable investment returns, enhance the transparency and operability ofdecision-making on profit distribution and to facilitate supervision by shareholders of theoperations of and profit distribution of the Company, Holly Futures Co., Ltd. (hereinafterreferred to as the “Company”) has formulated the Dividend Return Plan for Shareholderswithin Three Years after the A Share Offering of Holly Futures Co., Ltd. (hereinafterreferred to as the “Plan”), the detail of which are set out below:

I. PRINCIPLES FOR FORMULATION OF THE PLAN

In accordance with the provisions of the Company Law and the Articles of Association,the Company will fully take into account the returns for its investors and will implement anon-going and stable dividend distribution policy, while considering the long-term interests ofthe Company, the overall interests of all shareholders as a whole and the sustainabledevelopment of the Company.

II. FACTORS CONSIDERED IN FORMULATING THE PROFIT DISTRIBUTIONPLAN

In formulating the dividend distribution policy, the Company focuses on its operationsat the current stage and sustainable development, and the Company gives consideration toperforming its social and legal responsibilities, safeguarding the legitimate interests ofshareholders in a practical manner and providing investors with reasonable investmentreturns.

The Company is currently growing with good momentum, and needs sufficient capitalto finance its future development. When determining its dividend distribution policy, theCompany will take into full consideration the impact of various factors so that it can meetthe requirements for its normal operation and sustainable development.

Meanwhile, the dividend distribution policy of the Company, which attaches highimportance to providing investors with reasonable investment returns and takes into accountthe expectation of investors for the sustained rapid development of the Company, will fullytake into consideration the demands and wishes of shareholders. The specific dividenddistribution plan (including the proportion of cash dividends and whether distributingdividends in the form of shares) will be determined, considered and approved at the generalmeeting according to the actual operations of the Company in the year and the requirementsfor future development of its normal operation.

APPENDIX V DIVIDEND RETURN PLAN FOR SHAREHOLDERSWITHIN THREE YEARS AFTER THE A SHARE OFFERING

– V-1 –

III. SPECIFIC PROPOSAL ON THE DIVIDEND RETURN PLAN

1. The Company may distribute dividends in the form of cash, shares or acombination of both; where the Company satisfies the conditions for cashdividend distribution, it shall accord priority to profit distribution by way of cashdividends.

2. Save that the Company has any plan for substantial capital expenditure or otherexceptions approved by the general meeting, according to applicable laws andregulations, where there are distributable profits from the profits achieved for theyear and positive accumulated undistributed profits after making full allocation tothe statutory common reserve fund and discretionary common reserve fund, theprofits distributed in cash by the Company annually shall not be less than 10% ofthe distributable profits achieved for the year.

3. The Board of the Company shall distinguish the following different circumstances,taking into account the Company’ industry features, development stages, operationmodel and profitability as well as whether it has any substantial capitalexpenditure arrangement, and stipulate differentiated cash dividend policy inaccordance with the procedures set out in the Articles of Association:

(1) If the Company’s development is in mature stage and there is no substantialcapital expenditure, for profit distribution, cash dividend distribution shalltake up at least 80% in the profit distribution.

(2) If the Company’s development is in mature stage and there is any substantialcapital expenditure, for profit distribution, cash dividend distribution shalltake up at least 40% in the profit distribution.

(3) If the Company’s development is in growing stage and there is anysubstantial capital expenditure, for profit distribution, cash dividenddistribution shall take up at least 20% in the profit distribution.

If the Company’s development stage is not easily identified but there is anysubstantial capital expenditure, it can be dealt with according to the precedingprovision. Substantial capital expenditures include significant investments and othermajor capital expenditures.

4. Where the Company is operating well, and the Board considers that the shareprice of the Company does not reflect the share capital size of the Company aswell as distribution of share dividends is in the interests of all shareholders as awhole, the Company may conduct profit distribution by issuing share dividendbased on the Company’s cash flow position, business growth potential, net assetsper Share and other real and reasonable factors.


– V-2 –

IV. DECISION-MAKING AND SUPERVISION MECHANISMS OF THE RETURNPLAN

1. When formulating the profit distribution plan, the Board shall carefully study anddiscuss matters including the timing, conditions and minimum proportion,conditions for adjustments and the requirements of the decision-makingprocedures of the cash dividends, and the independent directors shall express anunequivocal opinion. Independent directors may put forward a dividend proposalthrough soliciting opinions from minority shareholders, and directly submit it tothe Board for consideration. Before consideration by general meeting of thespecific proposal for cash dividends, the Company shall communicate and engagewith shareholders, especially minority shareholders, through various channels,fully listen to the views and requisitions of minority shareholders, and respond toconcerns from minority shareholders in a timely manner. The Board ofSupervisors of the Company shall supervise the circumstances anddecision-making procedures regarding the formulation of the profit distributionproposal by the Board.

2. If the Company has distributable profits for the year but does not put forward anycash dividend proposals, the Board shall provide a special explanation for mattersincluding the specific reasons for not making cash dividends, the exact use of theretained earnings of the Company and the expected return on investment. The saidexplanation shall be submitted to the general meeting for consideration after theindependent directors have expressed their opinions, the approval of which shallrequire no less than two-thirds of the voting rights held by the shareholdersattending the general meeting and shall be disclosed in the designated informationdisclosure media of the Company. The Company shall provide shareholders withthe Internet voting platform for voting.

3. The Company shall disclose the profit distribution plan for the year in the annualreport: where there are distributable profits during the reporting period but theBoard of the Company does not put forward any plan for profit distribution incash, the reasons shall be disclosed in the periodic report to provide a detailedexplanation for not making profit distribution and the use of capital that mayotherwise be used as dividends but has been retained by the Company.Independent directors should express their own opinions on the matters.

4. The Board of Supervisors of the Company shall supervise the circumstances anddecision-making procedures regarding the implementation of the Company’s profitdistribution policy and dividend return plan by the Board and the management.

V. IMPLEMENTATION OF PROFIT DISTRIBUTION PLAN

After the general meeting of the Company has passed a resolution on the profitdistribution plan, the Board of the Company must complete the distribution of dividends (orshares) within two months after the convening of the general meeting.


– V-3 –

VI. FORMULATION CYCLE AND ADJUSTMENT MECHANISM OF THE RETURNPLAN

1. The Company shall formulate the return plan for shareholders according to theprofit distribution policies determined in the Articles of Association, and ensure toprepare the plan every three years as well as to formulate the profit distributionpolicies for next three years. When formulating the return plan for shareholders,the Board of the Company shall fully listen to and heed the views and suggestionsof shareholders (especially minority shareholders), independent directors andexternal supervisor through various channels. The profit distribution policies andthree-year return plan for shareholders formulated by the Board shall beimplemented after being submitted to and approved by the general meeting.

2. In the event of force majeure including war and natural disasters, or changes inthe external operating environment of the Company resulting in a material impacton the production and operation of the Company, or significant changes in theinternal operating condition of the Company, the Company may make adjustmentsto its profit distribution policies. When the Company makes adjustments to itsprofit distribution policies, the Board shall carry out specific explanation todiscuss in detail the reasons for the adjustments, prepare a written discussionreport and submit it to the general meeting after consideration by independentdirectors, the approval of which shall require no less than two-thirds of the votingrights held by the shareholders attending the general meeting. The Company shallprovide shareholders with the Internet voting platform for voting. Whenconsidering changes to the policies on profit distribution proposals, the generalmeeting shall fully consider the views of minority shareholders.

VII. MISCELLANEOUS

1. Matters not covered in the Plan shall be implemented in accordance with relevantlaws and regulations, regulatory documents and the Articles of Association.

2. The Plan shall be interpreted by the Board, and it shall come into force afterapproval by the general meeting and from the date of the initial public offeringand listing of A Shares of the Company.


– V-4 –


In accordance with the Provisions on the Report on Use of the Capital Raised in thePrevious Time enacted by China Securities Regulatory Commission (Zheng Jian Fa Xing Zi[2007] No. 500), Holly Futures Co., Ltd. (“the Company”) hereby reports on the use ofraised funds from the previous offering for the period ended 31 December 2020 as follows:

I. AMOUNT AND PAID-IN TIME OF RAISED FUNDS FROM THE PREVIOUSOFFERING OF THE COMPANY

Upon approval by China Securities Regulatory Commission (the “CSRC”) in its Replyon Approving Holly Futures Co., Ltd.’s Offering of Overseas Listed Foreign Shares (ZhengJian Xu Ke [2015] No. 1963)（《關於核準弘業期貨股份有限公司發行境外上市外資股的批覆》（證監許可[2015]1963號））, the Company became listed on the main board of the Stock Exchangeof Hong Kong Limited by way of initial public offering of 249,700,000 overseas listedforeign shares (the “H Shares”) (including 227,000,000 H Shares offered by the Companyand 22,700,000 sale shares offered by Selling Shareholders) at an offering price of HK$2.43per share on 30 December 2015. The aggregated subscription money of HK$606,771,000 hasbeen paid up in Hong Kong dollars in cash. After deduction of underwriting and sponsoringexpenses as well as issuance expenses advanced by the sponsor from the total subscriptionmoney, the actual funds raised amounted to HK$591,305,030.59, equivalent toRMB495,117,441.26 according to the central parity rate of Hong Kong dollars againstRenminbi on the date when such amount was received by the Company. After deducting thecontribution payable to the National Council for Social Security Fund from the actual fundsraised, the net funds amounted to HK$536,148,277.99, equivalent to RMB448,933,037.60(“Raised Funds from the Previous Offering”). The amounts above were remitted into theCompany’s account (bank account number: 012-875-1-248258-6) opened with the Bank ofChina (Hong Kong) Limited respectively on 30 December 2015 and 5 January 2016. Suchfunds were verified by KPMG Huazhen LLP（畢馬威華振會計師事務所（特殊普通合夥））whichaccordingly issued its capital verification report (KPMG Huazhen Yan Zi No. 1600244).

II. ACTUAL USE OF RAISED FUNDS FROM THE PREVIOUS OFFERING OFTHE COMPANY

The funds from the previous issuance of H shares by the Company, after deducting theissuance expenses and amounts payable to National Council for Social Security Fund, wereall used in accordance with the intended purposes set out in the H-share prospectus and putinto operation together with other capital of the Company.

The Company held the 2018 annual general meeting on 6 June 2019 and passed totransfer the remaining fund of HK$50 million which originally intended to be used for“developing and strengthening the existing futures brokerage business” to “developing theHong Kong and global futures business”. The change is subject to the approval of the StateAdministration of Foreign Exchange and the National Development and Reform Commissionand other relevant regulatory authorities.

APPENDIX VI REPORT OF THE USE OF RAISED FUNDSFROM THE PREVIOUS OFFERING

– VI-1 –

As at 31 December 2020, the Company has not obtained approval from the relevantregulatory authorities for the above application for changing the use of proceeds. The use ofproceeds did not change as compared to that as of 31 December 2018.

As at 31 December 2020, the accumulated proceeds used amounted to HK$453,399,912.95 and the remaining balance of the proceeds amounted to HK$82,748,365.04.

The following table sets forth its actual use of Raised Funds from the PreviousOffering.


– VI-2 –

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– VI-3 –

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– VI-4 –

III. CONCLUSION

This report is prepared according to the Provisions on the Report on Use of the CapitalRaised in the Previous Time enacted by the China Securities Regulatory Commission. TheCompany has compared the actual use of the aforesaid capital with the relevant contents inthe relevant periodic reports and other information disclosure documents published by theCompany since 2015 item by item. The actual use is consistent with the relevant contentsdisclosed.


– VI-5 –


Letter of Commitment(Authenticity, Correctness and Completeness of Information Disclosure)

Holly Futures Co., Ltd. (“the Company”) intends to apply for the initial public offeringof domestically listed Renminbi common shares (A Share) and the listing on the domesticstock exchanges (“the Offering and Listing”). The Company hereby makes the followingcommitments:

1. The prospectus published for the Offering and Listing (“the Prospectus”) does notcontain any false statement, misleading statement or significant omission. TheCompany will assume individual and joint legal liability for the authenticity,correctness and completeness of the Prospectus.

2. If the Prospectus contains any false statement, misleading statement or significantomission which has material and substantial influence on judging whether theCompany meets the offering conditions stipulated by the relevant laws, the Boardof the Company will develop the scheme to repurchase all the new shares issuedthis time and submit to the general meeting for consideration in 5 business daysafter the date when China Securities Regulatory Commission (“the CSRC”) or thejudicial authority makes final judgment on the facts above or the date when therelevant judgment takes effect.

The Company will repurchase all the new A Share issued this time according tothe relevant laws at the price equal to the offering price of the A Share of theCompany plus the interest on current account of the bank for the same period. Ifthe Company has any ex dividend and ex right matters during this period, such asdividend distribution, stock distribution, increase of share capital from capitalreserve or rights issue, the repurchased shares shall include all the new A Shareissued this time and the relevant derivative shares, and the offering price shall besubject to the corresponding ex dividend and ex right adjustment. The specificshare repurchase scheme shall be developed according to the applicable laws,regulations, regulatory documents and the Articles of Association and subject tothe relevant internal and external review and approval procedures. The repurchaseshall be made according to the repurchase scheme published by the Company atthat time.

3. If the Prospectus contains any false statement, misleading statement or significantomission and as a result, the investors of the Company suffer loss in the securitiestransactions, the Company will legally, fully and promptly compensate theinvestors for the loss according to the final decision or effective judgment of theCSRC or the judicial authority.

APPENDIX VII PUBLIC UNDERTAKINGS IN DOCUMENTSIN CONNECTION WITH THE A SHARE OFFERING

– VII-1 –

4. If the Company fails to perform the above obligations, it shall assume the relevantliabilities according to the relevant laws, regulations and the orders of theregulatory authority. When the Company perform the above obligations, if thereare provisions as otherwise specified in the applicable laws, regulations,regulatory documents and the listing rules of the place where the Company’sshares are listed, the relevant provisions shall prevail.


– VII-2 –


Letter of Commitment(Stabilisation of Stock Price in 3 Years after the Listing of A Share)

Holly Futures Co., Ltd. (“the Company”) intends to apply for the initial public offeringof domestically listed Renminbi common shares (A Share) and the listing on the domesticstock exchanges. The Company hereby makes the following commitments:

The Company will strictly comply with the Price Stabilisation Plan for A Share within3 Years after A Share Offering of Holly Futures Co., Ltd., and perform the obligation ofstabilising the stock price of the Company according to the plan.


– VII-3 –


Letter of Commitment(Restraint on Performance of Public Undertakings)

Holly Futures Co., Ltd. (“the Company”) intends to apply for the initial public offeringof domestically listed Renminbi common shares (A Share) and the listing on the domesticstock exchanges (“the Offering and Listing”). The Company hereby makes the followingcommitments for performing the public undertakings made by the Company during theOffering and Listing:

1. The Company will strictly perform its obligations and duties according to theundertakings made during the Offering and Listing.

2. If the Company fails to perform the obligations and duties publicly undertaken byit, the Company will take the following restraint measures:

(1) To explain in detail the reasons for not performing the obligations on theinformation disclosure media designated by China Securities RegulatoryCommission (“the CSRC”).

(2) If the investors of the Company suffer loss in the securities transactionsbecause they rely on the undertakings of the Company, the Company willlegally, fully and promptly compensate the investors for the loss according tothe final decision or effective judgment of the CSRC or the judicialauthority.

3. If the Company has proposed specific restraints in the relevant undertakings, theCompany shall perform according to the relevant restraints as promised.


– VII-4 –


Chapter I General Provisions

Article 1 To improve the governance structure of Holly Futures Co., Ltd. (the“Company”), regulate related (connected) transactions and guard against operational risks,these Rules were formulated in accordance with the Company Law of the People’s Republicof China, the Securities Law of the People’s Republic of China, the Regulation on theAdministration of Futures Trading, the Measures for the Supervision and Administration ofFutures Companies, the Measures Governing Information Disclosures by Listed Companies,the relevant rules of the domestic stock exchange governing the listing of shares (the“Domestic Listing Rules”), the Rules Governing the Listing of Securities on The StockExchange of Hong Kong Limited (the “Hong Kong Listing Rules”) and other relevantregulations.

Article 2 Related (connected) transactions shall be in compliance with the DomesticListing Rules and other relevant domestic laws and regulations as well as the Hong KongListing Rules. The related (connected) transactions of the Company shall be subject to fairpricing, legal decision-making procedures and standardized information disclosure system.

Written agreements shall be signed for related (connected) transactions between theCompany and related parties or connected persons.

Article 3 In these Rules, related persons, related parties and related transactions shallrefer to those as defined under the Domestic Listing Rules; while connected persons,associates and connected transactions shall refer to those as defined under the Hong KongListing Rules.

Chapter II Scope and Classification of Related (Connected) Parties

Article 4 In accordance with the Domestic Listing Rules, the related parties of theCompany shall include related legal persons and related natural persons.

Article 5 In accordance with the Domestic Listing Rules, a legal person shall be arelated legal person of the Company if:

(1) the legal person or other organization directly or indirectly controls the Company;

(2) the legal person or other organization other than the Company and its controlledsubsidiaries is controlled directly or indirectly by the legal person or otherorganization in (1) above;

APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEMTO BE EFFECTIVE UPON THE A SHARE OFFERING AND

THE LISTING OF THE A SHARES

– VIII-1 –

(3) the legal person or other organization other than the Company and its controlledsubsidiaries is controlled directly or indirectly by a related natural person set outin Article 7 hereof, or is a legal person or other organization in which the relatednatural person serves as director or senior management;

(4) the legal person or other organization and its Act in Concert holds 5% or more ofthe shares of the Company;

(5) the legal person or other organization is any other legal person or otherorganization having a special relationship with the Company which may cause theCompany to be inclined to the interests of that legal person or organization, asdetermined by the China Securities Regulatory Commission, the relevant domesticstock exchange or the Company in accordance with the principle that essence ismore important than form.

Article 6 In accordance with the Domestic Listing Rules, if the Company and the legalperson set out in (2) of Article 5 hereof are merely controlled by the same state-owned assetadministration organ, no related relationship shall be created as a result thereof, unlesschairman, general manager or half or more of the directors of the legal person belong to (2)Article 7 hereof.

Article 7 In accordance with the Domestic Listing Rules, a natural person shall be arelated natural person of the Company if:

(1) the natural person directly or indirectly holds 5% or more of the shares of theCompany;

(2) the natural person is a director, supervisor or senior management of the Company;

(3) the natural person is a director, supervisor or senior management of a legal personor other organization which directly or indirectly controls the Company;

(4) the natural person is a close family member of the persons referred to in (1) and(2) of this Article, including spouses, children aged 18 or above and their spouses,parents and parents-in-law, siblings and their spouses, siblings of spouses andparents-in-law of children;

(5) the natural person is any other natural person having a special relationship withthe Company which may cause the Company to be inclined to the interests of thatnatural person, as determined by the China Securities Regulatory Commission, therelevant domestic stock exchange or the Company in accordance with theprinciple that essence is more important than form.



– VIII-2 –

Article 8 In accordance with the Domestic Listing Rules, a legal person or otherorganisation or a natural person shall be deemed as a related person of the Company if:

(1) the person meets the requirements in the above Article 5 or Article 7 after anagreement entered into or an arrangement made by the Company or its relatedperson(s) comes into force or within the next twelve months;

(2) the person once met the requirements in the above Article 5 or Article 7 withinthe past 12 months.

Article 9 Under the Hong Kong Listing Rules, a connected person of the Companyshall mean:

(1) the directors, chief executive or substantial shareholders of the Company or itssubsidiary;

(2) any person who was the director of the Company or its subsidiary within 12months;

(3) the supervisors of the Company or any of its subsidiaries;

(4) shareholders with 10% or more of the voting right of the Company or any of itssubsidiaries;

(5) the associates of the persons referred above;

(6) connected subsidiaries; or

(7) any persons deemed by The Stock Exchange of Hong Kong Limited (the HongKong Stock Exchange) as connected persons.

In case of the following circumstances, a subsidiary of the Company shall not be aconnected person:

(1) a subsidiary directly or indirectly wholly-owned by the Company; or

(2) a subsidiary which is a connected person only because it is:

(a) a substantial shareholder of another subsidiary of the Company; or

(b) an associate of the director (or a person who served as a director in the past12 months), chief executive, substantial shareholder or supervisor of anysubsidiary of the Company.



– VIII-3 –

Article 10 In accordance with the Hong Kong Listing Rules, (1) to (3) in Article 9hereof exclude directors, chief executives, substantial shareholders or supervisors of any“insignificant subsidiary” of the Company. In this regard:

(1) An “insignificant subsidiary” is a “subsidiary” whose total assets, profits andrevenue compared to that of the Company are less than:

(a) 10% under the percentage ratios for each of the latest three financial years(or counting from the date of registration or establishment of the subsidiaryin case of less than three financial years); or

(b) 5% under the percentage ratios for the latest financial year.

(2) If the person is connected with two or more subsidiaries of the Company, thesubsidiaries’ total assets, profits and revenue shall be aggregated by the HongKong Stock Exchange to determine whether they are together “insignificantsubsidiaries” of the Company; and

(3) In calculating the relevant percentage ratios, 100% of the subsidiaries’ totalassets, profits and revenue will be used as the calculation basis. In case ofabnormality with the percentage ratio calculated, the Hong Kong Stock Exchangemay disregard the relevant calculation and consider the substitute test provided bythe Company.

Article 11 Pursuant to the Hong Kong Listing Rules, the Hong Kong Stock Exchangegenerally does not treat a PRC governmental body as a connected person. However, it mayrequest the Company to explain its relationship with a PRC governmental body and why itis not treated as a connected person. If the Hong Kong Stock Exchange determines that thePRC governmental body shall be treated as a connected person, the Company must complywith any additional provisions of the Hong Kong Stock Exchange.

Chapter III Scope and Classification of Related (Connected) Transactions

Article 12 Under the Domestic Listing Rules, a related transaction means a matterwhich takes place between the Company or any of its controlled subsidiary and a relatedperson of the Company, and which may result in the transfer of resources or obligations,including the following transactions:

(1) purchase or sale of assets;

(2) external investment (including entrusted wealth management and entrusted loans,investment in subsidiaries, etc.);

(3) provision of financial assistance;

(4) provision of guarantees;



– VIII-4 –

(5) renting or renting out assets;

(6) entering into contracts related to management (including entrusted operation andbeing entrusted operation, etc.);

(7) donating or accepting donated of assets;

(8) restructuring of creditor’s rights or debts;

(9) entering into a licensing agreement;

(10) transferring or acquiring research and development projects;

(11) purchase of raw materials, fuel and power;

(12) sale of products or goods;

(13) provision or acceptance of labour services;

(14) entrusting or being entrusted with sales;

(15) making an investment jointly with a related party;

(16) other matters which may result in the transfer of resources or obligations bymeans of an agreement.

The above purchase or sale of assets do not include purchase of raw materials, fuel andpower and sale of products and goods related to ordinary operation, but the purchase or saleof assets involved in the assets transfer are still included.

Article 13 The Shareholders, de facto controllers and other related persons (connectedpersons) of the Company shall not abuse their rights, shall not occupy the assets of theCompany or misappropriate the assets of its customers, and shall not prejudice the legitimaterights and interests of the Company and its customers.

Article 14 The Company shall not provide financing for Shareholders, de factocontrollers or any other related persons (connected persons), and shall not provide anyexternal guarantees.

Article 15 In accordance with the Hong Kong Listing Rules, connected transactions aretransactions with connected persons, and specified categories of transactions with thirdparties that may confer benefits on connected persons through their interests in the entitiesinvolved in the transactions. They may be one-off transactions or continuing transactions.



– VIII-5 –

Article 16 Any transactions between the Company and a connected person areconnected transactions.

(1) Transactions include both capital and revenue nature transactions, whether or notconducted in the ordinary and usual course of business of the Company. Theseinclude the following types of transactions:

(i) any acquisition or disposal of assets by the Company, including a deemeddisposal;

(ii) (a) the Company granting, accepting, exercising, transferring or terminatingan option to acquire or dispose of assets or to subscribe for securities(terminating an option is not a transaction if it is made under the termsof the original agreement and the Company has no discretion over thetermination);

(b) the Company deciding not to exercise an option to acquire or disposeof assets or to subscribe for securities;

(iii) entering into or terminating finance leases or operating leases or sub-leases;

(iv) granting an indemnity or providing or receiving financial assistance(including granting credit, lending money, or providing an indemnity againstobligations under a loan, or guaranteeing or providing security for a loan;

(v) entering into an agreement or arrangement to set up a joint venture in anyform (e.g. a partnership or a company), or any other form of jointarrangement;

(vi) issuing new securities of the Company or its subsidiaries;

(vii) providing, receiving or sharing services; or

(viii) acquiring or providing raw materials, intermediate products and/or finishedgoods.

(2) Financial assistance provided by the Company to, or received by the Companyfrom, a commonly held entity is a connected transaction.

(3) The Company acquiring an interest in a company (the “target company”) from aperson who is not a connected person is a connected transaction if the targetcompany’s substantial shareholder:

(i) is, or is proposed to be, a controller. A”controller” is a director, chiefexecutive or controlling shareholder of the Company; or



– VIII-6 –

(ii) is, or will, as a result of the transaction, become, an associate of a controlleror proposed controller.

Acquiring the target company’s assets is also a connected transaction if these assetsaccount for 90% or more of the target company’s net assets or total assets.

Article 17 Under the Hong Kong Listing Rules, exemptions from the connectedtransaction requirements are available for the following types of transactions, the detaileddefinitions and requirements of which are referred to in the appendix hereto:

(1) “de minimis transactions”

(2) “financial assistance”

(3) “issues of new securities”

(4) “dealings on stock exchanges”

(5) “repurchase of own securities”

(6) “directors’ service contracts and insurance”

(7) “consumer goods or services”

(8) “sharing of administrative services”

(9) “transactions with associates of passive investors”

(10) “transactions with connected persons at the subsidiary level”

Article 18 In case of the following circumstances, the financial assistance provided bythe Company to a connected person or commonly held entity will be fully exempt:

(1) relevant assistance is conducted on normal commercial terms or better; and

(2) the financial assistance provided by the Company is in proportion to the equityinterest directly held by the Company or its “subsidiary” in the connected personor the “commonly held entity”. Any guarantee given by the Company must be ona several (and not a joint and several) basis.



– VIII-7 –

Article 19 In case of the following circumstances, the financial assistance received bya listed issuer’s group from a connected person or commonly held entity will be fullyexempt:

(1) relevant assistance is conducted on normal commercial terms or better; and

(2) relevant assistance is not secured by the assets of the listed issuer’s group.

Article 20 Under the Hong Kong Listing Rules, connected transactions subject to thereporting, announcement or shareholders’ approval procedures are divided into connectedtransactions which are fully exempt, partially exempt and not exempt. Exemption is broadlydivided into two categories: (1) fully exempt from shareholders’ approval, annual review andall disclosure requirements; and (2) exempt from shareholders’ approval requirement.

Chapter IV Consideration of Related (Connected) Transactions

Article 21 The general manager of the Company is entitled to determine the relatedtransactions failing to meet the standards on consideration by the Board.

Article 22 A related transaction which requires consideration by the Board and timelydisclosure by the Company is one that meets any of the following conditions:

(1) the transaction amount of a related transaction between the Company and itsrelated natural person exceeds RMB300,000 (The Company shall not directly orindirectly provide loans to the Directors, supervisors or senior management);

(2) the transaction amount of a related transaction between the Company and itsrelated legal person exceeds RMB3 million and accounts for 0.5% or more of theabsolute value of the Company’s latest audited net assets;

(3) the related transaction which falls into the scope of authority of the generalmanager but is regarded by the Board, independent Directors or Board ofSupervisors to be subject to approval by the Board.

Article 23 For the related transaction between the Company and its related person(except for the Company’s being endowed with cash assets and reduction of debtobligations) with the amount of more than RMB30 million, which accounts for over 5% ofthe absolute value of the Company’s latest audited net assets, in addition to disclosure in atimely manner, the Company shall engage a securities service provider with the relatedqualification for the business of securities and futures to issue an audit report or valuationreport on the subject matter of transaction, and table the transaction at the general meetingfor consideration. However, the subject matter of a transaction involved in a relatedtransaction conducted between the Company and a related person under (11) to (14) ofArticle 12 hereof in relation to daily operation may be exempt from the audit or appraisal.



– VIII-8 –

Article 24 When conducting the day-to-day related transactions under (11) to (14) ofArticle 12 hereof with related persons, the Company shall disclose these transactions andcarry out the appropriate procedures for consideration in accordance with the followingprovisions:

(1) for agreements on day-to-day related transactions which have been alreadyconsidered and approved at a general meeting or the Board and are beingexecuted, if, during the execution, there is no significant change in the principalterms thereof, the Company shall disclose the actual performance of each of theseagreements in the annual reports and interim reports as required, and indicatewhether the performance is in compliance with the provisions of theseagreements. If, during the execution, there are significant changes in the principalterms thereof, or the agreements are required to be renewed upon expiry, theCompany shall submit the newly revised or renewed agreements on the day-to-dayrelated transactions to the Board or a general meeting for consideration based onthe total transaction amount involved in these agreements. Those agreementsinvolving no specific total transaction amount shall be submitted to a generalmeeting for consideration;

(2) for day-to-day related transactions which take place for the first time, theCompany shall enter into a written agreement with a related person and timelydisclose these transactions, and submit them to the Board or a general meeting forconsideration based on the total transaction amount involved in these agreements.Those agreements involving no specific total transaction amount shall besubmitted to a general meeting for consideration. After these agreements areconsidered, approved and disclosed, they shall be handled in the way same asday-to-day related transactions in accordance with the preceding paragraph;

(3) if various kinds of new day-to-day related transactions take place in largerquantities annually, and it often needs to enter into new agreements for theserelated transactions, and if it is difficult for each of these agreements to besubmitted to the Board or a general meeting for consideration in accordance withthe preceding paragraph, the Company may, before disclosing an annual report forthe previous year, make a reasonable estimate, by category, of the total transactionamount of the day-today related transactions of the Company to take place duringthat year for submission to the Board or a general meeting for consideration basedon the estimated findings, and make relevant disclosure. For those day-to-dayrelated transactions within the scope of the estimate, the Company shall disclosethem in the annual reports and interim reports by aggregate category. If the totaltransaction amount exceeds the estimated total amount during Company’s actualexecution of these transactions, the Company shall, based on the amount ofexcess, make a re-submission to the Board or a general meeting for considerationand make relevant disclosure.



– VIII-9 –

Article 25 When the board of directors of the Company reviews matters on relatedtransactions, the related director shall abstain from voting and shall not exercise the votingrights on behalf of other directors. The board meeting can be validly convened where thenumber of the non-related directors present exceeds half of the attendees and resolutions ofthe board meeting require approval of more than half of the non-related directors. Where thenumber of non-related directors present at the board meeting is less than three, the relatedtransactions shall be submitted to the shareholders’ meeting for consideration.

Related directors as referred to in preceding paragraph include the following directorsor directors with one of the following circumstances:

(1) a counterparty of the transaction;

(2) the direct or indirect controller of the counterparty of the transaction;

(3) an employee of the counterparty, or an employee of the legal person or otherorganizations that may directly or indirectly control the counterparty, or anemployee of the legal person or other organizations directly or indirectlycontrolled by the counterparty;

(4) closely related family members (including spouse, children aged 18 or above andtheir spouses, parents and parents of spouses, brothers and sisters and theirspouses, brothers and sisters of spouses, parents of the children’s spouses) of thecounterparty or its direct or indirect controller;

(5) closely related family members (including spouse, children aged 18 or above andtheir spouses, parents and parents of spouses, brothers and sisters and theirspouses, brothers and sisters of spouses, parents of the children’s spouses) of thedirectors, supervisors or senior management members of the counterparty or itsdirect or indirect controller;

(6) Directors considered by the CSRC, domestic stock exchanges, or considered bythe Company based on the principles of substance rather than form that theirindependent commercial judgment may be affected.

Article 26 When matters regarding related transactions are reviewed at the generalmeeting of the Company, related shareholders shall abstain from voting.

The related shareholders as referred to in the preceding paragraph include the followingshareholders or the shareholders in any of the following circumstances:

(1) a counterparty of the transaction;

(2) the direct or indirect controller of the counterparty of the transaction;

(3) directly or indirectly controlled by the counterparty of the transaction;



– VIII-10 –

(4) together with the counterparty of the transaction, directly or indirectly controlledby the same legal person or other organization or natural person;

(5) employed by the counterparty, or employed by a legal person that can directly orindirectly control or be controlled by the counterparty (applicable to a shareholderwho is a natural person);

(6) a shareholder whose voting right is restricted and affected because of incompleteperformance of equity transfer agreement or other agreement with thecounterparty of the transaction or related person thereof;

(7) shareholders which are likely to enjoy more interests of the Company asconsidered by CSRC or domestic stock exchange.

Article 27 Pursuant to the Listing Rules, connected transactions shall be subject toapproving at the general meeting of the Company (except for waiver from the Hong KongListing Rules, such as the examples stipulated in Article 18 and Article 19 under thisrequirement). Any shareholder who has a material interest in the transaction must abstainfrom voting on the resolution.

Chapter V Disclosure of Information about Related (Connected) Transactions

Article 28 Under the requirements of domestic Listing Rules, the following documentsshall be submitted to relevant domestic stock exchange when the Company makes disclosureof related transactions:

(1) the draft of an announcement;

(2) the agreement or letter of intent relating to the transaction;

(3) the resolution of the Board of Directors, the draft of an announcement on theresolution and the opinions of independent directors (if applicable);

(4) government approvals (if applicable) involved in the transaction;

(5) a professional report (if applicable) issued by a securities service agency;

(6) the written documents of the independent directors previously approving thetransaction;

(7) other documents as may be required by relevant domestic stock exchange.



– VIII-11 –

Article 29 In accordance with the Domestic Listing Rules, an announcement on arelated transaction disclosed by the Company shall include the following particulars:

(1) a summary of the transaction and general information about the counterparties andsubject matter of the transaction, including name, carrying amount, value,operations of the subject matter; if there exists mortgage or pledge or other thirdparty rights over the assets, material disputes, proceedings or arbitrations involvedin the assets or judicial measures such as seal up or freeze; in case of atransaction which reaches the criteria for disclosure based on the principle ofcumulative calculations, each individual transaction and details of cumulativecalculations shall be described briefly;

Where the subject matter is equity, it shall also indicate the basic status of thecompany and the total assets, total liabilities, net assets, operating income and netprofit and other financial information in the latest year;

Where there is a change in scope of combined statements arising from disposal ofequity interests in a subsidiary, it shall also describe whether there existsguarantee for the subsidiary, commission the subsidiary to manage wealth, andoccupation of company capitals; if exists, the amount involved, the impact on theCompany and measure taken shall be disclosed.

(2) the delivery status as well as the date of delivery and transfer of ownership of thesubject matter of the transaction;

(3) details about the prior approval and independent opinions expressed by theindependent directors;

(4) details about voting by the Board of Directors (if applicable);

(5) related relationships of the parties to the transaction and the general informationabout the related persons;

(6) pricing policy for the transaction and the basis for pricing, transaction price andthe book value or assessed value of the subject matter of the transaction and therelationship between clear, fair market prices as well as other matters which needto be explained because of the special nature of the subject matter of thetransaction in relation to pricing. In case of a big difference between thetransaction price and the book value, the assessed value or the market price, thereasons therefor shall be explained. In case of unfair transactions, the direction ofthe transfer of the interests arising from this related transaction shall be disclosedas well;



– VIII-12 –

(7) Major contents in other aspects of the transaction agreement, including thetransacted amount, way of payment (in cash, equity or asset swap), period ofpayment or arrangement for installment, terms of agreement and effective time aswell as term of validity; any kind of additional or retained terms shall bespecified in particular;

If the transaction is subject to approval by the general meeting or the competentauthority, the legal procedures and progress to be performed shall also be stated;

(8) The purpose of transaction and impacts of transaction to the Company, includingthe real purpose and necessity of this related transaction, impacts on the financialstatus of the Company in the current period and future as well as operating result,etc;

(9) total amount of various related transaction that have occurred with such relatedperson on cumulative basis from the beginning of that year to the date ofdisclosure;

(10) basis for pricing the transaction and the source of expenditure;

(11) estimated revenue obtained from the transaction (including potential interests),and impacts of the transaction on the financial status and operating results of theCompany in the current period and future;

(12) an analysis of the capability of the counterparty to perform the agreement;

(13) particulars on personnel placement, land lease, debt restructuring, etc. in relationto the transaction;

(14) description of possible competition in the same business upon completion of thetransaction, and relevant response measures therefor;

(15) securities service institutions and their opinions;

(16) other particulars required by the CSRC and relevant domestic stock exchangewhich help explain the real situation of the transaction.

Article 30 Pursuant to requirements of domestic Listing Rules, for a related transactionas a result of either the Company or a related person participating in an open tender orpublic auction and other acts, the Company may apply to the relevant domestic stockexchange for exemption from consideration and disclosure procedures required for a relatedtransaction.

Article 31 Pursuant to requirements under Hong Kong Listing Rules, the Companymust announce the connected transaction as soon as practicable after its terms have beenagreed. If the connected transaction is subsequently terminated or there is any material



– VIII-13 –

variation of its terms or material delay in the completion, the Company must announce thisfact as soon as practicable. The Company must also comply with all other applicableprovisions under the Listing Rules.

Article 32 Pursuant to requirements under Hong Kong Listing Rules, announcement onconnected transactions shall at least include following information:

(1) the information set out in Rule 14.58 to 14.60 of Hong Kong Listing Rules(contents of announcements on transactions to be disclosed);

(2) correlation between counterparties and connected persons’ interests in relevanttransaction;

(3) if the transaction is not required to be approved by shareholders, the advice of theindependent non-executive directors on the matters mentioned in Rules 14A.40(1)to (3) of the Hong Kong Listing Rules;

(4) if it is a continuing connected transaction, set out the calculation basis of theamount payable and cap amount of the transaction. If no circular is required to bepublished, the Company also need to disclose the way to determine and calculatethe cap, including relevant assumptions and the amount of previous transaction asa benchmark;

(5) if the transaction involves acquiring assets from connected person, set out theinitial cost for acquiring relevant assets by the connected person;

(6) if the transaction involves in sale of assets held by the Company for less than 12months, the Company shall include the initial cost for acquiring the assets;

(7) if the announcement sets out profit forecast in relation to the Company, or of acompany belongs to (or will be) the Company’s subsidiary, it should provideinformation as described in Rule 14.62 of the Hong Kong Listing Rules (must bepromulgated trading statement about the regulation of the profit forecast);

(8) if no circular is required to be published, it is necessary to state whether anyCompany directors have a significant interest in the transaction; If yes, whetherthey have abstain from voting at the board meeting;

(9) (if applicable) explain the transaction shall be approved by shareholders.

Chapter VI Execution of Related (Connected) Transactions

Article 33 For all related (connected) transactions which may be executed only afterapproval by shareholders’ general meetings, the Board of Directors and the Company’smanagement shall arrange the execution thereof based on the decisions made at theshareholders’ general meetings.



– VIII-14 –

Article 34 The relevant departments of the Company shall work together formanagement of the related (connected) transaction.

Article 35 In case the term of a daily related (connected) transaction agreementexceeds three years, the Company shall re-perform the relevant decision making proceduresand disclosure obligations every three years according to this guideline.

Chapter VII Penalties

Article 36 If a related (connected) person of the Company conducts a related(connected) transaction in violation of the provisions hereof which causes losses to theCompany, the Company and the shareholders may file a lawsuit to the people’s court inaccordance with the law.

Article 37 The Company shall impose penalties accordingly in accordance withrelevant laws and regulations as well as the Company’s rules and regulations on anydirectors, senior management, other persons directly in charge and persons responsible whohave violated the relevant provisions hereof.

Chapter VIII Supplementary Provisions

Article 38 ”above” in this mechanism include the number itself; “below” does notinclude the number itself.

Article 39 Matters not covered herein shall be handled in accordance with relevantnational laws, regulations and rules, normative documents, applicable laws of Hong Kong,Hong Kong Listing Rules and the Articles of Association. If the matters are inconsistentwith the national laws, regulations, rules and normative documents to be promulgated infuture, applicable laws of Hong Kong, Hong Kong Listing Rules, or the Articles ofAssociation amended according to lawful procedures, such national laws, regulations, rules,normative documents, applicable laws of Hong Kong, Hong Kong Listing Rules and theArticles of Association shall prevail.

Article 40 These Rules, as considered and approved at the shareholders’ generalmeeting, shall become effective from the date when the A Shares issued in the Company’sinitial public offering are listed on the relevant domestic stock exchange.

Article 41 The right to interpret these Measures shall be vested in the Board ofDirectors of the Company.



– VIII-15 –

AppendixDefinitions related to the Hong Kong Listing Rules

Note: In these definitions, “listed issuer” and “issuer” both refer to the Company.

“30%-controlled company”: Hong Kong Listing Rules 14A.06(1)

Means a company held by a person who can:

1. exercise or control the exercise of 30% (or an amount for triggering a mandatorygeneral offer or establishing legal or management control over a businessenterprise under the PRC law) or more of the voting power at general meetings;or

2. control the composition of a majority of the board of directors.

“Connected person at the subsidiary level”: Hong Kong Listing Rules 14A.06(9)

Means a person who is a connected person only because of the person’s connectionwith the listed issuer’s subsidiary or subsidiaries;

“Majority-controlled company”: Hong Kong Listing Rules 14A.06(23)

Means a company held by a person who can exercise or control the exercise of morethan 50% of the voting power at general meetings, or control the composition of a majorityof the board of directors.

“Material Interests” in a transaction: Hong Kong Listing Rules 2.15 and 2.16

The Listing Rules require that, where a transaction or arrangement of an issuer issubject to shareholders’ approval under the provisions of the Listing Rules, any shareholderthat has a material interest in the transaction or arrangement shall abstain from voting on theresolution(s) approving the transaction or arrangement in a general meeting.

In determining if a shareholder has material interests, following factors shall beconsidered:

(1) if the shareholder is a party of the transaction or the arrangement or a closeassociate of a party of the transaction or the arrangement; and

(2) whether the transaction or arrangement has grant its shareholder or close associateinterests that other shareholders are not entitled (whether economic interest orother interest).

Whether an interest is significant or not is not measured based on the monetary orfinancial terms, but depending on the specific circumstances of the transaction.



– VIII-16 –

“Connected subsidiary”: Hong Kong Listing Rules 14A.16

Means: (1) a non wholly-owned subsidiary of the listed issuer where any connectedperson(s) at the issuer level, individually or together, can exercise or control the exercise of10% or more of the voting power at the “subsidiary’s” general meeting. This 10% excludesany indirect interest in the “subsidiary” which is held by the connected person(s) through thelisted issuer; or (2) any “subsidiary” of a non wholly-owned subsidiary referred to in (1)above.

“Subsidiary”: Hong Kong Listing Rules 1.01

1. According to the meaning defined in Schedule 1 of the Companies Ordinance(Chapter 622 of the Laws of Hong Kong);

2. any entity which is accounted for and consolidated in the audited consolidatedaccounts of another entity as a subsidiary pursuant to applicable Hong KongFinancial Reporting Standards or International Financial Reporting Standards; and

3. any entity which will, as a result of acquisition of its equity interest by anotherentity, be accounted for and consolidated in the next audited consolidatedaccounts of such other entity as a subsidiary pursuant to applicable Hong KongFinancial Reporting Standards or International Financial Reporting Standards.

“Associate”: Hong Kong Listing Rules 14A.12, 14A.13, 14A.14, 14A.15

1. For any individuals, an “associate” means:

(i) his spouse; his (or his spouse’s) child/step-child, natural or adopted, underthe age of 18 years (each an “immediate family member”);

(ii) the trustees, acting in their capacity as trustees of any trust of which theindividual or his “immediate family member” is a beneficiary or, in the caseof a discretionary trust, is (to his knowledge) a discretionary object (otherthan a trust which is an employees’ share scheme or occupational pensionscheme established for a wide scope of participants and the connectedpersons’ aggregate interests in the scheme are less than 30%) (the“trustees”);

(iii) a “30%-controlled company” held, directly or indirectly, by the individual,his “immediate family members” and/or the “trustees” (individually ortogether), or any of its “subsidiaries”;

(iv) a person cohabiting with him as a spouse, or his child, step-child, parent,stepparent, brother, step-brother, sister or step-sister (each a “familymember”);



– VIII-17 –

(v) a “majority-controlled company” held, directly or indirectly, by the “familymembers” (individually or together), or held by the “family members”together with the individual, his “immediate family members” and/or the“trustees”, or any of its “subsidiaries”; or

(vi) any joint venture partner of a cooperative or contractual joint venture(whether or not it is a separate legal entity) where the person, his“immediate family members” and/or the “trustees” together directly orindirectly hold 30% (or an amount that would trigger a mandatory generaloffer or establish legal or management control over a business enterpriseunder the PRC law) or more in the joint venture’s capital or assetscontributions, or the contractual share of its profits or other income;

2. For any companies, an “associate” means:

(i) its “subsidiary” or holding company, or a fellow “subsidiary” of the holdingcompany;

(ii) the trustees, acting in their capacity as trustees of any trust of which thecompany is a beneficiary or, in the case of a discretionary trust, is (to itsknowledge) a discretionary object (the “trustees”);

(iii) a “30%-controlled company” held, directly or indirectly, by the company, thecompanies referred to in 2(i) above, and/or the “trustees” (individually ortogether), or any of its “subsidiaries”; or

Note: A “30%-controlled company” held by a person will not be regarded as his or itsassociate if the person’s and his or its associates’ interests in the company, other thanthose indirectly held through the listed issuer’s group, are together less than 10%.

(iv) any joint venture partner of a cooperative or contractual joint venture(whether or not it is a separate legal entity) where the company, anycompany which is its “subsidiary” or holding company or a fellow“subsidiary” of the holding company, and/or the “trustees”, together directlyor indirectly hold 30% (or an amount that would trigger a mandatory generaloffer or establish legal or management control over a business enterpriseunder the PRC law) or more in the joint venture’s capital or assetscontributions, or the contractual share of its profits or other income.

“Substantial shareholder”: Hong Kong Listing Rules 1.01, 14A.29

Means a person who is entitled to exercise, or control the exercise of, 10% or more ofthe voting power at any general meeting of the company. The Hong Kong Stock Exchangemay aggregate the interests of any individual and his or its “associates” to decide whetherthey together are any company’s “substantial shareholder”.



– VIII-18 –

“Closely allied group of shareholders”: Hong Kong Listing Rules 14.45

To determine whether a group of shareholders constitutes a “closely allied group ofshareholders”, the Hong Kong Stock Exchange will take into account the following factors:

(1) the number of persons in the group;

(2) the nature of their relationship including any past or present business associationbetween two or more of them;

(3) the length of time each of them has been a shareholder;

(4) whether they would together be regarded as “acting in concert” for the purposesof the Takeovers Code; and

(5) the way in which they have voted in the past on shareholders’ resolutions otherthan routine resolutions at an annual general meeting.

It is the listed issuer’s responsibility to provide sufficient information to the HongKong Stock Exchange to demonstrate that the group of shareholders is a “closely alliedgroup” of shareholders.

“Acquiring an interest in a target company”: Hong Kong Listing Rules 14A.28, 14A.29,14A.30

1. A listed issuer’s group acquiring an interest in a target company from a personwho is not a connected person and the company’s “substantial shareholder” is, oris proposed to be, a “controller” or is, or will, as a result of the transaction,become, an “associate” of a “controller”.

Note: (1) Acquiring the company’s assets is also a connected transaction if these assets account for 90%or more of the company’s net assets or total assets. (2) The Hong Kong Stock Exchange mayaggregate the interests of the “controller” and his or its “associates” in the target company to decidewhether they together are the company’s “substantial shareholder”. (3) This requirement does notapply to the following circumstance: if the “controller” or his or its “associate(s)” is or are togetherthe target company’s “substantial shareholders” only because of their indirect shareholdings in thetarget company held through the listed issuer’s group.

“Financial assistance to or from commonly held entities”: Hong Kong Listing Rules14A.26

Financial assistance provided by a listed issuer’s group to, or received by a listedissuer’s group from, a “commonly held entity”.



– VIII-19 –

“Commonly held entity”: Hong Kong Listing Rules 14A.27

Means a company whose shareholders include: (1) a member of the listed issuer’sgroup; and (2) any connected person(s) at the issuer level who, individually or together, canexercise or control the exercise of 10% or more of the voting power at the company’sgeneral meeting. This 10% excludes any indirect interest held by the person(s) through thelisted issuer.

“Controller”: Hong Kong Listing Rules 14A.28(1)

Means a director, chief executive or controlling shareholder of the listed issuer.

“Continuing connected transaction”: Hong Kong Listing Rules 14A.31

Connected transactions involving the provision of goods or services or financialassistance, which are carried out on a continuing or recurring basis and are expected toextend over a period of time. They are usually transactions in the “ordinary and usual courseof business” of the listed issuer’s group.

“Options”: Hong Kong Listing Rules 14A.61

If the listed issuer’s group grants an option to a connected person and the listedissuer’s group does not have discretion to exercise the option, the transaction is classified asif the option has been exercised (see rule 14A.79(1) of the Hong Kong Listing Rules). Inaddition, the listed issuer must announce the following subsequent events as soon aspracticable:

(1) any exercise or transfer of the option by the option holder; and/or

(2) (if the option is not, or is not to be, exercised in full), the option holder notifyingthe listed issuer’s group that it will not exercise the option, or the expiry of theoption, whichever is earlier.

“normal commercial terms or better”: Hong Kong Listing Rules 14A.06(26)

Terms which a party could obtain if the transaction were on an arm’s length basis orterms no less favourable to the listed issuer than terms available to or from independentthird parties.

“De minimis transactions”: Hong Kong Listing Rules 14A.76(1)

Connected transaction conducted on “normal commercial terms or better” and all thepercentage ratios (other than the profits ratio) are:

(a) less than 0.1%;



– VIII-20 –

(b) less than 1% and the transaction is a connected transaction only because itinvolves connected person(s) at the “subsidiary” level; or

(c) less than 5% and the total consideration is less than HK$3,000,000.

Note: This exemption does not apply to an “issue of new securities” by the listed issuer to a connectedperson.

The “percentage ratios” are the figures, expressed as percentages resulting from each ofthe following calculations:

1. “Assets ratio” 14.07(1)

The total assets which are the subject of the transaction divided by the total assets ofthe listed issuer (see in particular Rules 14.09 to 14.12, 14.16, 14.18 and 14.19 of the HongKong Listing Rules).

2. “Profits ratio” 14.07(2)

The profits attributable to the assets which are the subject of the transaction divided bythe profits of the listed issuer (see in particular rules 14.13 and 14.17 of the Hong KongListing Rules).

3. “Revenue ratio” 14.07(3)

The revenue attributable to the assets which are the subject of the transaction dividedby the revenue of the listed issuer (see in particular rules 14.14 and 14.17 of the Hong KongListing Rules).

4. “Consideration ratio” 14.07(4)

The consideration divided by the total market capitalisation of the listed issuer. Thetotal market capitalisation is the average closing price of the listed issuer’s securities asstated in the Hong Kong Stock Exchange’s daily quotations sheets for the five business daysimmediately preceding the date of the transaction (see in particular rule 14.15 of the HongKong Listing Rules).

5. “Equity capital ratio” 14.07(5)

The nominal value of the share capital to be issued by the listed issuer as considerationdivided by the nominal value of the listed issuer’s issued share capital immediately beforethe transaction. Fraction of shares includes any convertible securities issued or granted asconsideration by the listing issuers or shares that may be generated when the subscriptionrights are converted or exercised. When calculating the equity ratio, it shall not include thevalue of the listing issuer’s debt capital (if any); debt capital includes any preferred stock.



– VIII-21 –

Note: Listed issuers must consider all the percentage ratios to the extent applicable for classifying atransaction. In the case of an acquisition where the target entity uses accounting standards differentfrom those of the listed issuer, the listed issuer must, where applicable, perform an appropriate andmeaningful reconciliation of the relevant figures for the purpose of calculating the percentage ratios.

“Issues of new securities”: Hong Kong Listing Rules 14A.92

An “issue of new securities” by a listed issuer or its “subsidiary” to a connectedperson, and under the following circumstances:

1. the connected person receives a pro rata entitlement to the issue as a shareholder;

2. the connected person subscribes for the securities in a rights issue or open offer(a) through excess application; or (b) in his or its capacity as an underwriter orsubunderwriter of the rights issue or open offer;

3. the securities are issued to the connected person under: (a) a share option schemethat complies with Chapter 17 of the Hong Kong Listing Rules; or (b) a shareoption scheme adopted by the listed issuer before its securities first start dealingon the Hong Kong Stock Exchange, and has been approved by the Hong KongStock Exchange; or

4. the securities are issued under a top-up placing and subscription that meets thefollowing conditions: (a)time of the new securities issued to the connected personwill be as follows: (i) after it has reduced its holding in the same class ofsecurities by placing them to third parties who are not its “associates” under aplacing agreement; and (ii) within 14 days from the date of the placingagreement; (b) the number of new securities issued to the connected person doesnot exceed the number of securities placed by it; and (c) the new securities areissued at a price not less than the placing price. The placing price may beadjusted for the expenses of the placing.

Note: Pursuant to rule 13.28 of the Hong Kong Listing Rules, the listed issuer shall publish an announcementcontaining the relevant details of the placing and subscription of shares in respect of the connectedpersons.

“Dealings on stock exchanges”: Hong Kong Listing Rules 14A.93

Dealing which meets the following conditions, (1) the dealing in the securities isconducted as part of the “ordinary and usual course of business” of the listed issuer’s group;(2) the securities are listed on the Hong Kong Stock Exchange or a recognised stockexchange; (3) the dealing is carried out on the Hong Kong Stock Exchange or a recognisedstock exchange (or if not, no consideration passes to or from a connected person); and (4)the transaction is not made for the purpose of conferring a direct or indirect benefit uponany connected person who is a “substantial shareholder” of the target company.



– VIII-22 –

“Repurchases of own securities”: Hong Kong Listing Rules 14A.94

Repurchases of own securities by a listed issuer or its “subsidiary” from a connectedperson and (1) on the Hong Kong Stock Exchange or a recognised stock exchange, exceptwhere the connected person knowingly sells the securities to the listed issuer’s group; or (2)in a general offer made under the Code on Share Buy-backs.

“Directors’ service contracts and insurance”: Hong Kong Listing Rules 14A.95, 14A.96

A director entering into a service contract with the listed issuer or its “subsidiary”;

Purchase and maintenance of insurance for a director of the listed issuer or its“subsidiaries” against liabilities to third parties that may be incurred in the course ofperforming his duties if it is in the form permitted under the laws of Hong Kong and wherethe company purchasing the insurance is incorporated outside Hong Kong, the laws of thecompany’s place of incorporation.

Note: All directors’ service contracts to which rule 13.68 of the Hong Kong Listing Rules is applicable shallcomply with the shareholders’ approval requirement described in that rule.

“Consumer goods or services”: Hong Kong Listing Rules 14A.97

A listed issuer’s group buying consumer goods or services as a customer from, orselling consumer goods or services to, a connected person on “normal commercial terms orbetter” in its “ordinary and usual course of business”. Such consumer goods or services:

1. must be of a type ordinarily supplied for private use or consumption;

2. must be for the buyer’s own use, and not be:

(i) processed into the buyer’s products, or for resale; or

(ii) used by the buyer for any of its own businesses or contemplated businesses.This condition does not apply if the listed issuer’s group is the buyer andthere is an open market and transparency in the pricing of the goods orservices;

Note: Examples include (1) meals consumed by a director at a restaurant owned by the listed issuer’sgroup; (2) a director buying groceries for his own use at a retail store operated by the listed issuer’sgroup; (3) utilities provided by the listed issuer’s group to a director’s apartment; (4) utilitiesprovided by a connected person to the listed issuer’s group where the prices of the utilities providedare openly announced or publicly quoted and apply to other independent consumers.

3. they must be consumed or used by the buyer in the same state as when they werebought; and



– VIII-23 –

4. the transaction must be made on no more favourable terms to the connectedperson, or no less favourable terms to the listed issuer’s group, than thoseavailable from independent third parties; and note: When determining whether thisrule is applicable to a transaction, the listed issuer should consult the Hong KongStock Exchange at an early stage.

“Sharing of administrative services”: Hong Kong Listing Rules 14A.98

Administrative services shared between the listed issuer’s group and a connectedperson on a cost basis. The costs of the services must be identifiable and are allocated to theparties involved on a fair and equitable basis. Examples include shared secretarial, legal andstaff training services.

“Ordinary and usual course of business”: Hong Kong Listing Rules 14.04(8)

Means the existing principal activities of the entity or an activity wholly necessary forthe principal activities of the entity. In the context of financial assistance provided in theordinary and usual course of business, this means financial assistance provided by a bankingcompany only; in the context of financial assistance not provided in the ordinary and usualcourse of business, it means financial assistance not provided by a banking company.

“Transactions with associates of passive investors”: Hong Kong Listing Rules 14A.99

A connected transaction conducted between the listed issuer’s group and an “associate”of a “passive investor”, and it meets the following conditions:

(a) the “passive investor” is a connected person only because it is a “substantialshareholder” of the listed issuer and/or any of its “subsidiaries”; and

(b) the “passive investor”:

(i) is not a controlling shareholder of the listed issuer or its “subsidiaries”;

(ii) does not have any representative on the board of directors of the listed issueror its “subsidiaries”, and is not involved in the management of the listedissuer’s group (including having any influence over the management of thelisted issuer’s group through negative control (e.g. its veto rights) onmaterial matters of the listed issuer’s group);

(iii) is independent of the directors, chief executive, controlling shareholder(s)and any other “substantial shareholder(s)” of the listed issuer or its“subsidiaries”; and

(c) the transaction is of a revenue nature in the “ordinary and usual course ofbusiness” of the listed issuer’s group, and conducted on normal commercial termsor better.



– VIII-24 –

“Passive investor”: Hong Kong Listing Rules 14A.100

Means a “substantial shareholder” of the listed issuer and/or any of its “subsidiaries”that: (1) is a sovereign fund, or a unit trust or mutual fund authorised by the Securities andFutures Commission or an appropriate overseas authority; and (2) has a wide spread ofinvestments other than the securities of the listed issuer’s group and the “associate” thatenters into the transaction with the listed issuer’s group.

“Transactions with connected persons at the subsidiary level”: Hong Kong ListingRules 14A.101

A connected transaction between the listed issuer’s group and a connected person at thesubsidiary level on normal commercial terms or better is exempt from the circular,independent financial advice and shareholders’ approval requirements if:

(1) the listed issuer’s board of directors have approved the transactions; and

(2) the independent non-executive directors have confirmed that the terms of thetransaction are fair and reasonable; the transaction is on normal commercial termsor better and in the interests of the listed issuer and its shareholders as a whole.



– VIII-25 –


CHAPTER 1 GENERAL PROVISIONS

Article 1 To further improve the corporate governance structure of Holly Futures Co.,Ltd. (hereinafter referred to as the “Company”) and create sound working environment forindependent directors as well as enhance the standard operation of the Company, these rulesare hereby formulated in accordance with Company Law of the People’s Republic of China,the Guidance for Listed Companies on Establishment of Independent Directors System(hereinafter referred to as the “Guidance”), Rules Governing the Listing of Securities on theStock Exchange of Hong Kong Limited and the Articles of Association of the Company (the“Articles of Association”).

Article 2 Independent directors of the Company are Directors holding no positionsother than that of Director in the Company, and having no relationship with the Companyand its substantial shareholders and affiliates as to hinder their independent and objectivejudgments.

Article 3 Independent directors owe a duty of good faith and diligence to the Companyand all of its shareholders. Independent directors shall, in accordance with the requirementsof related laws and regulations, regulatory requirements and the Articles of Association,earnestly perform their duties and responsibilities and safeguard the overall interests of theCompany and all the shareholders with particular attention to ensure that the legitimaterights and interests of minority shareholders are not compromised.

Article 4 Independent directors shall perform their duties and responsibilitiesindependently without being subject to the influence of the Company’s major shareholdersand de facto controllers or other entities or individuals who have a vested interest in theCompany.

Article 5 The Board shall have at least one-third of its members as independentdirectors (and no less than 3 independent directors), at least one of whom is an accountingprofessional (an accounting professional shall meet the requirements of Article 9 of thissystem).

Article 6 Where an independent director fails to meet the conditions for independenceor is not fit to perform the duties and responsibilities of an independent director for otherreasons and, as a result, the number of independent directors fails to reach the specified inthe Guidance, the Company shall fill the vacancy according to provisions.

Article 7 Independent directors shall participate in trainings organized by China’sSecurities and Regulatory Commission and its authorized institutions as required by China’sSecurities and Regulatory Commission.

APPENDIX IX SYSTEM CONCERNING THEINDEPENDENT DIRECTORS TO BE EFFECTIVE UPON THE

A SHARE OFFERING AND THE LISTING OF THE A SHARES

– IX-1 –

CHAPTER 2 QUALIFICATIONS OF INDEPENDENT DIRECTORS

Article 8 Independent directors shall meet the following qualifications appropriate tothe exercise of their functions and powers:

(1) having more than 5 years of experiences in financial business (including futuresand securities) or legal or accounting businesses or the senior title in theeducation and research of the relevant disciplines;

(2) having educational background of graduate of college or university or above inrelevant field and holding a bachelor degree or above;

(3) familiar with futures law, administrative regulations and the provisions of CSRC,and possess the professional capabilities of futures;

(4) having the time and effort necessary for performing the relevant obligations;

(5) other qualifications specified in laws, regulations, normative documents and thesecurities regulatory authority located where the company shares are listed.

The independent directors of the Company can serve as the independent directors in upto 2 futures companies at the same time.

Article 9 Anyone who is nominated as an independent Director candidate as anaccounting professional shall possess relatively rich accounting professional knowledge andexperience and meet at least one of the following conditions:

(1) having the qualifications of certified public accountants;

(2) having a senior professional title, associate professor title or doctorate degree inaccounting, auditing or financial management;

(3) having a senior professional title in economic management and more than 5 yearsof full-time working experience in accounting, auditing or financial managementand other professional positions.

CHAPTER 3 INDEPENDENCE OF INDEPENDENT DIRECTORS

Article 10 Independent directors must meet the requirements for independence and thefollowing persons disqualified in this regard shall not act as independent director:

(1) a person who holds a position in the Company or its affiliates and such person’sclose relatives and major social relations;



– IX-2 –

(2) a person who directly or indirectly holds more than 1% of the issued shares of theCompany, or any of the ten largest natural person shareholders of the Company,or such person’s close relatives;

(3) a person who directly or indirectly holds more than 5% of the issued shares of theCompany or in any of the five largest shareholders of the Company, and whoworks in the entity having business relation or interest relation with the Companyand such person’s close relatives and major social relations;

(4) a person who provides financial, legal and consultation services to the Companyand its affiliates and such person’s close relatives;

(5) a person who has met any of the four conditions above in the most recent year;

(6) a person who works in other futures company other than as independent director;

(7) a person identified by the laws, regulations or the CSRC as not suitable forserving as the independent director of a futures company.

CHAPTER 4 NOMINATION, ELECTION AND CHANGE OFINDEPENDENT DIRECTORS

Article 11 The Board, the Board of Supervisors or shareholders individually orcollectively holding more than 1% of the issued shares of the Company may nominatecandidates for independent directors to be elected at the shareholders’ meeting.

Article 12 The consent to the nomination for independent directors shall be obtainedfrom the nominee before the nomination. The nominator shall have full knowledge of thenominee’s general information such as profession, educational background, professional title,detailed working experience and all other posts he or she concurrently holds, and giveopinion on the nominee’s qualifications and the independence required as an independentdirector. The nominee shall make a statement that he/she has no relationships with theCompany that may affect his/her independent and objective judgment.

The Board of the Company shall announce the above details as required before theconvening of a general meeting to elect independent directors.

Article 13 Before a general meeting of shareholders is held to elect independentdirectors, the Company shall simultaneously submit relevant materials regarding allnominees to the CSRC, the local residence office of the CSRC at the place where theCompany is located, and the domestic stock exchanges on which the Company’s shares arelisted. If the Board of Directors objects to the qualifications of the nominees, a writtenopinion of the Board of Directors in connection therewith shall also be submitted at thesame time.



– IX-3 –

If the CSRC has an objection to a nominee, such nominee may be a candidate forelection as a director of the Company, but not a candidate for election as an independentdirector. When convening a general meeting of shareholders to elect independent directors,the Board of the Company shall explain whether the CSRC had any objection to any of thecandidates being elected as independent directors.

Article 14 The term of office of an independent director shall be the same as that ofother directors of the Company. Upon the expiry of his/her term, he or she may serveanother term if re-elected. However, his/her consecutive term shall not exceed 6 years.

Article 15 The Independent directors shall attend Board meeting as scheduled, in orderto understand the operation of the Company, actively investigate and obtain necessaryinformation for making decision.

Article 16 Independent directors shall not appoint a non-independent director by proxyto attend the Board meeting on his/her behalf. If an independent director fails to attend aBoard meeting for three consecutive times, the Board shall submit to the shareholders’general meeting that the independent director be dismissed. Except for the circumstancesmentioned above and such other circumstances as prescribed in the Company Law in whicha person shall not act as a director, an independent director shall not be dismissed withoutreason before the expiry of his term of office. If an independent director is dismissedprematurely, the Company shall disclose the dismissal as a matter requiring specialdisclosure. A dismissed independent director who considers his dismissal unjustified maymake a public statement.

Article 17 An independent director may resign before the term of his/her officeexpires. He/she shall submit a written resignation report to the Board and spell out thecircumstances related to the resignation or those that need to be brought to the attention ofshareholders and creditors of the Company.

If the resignation of the independent director causes the number of independentdirectors in the Board to become less than the minimum number required by the Guidance,the resignation report of the independent director shall take effect after the subsequentlyappointed independent director fills the vacancy.

CHAPTER 5 RESPONSIBILITIES OF INDEPENDENT DIRECTORS

Article 18 Independent directors shall have the following special functions and powersother than those of a director conferred by the Company Law and other relevant laws andregulations:

(1) major connected transactions shall be approved by independent directors beforesubmission to the Board for discussion; before an independent director makes hisor her judgment, an intermediary agency may be employed to produce anindependent financial advisory report which will serve as the basis for his or herjudgment;



– IX-4 –

(2) put forward the proposal to the Board relating to the appointment or dismissal ofaccounting firms;

(3) propose to the Board to call an extraordinary general meeting;

(4) propose to call a Board meeting;

(5) appoint external auditing and consulting organizations independently;

(6) may openly solicit proxies before a shareholders’ meeting is convened.

Consent from more than one-half of all the independent directors shall be obtained ifan independent director desires to exercise the above-mentioned functions and powers.

In case that the above proposal is not adopted or the functions and powers specifiedcannot be properly exercised, the Company shall disclose the related situation.

The connected transactions above are determined with reference to relevantrequirements of CSRC, the domestic stock exchanges and the Hong Kong Stock Exchange.

Article 19 For the audit committee, nomination committee as well as remunerationcommittee under the Board, independent directors shall account for more than half of thecomposition.

Article 20 Independent directors shall give independent opinion on the followingmatters to the Board or the shareholders’ meeting:

(1) nomination, appointment and replacement of directors;

(2) appointment and dismissal of senior management personnel;

(3) remuneration for directors and senior management personnel of the Company;

(4) any existing or new loans borrowed by the Company or other funds transfer thatexceeds RMB3 million or 5% of the Company’s recently audited net assets madeby the company’s shareholders, de facto controllers or connected enterprises, andwhether or not the Company has taken effective measures to collect the amountdue;

(5) matters that are deemed by independent directors to be detrimental to the interestsof minority shareholders;

(6) other matters specified by the Articles of Association.

Article 21 With respect to the matters mentioned in Article 20, independent directorsshall provide one of the following kinds of opinions:



– IX-5 –

(1) a consent opinion;

(2) a reserved opinion and its reasons;

(3) a negative opinion and its reasons;

(4) a non-comment opinion and the hurdles for giving such opinion.

Article 22 In the event that the matters concerned constitute discloseable matters, theCompany shall publish the opinion of the independent directors. If there is no consensusview among the independent directors, the Board shall separately state the opinion of eachof the independent director.

Article 23 Independent directors shall submit annual report on work to the annualgeneral meeting of the Company.

CHAPTER 6 WORKING CONDITIONS OF INDEPENDENT DIRECTORS

Article 24 The Company shall ensure that independent directors have the same right tobe kept informed as other directors in the Company by providing relevant materials andinformation to independent directors in a timely manner and regularly informing independentdirectors of the operation of the Company. Where necessary, the Company shall organizeindependent directors for site visit. With respect to matters that must be submitted to theBoard for decision, the Company must notify independent directors in advance withinlegally prescribed time and provide them with sufficient materials. Independent directorsmay ask for supplementary materials if they consider the given materials incomplete. Whentwo or more independent directors consider that the materials are incomplete or theargumentation is unclear, they may jointly propose in writing to the Board to postpone theconvening of the board meeting or to postpone the discussion of the matter, which shall beadopted by the Board.

Information provided by the Company to independent directors shall be kept by bothparties for at least five years.

Article 25 The Company shall provide independent directors with the necessaryworking facilities for them to perform their duties. The secretary of the Board shall activelyoffer assistance to independent directors by giving a briefing, providing materials, etc.Where the independent opinion, proposal and written statement given by independentdirectors shall be made public, the secretary of the Board shall handle the mattersconcerning the announcement without delay.

Article 26 When an independent director exercises his/her functions and powers,relevant personnel in the Company shall cooperate actively and shall not turn down his/herrequests, hinder his/her work or conceal information from him/her, nor shall they interferewith the exercise of his/her functions and powers independently.



– IX-6 –

Article 27 Expenses incurred from the engagement of intermediary agencies and otherexpenses relating to the performance of functions and powers by independent directors shallbe borne by the Company.

Article 28 The Company shall grant appropriate allowances to independent directorsand reimburse the independent directors out of pocket expenses incurred in attending boardmeetings, general meetings and the exercise of powers as required in the Articles ofAssociations. The standard of the allowances shall be proposed by the Board forconsideration, approved at the shareholders’ meeting, and disclosed in the Company’s annualreport.

Independent directors shall not receive any extra non-disclosed interests from theCompany and its major shareholders or other interested entities and persons other than theabove-mentioned allowances and expenses.

Article 29 The Company may establish a liability insurance policy for independentdirectors to lower the risks of independent directors that may occur when performing theirduties and responsibilities under normal circumstances.

CHAPTER 7 SUPPLEMENTARY PROVISIONS

Article 30 The terms “above” and “over” mentioned in the rules all include theoriginal number.

Article 31 For matters not provided for herein, relevant laws and administrativeregulations, normative documents and the listing rules of the domestic stock exchanges onwhich the Company’s shares are listed as well as the Articles of Association shall apply.

Where any provisions of these rules conflict with the relevant laws, administrativeregulations, other normative documents and the listing rules of the domestic stock exchangeson which the Company’s shares are listed as amended from time to time, the correspondingrequirements shall be annulled simultaneously and the latter shall prevail.

Article 32 The Board is responsible for interpretation of the Rules.

Article 33 The Rules shall, as approved by the shareholders’ meeting, take effect andbe implemented on the date when the A Share of the Company offered through initial publicoffering are listed on the domestic stock exchanges.



– IX-7 –


CHAPTER I GENERAL PROVISIONS

Article 1 In order to regulate the management and use of raised funds of Holly FuturesCo., Ltd. (the “Company”), ensure the safety of raised funds, improve the efficiency of theuse of raised funds, safeguard the legitimate interests of all shareholders and guarantee theinterests of investors to the greatest extent, these Rules are formulated in accordance withthe relevant laws, administrative regulations and normative documents including theCompany Law of the People’s Republic of China, the Securities Law of the People’sRepublic of China, the listing rules of the domestic stock exchanges, the Guideline No. 2 onSupervision and Administration of Listed Companies-Regulatory Requirements onManagement and Use of Proceeds of Listed Companies（《上市公司監管指引第2號－上市公司募集資金管理和使用的監管要求》）as well as the Articles of Association of Holly Futures Co.,Ltd. (the “Articles of Association”).

Article 2 For the purpose of these Rules, the term “raised funds” refers to the fundsraised by the Company through public offering of securities (including the initial publicoffering, right issue after listing, follow-on offering, etc.), issue of convertible corporatebonds or funds publicly raised from public investors in the society through the waysotherwise stipulated under laws and regulations; the investment projects for raised fundsherein refer to fixed asset investment and equity investment projects wholly or partiallyfunded with raised funds.

Article 3 These Rules comprise a code of conduct of the Company with respect to theuse and management of its raised funds. Where the investment projects for raised funds aremade by a subsidiary of the Company or other enterprises controlled by the Company, theCompany shall ensure the subsidiary or other enterprises controlled by it to comply withthese Rules.

Article 4 The raised funds of the Company can only be used for the projects whichhave been publicly disclosed to be invested with raised funds. The board of directors (the“Board”) of the Company shall prepare a detailed plan on the use of raised funds to ensureuse of raised funds in a normative, open and transparent way.

Article 5 The Board shall disclose the use of raised funds in a prompt manner inaccordance with relevant laws, administrative regulations and the Articles of Association.

Article 6 The Company shall ensure the authenticity and fairness of the use of raisedfunds to prevent appropriation or embezzlement of raised funds by affiliated persons, andtake effective measures to prevent the utilisation of investment projects for raised funds byaffiliated persons for acquisition of inappropriate gains.

APPENDIX X ADMINISTRATION SYSTEM OF RAISED FUNDS TO BEEFFECTIVE UPON THE A SHARE OFFERING AND


– X-1 –

CHAPTER II DEPOSIT OF RAISED FUNDS

Article 7 The Company’s raised funds shall be deposited into the designated accountsestablished with the approval of the Board for centralised management and the number ofdesignated accounts shall not exceed the number of investment projects for raised funds. Thedesignated accounts shall not be used for deposit of funds other than raised funds or otherpurposes.

Where the Company has raised funds for more than two times, it shall set up adesignated account for raised funds independently. The funds needed for the sameinvestment project shall be deposited in the same designated account.

Article 8 A tripartite custody agreement (the “Tripartite Custody Agreement”) withrespect to the deposit at the designated account for raised funds shall be entered into amongthe Company, the sponsor(s) and the commercial bank (the “Commercial Bank”) with whichthe raised funds are deposited within one month upon receipt of the raised funds. Theagreement shall set out at least the following contents:

(I) The Company shall deposit the raised funds into the designated account for raisedfunds in a centralised way;

(II) The account number of the designated account for raised fund, the fund-raisingprojects involved in the designated account, and the deposit amount;

(III) If the Company withdraws an amount of more than RMB50 million from thedesignated account for raised funds once or at multiple times within 12 months orthe amount reaches 20% of the net raised funds, the Company or the CommercialBank shall notify the sponsor(s) or independent financial adviser promptly;

(IV) The Commercial Bank shall provide the Company with bank statements of thedesignated account for raised funds on a monthly basis and make copies to thesponsor(s) or independent financial adviser;

(V) The sponsor(s) or independent financial adviser may make inquiries to theCommercial Bank on the designated account for raised funds at any time;

(VI) The supervisory responsibilities of the sponsor(s) or independent financial adviser,the notification and cooperation responsibilities of the Commercial Bank, and thesupervision method of the sponsor(s), independent financial adviser and theCommercial Bank on the use of funds raised by the Company;

(VII) The right, obligation and liability for breaching by the Company, the CommercialBank, the sponsor(s) or the independent financial adviser.



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(VIII) Where a commercial bank fails to promptly issue statements to the sponsor orindependent financial adviser or notify the special account for any largewithdrawals for three times, and fails to cooperate with the sponsor orindependent financial adviser to inquire and investigate the special accountinformation, the Company shall terminate the agreement and cancel the specialaccount for fund-raising.

After the execution of the tripartite regulatory agreement, the Company shall promptlydisclose the main content of such agreement.

Where the Company implements a fundraising proposal through a controllingsubsidiary, the Company, the controlling subsidiary which implements the fundraisingproposal, the commercial bank and the sponsor or independent financial adviser shall jointlysign a tripartite agreement, and the Company and its controlling subsidiary shall be regardedas one party.

Where the tripartite regulatory agreement is terminated in advance prior to theexpiration of the validity period, the Company shall sign a new agreement with the relevantparties within 2 weeks from the date of termination of the agreement and report to the localstock exchange for filing and make an announcement in a timely manner.

CHAPTER III USE OF PROCEEDS

Article 9 The Company shall use the raised funds in accordance with the investmentplan for raised funds as undertaken in the offering application documents. Any materialimpact on normal progress of the investment plan for raised funds shall be announced in atimely manner.

The raised funds shall not be used for pledge, entrusted loans or other investments thatcovertly change the use of raised funds.

Article 10 The Company shall not make available the raised funds, whether directly orindirectly, for connected parties such as the controlling shareholder(s) and de factocontroller(s), or provide benefits for connected parties for inappropriate gains from theInvestment projects for raised funds.

Article 11 For use of the raised funds, the Company shall make application and gothrough the approval procedures for the use of the raised funds in strict compliance withfinancial management system of the Company. For expenditure of the raised funds, therelevant department should propose the use plan of raised funds which shall be subject toaudit by the finance department after the signature by the manager of competent department(or the person in charge of the project). The payment shall then be made upon signature bythe chief finance officer and chairman or be subject to the approval by the Board or at thegeneral meeting if the expenditure is beyond the scope of authority of the chairman.



– X-3 –

The application for raised funds herein refers to the report on use of raised funds bythe using department or unit and the report shall specify the application purpose, amount,timing of drawdown or transfer, etc.

The approval procedures for raised funds herein refer to the procedures for the use ofraised funds by the using department or unit within the scope of the use plan of raised fundsor the Company’s budget which are subject to audit by the finance department, signature forapproval by the chief financial officer and chairman, and execution by the accountingdepartment.

Article 12 The Company shall perform comprehensive inspections in respect ofprogress of the investment projects for raised funds at the end of each fiscal year.

In case of a discrepancy of more than 30% between the annual actual amount of raisedfunds used under the investment projects for raised funds and the expected amount of raisedfunds to be used for the year according to the raised funds investment plan as previouslydisclosed, the Company shall adjust the raised funds investment plan and disclose theprevious year’s annual raised funds investment plan, current actual investment progress,expected investment plan by year after adjustment, and reasons for the changes ininvestment plan, etc. in the special statement for annual usage of raised funds.

Article 13 The Company shall pay continuous attention to the progress and effects ofthe investment projects for raised funds. In case of discrepancy of over 20% between theactual progress and effects and planned ones, it is required to disclose the progress andreasons for the discrepancy of the investment projects for raised funds in the periodicreports.

Article 14 The Company shall check the feasibility and estimated earnings of theinvestment projects for raised funds and decide whether to continue to implement theproject, and disclose the progress of the project, reasons for any abnormality and theadjusted investment plan (if any) for the raised funds in the latest periodic report in case ofany of following circumstances:

(I) Any material change in the market environment in which the investment projectsfor raised funds is involved;

(II) Suspension of the investment projects for raised funds for over one year;

(III) Failure to meet the deadline specified in the previous plan for investment withraised funds and less than 50% of the proposed investment amount has beenmade;

(IV) Other abnormalities of the investment projects for raised funds.

Article 15 If the Company decides to terminate the original investment projects forraised funds, it is required to select new investment projects in a prompt and scientific way.



– X-4 –

Article 16 In the case that the Company has made investment with its own funds intothe investment projects for raised funds prior to receiving the raised funds, the raised fundsmay be used for the original purpose of such investment within six months from the receiptthereof. Such replacement shall be considered and approved by the Board with a verificationreport issued by an accountant firm and the explicit consent from independent directors, theBoard of Supervisors and the sponsor(s) and implemented upon fulfillment of theinformation disclosure obligation.

In case the intention to replace the pre-invested self-raised fund with raised funds isdisclosed in the application document for issuance and the pre-invested amount is confirmed,it shall be publicly announced before the implementation of the replacement.

Article 17 Where the Company uses the temporarily idle raised funds to replenishworking capital, such replenishment shall meet the following conditions:

(I) It shall not involve any de facto changes in the purpose of raised funds or affectthe normal implementation of the raised funds investment plan;

(II) Any raised funds previously used for temporary replenishment of working capital,if applicable and falling due, have been returned;

(III) The duration of any individual replenishment to the working capital shall notexceed 12 months;

(IV) The temporarily idle raised funds shall not be used for high-risk investments;

(V) The temporarily idle raised funds can only be used for production and operationrelated to principal businesses.

The aforementioned matters shall be subject to consideration and approval by theBoard of the Company, and the explicit consent and disclosure by the independent directors,the Board of Supervisors and the sponsor(s).

Article 18 The replenishment of working capital with the temporarily idle raised fundsshall be subject to consideration and approval by the Board of the Company and thefollowings shall be announced within two trading days.

(I) The basic situation of the funds raising, including the time of raising, the amountof funds raised, the net amount of funds raised and the investment plan, etc.;

(II) The use funds;

(III) The amount and time limit of idle raised funds to supplement working capital;



– X-5 –

(IV) The expected amount of financial expenses to be saved by the idle funds raised tosupplement working capital, the reasons of insufficient working capital, whetherthere is any behaviors to change the use of funds and measures to ensure that thenormal progress of the funds raising proposal will not be affected;

(V) Opinions issued by independent directors, board of supervisors, sponsorinstitutions or independent financial advisers;

(VI) Other content required by the China Securities Regulatory Commission or localstock exchanges.

Before the expiry date of the replenishment of working capital, the Company shallreturn such part of the capital to the designated account for raised funds, and shall report tomake announcement thereon within two trading days after all the capital is returned.

Article 19 Where a single investment project to be financed with the raised funds iscompleted and the Company uses the remaining raised fund of such project (includinginterest income) for other investment projects for raised funds, it shall obtain an approvalfrom the Board and the opinions from the independent directors, the sponsor(s) and theBoard of Supervisors.

CHAPTER IV CHANGES IN INVESTMENT PROJECTS FOR PROCEEDS

Article 20 The application of raised funds and project investment with the raised fundsshall, in principle, be in accordance with the provisions under the offering applicationdocuments. Any change in application required for special reasons shall be subject toconsideration by the Board and approval by way of a resolution at the general meeting.

The unit in charge of project shall submit the reasons for the change and new projectproposal to the general manager. Upon confirmation at the office meeting of generalmanager, the general manager will submit the change in writing to the Board forconsideration.

Article 21 The new project to be financed with the raised funds shall be in line withthe Company’s strategy on accelerating structural adjustment and national industrial policies,and fall into the industry and investment supported by the State. Before the change of plan,the unit in charge of the project shall conduct sufficient investigation and analyticdemonstration for the new project and prepare a new project proposal on the basis ofscientific demonstration. Upon change in the purpose, the raised funds shall, in principle, beinvested in the principal business of the Company.

Article 22 For the new project proposal and other relevant documents as proposed bythe unit in charge of project which are confirmed by the general manager for transmission,the Board of the Company shall organise the internal experts or engage intermediary toconduct special assessment, and resolve whether to make the change based on theassessment.



– X-6 –

The Board of the Company shall conduct feasibility analysis on the new investmentprojects for raised funds after the proposed change in a prudent way to make sure that theinvestment project has good market prospects and profitability so as to effectively preventinvestment risks and increase the benefits from using the raised funds.

The resolution in relation to the change in the investment projects for raised funds asconsidered and approved by the Board shall be disclosed in a prompt manner, and subject toconsideration at the general meeting of the Company. In case any connected transaction isinvolved in the change, the relevant resolution shall be passed through voting with theconnected directors or connected shareholders abstained from voting.

Article 23 In case the Company intends to change the implementation of an investmentproject for raised funds to joint venture, the necessity of the joint venture shall be carefullyconsidered on the basis of a thorough understanding of the basic condition of the jointventure partner, and the Company shall be a controlling shareholder so as to ensure theeffective control of the investment project for raised funds.

Article 24 If the Company changed the investment project for raised funds to acquirethe assets (including interests) of controlling shareholders or beneficial controller, effectiveavoidance of intra-industry competition and minimization of connected transactions shall beensured after the acquisition. The Company shall make disclosure on the reasons forentering into transaction with its controlling shareholders or de facto controller, pricingpolicy and pricing basis for connected transaction, impact of connected transaction on theCompany and solutions to relevant issues.

Article 25 Change of the place of implementation of the investment project for raisedfunds shall be considered and approved by the Board, and shall be announced within 2trading days with explanation on the changes, the reasons, the impact on the implementationof the investment project for raised funds as well as the opinions given by the sponsor(s) orthe independent financial adviser.

Article 26 Any of the following changes in implementation of the investment projectfor raised funds as compared with disclosures in the Company’s offering applicationdocuments shall be deemed to be an alteration of the purpose of the raised funds:

1. revoke or add new investment project for raised funds;

2. over 20% of movement to investment amount of a single investment project forraised funds.

3. other circumstances as recognised by the CSRC or domestic stock exchange(s).

Article 27 The changes in investment project for raised funds shall be subject tospecific opinions from the Company’s Board of Supervisors, independent directors andsponsor(s).



– X-7 –

Article 28 The Company shall properly prepare the plan on use of surplus raised fundsbased on the development plan and actual production and operation needs of the Companyno later than 6 months after the receipt of raised funds and disclose the plan in a promptmanner upon consideration and approval by the Board. Independent directors and sponsor(s)shall express independent opinions on the reasonableness and necessity of the plan on theuse of surplus raised funds, and disclose the same with the relevant announcement of theCompany.

The surplus raised funds shall be used for the principal businesses of the Company, andshall not be used for securities investment, entrusted wealth management, derivativesinvestment, venture capital and other high-risk investments or provision of financialassistance for others, etc.

Before actual use of surplus raised funds, the Company shall fulfill the relevantprocedures of consideration by the Board or at the general meeting, and make promptdisclosures thereof.

CHAPTER V IMPLEMENTATION MANAGEMENT OF PROJECT FOR PROCEEDS

Article 29 The implementation of investment projects for raised funds shall beorganized by the general manager. The implementation of construction of fixed assetinvestment project shall be in the charge of the Company’s relevant business department andproject implementation unit; the equity investment project shall be jointly implemented bythe department responsible for investment and finance department of the Company.

Article 30 In the process of project investment, the project implementation departmentshall be responsible for the preparation of implementation plan, quality control, organizationof project implementation, project progress tracking, establishment of project managementfiles, etc.

Article 31 The finance department of the Company is responsible for the transfer andarrangement of funds and set up separate accounting records and ledger for the activitiesinvolving the use of raised funds.

Article 32 Upon completion of project, the department responsible for investment ofthe Company shall cooperate with the project management department, projectimplementation unit, finance department and externally engaged agencies in completionacceptance.

Article 33 In case of termination of project implementation, investment beyondbudgeting, delay in progress, etc. arising from the material changes in relevant nationalpolicies, market environment, relevant technologies, circumstances of partners, etc., therelevant department shall report to the general manager and the Board promptly. For thedelay in project for over 6 months, the general manager shall explain the reasons for thedelay and possible effects on the investment project for raised funds to the Board, and



– X-8 –

submit the new project implementation schedule to the Board for consideration and approvalbefore submitting the same to the general meeting. Upon approval at the general meeting,the new implementation schedule will come into force.

For termination of project implementation, the general manager shall report the reasonsfor the termination and possible effects on the profitability of the investment project forraised funds to the Board for consideration and approval, after which the termination ofproject implementation will be tabled at the general meeting for approval before coming intoforce. The introduction of any new investment projects for raised funds after projecttermination shall be subject to relevant approval procedures under the Rules and informationdisclosure.

Article 34 Upon project delivery, the project using unit must conduct statistics ofoperating data and set up accounts and statement system. The report on project investmenteffects shall be submitted to the finance department and investment department on asemiannual and annual basis.

Article 35 The finance department shall submit the summary report on the use ofraised funds and benefits accounting of the projects that have been put into operation to theBoard on a semiannual and annual basis.

CHAPTER VI ADMINISTRATION AND SUPERVISION OF USE OF PROCEEDS

Article 36 The project implementation department and project implementation unitshall prepare and promptly submit the detailed written explanations on the followingcircumstances to the general manager and send copies of the same to the secretary to theBoard:

1. The actual progress of project fails to meet the schemed progress and the projectcannot be completed as scheduled;

2. The actual investment amount required for the project exceeds the budget;

3. The engineering quality of the project fails to satisfy requirements;

4. The actual benefits of the project fall short of estimated or forecasted benefits.

In case of large discrepancy, the general manager shall report to the Board of theCompany which shall made relevant resolution thereon and disclose the same in accordancewith the information disclosure system.

Article 37 The Company shall explain the use and investment of raised funds, whetherthere is difficulty, obstacle or loss with the development prospects at the explanation sessionon annual report.



– X-9 –

Article 38 The Board of the Company shall comprehensively review progress of theinvestment projects for raised funds semi-annually, and issue a Special Report on theDeposit and the Actual Use of Proceeds of the Company（《公司募集資金存放與實際使用情況的專項報告》）which shall be considered and approved by the Board and Board of Supervisorsand announced upon the consideration by the Board.

Article 39 The Company’s internal audit department shall at least quarterly performchecking on the deposit and use of raised funds and promptly make report on the checkresults to the audit committee.

In case of significant violation existed in the administration of the Company’s raisedfunds as considered by the audit committee, a report thereon shall be made to the Board ona timely basis. The Board shall, within two trading days upon receipt of the report, report tothe stock exchange and make an announcement, the contents of which shall include thesignificant violation existed in the administration of raised funds, consequences incurred ormay be incurred and measures taken or intended to be taken.

Article 40 In case raised funds is used in the year, the Board shall issue a specialreport on the annual deposit and use of raised funds and engage certified public accountantsto issue a verification report on the deposit and use of raised funds.

Certified public accountants shall provide reasonable assurance and make verificationconclusion as to whether the special report of the Board has been prepared in accordancewith the Rules and the relevant format guidance, and whether the annual deposit and use ofraised funds have been actually reflected.

In case the verification conclusion is a “conclusion with reservation”, “negativeconclusion” or “unable to make conclusion”, the Board shall conduct analysis in respect ofthe reasons for the conclusion given by the certified public accountant in the verificationreport, propose corrective measures and make disclosure in the annual report. The sponsor(s)shall carry out on-site checking and issue special examination report in respect of the annualdeposit and use of raised funds within 10 trading days after the verification report isdisclosed. The reasons for the above verification conclusion given by certified publicaccountant shall be seriously analyzed in the examination report, and explicit examinationopinion shall be given. The Company shall disclose the examination report promptly afterreceiving it.

Article 41 The independent directors shall concern about whether there is a significantdiscrepancy between the actual use of raised funds and the information disclosure made bythe Company. Upon agreement by more than 1/2 of the independent directors, theindependent directors may engage an accounting firm to conduct a special audit in respect ofthe use of raised funds. The Company shall fully cooperate with the special audit work andpay the audit fees as necessary.



– X-10 –

Article 42 In the event of any violation of the laws, regulations, the Articles ofAssociation or the Rules in the use of the raised funds, resulting in losses to the Company,those persons liable shall assume relevant legal liabilities.

CHAPTER VII SUPPLEMENTARY PROVISIONS

Article 43 The term “over” shall include the given figure and “more than” shall notwhen used herein.

Article 44 These Rules shall be construed by the Board of the Company.

Article 45 For all matters in the Rules which are not mentioned, the relevant nationallaws, regulations, normative documents and the Articles of Association shall be followed.

Article 46 Upon consideration and approval at the general meeting of the Company,these Rules shall come into effect and be implemented from the date when the shares of theCompany offered through initial public offering are listed on the domestic stock exchanges.



– X-11 –


AMENDMENTS TO THE ARTICLES OF ASSOCIATION(APPLICABLE UPON THE LISTING OF A SHARES)

Original Article1Amended Article (Draft) (Applicable upon the

Listing of A Shares)

CHAPTER 1 GENERAL PROVISIONS CHAPTER 1 GENERAL PROVISIONS

Article 1 In order to safeguard the legitimaterights and interests of Holly Futures Co., Ltd. (the“Company”) and its shareholders and creditors,and to regulate the organization and activities ofthe Company, these Articles of Association areformulated in accordance with the Company Lawof the People’s Republic of China (the “CompanyLaw”), the Securities Law of the People’sRepublic of China (the “Securities Law”), theSupervision and Administration Measures onFutures Firms, the Special Regulations of the StateCouncil on the Overseas Offering and Listing ofShares by Joint Stock Limited Companies (the“Special Regulations”), the Mandatory Provisionsfor Articles of Association of Companies to beListed Overseas (the “Mandatory Provisions”), theLetter Regarding Opinion on SupplementaryAmendments to Articles of Association ofCompanies to be Listed in Hong Kong, the RulesGoverning the Listing of Securities on The StockExchange of Hong Kong Limited (the “Hong KongListing Rules”) and other relevant laws,regulations and regulatory documents.

Article 1 In order to safeguard the legitimaterights and interests of Holly Futures Co., Ltd. (the“Company”) and its shareholders and creditors,and to regulate the organization and activities ofthe Company, these Articles of Association areformulated in accordance with the Company Lawof the People’s Republic of China (the “CompanyLaw”), the Securities Law of the People’sRepublic of China (the “Securities Law”), theSupervision and Administration Measures onFutures Firms, the Special Regulations of the StateCouncil on the Overseas Offering and Listing ofShares by Joint Stock Limited Companies (the“Special Regulations”), the Mandatory Provisionsfor Articles of Association of Companies to beListed Overseas (the “Mandatory Provisions”), theLetter Regarding Opinion on SupplementaryAmendments to Articles of Association ofCompanies to be Listed in Hong Kong, the RulesGoverning the Listing of Securities on The StockExchange of Hong Kong Limited (the “Hong KongListing Rules”), the Guidelines for the Articlesof Association of Listed Companies, the listingrules of domestic stock exchanges and otherrelevant laws, regulations and regulatorydocuments.

1 Note: The bold articles under the Original Article column shall become effective upon the consideration andapproval at the annual general meeting to be held by the Company.

APPENDIX XI COMPARISON OF THE EXISTING ARTICLES OF ASSOCIATIONAGAINST THE ARTICLES OF ASSOCIATION TO BE EFFECTIVE UPON

THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

– XI-1 –



Article 2 The Company is a joint stock limitedcompany established in accordance with theCompany Law, the Securities Law, the Supervisionand Administration Measures on Futures Firms aswell as other relevant laws and administrativeregulations of the People’s Republic of China (the“PRC”, excluding Hong Kong, Macau and Taiwanfor the purpose of these Articles of Association andits appendixes). The Company is a joint stocklimited company established through overalltransformation from Jiangsu Holly FuturesCompany Limited. On 29 November 2012, theCompany was established by way of promotion andregistered with the Administration for Industry andCommerce of Jiangsu Province. The unified socialcredit code of the Company is91320000100022362N.

Promoters of the Company are as follows:

Jiangsu SOHO Holdings Group Co., Ltd.

Jiangsu Holly Corporation

Jiangsu Holly Su Industrial Co., Ltd.

Jiangsu High Hope International Group Co., Ltd.

Jiangsu Hongrui Venture Capital Co., Ltd.

Shanghai Mingda Industrial (Group) CompanyLimited

Jiangsu Holly International Logistics Corporation

Article 2 The Company is a joint stock limitedcompany established in accordance with theCompany Law, the Securities Law, the Supervisionand Administration Measures on Futures Firms aswell as other relevant laws and administrativeregulations of the People’s Republic of China (the“PRC”, excluding Hong Kong, Macau and Taiwanfor the purpose of these Articles of Association andits appendixes). The Company is a joint stocklimited company established through overalltransformation from Jiangsu Holly FuturesCompany Limited. On 29 November 2012, theCompany was established by way of promotion andregistered with the Administration for Industry andCommerce of Jiangsu Province. The unified socialcredit code of the Company is91320000100022362N.

Promoters of the Company are as follows:

Jiangsu SOHO Holdings Group Co., Ltd.

Jiangsu Holly Corporation

Jiangsu Holly Su Industrial Co., Ltd.

Jiangsu High Hope International Group Co., Ltd.

Jiangsu Hongrui Venture Capital Co., Ltd.

Shanghai Mingda Industrial (Group) CompanyLimited

Jiangsu Holly International Logistics Corporation

Article 3 Name of the Company

Chinese name: 弘業期貨股份有限公司

English name: Holly Futures Co., Ltd.

Article 3 Name of the Company

Chinese name: 弘業期貨股份有限公司

English name: Holly Futures Co., Ltd.

Article 4 Address of the Company: No. 50Zhonghua Road, Nanjing, Jiangsu Province

Postal code: 210001

Telephone: 025-52278980

Fax: 025-52308148

Article 4 Address of the Company: No. 50Zhonghua Road, Nanjing, Jiangsu Province

Postal code: 210001

Telephone: 025-52278980

Fax: 025-52308148



– XI-2 –



Article 5 The legal representative of the Companyshall be the general manager of the Company.

Article 5 The legal representative of the Companyshall be the general manager of the Company.

Article 6 The Company is a joint stock limitedcompany in perpetual existence.

The Company is an independent legal person andshall be governed and protected by the PRC laws,administrative regulations and other relevant rules.

All the Company’s capital shall be divided intoequal shares. Shareholders of the Company shallhave rights and assume liabilities to the Companyto the extent of their shareholdings in theCompany. The Company shall be liable for itsdebts to the extent of its total assets.

Article 6 The Company is a joint stock limitedcompany in perpetual existence.

The Company is an independent legal person andshall be governed and protected by the PRC laws,administrative regulations and other relevant rules.

All the Company’s capital shall be divided intoequal shares. Shareholders of the Company shallhave rights and assume liabilities to the Companyto the extent of their shareholdings in theCompany. The Company shall be liable for itsdebts to he extent of its total assets.

Article 7 The Articles of Association shall becomeeffective from the date on which the Companyconducts overseas initial public offering of sharesand is listed on the Stock Exchange of Hong KongLimited (the “Hong Kong Stock Exchange”) andbeing approved at the general meeting.

Once effective, these Articles of Association shallautomatically supersede the Company’ existingArticles of Association and its amendments andshall constitute a legally binding document toregulate the organization and activities of theCompany, the rights and obligations between theCompany and its shareholders and among theshareholders.

Article 7 The Articles of Association is subject tothe approval at the general meetings and shallbecome effective from the date on which theCompany conducts domestic initial public offeringof shares and is listed on a domestic stockexchange.

Once effective, these Articles of Association shallautomatically supersede the Company’ existingArticles of Association and its amendments andshall constitute a legally binding document toregulate the organization and activities of theCompany, the rights and obligations between theCompany and its shareholders and among theshareholders.



– XI-3 –



Article 8 The Articles of Association shall belegally binding on the Company and itsshareholders, directors, supervisors, generalmanager and other senior management, all ofwhom are entitled to claim rights regarding theCompany’s affairs in accordance with theseArticles of Association.

According to the Articles of Association, ashareholder may take legal action against theCompany and its shareholders, directors,supervisors, general manager and other seniormanagement of the Company, and the Companymay take legal action against its shareholders,directors, supervisors, general manager and othersenior management.

The actions referred to in the preceding paragraphinclude institution of proceedings in a court andmaking application to an arbitration agency forarbitration.

The “other senior management” referred to in theprevious paragraph include deputy generalmanagers, chief risk officer, financial controllerand secretary of the Board of the Company.

Article 8 The Articles of Association shall belegally binding on the Company and itsshareholders, directors, supervisors, generalmanager and other senior management, all ofwhom are entitled to claim rights regarding theCompany’s affairs in accordance with theseArticles of Association.

According to the Articles of Association, ashareholder may take legal action against theCompany and its shareholders, directors,supervisors, general manager and other seniormanagement of the Company, and the Companymay take legal action against its shareholders,directors, supervisors, general manager and othersenior management.

The actions referred to in the preceding paragraphinclude institution of proceedings in a court andmaking application to an arbitration agency forarbitration.

The “other senior management” referred to in theprevious paragraph include deputy generalmanagers, chief risk officer, financial controllerand secretary of the Board of the Company.

Article 9 The Company may invest in otherlimited liabilities companies and joint stocklimited liabilities companies and shall assumeliabilities to the investees to the extent of theamount of its capital contribution, provided that itshall not become an investor that shall bear jointand several liabilities for the debts of the investeesunless otherwise provided by laws andadministrative regulations. The Company shall notbecome a shareholder with unlimited liabilities ofany other economic organizations.

Article 9 The Company may invest in otherlimited liabilities companies and joint stocklimited liabilities companies and shall assumeliabilities to the investees to the extent of theamount of its capital contribution, provided that itshall not become an investor that shall bear jointand several liabilities for the debts of the investeesunless otherwise provided by laws andadministrative regulations. The Company shall notbecome a shareholder with unlimited liabilities ofany other economic organizations.



– XI-4 –



Article 10 In accordance with the provisions ofthe Constitution of the Communist Party of China,the Company shall set up an organization of theCommunist Party of China. The Party organizationshall exercise its role as the core of leadership andthe political nucleus, and shall focus on the overalldirection and development and ensuring strictpolicy implementation. The Company shallestablish related working organs, and maintain anadequate level of staffing to handle Party affairs aswell as sufficient funding for the activities of theParty organization.

Article 10 In accordance with the provisions ofthe Constitution of the Communist Party of China,the Company shall set up an organization of theCommunist Party of China. The Party organizationshall exercise its role as the core of leadership andthe political nucleus, and shall focus on the overalldirection and development and ensuring strictpolicy implementation. The Company shallestablish related working organs, and maintain anadequate level of staffing to handle Party affairs aswell as sufficient funding for the activities of theParty organization.

CHAPTER 2 OBJECTIVES AND SCOPE OFBUSINESS

CHAPTER 2 OBJECTIVES AND SCOPE OFBUSINESS

Article 11 The business objectives of theCompany are to continue to improve the level ofits operation and management as well as corecompetitiveness, to create great economic andsocial benefits and to maximize shareholders’equity, customers’ interests and employees’ valuein compliance with the relevant laws andregulations by adhering to its corporate philosophyof “compliance, soundness, high efficiency andinnovation”.

Article 11 The business objectives of theCompany are to continue to improve the level ofits operation and management as well as corecompetitiveness, to create great economic andsocial benefits and to maximize shareholders’equity, customers’ interests and employees’ valuein compliance with the relevant laws andregulations by adhering to its corporate philosophyof “compliance, soundness, high efficiency andinnovation”.

Article 12 As legally registered, the scope ofbusiness of the Company includes commodityfutures brokerage, financial futures brokerage,futures investment consulting, asset managementand fund sale.

Upon approval, the Company can engage in otherbusinesses as regulated by the China SecuritiesRegulatory Commission (the “CSRC”). TheCompany must obtain approval from the CSRC inrespect of the change in the scope of business, andshall complete the relevant procedures with thecompany registration authorities according to legalprocedures.

Article 12 As legally registered, the scope ofbusiness of the Company includes commodityfutures brokerage, financial futures brokerage,futures investment consulting, asset managementand fund sale.

Upon approval, the Company can engage in otherbusinesses as regulated by the China SecuritiesRegulatory Commission (the “CSRC”). TheCompany must obtain approval from the CSRC inrespect of the change in the scope of business, andshall complete the relevant procedures with thecompany registration authorities according to legalprocedures.



– XI-5 –



CHAPTER 3 SHARES AND REGISTEREDCAPITAL

CHAPTER 3 SHARES AND REGISTEREDCAPITAL

Article 13 There must be ordinary shares in theCompany at all times. Subject to approval of thecorporate approval authority authorized by theState Council, the Company may create otherclasses of shares according to its requirements.

Shareholders of different classes of the Companyshall enjoy the same rights in any distribution inthe form of dividends or any other form.

Article 13 There must be ordinary shares in theCompany at all times. Subject to approval of thecorporate approval authority authorized by theState Council, the Company may create otherclasses of shares according to its requirements.

Shareholders of different classes of the Companyshall enjoy the same rights in any distribution inthe form of dividends or any other form.

Article 14 The shares of the Company shall berepresented by certificates of share. The sharesissued by the Company shall have a par value ofRMB1 each.

Article 14 The shares of the Company shall berepresented by certificates of share. The sharesissued by the Company shall have a par value ofRMB1 each.

Article 15 The shares of the Company shall beissued in an open, fair and equal manner. Eachshare of the same class shall rank pari passu witheach other.

Shares of a class in each issuance shall be issuedunder the same terms and at the same price. Eachof the shares shall be subscribed for at the sameprice by any entity or individual.

Article 15 The shares of the Company shall beissued in an open, fair and equal manner. Eachshare of the same class shall rank pari passu witheach other.

Shares of a class in each issuance shall be issuedunder the same terms and at the same price. Eachof the shares shall be subscribed for at the sameprice by any entity or individual.

Article 16 Subject to approval of the competentsecurities regulatory authority of the State Council,the Company may issue shares to domesticinvestors and foreign investors.

In the preceding paragraph, the foreign investorsmean those investors from foreign countries andfrom the regions of Hong Kong, Macau andTaiwan who subscribe for shares issued by theCompany, and domestic investors mean thoseinvestors within the territory of the PRC excludingthe regions mentioned above who subscribe forshares issued by the Company.

Article 16 Subject to approval of the competentsecurities regulatory authority of the State Council,the Company may issue shares to domesticinvestors and foreign investors.

In the preceding paragraph, the foreign investorsmean those investors from foreign countries andfrom the regions of Hong Kong, Macau andTaiwan who subscribe for shares issued by theCompany, and domestic investors mean thoseinvestors within the territory of the PRC excludingthe regions mentioned above who subscribe forshares issued by the Company.



– XI-6 –



Article 17 Shares issued by the Company todomestic investors for subscription in Renminbishall be referred to as domestic shares, and sharesissued by the Company to overseas investors forsubscription in foreign currency shall be referredto as foreign shares. Foreign shares which arelisted outside the PRC shall be referred to asoverseas listed foreign shares. Both holders ofdomestic shares and holders of overseas listedforeign shares are holders of ordinary shares whohave same obligations and rights.

Foreign currency referred to in the precedingparagraph means a freely convertible legalcurrency of other countries or regions (other thanRenminbi) which is recognized by the competentforeign exchange administration authority of theState and can be used for payment of theCompany’s shares.

H shares are shares which have been admitted forlisting on the Hong Kong Stock Exchange, the parvalue of which is denominated in Renminbi, andwhich are subscribed for and traded in Hong Kongdollars.

Subject to approval of the securities regulatoryauthority of the State Council and Hong KongStock Exchange, holders of domestic shares of theCompany may transfer their shares to foreigninvestors and such transferred shares may be listedor traded on an overseas stock exchange. To list ortrade the transferred shares on an overseas stockexchange shall also be subject to the regulatoryprocedures, rules and requirements of the overseasstock market. There shall be no need to convene aclass meeting of shareholders for voting on thelisting or trading of the transferred shares on anoverseas stock exchange.

Article 17 Shares issued by the Company todomestic investors for subscription in Renminbishall be referred to as domestic shares, and thedomestic shares listed domestically shall bereferred to as A shares. Shares issued by theCompany to overseas investors for subscription inforeign currency shall be referred to as foreignshares. Foreign shares which are listed outside thePRC shall be referred to as overseas listed foreignshares. Both holders of A shares and holders ofoverseas listed foreign shares are holders ofordinary shares who have same obligations andrights.

Foreign currency referred to in the precedingparagraph means a freely convertible legalcurrency of other countries or regions (other thanRenminbi) which is recognized by the competentforeign exchange administration authority of theState and can be used for payment of theCompany’s shares.

H shares are shares which have been admitted forlisting on the Hong Kong Stock Exchange, the parvalue of which is denominated in Renminbi, andwhich are subscribed for and traded in Hong Kongdollars.

A shares are the shares issued upon theapproval of the authorities authorized by theState Council and listed and traded in thedomestic stock exchange as reviewed andapproved by domestic stock exchange.

Subject to approval of the securities regulatoryauthority of the State Council and Hong KongStock Exchange, holders of domestic shares of theCompany may transfer their shares to foreigninvestors and such transferred shares may be listedor traded on an overseas stock exchange. To list ortrade the transferred shares on an overseas stockexchange shall also be subject to the regulatoryprocedures, rules and requirements of the overseasstock market. There shall be no need to convene aclass meeting of shareholders for voting on thelisting or trading of the transferred shares on anoverseas stock exchange.



– XI-7 –



Article 18 Upon approval of the corporateapproval authority authorized by the State Council,the Company had a total of 680,000,000 issuedshares before the initial public offering of Hshares, representing 100% of the total number ofissued ordinary shares of the Company, whichwere subscribed for and held by the promoters,among which:

Article 18 Upon approval of the corporateapproval authority authorized by the State Council,the Company had a total of 680,000,000 issuedshares before the initial public offering of Hshares, representing 100% of the total number ofissued ordinary shares of the Company, whichwere subscribed for and held by the promoters,among which:

PercentageNumber of

shares(share)

Promoter ofshareholding Percentage

Number ofshares(share)

Promoter ofshareholding

Jiangsu SOHO Holdings Group Co.,Ltd.

292,992,674 43.09% Jiangsu SOHO Holdings Group Co.,Ltd.

292,992,674 43.09%

Jiangsu Holly Corporation 147,900,000 21.75% Jiangsu Holly Corporation 147,900,000 21.75%

Jiangsu Holly Su Industrial Co., Ltd. 143,548,000 21.11% Jiangsu Holly Su Industrial Co., Ltd. 143,548,000 21.11%

Jiangsu High Hope International GroupCo., Ltd.

68,000,000 10.00% Jiangsu High Hope International GroupCo., Ltd.

68,000,000 10.00%

Jiangsu Hongrui Venture Capital Co.,Ltd.

9,469,895 1.39% Jiangsu Hongrui Venture Capital Co.,Ltd.

9,469,895 1.39%

Shanghai Mingda Industrial (Group)Company Limited

9,276,631 1.36% Shanghai Mingda Industrial (Group)Company Limited

9,276,631 1.36%

Jiangsu Holly International LogisticsCorporation

8,812,800 1.30% Jiangsu Holly International LogisticsCorporation

8,812,800 1.30%

Total 680,000,000 100.00% Total 680,000,000 100.00%



– XI-8 –



Article 19 Upon establishment, subject to approvalof the securities regulatory authority of the StateCouncil and Hong Kong Stock Exchange, theCompany may issue no more than 261,050,000ordinary shares (including 34,050,000 sharesissued pursuant to exercise of the over-allotmentoption). All of such ordinary shares shall be Hshares. The final offering size shall be adjusted bythe Company in light of the capital marketcondition and its financing target. The state-ownedshareholders of the Company will transfer to theNational Council for Social Security Fund no morethan 22,700,000 state– owned shares (expected tobe no more than 26,105,000 shares if theover-allotment option representing 15% of the totalnumber of new shares to be issued is exercised infull) in accordance with the regulations onreduction of the state-owned shares, upon issuanceof overseas listed foreign shares.

The share capital of the Company comprises907,000,000 ordinary shares, including657,300,000 domestic shares and 249,700,000overseas listed foreign shares.

Article 19 Upon establishment, subject to approvalof the securities regulatory authority of the StateCouncil and Hong Kong Stock Exchange, theCompany has issued 249,700,000 H shares.

Upon the approval of the securities regulatoryauthority of the State Council and [domesticstock exchange], the Company initially issued[�] A shares to the public in [�].

The share capital of the Company comprises [�]ordinary shares, including [�] A shares and249,700,000 H shares.

Article 20 Upon approval by the competentsecurities regulatory authority of the State Councilof the proposal for issue of domestic shares andoverseas listed foreign shares of the Company, theBoard of the Company may arrange implement ofseparate issue.

The separate issue of the domestic shares andoverseas listed foreign shares by the Companypursuant to the preceding paragraph shall becompleted within fifteen months from the date ofapproval by the Securities Commission of theState Council.

Article 20 Upon approval by the competentsecurities regulatory authority of the State Councilof the proposal for issue of domestic shares andoverseas listed foreign shares of the Company, theBoard of the Company may arrange implement ofseparate issue.

The separate issue of the domestic shares andoverseas listed foreign shares by the Companypursuant to the preceding paragraph shall becompleted within fifteen months from the date ofapproval by the Securities Commission of theState Council.

Article 21 Where the total number of shares statedin the proposal for the issuance of shares includesoverseas listed foreign shares and domestic shares,such shares shall be fully subscribed for at theirrespective offerings. If the shares are not fullysubscribed for at their respective offerings due toexceptional circumstances, these shares may beissued in separate tranches subject to approval ofthe Securities Commission of the State Council.

Article 21 Where the total number of shares statedin the proposal for the issuance of shares includesoverseas listed foreign shares and domestic shares,such shares shall be fully subscribed for at theirrespective offerings. If the shares are not fullysubscribed for at their respective offerings due toexceptional circumstances, these shares may beissued in separate tranches subject to approval ofthe Securities Commission of the State Council.



– XI-9 –



Article 22 The registered capital of the Companyis RMB907,000,000.

Article 22 The registered capital of the Companyis RMB[�].

Article 23 The Company may, based on itsoperation and development requirements, increaseits capital pursuant to the Articles of Association.

The Company may increase its capital through thefollowing means:

1) offering new shares to non-specially designatedinvestors for subscription;

2) issuing new shares to existing shareholders;

3) issuing bonus shares to existing shareholders;

4) any other means permitted by laws andadministrative regulations.

Once the Company’s increase of share capital bymeans of the issuance of new shares has beenapproved in accordance with the provisions of theArticles of Association, the issuance thereof shallbe carried out in accordance with the proceduresset out in the relevant laws and administrativeregulations of the PRC.

Article 23 The Company may, based on itsoperation and development requirements, increaseits capital pursuant to the Articles of Association.

The Company may increase its capital through thefollowing means:

1) offering new shares to non-specially designatedinvestors for subscription;

2) non-public offering of shares;

3) issuing new shares to existing shareholders;

4) issuing bonus shares to existing shareholders;

5) share capital increase by transferringreserve;

6) any other means permitted by laws andadministrative regulations.

Once the Company’s increase of share capital bymeans of the issuance of new shares has beenapproved in accordance with the provisions of theArticles of Association, the issuance thereof shallbe carried out in accordance with the proceduresset out in the relevant laws and administrativeregulations and required by the relevantregulatory authorities of the PRC.

Article 24 Unless otherwise stipulated in laws,administrative regulations or the Hong KongListing Rules, shares of the Company may befreely transferred and shall be free from all liens.The transfer of overseas listed foreign shares listedin Hong Kong shall be registered with a shareregistrar in Hong Kong appointed by theCompany.

Article 24 Unless otherwise stipulated in laws,administrative regulations and securitiesregulatory authorities of the place where theCompany’s shares are listed, shares of theCompany may be freely transferred and shall befree from all liens. The transfer of overseas listedforeign shares listed in Hong Kong shall beregistered with a share registrar in Hong Kongappointed by the Company.

Article 25 The Company shall not accept anyshares of the Company as the subject of a pledge.

Article 25 The Company shall not accept anyshares of the Company as the subject of a pledge.



– XI-10 –



Article 26 Shares of the Company held by thepromoters shall not be transferred within one yearfrom the date of the establishment of theCompany. Shares issued prior to the publicoffering of the Company shall not be transferredwithin one year from the date on which the sharesof the Company were listed on the stockexchange(s).

The directors, supervisors and senior managementof the Company shall report to the Company theirshareholdings and changes therein and shall nottransfer more than 25% of the total number ofshares held by them in any year during their termsof office. The shares held by them shall not betransferred within one year from the date on whichthe shares of the Company are listed and traded onthe stock exchange(s). The aforesaid person(s)shall not transfer the shares of the Company heldby them within six months from the termination oftheir service.

In case of any conflict between this article and therequirements under the Hong Kong Listing Ruleson the restrictions on transfer of shares, the lattershall prevail.

Article 26 Shares of the Company held by thepromoters shall not be transferred within one yearfrom the date of the establishment of theCompany. Shares issued prior to the publicoffering of the Company shall not be transferredwithin one year from the date on which the sharesof the Company were listed on the stockexchange(s).

The directors, supervisors and senior managementof the Company shall report to the Company theirshareholdings and changes therein and shall nottransfer more than 25% of the total number ofshares held by them in any year during their termsof office. The shares held by them shall not betransferred within one year from the date on whichthe shares of the Company are listed and traded onthe stock exchange(s). The aforesaid person(s)shall not transfer the shares of the Company heldby them within six months from the termination oftheir service.

In case of any conflict between this article and therequirements under the Hong Kong Listing Ruleson the restrictions on transfer of shares, the lattershall prevail.

None Article 27 Directors, supervisors, seniormanagement and the shareholders holding overfive percent of the Company sells theCompany’s shares within six months after theacquisition of the same or repurchases theCompany’s shares within six months after saleof the same, any proceed arising therefrom shallbe attributed to the Company and theCompany’s Board shall retrieve such proceed.However, where a securities company holdsmore than 5% of the Company’s shares as aresult of underwriting, the sale of the residue ofthe Company’s shares shall not be subject tothis 6-month restriction.



– XI-11 –



In the case that the Board fails to comply withthe requirements under the aforesaidparagraph, a shareholder shall have the right torequest the Board to comply within thirty days.In case of the Board’s failure to comply withthe same within the aforesaid period, suchshareholder shall have the right to institute alegal proceeding directly with the people’s courtin its own name for the benefit of the Company.

In the case that the Board fails to comply withthe requirements under the first paragraph, theresponsible director(s) shall assume jointliability according to the law.

CHAPTER 4 REDUCTION OF CAPITAL ANDREPURCHASE OF SHARES

CHAPTER 4 REDUCTION OF CAPITAL ANDREPURCHASE OF SHARES

Article 27 Pursuant to the provisions of theArticles of Association, the Company may reduceits registered capital. The Company shall reduceits registered capital in compliance with theprocedures as required by the Company Law andother relevant laws, regulations and these Articlesof Association.

Article 28 Pursuant to the provisions of theArticles of Association, the Company may reduceits registered capital. The Company shall reduceits registered capital in compliance with theprocedures as required by the Company Law andother relevant laws, regulations and these Articlesof Association.

Article 28 The Company shall prepare a balancesheet and an inventory of assets when it reducesits registered capital.

The Company shall notify its creditors within 10days from the date of the resolution on reductionin registered capital and shall publish anannouncement in a newspaper at least three timeswithin 30 days from the date of such resolution. Acreditor shall have the right, within 30 days uponreceipt of the notice from the Company or, in thecase of a creditor who does not receive suchnotice, within 45 days of the date of the firstannouncement, to require the Company to repay itsdebt or to provide corresponding guarantee forsuch debt.

The registered capital of the Company followingthe reduction in capital shall not fall below theminimum statutory requirement.

Article 29 The Company shall prepare a balancesheet and an inventory of assets when it reducesits registered capital.

The Company shall notify its creditors within 10days from the date of the resolution on reductionin registered capital and shall publish anannouncement in a newspaper at least three timeswithin 30 days from the date of such resolution. Acreditor shall have the right, within 30 days uponreceipt of the notice from the Company or, in thecase of a creditor who does not receive suchnotice, within 45 days of the date of the firstannouncement, to require the Company to repay itsdebt or to provide corresponding guarantee forsuch debt.

The registered capital of the Company followingthe reduction in capital shall not fall below theminimum statutory requirement.



– XI-12 –



Article 29 The Company may, in accordance withthe requirements under laws, regulations and theseArticles of Association, acquire its shares underthe following circumstances:

1) cancelling its shares for the purpose ofreducing its registered capital;

2) merging with another company which holds theshares of the Company;

3) using shares for employee stock ownershipplans or equity incentives;

4) acquiring the shares of shareholders who voteagainst any resolution adopted at the shareholders’general meeting on the merger or demerger of theCompany and request the Company to acquiretheir shares; and

5) using shares for conversion pursuant to theconvertible corporate bonds issued by theCompany;

6) to maintain corporate value andshareholder’ interests as the Company deemsnecessary.

Other than the above-mentioned circumstances, theCompany shall not engage in any activities for thepurchase or sale of its shares.

Article 30 The Company may, in accordance withthe requirements under laws, regulations and theseArticles of Association, acquire its shares underthe following circumstances:

1) cancelling its shares for the purpose ofreducing its registered capital;

2) merging with another company which holds theshares of the Company;

3) using shares for employee stock ownershipplans or equity incentives;

4) acquiring the shares of shareholders who voteagainst any resolution adopted at the shareholders’general meeting on the merger or demerger of theCompany and request the Company to acquiretheir shares; and

5) using shares for conversion pursuant to theconvertible corporate bonds issued by theCompany;

6) to maintain corporate value andshareholder’ interests as the Company deemsnecessary.

Other than the above-mentioned circumstances, theCompany shall not engage in any activities for thepurchase or sale of its shares.



– XI-13 –



Any acquisition of shares by the Company for thepurpose of clauses (1) and (2) shall be approvedat a shareholders’ general meeting. Where theCompany is to acquire its shares pursuant toclause (3), (5) and (6), shall do so in accordancewith the requirements of these Articles or asauthorized at the shareholders’ general meeting,resolved at a Board meeting with more thantwo-third of the director present. In the eventthat the Company has acquired its shares under thecircumstance set out in clause (1), such sharesshall be cancelled within 10 days from the date ofacquisition, and for circumstances set out inclauses (2) and (4), such shares shall betransferred or cancelled within six months fromthe date of acquisition. In the event that theCompany has acquired its shares under thecircumstance set out in clauses (3), (5) and (6),the total amount of shares held by the Companyshall not exceed 10% of the total issued sharesof the Company, and such shares shall betransferred or cancelled within 3 years.

The acquisition of the Company’s shares shallbe proceeded through open centralizedtransactions or other methods recognized bylaws and regulations and the securitiesregulatory authority of the place where theCompany’s shares are listed. Where a companyacquires shares of the Company’s own sharesdue to the circumstances specified in items (3),(5) and (6), it shall be proceeded through anopen centralized transaction method.

Any acquisition of shares by the Company for thepurpose of clauses (1) and (2) shall be approvedat a shareholders’ general meeting. Where theCompany is to acquire its shares pursuant toclause (3), (5) and (6), shall do so in accordancewith the requirements of these Articles or asauthorized at the shareholders’ general meeting,resolved at a Board meeting with more thantwo-third of the director present. In the eventthat the Company has acquired its shares under thecircumstance set out in clause (1), such sharesshall be cancelled within 10 days from the date ofacquisition, and for circumstances set out inclauses (2) and (4), such shares shall betransferred or cancelled within six months fromthe date of acquisition. In the event that theCompany has acquired its shares under thecircumstance set out in clauses (3), (5) and (6),the total amount of shares held by the Companyshall not exceed 10% of the total issued sharesof the Company, and such shares shall betransferred or cancelled within 3 years.

Article 30 The Company may, upon approval ofthe relevant competent authorities of the PRC,repurchase its shares in one of the following ways:

1) making a pro rata general offer of repurchaseto all its shareholders;

2) repurchasing shares through public trading on astock exchange;

3) repurchasing by an off-market agreement; or

4) other ways as permitted by laws, regulations,rules, regulatory documents and the relevantcompetent authorities.

Article 31 The Company may, upon approval ofthe relevant competent authorities of the PRC,repurchase its shares in one of the following ways:

1) making a pro rata general offer of repurchaseto all its shareholders;

2) repurchasing shares through public trading on astock exchange;

3) repurchasing by an off-market agreement; or

4) other ways as permitted by laws, regulations,rules, regulatory documents and the relevantcompetent authorities.



– XI-14 –



Article 31 The Company shall obtain priorapproval of the shareholders at a shareholders’general meeting in accordance with the provisionsof the Articles of Association before it repurchasesits shares by means of an off-market agreement.The Company may, by obtaining prior approval ofthe shareholders at a shareholders’ general meetingin the same manner, discharge or vary a contractwhich has been entered into in the aforesaidmanner, or waive its rights thereunder.

A contract for repurchase of shares referred to inthe preceding paragraph includes (but not limitedto) an agreement to consent to assuming theobligation to repurchase shares or an agreement toacquire the right to repurchase shares.

The Company shall not assign a contract forrepurchase of its shares or any right stipulatedtherein.

So far as the Company’s right to repurchaseredeemable shares is concerned:

1) if the redeemable shares are not repurchasedthrough the market or by tender, the prices shallnot exceed a maximum price;

2) if the repurchase is made by tender, such tendershall be made available to all shareholders underthe same terms.

Article 32 The Company shall obtain priorapproval of the shareholders at a shareholders’general meeting in accordance with the provisionsof the Articles of Association before it repurchasesits shares by means of an off-market agreement.The Company may, by obtaining prior approval ofthe shareholders at a shareholders’ general meetingin the same manner, discharge or vary a contractwhich has been entered into in the aforesaidmanner, or waive its rights thereunder.

A contract for repurchase of shares referred to inthe preceding paragraph includes (but not limitedto) an agreement to consent to assuming theobligation to repurchase shares or an agreement toacquire the right to repurchase shares.

The Company shall not assign a contract forrepurchase of its shares or any right stipulatedtherein.

So far as the Company’s right to repurchaseredeemable shares is concerned:

1) if the redeemable shares are not repurchasedthrough the market or by tender, the prices shallnot exceed a maximum price;

2) if the repurchase is made by tender, such tendershall be made available to all shareholders underthe same terms.

Article 32 Shares shall be cancelled after therepurchase within a period prescribed by laws andadministrative regulations, and the Company shallapply to the original company registrationauthority for registration of the change in itsregistered capital.

The Company’s registered capital shall bededucted an amount equal to the aggregate parvalue of those cancelled shares.

Article 33 Shares shall be cancelled after therepurchase within a period prescribed by laws andadministrative regulations, and the Company shallapply to the original company registrationauthority for registration of the change in itsregistered capital.

The Company’s registered capital shall bededucted an amount equal to the aggregate parvalue of those cancelled shares.



– XI-15 –



Article 33 Except where the Company is in thecourse of liquidation, it must comply with thefollowing provisions in repurchasing its shares inissue:

1) Where the Company repurchases its shares atpar value, payment shall be deducted from thedistributable profits of the Company or the raisedfunds of a new issue of shares made for thatpurpose;

2) Where the Company repurchases its shares at apremium, payment shall be deducted from thedistributable profits of the Company or the raisedfunds of a new issue of shares made for thatpurpose. Payment of the portion in excess of theirpar value shall be effected as follows:

1. if the shares being repurchased were issued atpar value, payment shall be made out of thedistributable profits of the Company;

2. if the shares being repurchased were issued at apremium, payment shall be made out of thedistributable profits of the Company or the raisedfunds of a new issue of shares made for thatpurpose, provided that the amount paid out of theraised funds of the new issue shall not exceed theaggregate of premiums received by the Companyon the issue of the shares repurchased or thecurrent balance of the Company’s premiumaccount (or capital reserve account) (including thepremiums from the new issue);

3) Payments made by the Company inconsideration for the following shall be made outof the Company’s distributable profits:

1. the acquisition of rights to repurchase itsshares;

2. the variation of any contract to repurchase itsshares;

3. the release of any obligation under any contractto repurchase its shares;

Article 34 Except where the Company is in thecourse of liquidation, it must comply with thefollowing provisions in repurchasing its shares inissue:

1) Where the Company repurchases its shares atpar value, payment shall be deducted from thedistributable profits of the Company or the raisedfunds of a new issue of shares made for thatpurpose;

2) Where the Company repurchases its shares at apremium, payment shall be deducted from thedistributable profits of the Company or the raisedfunds of a new issue of shares made for thatpurpose. Payment of the portion in excess of theirpar value shall be effected as follows:

1. if the shares being repurchased were issued atpar value, payment shall be made out of thedistributable profits of the Company;

2. if the shares being repurchased were issued at apremium, payment shall be made out of thedistributable profits of the Company or the raisedfunds of a new issue of shares made for thatpurpose, provided that the amount paid out of theraised funds of the new issue shall not exceed theaggregate of premiums received by the Companyon the issue of the shares repurchased or thecurrent balance of the Company’s premiumaccount (or capital reserve account) (including thepremiums from the new issue);

3) Payments made by the Company inconsideration for the following shall be made outof the Company’s distributable profits:

1. the acquisition of rights to repurchase itsshares;

2. the variation of any contract to repurchase itsshares;

3. the release of any obligation under any contractto repurchase its shares;



– XI-16 –



4) To the extent that shares are repurchased out ofan amount deducted from the distributable profitsof the Company, the amount of the Company’sregistered capital reduced under the relevantrequirements shall be transferred to the Company’spremium account (or capital reserve account).

4) To the extent that shares are repurchased out ofan amount deducted from the distributable profitsof the Company, the amount of the Company’sregistered capital reduced under the relevantrequirements shall be transferred to the Company’spremium account (or capital reserve account).

CHAPTER 5 FINANCIAL ASSISTANCE FORACQUISITION OF SHARES OF THE

COMPANY

CHAPTER 5 FINANCIAL ASSISTANCE FORACQUISITION OF SHARES OF THE

COMPANY

Article 34 The Company and its subsidiaries(including the Company’s affiliates) shall not, byany means including gifts, advanced payment,guarantees, compensation or loan at any time,provide any kind of financial assistance to aperson who is acquiring or is proposing to acquireshares of the Company. The said acquirer of sharesof the Company includes a person who directly orindirectly incurs any obligations due to theacquisition of shares of the Company.

The Company and its subsidiaries (including theCompany’s affiliates) shall not, by any othermeans at any time, provide financial assistance tothe said acquirer for the purpose of reducing ordischarging the obligations assumed by thatperson.

This provision does not apply to the circumstancesstated in Article 35 of these Articles ofAssociation.

Article 35 The Company and its subsidiaries(including the Company’s affiliates) shall not, byany means including gifts, advanced payment,guarantees, compensation or loan at any time,provide any kind of financial assistance to aperson who is acquiring or is proposing to acquireshares of the Company. The said acquirer of sharesof the Company includes a person who directly orindirectly incurs any obligations due to theacquisition of shares of the Company.

The Company and its subsidiaries (including theCompany’s affiliates) shall not, by any othermeans at any time, provide financial assistance tothe said acquirer for the purpose of reducing ordischarging the obligations assumed by thatperson.

This provision does not apply to the circumstancesstated in Article 37 of these Articles ofAssociation.



– XI-17 –



Article 35 The financial assistance referred to inthis Chapter includes (but not limited to) thefollowing means:

1) gift;

2) guarantee (including the assumption of liabilityby the guarantor or the provision of assets by theguarantor to secure the performance of obligationsby the obligor), or compensation (other thancompensation in respect of the Company’s owndefault) or release or waive of any rights;

3) provision of loan or entering into of any otheragreement under which the obligations of theCompany are to be fulfilled before the obligationsof another party, or a change in the parties to, orthe assignment of rights arising under, such loanor agreement;

4) any other form of financial assistance given bythe Company when the Company is insolvent orhas no net assets or when its net assets wouldthereby be reduced to a material extent.

The expression “assumption of obligations”referred to in this Chapter includes the assumptionof obligations by way of contract or by way ofarrangement (irrespective of whether such contractor arrangement is enforceable or not, and whethersuch obligations are to be assumed by the obligorsolely or jointly with other persons), or by anyother means which results in a change in theobligor’s financial position.

Article 36 The financial assistance referred to inthis Chapter includes (but not limited to) thefollowing means:

1) gift;

2) guarantee (including the assumption of liabilityby the guarantor or the provision of assets by theguarantor to secure the performance of obligationsby the obligor), or compensation (other thancompensation in respect of the Company’s owndefault) or release or waive of any rights;

3) provision of loan or entering into of any otheragreement under which the obligations of theCompany are to be fulfilled before the obligationsof another party, or a change in the parties to, orthe assignment of rights arising under, such loanor agreement;

4) any other form of financial assistance given bythe Company when the Company is insolvent orhas no net assets or when its net assets wouldthereby be reduced to a material extent.

The expression “assumption of obligations”referred to in this Chapter includes the assumptionof obligations by way of contract or by way ofarrangement (irrespective of whether such contractor arrangement is enforceable or not, and whethersuch obligations are to be assumed by the obligorsolely or jointly with other persons), or by anyother means which results in a change in theobligor’s financial position.



– XI-18 –



Article 36 The following activities shall not bedeemed to be activities as prohibited in Article 33of this Chapter:

1) the provision of financial assistance by theCompany in good faith in the interest of theCompany, and the principal purpose of giving thefinancial assistance is not for the acquisition ofshares of the Company, or the giving of thefinancial assistance is an incidental part of anoverall plan of the Company;

2) the lawful distribution of the Company’s assetsby way of dividend;

3) the allotment of bonus shares as dividends;

4) a reduction in registered capital, a repurchaseof shares or a reorganization of the share capitalstructure of the Company effected in accordancewith these Articles of Association;

5) the lending of money by the Company withinits scope of business and in the ordinary course ofits business (provided that the net assets of theCompany are not thereby reduced or that, to theextent that the assets are thereby reduced, thefinancial assistance is provided out of thedistributable profits of the Company);

6) the provision of money by the Company foremployee share schemes (provided that the netassets of the Company are not thereby reduced orthat, to the extent that the assets are therebyreduced, the financial assistance is provided out ofthe distributable profits of the Company).

Article 37 The following activities shall not bedeemed to be activities as prohibited in Article 35of this Chapter:

1) the provision of financial assistance by theCompany in good faith in the interest of theCompany, and the principal purpose of giving thefinancial assistance is not for the acquisition ofshares of the Company, or the giving of thefinancial assistance is an incidental part of anoverall plan of the Company;

2) the lawful distribution of the Company’s assetsby way of dividend;

3) the allotment of bonus shares as dividends;

4) a reduction in registered capital, a repurchaseof shares or a reorganization of the share capitalstructure of the Company effected in accordancewith these Articles of Association;

5) the lending of money by the Company withinits scope of business and in the ordinary course ofits business (provided that the net assets of theCompany are not thereby reduced or that, to theextent that the assets are thereby reduced, thefinancial assistance is provided out of thedistributable profits of the Company);

6) the provision of money by the Company foremployee share schemes (provided that the netassets of the Company are not thereby reduced orthat, to the extent that the assets are therebyreduced, the financial assistance is provided out ofthe distributable profits of the Company).

CHAPTER 6 SHARE CERTIFICATES ANDREGISTER OF SHAREHOLDERS

CHAPTER 6 SHARE CERTIFICATES ANDREGISTER OF SHAREHOLDERS

Article 37 The share certificates of the Companyshall be in registered form.

In addition to those provided in the Company Law,a share certificate of the Company shall alsocontain any other items required to be specified bythe stock exchange(s) on which the shares of theCompany are listed.

Article 38 The share certificates of the Companyshall be in registered form.

In addition to those provided in the Company Law,a share certificate of the Company shall alsocontain any other items required to be specified bythe stock exchange(s) on which the shares of theCompany are listed.



– XI-19 –



Article 38 The share certificates shall be signedby the Chairman. Where the stock exchange onwhich the shares of the Company are listedrequires the share certificates to be signed by othersenior management, the share certificates shall alsobe signed by such senior management. The sharecertificates shall take effect after affixing, oraffixing by way of printing, of the seal of theCompany. The share certificates shall only beaffixed with the Company’s seal under theauthorization of the Board. The signatures of theChairman or other relevant senior management ofthe Company on the share certificates may also bein printed form.

Where the share certificates of the Company areissued and traded in a paperless form, it shallcomply with regulations otherwise stipulated bythe securities regulatory authority or stockexchange of the place where the Company’s sharesare listed.

Article 39 The share certificates shall be signedby the Chairman. Where the stock exchange onwhich the shares of the Company are listedrequires the share certificates to be signed by othersenior management, the share certificates shall alsobe signed by such senior management. The sharecertificates shall take effect after affixing, oraffixing by way of printing, of the seal of theCompany. The share certificates shall only beaffixed with the Company’s seal under theauthorization of the Board. The signatures of theChairman or other relevant senior management ofthe Company on the share certificates may also bein printed form.

Where the share certificates of the Company areissued and traded in a paperless form, it shallcomply with regulations otherwise stipulated bythe securities regulatory authority or stockexchange of the place where the Company’s sharesare listed.

Article 39 The Company shall keep a register ofshareholders according to the certificate providedby the securities registration authority, which shallcontain the following particulars:

1) the name, address (domicile), occupation ornature of each shareholder;

2) the class and number of shares held by eachshareholder;

3) the amount paid-up or payable in respect ofshares held by each shareholder;

4) the serial numbers of the shares held by eachshareholder;

5) the date on which any shareholder registers asa shareholder;

6) the date on which any shareholder ceases to bea shareholder.

The register of shareholders shall be sufficientevidence substantiating the shareholders’shareholding in the Company, except where thereis evidence to the contrary.

Article 40 The Company shall keep a register ofshareholders according to the certificate providedby the securities registration authority, which shallcontain the following particulars:

1) the name, address (domicile), occupation ornature of each shareholder;

2) the class and number of shares held by eachshareholder;

3) the amount paid-up or payable in respect ofshares held by each shareholder;

4) the serial numbers of the shares held by eachshareholder;

5) the date on which any shareholder registers asa shareholder;

6) the date on which any shareholder ceases to bea shareholder.

The register of shareholders shall be sufficientevidence substantiating the shareholders’shareholding in the Company, except where thereis evidence to the contrary.



– XI-20 –



Article 40 The Company may, in accordance withthe understanding and agreements made betweenthe competent securities authorities of the StateCouncil and overseas securities regulatoryauthorities, maintain its original register of holdersof overseas listed foreign shares outside the PRCand appoint overseas agent(s) to manage suchregister. The original register of holders ofoverseas listed foreign shares listed in the HongKong Stock Exchange shall be maintained in HongKong.

The Company shall maintain a duplicate of theregister of holders of overseas listed foreign sharesat its domicile. The appointed overseas agent(s)shall ensure the consistency between the originalregister and the duplicate register of holders ofoverseas listed foreign shares at all times.

In case of any inconsistency between the originalregister and the duplicate register of holders ofoverseas listed foreign shares, the original registershall prevail.

Article 41 The Company may, in accordance withthe understanding and agreements made betweenthe competent securities authorities of the StateCouncil and overseas securities regulatoryauthorities, maintain its original register of holdersof overseas listed foreign shares outside the PRCand appoint overseas agent(s) to manage suchregister. The original register of holders ofoverseas listed foreign shares listed in the HongKong Stock Exchange shall be maintained in HongKong.

The Company shall maintain a duplicate of theregister of holders of overseas listed foreign sharesat its domicile. The appointed overseas agent(s)shall ensure the consistency between the originalregister and the duplicate register of holders ofoverseas listed foreign shares at all times.

In case of any inconsistency between the originalregister and the duplicate register of holders ofoverseas listed foreign shares, the original registershall prevail.

Article 41 The Company shall maintain acomplete register of shareholders.

The register of shareholders shall include thefollowing:

(1) the register of shareholders maintained at theCompany’s domicile, other than those parts asdescribed in clauses (2) and (3) of this paragraph;

(2) the register of holders of overseas listedforeign shares of the Company maintained at theplace where the overseas stock exchange on whichthe shares are listed is located; and

(3) the register of shareholders maintained at suchother place as the Board may consider necessaryfor the purpose of listing of the Company’s shares.

Article 42 The Company shall maintain acomplete register of shareholders.

The register of shareholders shall include thefollowing:

(1) the register of shareholders maintained at theCompany’s domicile, other than those parts asdescribed in clauses (2) and (3) of this paragraph;

(2) the register of holders of overseas listedforeign shares of the Company maintained at theplace where the overseas stock exchange on whichthe shares are listed is located; and

(3) the register of shareholders maintained at suchother place as the Board may consider necessaryfor the purpose of listing of the Company’s shares.



– XI-21 –



Article 42 Different parts of the register ofshareholders shall not overlap with one another.No transfer of the shares registered in any part ofthe register shall, during the existence of thatregistration, be registered in any other part of theregister of shareholders.

Alteration or rectification of each part of theregister of shareholders shall be made inaccordance with the laws of the place where thatpart of the register of shareholders is maintained.

Article 43 Different parts of the register ofshareholders shall not overlap with one another.No transfer of the shares registered in any part ofthe register shall, during the existence of thatregistration, be registered in any other part of theregister of shareholders.

Alteration or rectification of each part of theregister of shareholders shall be made inaccordance with the laws of the place where thatpart of the register of shareholders is maintained.

Article 43 Any paid up overseas listed foreignshares listed on the Hong Kong Stock Exchangeare free to be transferred pursuant to the Articlesof Association, provided that the Board may refuseto recognize any instrument of transfer withoutassigning any reason unless the followingconditions are satisfied:

1) the document of transfer and other documentsrelating to or which may affect the ownership ofany shares shall be registered, and the payment offees stipulated by the Hong Kong Listing Rulesshall be made to the Company in relation to suchregistration;

2) the instrument of transfer only relates to theoverseas listed foreign shares listed in Hong Kong;

3) the stamp duty on the instrument of transferpayable according to laws has been paid;

4) the relevant share certificates and the evidencesreasonably required by the Board showing that thetransferor has the right to transfer such shareshave been provided;

5) if the shares are to be transferred to jointholders, the number of joint holders shall notexceed four, and all the joint holders of any shareshall assume joint liability to pay for all amountspayable for such share;

6) the relevant shares shall be free from anycompany’s liens; and

Article 44 Any paid up overseas listed foreignshares listed on the Hong Kong Stock Exchangeare free to be transferred pursuant to the Articlesof Association, provided that the Board may refuseto recognize any instrument of transfer withoutassigning any reason unless the followingconditions are satisfied:

1) the document of transfer and other documentsrelating to or which may affect the ownership ofany shares shall be registered, and the payment offees stipulated by the Hong Kong Listing Rulesshall be made to the Company in relation to suchregistration;

2) the instrument of transfer only relates to theoverseas listed foreign shares listed in Hong Kong;

3) the stamp duty on the instrument of transferpayable according to laws has been paid;

4) the relevant share certificates and the evidencesreasonably required by the Board showing that thetransferor has the right to transfer such shareshave been provided;

5) if the shares are to be transferred to jointholders, the number of joint holders shall notexceed four, and all the joint holders of any shareshall assume joint liability to pay for all amountspayable for such share;

6) the relevant shares shall be free from anycompany’s liens; and



– XI-22 –



7) no transfer of share shall be made to a minor orto a person of unsound mind or a legally incapableperson.

If the Company refuses to register any transfer ofshares, it shall provide the transferor and thetransferee of the shares with a notification ofrefusal in relation to the registration of suchtransfer within 2 months from the date of filing aformal application for such transfer.

All transfers of overseas listed foreign shares shallbe effected by instruments of transfer in writing inan ordinary or usual form or in any other formacceptable to the Board (including the standardtransfer form or form of transfer as stipulated bythe Hong Kong Stock Exchange from time totime). The instruments of transfer may be signedby hand without being affixed with a seal. Wherethe transferor or transferee of the shares of theCompany is a recognized clearing house(“Recognized Clearing House”) as defined by theSecurities and Futures Ordinance (Chapter 571 ofthe Laws of Hong Kong) or its nominee, theinstruments of transfer may be signed by hand orin a machine-printed format.

7) no transfer of share shall be made to a minor orto a person of unsound mind or a legally incapableperson.

If the Company refuses to register any transfer ofshares, it shall provide the transferor and thetransferee of the shares with a notification ofrefusal in relation to the registration of suchtransfer within 2 months from the date of filing aformal application for such transfer.

All transfers of overseas listed foreign shares shallbe effected by instruments of transfer in writing inan ordinary or usual form or in any other formacceptable to the Board (including the standardtransfer form or form of transfer as stipulated bythe Hong Kong Stock Exchange from time totime). The instruments of transfer may be signedby hand without being affixed with a seal. Wherethe transferor or transferee of the shares of theCompany is a recognized clearing house(“Recognized Clearing House”) as defined by theSecurities and Futures Ordinance (Chapter 571 ofthe Laws of Hong Kong) or its nominee, theinstruments of transfer may be signed by hand orin a machine-printed format.

Article 44 Any laws, regulations and listingrules of the place where the shares of theCompany are listed concerning the book closureperiod prior to the holding of a general meetingto dividend distributions by the Company shallbe observed.

Article 45 Any laws, regulations and listingrules of the place where the shares of theCompany are listed concerning the book closureperiod prior to the holding of a general meetingto dividend distributions by the Company shallbe observed.

Article 45 Where the Company intends to convenea shareholders’ general meeting, distributedividends, liquidate or carry out other activitieswhich would require the determination ofshareholdings, the Board or the convener of theshareholders’ general meeting shall fix a recorddate for the registration of the shareholdings, andshareholders whose name appear on the register ofshareholders at the close of business of the recorddate shall be shareholders of the Company.

Article 46 Where the Company intends to convenea shareholders’ general meeting, distributedividends, liquidate or carry out other activitieswhich would require the determination ofshareholdings, the Board or the convener of theshareholders’ general meeting shall fix a recorddate for the registration of the shareholdings, andshareholders whose name appear on the register ofshareholders at the close of business of the recorddate shall be shareholders of the Company.

Article 46 Any person who objects to the registerof shareholders and requests to have his nameentered in or removed from the register ofshareholders may apply to a court of competentjurisdiction for rectification of the register ofshareholders.

Article 47 Any person who objects to the registerof shareholders and requests to have his nameentered in or removed from the register ofshareholders may apply to a court of competentjurisdiction for rectification of the register ofshareholders.



– XI-23 –



Article 47 Any shareholder who is registered in,or any person who requests to have his nameentered in, the register of shareholders may, if hisshare certificates (the “original certificates”) arelost, apply to the Company for a replacement ofshare certificates in respect of such shares (the“relevant shares”).

If a holder of the domestic shares has his sharecertificate lost and applies for a replacement, itshall be dealt with in accordance with theprovisions of the Company Law and relevant lawsand regulations.

If a holder of overseas listed foreign shares has hisshare certificate lost and applies for a replacement,it may be dealt with in accordance with therelevant laws, the rules of the stock exchange andother relevant regulations of the place where theoriginal register of holders of overseas listedforeign shares is maintained.

Where a holder of the Company’s overseas listedforeign shares listed in the Hong Kong has hisshare certificates lost, the issue of the replacementcertificate to the holder of such shares shallcomply with the following requirements:

1) the applicant shall submit an application to theCompany in prescribed standard form accompaniedby a notarial act or statutory declaration,containing the grounds upon which the applicationis made and the circumstances and evidence of theloss of the share certificates as well as declaringthat no other person shall be entitled to request tobe registered as the shareholder in respect of therelevant shares.

2) no statement has been received by the Companyfrom a person other than the applicant for havinghis name registered as a holder of the relevantshares before the Company came to a decision toissue the replacement certificate.

Article 48 Any shareholder who is registered in,or any person who requests to have his nameentered in, the register of shareholders may, if hisshare certificates (the “original certificates”) arelost, apply to the Company for a replacement ofshare certificates in respect of such shares (the“relevant shares”).

If a holder of the domestic shares has his sharecertificate lost and applies for a replacement, itshall be dealt with in accordance with theprovisions of the Company Law and relevant lawsand regulations.

If a holder of overseas listed foreign shares has hisshare certificate lost and applies for a replacement,it may be dealt with in accordance with therelevant laws, the rules of the stock exchange andother relevant regulations of the place where theoriginal register of holders of overseas listedforeign shares is maintained.

Where a holder of the Company’s overseas listedforeign shares listed in the Hong Kong has hisshare certificates lost, the issue of the replacementcertificate to the holder of such shares shallcomply with the following requirements:

1) the applicant shall submit an application to theCompany in prescribed standard form accompaniedby a notarial act or statutory declaration,containing the grounds upon which the applicationis made and the circumstances and evidence of theloss of the share certificates as well as declaringthat no other person shall be entitled to request tobe registered as the shareholder in respect of therelevant shares.

2) no statement has been received by the Companyfrom a person other than the applicant for havinghis name registered as a holder of the relevantshares before the Company came to a decision toissue the replacement certificate.



– XI-24 –



3) the Company shall, if it decides to issue areplacement certificate to the applicant, make anannouncement of its intention to issue thereplacement certificate in such newspapersdesignated by the Board; the announcement shallbe made at least once every 30 days in a period of90 days.

4) prior to the publication of its announcement ofintention to issue a replacement certificate, theCompany shall deliver to the stock exchangewhere the Company is listed a copy of theannouncement to be published. The Company maypublish the announcement upon receiving aconfirmation from such stock exchange that theannouncement has been exhibited at the premisesof such stock exchange. The announcement shallbe exhibited at the premises of such stockexchange for a period of 90 days.

In case an application to issue a replacementcertificate has been made without the consent ofthe registered holder of the relevant shares, theCompany shall send by post to such registeredshareholder a copy of the announcement to bepublished.

5) if, upon expiration of the 90 period referred toin sub-paragraphs (3) and (4) of this article, theCompany has not received from any person anyobjection to such application, the Company mayissue a replacement share certificate to theapplicant according to his application.

6) where the Company issues a replacementcertificate under this article, it shall forthwithcancel the original certificate and enter thecancellation and issuance in the register ofshareholders accordingly.

7) all expenses relating to the cancellation of anoriginal certificate and the issue of a replacementshare certificate by the Company shall be borne bythe applicant. The Company may refuse to takeany action until a reasonable guarantee is providedby the applicant for such expenses.

3) the Company shall, if it decides to issue areplacement certificate to the applicant, make anannouncement of its intention to issue thereplacement certificate in such newspapersdesignated by the Board; the announcement shallbe made at least once every 30 days in a period of90 days.

4) prior to the publication of its announcement ofintention to issue a replacement certificate, theCompany shall deliver to the stock exchangewhere the Company is listed a copy of theannouncement to be published. The Company maypublish the announcement upon receiving aconfirmation from such stock exchange that theannouncement has been exhibited at the premisesof such stock exchange. The announcement shallbe exhibited at the premises of such stockexchange for a period of 90 days.

In case an application to issue a replacementcertificate has been made without the consent ofthe registered holder of the relevant shares, theCompany shall send by post to such registeredshareholder a copy of the announcement to bepublished.

5) if, upon expiration of the 90 period referred toin sub-paragraphs (3) and (4) of this article, theCompany has not received from any person anyobjection to such application, the Company mayissue a replacement share certificate to theapplicant according to his application.

6) where the Company issues a replacementcertificate under this article, it shall forthwithcancel the original certificate and enter thecancellation and issuance in the register ofshareholders accordingly.

7) all expenses relating to the cancellation of anoriginal certificate and the issue of a replacementshare certificate by the Company shall be borne bythe applicant. The Company may refuse to takeany action until a reasonable guarantee is providedby the applicant for such expenses.



– XI-25 –



Article 48 Where the Company issues areplacement certificate pursuant to the Articles ofAssociation, the name of a bona fide purchaserwho obtains the aforementioned new sharecertificate or a shareholder who thereafter registersas the owner of such shares (in the case that he isa bona fide purchaser) shall not be removed fromthe register of shareholders.

Article 49 Where the Company issues areplacement certificate pursuant to the Articles ofAssociation, the name of a bona fide purchaserwho obtains the aforementioned new sharecertificate or a shareholder who thereafter registersas the owner of such shares (in the case that he isa bona fide purchaser) shall not be removed fromthe register of shareholders.

Article 49 The Company shall not be liable forany damages sustained by any person for reason ofthe cancellation of the original certificate or theissuance of the replacement certificate, unless theclaimant proves that the Company had actedfraudulently.

Article 50 The Company shall not be liable forany damages sustained by any person for reason ofthe cancellation of the original certificate or theissuance of the replacement certificate, unless theclaimant proves that the Company had actedfraudulently.

CHAPTER 7 SHAREHOLDERS ANDSHAREHOLDERS’ GENERAL MEETINGS

CHAPTER 7 SHAREHOLDERS ANDSHAREHOLDERS’ GENERAL MEETINGS

Article 50 A shareholder of the Company is aperson who lawfully holds shares of the Companyand whose name is entered in the register ofshareholders.

A shareholder shall enjoy the relevant rights andassume the relevant obligations in accordance withthe class of shares he/she/it holds. Shareholdersholding the same class of shares shall be entitledto the same rights and assume the sameobligations.

Article 51 The Company has established theregister of shareholders according to thecertificates provided by the securitiesregistration authority, and the register ofshareholders shall be sufficient evidence of theshareholders’ shareholding in the Company. Ashareholder of the Company is a person wholawfully holds shares of the Company and whosename is entered in the register of shareholders.

A shareholder shall enjoy the relevant rights andassume the relevant obligations in accordance withthe class of shares he/she/it holds. Shareholdersholding the same class of shares shall be entitledto the same rights and assume the sameobligations.



– XI-26 –



Article 51 Holders of the ordinary shares of theCompany shall have the following rights:

1) the right to receive dividends and otherforms of benefit distributions in proportionto their shareholdings;

(2) the right to attend or appoint a proxy toattend shareholders’ general meetings and toexercise the voting right thereat according tolaw;

(3) the right to supervise and manage theCompany’s business operations, put forwardproposals and raise inquiries;

(4) the right to transfer, grant or pledge theshares held in accordance with laws,administrative regulations and provisions ofthe Articles of Association;

(5) the right to access relevant information inaccordance with the provisions of theArticles of Association, including:

1. a copy of the Articles of Association uponpayment of the costs thereof;

2. the right to inspect and copy, subject topayment of a reasonable charge:

(i) the register of all shareholders;

(ii) the personal particulars of the directors,supervisors and senior management ofthe Company, including:

(A) the present and former name and alias;

(B) the principal address (place ofresidence);

(C) the nationality;

Article 52 Shareholders of the Company shallhave the following rights:

1) the right to receive dividends and otherforms of benefit distributions in proportionto their shareholdings;

2) the right to file a petition for, convene,hold and attend or appoint a proxy to attendshareholders’ general meetings according tolaw and to exercise the voting right thereat;

3) the right to supervise and manage theCompany’s business operations, put forwardproposals and raise inquiries;

4) the right to transfer, grant or pledge theshares held in accordance with laws,administrative regulations and provisions ofthe Articles of Association;

5) the right to access relevant information inaccordance with the provisions of theArticles of Association, including:

1. a copy of the Articles of Association uponpayment of the costs thereof;

2. the right to inspect and copy, subject topayment of a reasonable charge:

(i) the register of all shareholders;

(ii) the personal particulars of the directors,supervisors and senior management ofthe Company, including:

(A) the present and former name and alias;

(B) the principal address (place ofresidence);

(C) the nationality;



– XI-27 –



(D) the full-time job and all other part-time jobsand duties;

(E) the identification documents and the numbersthereof.

(iii) the state of the share capital of theCompany;

(iv) the reports stating the aggregate par value,quantity, maximum and minimum pricespaid in respect of each class of sharesrepurchased by the Company since the endof the last accounting year and the aggregateamount incurred by the Company for thispurpose;

(v) the minutes of shareholders’ generalmeetings;

(vi) the resolutions made at the meetings of theBoard;

(vii) the resolutions made at the meetings of thesupervisory Committee;

(viii) the copy of corporate bonds and financialaccounting report.

The Company shall place the documents referredto in items (i) to (vii) mentioned above (other thanitem (ii)) in accordance with the requirements ofthe Hong Kong Listing Rules at the Company’saddress in Hong Kong for inspection by the publicand shareholders of overseas-listed foreign sharesfree of charge, of which item (v) may be inspectedby shareholders only.

(D) the full-time job and all other part-time jobsand duties;

(E) the identification documents and the numbersthereof.

(iii) the state of the share capital of theCompany;

(iv) the reports stating the aggregate par value,quantity, maximum and minimum pricespaid in respect of each class of sharesrepurchased by the Company since the endof the last accounting year and the aggregateamount incurred by the Company for thispurpose;

(v) the minutes of shareholders’ generalmeetings;

(vi) the resolutions made at the meetings of theBoard;

(vii) the resolutions made at the meetings of thesupervisory Committee;

(viii) the copy of corporate bonds and financialaccounting report.

The Company shall place the documents referredto in items (i) to (vii) mentioned above (other thanitem (ii)) in accordance with the requirements ofthe Hong Kong Listing Rules at the Company’saddress in Hong Kong for inspection by the publicand shareholders of overseas-listed foreign sharesfree of charge, of which item (v) may be inspectedby shareholders only.



– XI-28 –



6) in the event of the termination or liquidationof the Company, the right to participate inthe distribution of the remaining property ofthe Company according to the number ofshares held;

7) for shareholders who object to theresolutions on a merger or a demerger of theCompany made at a shareholders’ generalmeeting, the right to require the Company topurchase their shares;

8) other rights conferred by laws,administrative regulations and the Articles ofAssociation.

The Company shall not exercise any of its rightsto freeze or otherwise impair any of the rightsattached to any share by reason only that a personwho is interested directly or indirectly therein hasfailed to disclose his interests to the Company.

6) in the event of the termination or liquidationof the Company, the right to participate inthe distribution of the remaining property ofthe Company according to the number ofshares held;

7) for shareholders who object to theresolutions on a merger or a demerger of theCompany made at a shareholders’ generalmeeting, the right to require the Company topurchase their shares;

8) other rights conferred by laws,administrative regulations and the Articles ofAssociation.

The Company shall not exercise any of its rightsto freeze or otherwise impair any of the rightsattached to any share by reason only that a personwho is interested directly or indirectly therein hasfailed to disclose his interests to the Company.

Article 52 Where a shareholder request to inspector obtain a copy of the relevant information setout in the preceding article, he shall provide theCompany with written documents evidencing theclass and number of shares he holds in theCompany, and the Company shall provide theinformation as requested upon verification of theidentify of such shareholder.

Article 53 Where a shareholder request to inspector obtain a copy of the relevant information setout in the preceding article, he shall provide theCompany with written documents evidencing theclass and number of shares he holds in theCompany, and the Company shall provide theinformation as requested upon verification of theidentify of such shareholder.



– XI-29 –



Article 53 The holders of ordinary shares of theCompany shall assume the following obligations:

1) to abide by the laws, administrative regulationsand Articles of Association;

2) to pay subscription monies according to thenumber of shares subscribed for and the method ofsubscription;

3) not to divest the shares unless provided bylaws and regulations;

4) not to abuse their rights as shareholders toprejudice the interests of the Company or othershareholders; not to abuse the position of theCompany as an independent legal person and thelimited liabilities of shareholders to prejudice theinterests of the creditors of the Company;

Shareholders of the Company who abuse theirrights as shareholders and thereby cause losses tothe Company or other shareholders shall be liablefor compensation according to the law.

Where shareholders of the Company abuse theCompany’s position as an independent legalperson and the limited liabilities of shareholdersfor evading repayment of debts, and therebymaterially prejudicing the interests of the creditorsof the Company, they shall be jointly and severallyliable for the debts of the Company.

5) other obligations liable as stipulated by laws,administrative regulations and the Articles ofAssociation.

Shareholders shall not be liable to make anyfurther contribution to the share capital other thanas agreed by the subscriber of the relevant shareson subscription.

Article 54 Shareholders of the Company shallassume the following obligations:

1) to abide by the laws, administrative regulationsand Articles of Association;

2) to pay subscription monies according to thenumber of shares subscribed for and the method ofsubscription;

3) not to divest the shares unless provided bylaws and regulations;

4) not to abuse their rights as shareholders toprejudice the interests of the Company or othershareholders; not to abuse the position of theCompany as an independent legal person and thelimited liabilities of shareholders to prejudice theinterests of the creditors of the Company;

Shareholders of the Company who abuse theirrights as shareholders and thereby cause losses tothe Company or other shareholders shall be liablefor compensation according to the law.

Where shareholders of the Company abuse theCompany’s position as an independent legalperson and the limited liabilities of shareholdersfor evading repayment of debts, and therebymaterially prejudicing the interests of the creditorsof the Company, they shall be jointly and severallyliable for the debts of the Company.

5) other obligations liable as stipulated by laws,administrative regulations and the Articles ofAssociation.

Shareholders shall not be liable to make anyfurther contribution to the share capital other thanas agreed by the subscriber of the relevant shareson subscription.



– XI-30 –



None Article 55 In the event that any resolution ofthe shareholders’ general meeting or the Boardof the Company violates any applicable law oradministrative regulations, the shareholdersshall have the right to request the People’sCourt to invalidate the resolution.

In the event that any convening procedure,voting method of the shareholders’ generalmeeting or of any Board meeting is found inviolation of applicable laws, administrativeregulations, the shareholders may request thePeople’s Court to invalidate the resolutionthereof within 60 days from the date on whichsuch resolution is resolved.

None Article 56 In the event of any loss caused to theCompany as a result of violation of applicablelaws, administrative regulations or the Articlesof Association by the directors or seniormanagement when performing their duties, anyof the shareholders who holds 1% or more ofthe shares individually or jointly for no lessthan 180 consecutive days shall have the rightto request the supervisory Committee in writingto initiate litigation before the People’s Court.

In the event of any loss caused to the Companyas a result of violation of applicable laws,administrative regulations or the Articles ofAssociation by the supervisory Committee whenperforming its duties, any of the shareholdersmay request the Board in writing to initiatelitigation before the People’s Court. In theevent that the supervisory Committee or theBoard dismisses the written request of any ofthe shareholders as specified in the precedingparagraph, or withholds from initiatinglitigation within 30 days of the receipt of therequest, or that the failure to initiate litigationimmediately may otherwise cause irreparabledamage to the interest of the Company in anurgent circumstance, such shareholder(s) asmentioned in the preceding paragraph shallhave the right to initiate litigation before thePeople’s Court in the name(s) of suchshareholder(s) in the interest of the Company.



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The shareholders as referred to this article (1)are entitled to commence the relevant legalproceedings against any third party for any losscaused to the Company by damaging the legalinterests of the Company in accordance with therequirements of the preceding two paragraphs.

None Article 57 In the event that any director orsenior management violates applicable laws,administrative regulations or the Articles ofAssociation to the detriment of the interest ofthe shareholders, the shareholders may initiatelitigation before the People’s Court.

None Article 58 Any shareholder holding 5% orabove of the voting shares of the Company, whopledges its shares, shall immediately report tothe Company in writing on the day ofeffectiveness of such pledge of shares.

Article 54 In addition to the obligations requiredby laws, administrative regulations or the listingrules of stock exchange on which the shares of theCompany are listed, in exercising his rights as ashareholder, a controlling shareholder shall notmake any decisions on the following matters, as aresult of the exercise of his voting rights, in amanner prejudicial to the interests of all or someof the shareholders of the Company:

1) to release a director or a supervisor of his dutyin good faith and in the best interests of theCompany;

2) to approve a director or a supervisor (for hisown account or for the account of other parties) todeprive the Company of its property in anymanner, including but not limited to anyopportunity favorable to the Company;

3) to approve a director or a supervisor (for hisown account or for the account of other parties) todeprive another shareholder of his personalinterests, including but not limited to any rights todistribution and voting rights, but excluding anyrestructuring of the Company submitted to ashareholders’ general meeting for approval inaccordance with the Articles of Association.

Article 59 In addition to the obligations requiredby laws, administrative regulations or the listingrules of stock exchange on which the shares of theCompany are listed, in exercising his rights as ashareholder, a controlling shareholder shall notmake any decisions on the following matters, as aresult of the exercise of his voting rights, in amanner prejudicial to the interests of all or someof the shareholders of the Company:

1) to release a director or a supervisor of his dutyin good faith and in the best interests of theCompany;

2) to approve a director or a supervisor (for hisown account or for the account of other parties) todeprive the Company of its property in anymanner, including but not limited to anyopportunity favorable to the Company;

3) to approve a director or a supervisor (for hisown account or for the account of other parties) todeprive another shareholder of his personalinterests, including but not limited to any rights todistribution and voting rights, but excluding anyrestructuring of the Company submitted to ashareholders’ general meeting for approval inaccordance with the Articles of Association.



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Article 55 The controlling shareholder referred toin the preceding Article means a person whosatisfies any one of the following conditions:

1) any person acting on his own or in concert withother parties has the power to elect not lessthanhalf of the directors;

2) any person acting on his own or in concert withother parties has the power to exercise or controlthe exercise of 30% or more of the voting rightsof the Company;

3) any person acting on his own or in concert withother parties holds 30% or more of the outstandingshares of the Company;

4) any person acting on his own or in concert withother parties has actual control over the Companyin any other manner.

The term “de facto controller” referred to in thisArticle represents a person who, although not ashareholder of the Company, can actually controlthe acts of the Company through investmentrelations, agreements or other arrangements.

Article 60 The controlling shareholder referred toin the preceding Article means a person whosatisfies any one of the following conditions:

1) any person acting on his own or in concert withother parties has the power to elect not lessthanhalf of the directors;

2) any person acting on his own or in concert withother parties has the power to exercise or controlthe exercise of 30% or more of the voting rightsof the Company;

3) any person acting on his own or in concert withother parties holds 30% or more of the outstandingshares of the Company;

4) any person acting on his own or in concert withother parties has actual control over the Companyin any other manner.

5) Any other person defined as controllingshareholder in laws, regulations and listingrules of the place where the shares of theCompany are listed.

The term “de facto controller” referred to in thisArticle represents a person who, although not ashareholder of the Company, can actually controlthe acts of the Company through investmentrelations, agreements or other arrangements.



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Article 56 In the event of any of the followingcircumstances, The Company shall promptly notifyall Shareholders in writing or make anannouncement, and report to the local office of theCSRC at its domicile:

1) The Company, or its directors, supervisors orsenior management are put on file forinvestigation or subject to compulsory measures bycompetent authorities due to alleged violations oflaws and regulations;

2) The Company, or its directors, supervisors orsenior management have been subject toadministrative or criminal penalties due toviolations of laws and regulations;

3) The risk regulatory indicators of the Companyfail to meet the prescribed requirements;

4) Customers of the Company experience hugeoverdrafts or blow up their positions, which mayaffect operation of the Company as a goingconcern;

5) The Company is in any emergency that hasmaterially and adversely affected, or maymaterially and adversely affect, the interests of theCompany or its customers; and

6) Other circumstances as may affect theoperations of the Company as a going concern.

The Company and its subsidiaries are subject tothe regulatory measures and administrativepenalties made by CSRC and its local branchoffices according to the article 55(2) and (4) orarticle 56 the of Administrative Regulations onFutures Trading (《期貨交易管理條例》), the Companyshall give a written notice to all Shareholders ormake an announcement.

Article 61 In the event of any of the followingcircumstances, The Company shall promptly notifyall Shareholders in writing or make anannouncement, and report to the local office of theCSRC at its domicile:

1) The Company, or its directors, supervisors orsenior management are put on file forinvestigation or subject to compulsory measures bycompetent authorities due to alleged violations oflaws and regulations;

2) The Company, or its directors, supervisors orsenior management have been subject toadministrative or criminal penalties due toviolations of laws and regulations;

3) The risk regulatory indicators of the Companyfail to meet the prescribed requirements;

4) Customers of the Company experience hugeoverdrafts or blow up their positions, which mayaffect operation of the Company as a goingconcern;

5) The Company is in any emergency that hasmaterially and adversely affected, or maymaterially and adversely affect, the interests of theCompany or its customers; and

6) Other circumstances as may affect theoperations of the Company as a going concern.

The Company and its subsidiaries are subject tothe regulatory measures and administrativepenalties made by CSRC and its local branchoffices according to the article 55(2) and (4) orarticle 56 the of Administrative Regulations onFutures Trading (《期貨交易管理條例）), the Companyshall give a written notice to all Shareholders ormake an announcement.



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Article 57 Approval of the CSRC shall beobtained for change of shareholdings in theCompany in any of the circumstances below:

1) Change of controlling shareholder or the largestshareholder;

2) Shareholding of a single shareholder or theaggregate shareholding of affiliatedshareholders amounts to over 5% and foreignshareholders are involved.

Besides above regulations, the approval of thebranch office of CSRC at the domicile of theCompany is required where the shareholding bysingle shareholder or affiliated shareholders of theCompany amounts to over 5%.

Without the approval of CSRC or its detachedoffice, if any individuals or entities or affiliatedpersons hold shareholding of the Companyamounts to over 5% without authorization orbecome the shareholders of the Company byproviding false application materials and so forth,CSRC or its local branch can order them totransfer the shareholdings within the limitedperiod. The shareholding excludes voting powerand dividend right before being transferred.

Article 62 Approval of the CSRC shall beobtained for change of shareholdings in theCompany in any of the circumstances below:

1) Change of controlling shareholder or the largestshareholder;

2) Shareholding of a single shareholder or theaggregate shareholding of affiliatedshareholders amounts to over 5% and foreignshareholders are involved.

Besides above regulations, the approval of thebranch office of CSRC at the domicile of theCompany is required where the shareholding bysingle shareholder or affiliated shareholders of theCompany amounts to over 5%.

Without the approval of CSRC or its detachedoffice, if any individuals or entities or affiliatedpersons hold shareholding of the Companyamounts to over 5% without authorization orbecome the shareholders of the Company byproviding false application materials and so forth,CSRC or its local branch can order them totransfer the shareholdings within the limitedperiod. The shareholding excludes voting powerand dividend right before being transferred.



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Article 58 If Shareholders holding 5% or moreequity or de facto controllers of the Companyshall notify the Company within three workingdays in a proactive, accurate and completemanner in any of the following circumstances:

1) Shares of the Company they hold have beenfrozen, sealed up or under enforcement measures;

2) Shares of the Company they hold are pledgedor the pledged shares are released;

3) They decide to transfer Shares of the Companythey hold;

4) Shareholders are unable to properly exercisethe rights or assume the obligations thereof asShareholders, which may cause significantdeficiencies in the governance of the Company;

5) Material changes in equity, business scopeand in operation and management;

6) Changes in the chairman, general manager,or directors and senior management whoperform corresponding duties on their behalf;

7) Factors such as national laws andregulations, major policy adjustments or forcemajeure that may have a material adverse effecton the operation and management of theCompany;

8) They are under investigation or being subjectto compulsory measures taken by competentauthorities for alleged grave violations of laws andregulations;

9) They receive administrative or criminal penaltydue to serious violations of laws and regulations;


11) They are involved in merger, division ormajor asset or debt restructuring;

12) They are subject to regulatory measuresincluding suspension of operation forrecertification, cancellation, takeover or custody,or enter into dissolution, bankruptcy or closureprocedure;

Article 63 If Shareholders holding 5% or moreequity or de facto controllers of the Companyshall notify the Company within three workingdays in a proactive, accurate and completemanner in any of the following circumstances:

1) Shares of the Company they hold have beenfrozen, sealed up or under enforcement measures;

2) Shares of the Company they hold are pledgedor the pledged shares are released;

3) They decide to transfer Shares of the Companythey hold;

4) Shareholders are unable to properly exercisethe rights or assume the obligations thereof asShareholders, which may cause significantdeficiencies in the governance of the Company;

5) Material changes in equity, business scopeand in operation and management;

6) Changes in the chairman, general manager,or directors and senior management whoperform corresponding duties on their behalf;

7) Factors such as national laws andregulations, major policy adjustments or forcemajeure that may have a material adverse effecton the operation and management of theCompany;

8) They are under investigation or being subjectto compulsory measures taken by competentauthorities for alleged grave violations of laws andregulations;

9) They receive administrative or criminal penaltydue to serious violations of laws and regulations;


11) They are involved in merger, division ormajor asset or debt restructuring;

12) They are subject to regulatory measuresincluding suspension of operation forrecertification, cancellation, takeover or custody,or enter into dissolution, bankruptcy or closureprocedure;



– XI-36 –



13) They are involved in other circumstances thatmay affect equity changes of the Company oroperation of the Company as a going concern.

Shareholders holding 5% or more equity of theCompany fall under any of the circumstancesprescribed in the preceding paragraph, theCompany shall report the relevant information tothe local office of the CSRC at its domicile withinthree working days upon receipt of the noticegiven by the said Shareholders.

De facto controllers of the Company fall underany of the circumstances listed in items 8 to 12 ofthe preceding paragraph, the Company shall reportthe relevant information to the local office of theCSRC at its domicile within three working daysupon receipt of the notice given by the de factocontrollers.

13) They are involved in other circumstances thatmay affect equity changes of the Company oroperation of the Company as a going concern.

Shareholders holding 5% or more equity of theCompany fall under any of the circumstancesprescribed in the preceding paragraph, theCompany shall report the relevant information tothe local office of the CSRC at its domicile withinthree working days upon receipt of the noticegiven by the said Shareholders.

De facto controllers of the Company fall underany of the circumstances listed in items 8 to 12 ofthe preceding paragraph, the Company shall reportthe relevant information to the local office of theCSRC at its domicile within three working daysupon receipt of the notice given by the de factocontrollers.

Article 59 The Controlling Shareholders, de factocontrollers and other affiliated parties of theCompany shall not abuse their rights, shall notoccupy the assets of the Company ormisappropriate the assets of its customers, andshall not prejudice the legitimate rights andinterests of the Company and its customers. TheControlling Shareholders, de facto controllers,directors, supervisors or senior management of theCompany shall not use the connected relations todamage the interests of the Company.

Otherwise, they shall make compensation for theloss incurred to the Company.

Article 64 The Controlling Shareholders, de factocontrollers and other affiliated parties of theCompany shall not abuse their rights, shall notoccupy the assets of the Company ormisappropriate the assets of its customers, andshall not prejudice the legitimate rights andinterests of the Company and its customers. TheControlling Shareholders, de facto controllers,directors, supervisors or senior management of theCompany shall not use the connected relations todamage the interests of the Company.

Otherwise, they shall make compensation for theloss incurred to the Company.

The controlling shareholder and actualcontroller of the Company have a duty of goodfaith to the Company and shareholders of theCompany’s public shares. Controllingshareholders shall strictly exercise their rightsas investors in accordance with the law.Controlling shareholders shall not throughprofit distribution, asset restructuring, foreigninvestment, capital appropriation, loanguarantees, etc., damage the legitimate rightsand interests of the Company and publicshareholders, or by their controlling positiondamage the Interests of THE Company andpublic shareholders.



– XI-37 –



CHAPTER 8 SHAREHOLDERS’ GENERALMEETINGS

CHAPTER 8 SHAREHOLDERS’ GENERALMEETINGS

Article 60 The shareholders’ general meeting isthe organ of authority of the Company and shallexercise its functions and powers in accordancewith the law.

Article 65 The shareholders’ general meeting isthe organ of authority of the Company and shallexercise its functions and powers in accordancewith the law.

Article 61 The shareholders’ general meeting shallexercise the following functions and powers:

1) to decide the Company’s operational guidelinesand investment schemes;

2) to elect and remove directors not being staffrepresentatives and to determine matters relating tothe directors’ remunerations;

3) to elect and remove supervisors beingshareholders’ representatives and to determinematters relating to the supervisors’ remunerations;

4) to consider and approve the reports of theBoard;

5) to consider and approve the reports of thesupervisory Committee;

6) to consider and approve the Company’s annualfinancial budgets and final accounts;

7) to consider and approve the Company’s profitdistribution plan and plan for making up losses;

8) to resolve on an increase or a reduction in theCompany’s registered capital and acquisition ofthe Company’s shares;

9) to resolve on matters such as merger, demerger,dissolution, liquidation or change of corporateform of the Company;

10) to resolve on the issue of debentures by theCompany;

Article 66 The shareholders’ general meeting shallexercise the following functions and powers:

1) to decide the Company’s operational guidelinesand investment schemes;

2) to elect and remove directors not being staffrepresentatives and to determine matters relating tothe directors’ remunerations;

3) to elect and remove supervisors not beingshareholders’ representatives and to determinematters relating to the supervisors’ remunerations;

4) to consider and approve the reports of theBoard;

5) to consider and approve the reports of thesupervisory Committee;

6) to consider and approve the Company’s annualfinancial budgets and final accounts;

7) to consider and approve the Company’s profitdistribution plan and plan for making up losses;

8) to resolve on an increase or a reduction in theCompany’s registered capital and acquisition ofthe Company’s shares;

9) to resolve on matters such as merger, demerger,dissolution, liquidation or change of corporateform of the Company;

10) to resolve on the issue of debentures by theCompany;



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11) to resolve on the appointment, dismissal ornon-reappointment of the accounting firms;

12) to amend the Articles of Association;

13) to consider proposals put forward by anyshareholder representing 3% or more of theCompany’s shares with voting rights;

14) to consider the purchases or sales of anymaterial assets of the Company within a year inexcess of 30% of the Company’s audited netassets in the latest period;

15) to consider and approve long-term materialinvestment, acquisition or disposal asset, assetchange, related transactions or pledged loans ofthe Company to be approved by shareholders’general meeting;

16) to consider related transactions to be resolvedby shareholders’ general meeting as required bylisting rules of the place where the Company’sshares are listed;

17) to consider and approve matters relating tochange of the use of raised funds;

18) to consider share incentive plans;

19) to consider any other matters to be resolvedby shareholders’ general meeting as required bythe laws, administrative regulations, departmentalrules, listing rules of the place where the sharesof the Company are listed or the Articles ofAssociation.

11) to resolve on the appointment, dismissal ornon-reappointment of the accounting firms;

12) to amend the Articles of Association;

13) to consider proposals put forward by anyshareholder representing 3% or more of theCompany’s shares with voting rights;

14) to consider the purchases or sales of anymaterial assets of the Company within a year inexcess of 30% of the Company’s audited netassets in the latest period;

15) to consider and approve long-term materialinvestment, acquisition or disposal asset, assetchange, related transactions or pledged loans ofthe Company to be approved by shareholders’general meeting;

16) to consider related transactions to be resolvedby shareholders’ general meeting as required bylisting rules of the place where the Company’sshares are listed;

17) to consider and approve matters relating tochange of the use of raised funds;

18) to consider share incentive plans;

19) to consider any other matters to be resolvedby shareholders’ general meeting as required bythe laws, administrative regulations, departmentalrules, listing rules of the place where the sharesof the Company are listed and the Articles ofAssociation.

Article 62 The Company shall not enter into anycontract with any party other than the directors,supervisors, general manager and other seniormanagement without the prior approval of theshareholders’ general meeting, pursuant to whichsuch party shall be in charge of management ofthe whole or any substantial part of theCompany’s business.

Article 67 Except in special circumstances such ascrisis of the Company, the Company shall notenter into any contract with any party other thanthe directors, supervisors, general manager andother senior management without the priorapproval of the shareholders’ general meeting byway of special resolution, pursuant to which suchparty shall be in charge of management of thewhole or any substantial part of the Company’sbusiness.



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Article 63 The Company shall not providefinancing for Shareholders, de facto controllers orany other affiliate, and shall not provide anyexternal guarantees.

Article 68 The Company shall not providefinancing for Shareholders, de facto controllers orany other affiliate, and shall not provide anyexternal guarantees.

Article 64 A shareholders’ general meeting shalleither be an annual general meeting or anextraordinary general meeting. The shareholders’general meetings shall be convened by the Board.Annual general meetings shall be held once everyyear and within six months from the close of thepreceding financial year.

An extraordinary general meeting shall beconvened within two months of the occurrence ofany one of the following circumstances:

1) the number of directors is less than the numberstipulated in the Company Law or two thirds ofthe number required in the Articles of Association;

2) when the losses of the Company not made upfor amount to one-third of the total amount of itsshare capital;

3) where any shareholder individually or jointlyholding 10% or more of the Company’s issuedshares carrying voting rights requests in writingthe convening of an extraordinary general meeting;

4) when considered necessary by the Board;

5) when requested by the supervisory Committee;

6) when requested by more than 1/2 independentdirectors;

7) other circumstances stipulated by laws,administrative regulations, departmental rules orthe Articles of Association.

Article 69 A shareholders’ general meeting shalleither be an annual general meeting or anextraordinary general meeting. The shareholders’general meetings shall be convened by the Board.Annual general meetings shall be held once everyyear and within six months from the close of thepreceding financial year.

An extraordinary general meeting shall beconvened within two months of the occurrence ofany one of the following circumstances:

1) the number of directors is less than the numberstipulated in the Company Law or two thirds ofthe number required in the Articles of Association;

2) when the losses of the Company not made upfor amount to one-third of the total amount of itsshare capital;

3) where any shareholder individually or jointlyholding 10% or more of the Company’s issuedshares carrying voting rights requests in writingthe convening of an extraordinary general meeting;

4) when considered necessary by the Board;

5) when requested by the supervisory Committee;

6) when requested by more than 1/2 independentdirectors;

7) other circumstances stipulated by laws,administrative regulations, departmental rules orthe Articles of Association.



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None Article 70 The location of the shareholders’general meetings shall be the domicile of theCompany or other place designated by theBoard.

The shareholders’ general meetings shall have avenue and be held on-site. The Company mayalso provide network or any other means for itsshareholders to conveniently participate in theshareholders’ general meetings. Shareholdersparticipating in the shareholders’ generalmeetings by any aforesaid means shall bedeemed as having attended the meetings.

None Article 71 When holding a shareholders’general meeting, the Company shall engagelawyers to give legal opinion and makeannouncement on the following issues:

1) Whether the procedures for convening andholding a shareholders’ general meeting is incompliance with laws, administrativeregulations and the Articles;

2) Whether the qualifications of the attendeesand convener are legal and valid;

3) Whether the voting procedures and results ofthe shareholders’ general meeting are legal andvalid;

4) Legal opinions on other relevant issues asrequested by the Company.

None Article 72 Independent directors shall beentitled to make a proposal to the Board onholding an extraordinary general meeting. Forsuch a proposal, the Board shall give a writtenreply on whether to agree or not to hold suchmeeting within ten days upon receipt of theproposal in accordance with the laws,administrative regulations and these Articles ofAssociation. Where the Board agrees to holdsuch a meeting, a notice of general meeting willbe given within five days after the resolution ofthe Board is made. Where the Board does notagree to hold such a meeting, the reasons willbe given and an announcement be made.



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None Article 73 The supervisory Committee isentitled to propose in writing to the Board toconvene an extraordinary general meeting. TheBoard shall, in accordance with the laws,administrative regulations and the Articles ofAssociation, furnish a written reply to thesupervisory Committee stating its agreement ordisagreement to the convening of theextraordinary general meeting within ten daysafter having received such proposal.

In the event that the Board agrees to convenean extraordinary general meeting, it shall servethe notice of such meeting within five days afterthe relevant Board resolution is passed. Consentof the supervisory Committee shall be obtainedin the event of any changes made to the originalproposal in the notice.

In the event that the Board does not agree toconvene an extraordinary general meeting ordoes not furnish any written reply to thesupervisory Committee within ten days afterhaving received such proposal, the Board isdeemed to be unable or unwilling to performthe duty of convening a general meeting, inwhich case the supervisory Committee mayconvene and preside over such meeting by itself.



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None Article 74 Shareholders holding, individually orin aggregate, 10% or more of the shares of theCompany, shall have the right to request theBoard in writing to convene an extraordinarygeneral meeting. The Board shall, in accordancewith the laws, administrative regulations andthe Articles of Association, furnish a writtenreply stating its agreement or disagreement tothe convening of the extraordinary generalmeeting within ten days after having receivedsuch proposal.

In the event that the Board agrees to convenean extraordinary general meeting, it shall servethe notice of such meeting within five days afterthe relevant Board resolution is passed. Consentof the relevant shareholders shall be obtained inthe event of any changes made to the originalproposal in the notice.

In the event that the Board does not agree toconvene an extraordinary general meeting ordoes not furnish any written reply within tendays after having received such proposal,shareholders holding, individually or inaggregate, 10% or more of the shares of theCompany, shall have the right to request thesupervisory Committee in writing to convene anextraordinary general meeting.

If the supervisory Committee agrees to convenethe extraordinary general meeting, it shall issuea notice thereof within 5 days of its receipt ofthe request, and any amendment made in thenotice to the original proposals shall be subjectto the consent of the relevant shareholders.

If the supervisory Committee fails to issue thenotice of the extraordinary general meetingwithin the period mentioned above, it shall bedeemed that it will not convene and presideover the shareholders’ general meeting, inwhich case shareholders holding, individually orin aggregate, 10% or more the shares of theCompany for 90 consecutive days may conveneand preside over such meeting.



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None Article 75 If the supervisory Committee or anysuch shareholder(s) convene(s) an extraordinarymeeting, the Board shall be notified in writing,and the meeting shall be registered with thelocal branch of the CSRC and the stockexchange(s) in the place in which the Companyis located. The shareholder(s) convening theshareholders’ general meeting shall hold no lessthan 10% of the shares of the Company priorto the announcement of any resolution approvedat the shareholders’ general meeting. Suchconvening shareholder(s) shall submit relevantevidence to the local branch of the CSRC andthe stock exchange(s) in the place in which theCompany is located when issuing the notice ofshareholder’s general meeting andannouncement of any resolution approved at theshareholder’s general meeting.

None Article 76 The Board and its secretary shallcooperate with the supervisory Committee orsuch shareholder(s) convening the meeting. TheBoard shall provide the register of shareholdersas of the record date.

None Article 77 Any such expenses necessary toconvene the meeting incurred by thesupervisory Committee or such shareholder(s)shall be reimbursed by the Company.

None Article 78 The contents of the proposal shall fallwithin the duties of the shareholders’ generalmeeting, and shall cover a specific subject fordiscussion with concrete matters to be resolved,in accordance with the laws, administrativeregulations and relevant requirements of theArticles of Association.



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Article 65 Where the Company convenes anannual general meeting, a written notice shall begiven at least 20 working days prior to the dateof the meeting to notify all the Shareholders;where the Company convenes an extraordinarygeneral meeting, a public announcement shallbe published at least 10 working days or 15days (whichever is longer) prior to the date ofthe meeting to notify all the Shareholders. AnyShareholder who intends to attend the meetingshall deliver to the Company a written replystating his or her intention to attend within theperiod stipulated in the meeting notice.

When calculating the starting date, the date of themeeting shall be excluded.

Article 79 Where the Company convenes anannual general meeting, a written notice shall begiven at least 20 working days prior to the dateof the meeting to notify all the Shareholders;where the Company convenes an extraordinarygeneral meeting, a public announcement shallbe published at least 10 working days or 15days (whichever is longer) prior to the date ofthe meeting to notify all the Shareholders. AnyShareholder who intends to attend the meetingshall deliver to the Company a written replystating his or her intention to attend within theperiod stipulated in the meeting notice.


Article 66 Where the Company convenes a generalmeeting, the Board, the supervisory Committeeand Shareholder(s) severally or jointly holding 3%or more Shares are entitled to submit written newproposals to the Company. Matters mentioned inproposals which are within the scope of thepowers of the general meeting shall be included inthe meeting agenda.

Shareholder(s) severally or jointly holding morethan 3.0% Shares of the Company may submitwritten provisional proposals to the convener 10days before a general meeting is convened. Theconvener shall serve a supplementary notice ofgeneral meeting to other Shareholders within twodays after receipt of a proposal, and announce thecontents of provisional proposals.

Article 80 Where the Company convenes a generalmeeting, the Board, the supervisory Committeeand Shareholder(s) severally or jointly holding 3%or more Shares are entitled to submit proposals tothe Company.

Shareholder(s) severally or jointly holding morethan 3% Shares of the Company may submitwritten provisional proposals to the convener 10days before a general meeting is convened. Theconvener shall serve a supplementary notice ofgeneral meeting to other Shareholders within twodays after receipt of a proposal, and announce thecontents of provisional proposals.

Except as mentioned above, the convener shallnot amend any proposal as specified in thenotice of shareholders’ general meeting or addany new proposal after issuing the notice of theshareholders’ general meeting. Theshareholders’ general meeting shall not vote onand resolve any resolution for any proposal notstated in the notice of the shareholders’ generalmeeting or not in compliance with therequirements in Article 79 of the Articles ofAssociation.

Article 67 Proposals not set out in the notice ofgeneral meeting or not complying with theprovision herein shall not be voted on orresolved at the general meeting.

Article 81 Proposals not set out in the notice ofgeneral meeting or not complying with theprovision herein shall not be voted on orresolved at the general meeting.



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Article 68 The notice of a shareholders’ meetingshall:

1) be in writing;

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

3) state the matters to be considered at themeeting;

4) set out the record date for shareholders who areentitled to attend the shareholders’ generalmeeting;

5) provide shareholders with such information andexplanation as necessary for them to makeinformed decisions on the matters to beconsidered. This principle includes (but is notlimited to), where a proposal on merger,repurchase of shares, restructuring of share capitalor other restructuring is put forward by theCompany, the provision of the specific conditionsand the contracts (if any) of the transactionscontemplated, and the causes and consequences ofsuch proposals shall be properly explained;

6) disclose the nature and extent of the materialinterest, if any, of any director, supervisor, generalmanager and senior management officer in thematters to be considered; and provide anexplanation of the differences, if any, between theway in which the matter to be considered wouldaffect such director, supervisor, general manager orsenior management officer as a shareholder andthe way in which such matter would affect othershareholders of the same class;

7) set out the full text of any special resolutionproposed to be passed at the meeting;

8) contain an express statement that a shareholderentitled to attend and vote has the right to appointone or more proxies to attend and vote on hisbehalf and that such proxy need not be ashareholder;

9) specify the time and place for lodging proxyforms for the meeting;

Article 82 The notice of a shareholders’ meetingshall:

1) be in writing;

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

3) present the matters and proposals to beconsidered at the meeting;

4) set out the record date for shareholders who areentitled to attend the shareholders’ generalmeeting;

5) provide shareholders with such information andexplanation as necessary for them to makeinformed decisions on the matters to beconsidered. This principle includes (but is notlimited to), where a proposal on merger,repurchase of shares, restructuring of share capitalor other restructuring is put forward by theCompany, the provision of the specific conditionsand the contracts (if any) of the transactionscontemplated, and the causes and consequences ofsuch proposals shall be properly explained;

6) disclose the nature and extent of the materialinterest, if any, of any director, supervisor, generalmanager and senior management officer in thematters to be considered; and provide anexplanation of the differences, if any, between theway in which the matter to be considered wouldaffect such director, supervisor, general manager orsenior management officer as a shareholder andthe way in which such matter would affect othershareholders of the same class;

7) set out the full text of any special resolutionproposed to be passed at the meeting;

8) contain an express statement that a shareholderentitled to attend and vote has the right to appointone or more proxies to attend and vote on hisbehalf and that such proxy need not be ashareholder;

9) specify the time and place for lodging proxyforms for the meeting;



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10) the name and telephone number of thestanding contact person for meeting affairs.

10) the name and telephone number of thestanding contact person for meeting affairs.

Article 69 The notice of a shareholders’ generalmeeting shall be sent to the shareholders (whetheror not entitled to vote at the shareholders’ generalmeeting) by hand or prepaid mail to the address ofthe recipients as shown in the register ofshareholders. For holders of domestic shares, thenotice of a shareholders’ general meeting may begiven by way of an announcement.

The announcement referred to in the precedingparagraph shall be published on the website ofthe stock exchange and the media that meet therequirements of the securities regulatoryauthority of the State Council within the periodstipulated in Article 65 of this Articles ofAssociation; after the publication of theannouncement, all holders of domestic shares shallbe taken to have received notice of the relevantshareholders’ meeting.

The accidental omission to give notice of ameeting to, or the non-receipt of notice of ameeting by, any person entitled to receive suchnotice shall not invalidate the meeting and theresolutions passed at the meeting.

Article 83 The notice of a shareholders’ generalmeeting shall be sent to the shareholders (whetheror not entitled to vote at the shareholders’ generalmeeting) by hand or prepaid mail to the address ofthe recipients as shown in the register ofshareholders. For holders of domestic shares, thenotice of a shareholders’ general meeting may begiven by way of an announcement.

The announcement referred to in the precedingparagraph shall be published on the website ofthe stock exchange and the media that meet therequirements of the securities regulatoryauthority of the State Council within the periodstipulated in Article 79 of this Articles ofAssociation; after the publication of theannouncement, all holders of domestic shares shallbe taken to have received notice of the relevantshareholders’ meeting.




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None Article 84 If the shareholders’ general meetingintends to discuss the election of directors orsupervisors, the notice of the shareholders’general meeting should disclose full informationof the candidates for directors and supervisors.The notice should at least include the following:

1) Personal information such as educationbackground, work experience, othersimultaneous appointments;

2) whether or not the candidate has anyconnected relationship with the Company or itscontrolling shareholders and actual controller;

3) the number of shares of the Company heldby the candidate;

4) whether or not the candidate has beensubject to penalties by the CSRC and otherrelevant authorities as well as sanctions by anystock exchange;

5) information about the newly appointed,re-elected or transferred directors orsupervisors that needs to be disclosed accordingto listing rules the places where shares of theCompany are listed.

Each candidate for director or supervisorshould be separately proposed, except fordirectors or supervisors elected by way ofcumulative voting.

None Article 85 After the notice of shareholders’general meeting is issued, the shareholders’general meeting shall not be postponed orcancelled without a proper reason and theproposals stated in the notice of theshareholders’ general meeting shall not becancelled. In the event of any postponement orcancellation, the convener shall issue anannouncement and state the reasons therein atleast 2 working days before the original date ofthe shareholders’ general meeting.



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None Article 86 The Board of the Company and otherconvener(s) shall take necessary measures toensure the smooth running of the shareholders’general meeting, including measures taken todeter any acts intervening in the shareholders’general meeting, picking quarrels, provokingtroubles and infringing of legal rights andinterests of shareholders, and shall report themto the authorities for investigation andpunishment on a timely basis.

Article 70 Any shareholder who is entitled toattend and vote at a shareholders’ meeting shall beentitled to appoint one or more persons (whether ashareholder or not) as his proxy to attend and voteon his behalf. A proxy so appointed shall exercisethe following rights pursuant to such authorization:

1) such shareholder’s right to speak at themeeting;

2) the right to demand a poll alone or jointly withothers;

3) unless otherwise required by applicablesecurities listing rules or other securities laws andregulations, the right to vote by a show of handsor by poll, provided that where more than oneproxy is appointed, the proxies may only exercisesuch voting rights by poll.

Article 87 Any shareholder who is entitled toattend and vote at a shareholders’ meeting shall beentitled to appoint one or more persons (whether ashareholder or not) as his proxy to attend and voteon his behalf. A proxy so appointed shall exercisethe following rights pursuant to such authorization:

1) such shareholder’s right to speak at themeeting;

2) the right to demand a poll alone or jointly withothers;

3) unless otherwise required by applicablesecurities listing rules or other securities laws andregulations, the right to vote by a show of handsor by poll, provided that where more than oneproxy is appointed, the proxies may only exercisesuch voting rights by poll.

None Article 88 Individual shareholders who attendthe meeting in person shall show their identitycards or other effective document or proof ofidentity and stock account cards. Proxies ofindividual shareholders shall show effectiveproof of identity and form of proxy.

None Article 89 Corporate shareholders should attendthe meeting by their legal representative or theproxy appointed by the legal representative.Legal representative who attends the meetingshould present his/her own identity card,evidence of shareholding and valid documentsevidencing his/her capacity as a legalrepresentative. When a proxy is appointed toattend the meeting, the proxy should presenthis/her identity card and a writtenauthorization instrument produced by the legalrepresentative of the corporate shareholder.



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Article 71 The instrument appointing a proxy mustbe made in writing and signed under the hand ofthe appointer or his attorney duly authorized inwriting. If the appointer is a legal person, theinstrument shall be made under its corporate sealor signed under the hand of its director or attorneyduly authorized. The power of attorney shall statethe number of shares represented by the saidproxy; in the case where more than one proxy isappointed, the instrument shall state the number ofshares respectively represented by each proxy ofthe shareholder.

Article 90 The instrument appointing a proxymust be made in writing, and form of proxyappointing another person to attend ashareholders’ general meeting produced by ashareholder shall state the following:

1) name of the proxy;

2) whether he/she has the voting right;

3) instructions as to vote for or vote against orabstain from voting in relation to each matteron the agenda to be examined at theshareholders’ general meeting;

4) issuing date and validity period of the proxyform;

5) signature (or chop) of the appointer, or thesignature (or chop) of the proxy entrusted inwriting. If the appointer is a corporate shareholder,the corporation’s seal shall be affixed;

6) the number of shares represented by proxy,if more than one person is appointed as proxy, thenumber of shares represented by each proxy shallbe stated.

The power of attorney shall state whether ornot the proxy can vote at its own will if theshareholder does not give specific instructions.



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Article 72 The proxy form shall be deposited atthe domicile of the Company or any other placespecified in the notice for convening the meetingnot less than twenty-four hours prior to theconvening of the meeting or twenty-four hoursprior to the time appointed for voting. Where theproxy form is signed by a person authorized bythe appointer, the power of attorney or otherauthorization instruments shall be notarized. Thepower of attorney or other authorizationinstruments so notarized, together with the proxyform, shall be deposited at the domicile of theCompany or such other place as specified in thenotice for convening the meeting.

Where the appointer is a legal person, its legalrepresentative or other persons authorized byresolution of the board of directors or otherdecision-making organs may attend theshareholders’ meeting of the Company as arepresentative of the appointer.

Where the shareholder is a recognized clearinghouse (or its proxy), the shareholder may authoriseone or more persons it considers appropriate as itsrepresentative(s) at any shareholders’ generalmeeting or any category shareholders meeting;however, if more than one person are authorized,the power of attorney shall contain the number andclass of shares for which such persons areauthorized, and shall be signed by an authorizedpersonnel of the recognized clearing house. Theperson(s) so authorized can represent therecognized clearing house (or its proxy) to attendthe meeting and exercise its right, as if the personsare the Company’s individual shareholders, andshall not be required to produce evidence ofshareholding, the notarized power of attorney and/or further evidence to prove that he/she/they havebeen duly authorized.

Article 91 The proxy form shall be deposited atthe domicile of the Company or any other placespecified in the notice for convening the meetingnot less than twenty-four hours prior to theconvening of the meeting or twenty-four hoursprior to the time appointed for voting. Where theproxy form is signed by a person authorized bythe appointer, the power of attorney or otherauthorization instruments shall be notarized. Thepower of attorney or other authorizationinstruments so notarized, together with the proxyform, shall be deposited at the domicile of theCompany or such other place as specified in thenotice for convening the meeting.

Where the appointer is a legal person, its legalrepresentative or other persons authorized byresolution of the board of directors or otherdecision-making organs may attend theshareholders’ meeting of the Company as arepresentative of the appointer.

Where the shareholder is a recognized clearinghouse (or its proxy), the shareholder may authoriseone or more persons it considers appropriate as itsrepresentative(s) at any shareholders’ generalmeeting or any category shareholders meeting;however, if more than one person are authorized,the power of attorney shall contain the number andclass of shares for which such persons areauthorized, and shall be signed by an authorizedpersonnel of the recognized clearing house. Theperson(s) so authorized can represent therecognized clearing house (or its proxy) to attendthe meeting and exercise its right, as if the personsare the Company’s individual shareholders, andshall not be required to produce evidence ofshareholding, the notarized power of attorney and/or further evidence to prove that he/she/they havebeen duly authorized.



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Article 73 Any proxy form issued to a shareholderby the Board of the Company for appointing aproxy of shareholder shall allow the shareholder tofreely instruct the proxy to cast vote in favor of oragainst, and to give separate instructions for eachmatter to be resolved at the meeting. Such proxyform shall state whether the proxy may vote as hethinks fit in the absence of instructions from theshareholder.

Proxies should, when attending the generalmeeting on behalf of the shareholders, presenttheir identification proof and the power of attorneysigned by the appointer or a legal representative ofthe appointer or a duly appointed agent. Thepower of attorney should specify the date ofissuance.

If a corporate shareholder (other than therecognized clearing house or its nominees)delegates its legal representative to attend themeeting, the Company shall have the right torequest such legal representative to provide aproof of his/her identity and a valid proof of his/her legal representative qualification.

Article 92 Any proxy form issued to a shareholderby the Board of the Company for appointing aproxy of shareholder shall allow the shareholder tofreely instruct the proxy to cast vote in favor of oragainst, and to give separate instructions for eachmatter to be resolved at the meeting. Such proxyform shall state whether the proxy may vote as hethinks fit in the absence of instructions from theshareholder.

Proxies should, when attending the generalmeeting on behalf of the shareholders, presenttheir identification proof and the power of attorneysigned by the appointer or a legal representative ofthe appointer or a duly appointed agent. Thepower of attorney should specify the date ofissuance.

If a corporate shareholder (other than therecognized clearing house or its nominees)delegates its legal representative to attend themeeting, the Company shall have the right torequest such legal representative to provide aproof of his/her identity and a valid proof of his/her legal representative qualification.

Article 74 Where the appointer has deceased,become incapacitated, withdrawn the appointmentor the power of attorney, or where the relevantshares have been transferred prior to the voting, avote given by the proxy in accordance with thepower of attorney shall remain valid provided thatno written notice of such event has been receivedby the Company prior to the commencement of therelevant meeting.

Article 93 Where the appointer has deceased,become incapacitated, withdrawn theappointment or the power of attorney, or wherethe relevant shares have been transferred priorto the voting, a vote given by the proxy inaccordance with the power of attorney shallremain valid provided that no written notice ofsuch event has been received by the Companyprior to the commencement of the relevantmeeting.

None Article 94 The Company shall be responsible tocompile the attendee register which shallinclude, among others, the name of attendee (orname of relevant unit), identity certificatenumber, domicile, the number of shares withvoting rights that he/she holds or represents,and name of the person (or name of relevantunit) who attends the meeting by proxy.



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None Article 95 The convener and lawyers engagedby the Company shall verify the legitimatequalification of shareholders in accordance withthe register of members provided by thesecurities registration and settlement companyand shall register the names of shareholdersand the number of voting shares each of themholds. The registration shall end before thechairperson of the meeting announces thenumber of shareholders and proxies attendingthe meeting and the total number of votingshares they hold.

None Article 96 All the directors, supervisors and thesecretary to the Board of the Company shallattend the shareholders’ general meeting, andthe general manager and other seniormanagement shall observe the shareholders’general meeting.

None Article 97 The Company shall formulate therules of procedures of the shareholders’ generalmeeting which shall set out in detail theprocedures of convening and voting in respectof the general meeting (including notice,registration, consideration and approval ofproposals, voting, vote counting, announcementof voting results, the resolution making process,minutes of the meeting and the signing andannouncement thereof, etc.) and the principlesfor granting authorities to the Board at theshareholders’ general meeting. The scope ofauthority shall be specified in details. However,the functions and powers to be exercised by theshareholders’ general meeting as specificallystipulated in the Company Law shall not beauthorized to the Board to exercise. The rulesof procedures of the shareholders’ generalmeeting shall be prepared by the Board, besubject to the approval at the shareholders’general meeting and be attached to the Articlesof Association as an appendix.

None Article 98 At an annual general meeting, theBoard and the supervisory Committee shallreport their work performance in the precedingyear to the shareholders. Each independentdirector shall also report their workperformance.



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None Article 99 directors, supervisors and seniormanagement shall give explanations uponshareholders’ inquiries and suggestions at theshareholders’ general meeting.

None Article 100 The chairperson of the meeting shallannounce the total number of shareholders andproxies present at the meeting on site and thetotal number of shares with voting rights heldby such shareholders and proxies before voting,and the total number of shareholders andproxies present at the meeting on site and thetotal number of shares with voting rights heldby such shareholders and proxies shall besubject to those registered in the register of themeeting.

Article 75 Resolutions of shareholders’ generalmeetings shall be classified as ordinary resolutionsand special resolutions.

To adopt an ordinary resolution, a majority of thevoting rights represented by the shareholders(including proxies) present at the meeting must becast in favor of the resolution.

To adopt a special resolution, not less thantwo-thirds of the voting rights represented by theshareholders (including proxies) present at themeeting must be cast in favor of the resolution.

Article 101 Resolutions of shareholders’ generalmeetings shall be classified as ordinary resolutionsand special resolutions.

To adopt an ordinary resolution, a majority of thevoting rights represented by the shareholders(including proxies) present at the meeting must becast in favor of the resolution.

To adopt a special resolution, not less thantwo-thirds of the voting rights represented by theshareholders (including proxies) present at themeeting must be cast in favor of the resolution.

Article 76 The Company has no voting right forthe Shares it holds, and such part of Shares shallbe excluded from the total number of votingShares represented by the Shareholders attendingthe general meeting. Shareholders (includingproxies thereof) shall exercise their voting rightsas per the voting Shares they represent. EachShare carries the right to one vote.

Where any shareholder is, under the Hong KongListing Rules, required to abstain from voting onany particular resolution or restricted to votingonly for or against any particular resolution, anyvotes cast by or on behalf of such shareholder incontravention of such requirement or restrictionshall not be counted.

Article 102 The Company has no voting right forthe Shares it holds, and such part of Shares shallbe excluded from the total number of votingShares represented by the Shareholders attendingthe general meeting. Shareholders (includingproxies thereof) shall exercise their voting rightsas per the voting Shares they represent. EachShare carries the right to one vote.

Where any shareholder is, under relevant laws,regulations and the listing rules of the placeswhere shares of the Company are listed,required to abstain from voting on any particularresolution or restricted to voting only for oragainst any particular resolution, any votes cast byor on behalf of such shareholder in contraventionof such requirement or restriction shall not becounted.



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Article 77 Resolutions submitted to ashareholders’ general meeting shall be voted bypoll, but subject to the requirements of the HongKong Listing Rules, the chairman of the meetingmay in good faith allow resolutions purely relatedto procedural or administrative matters to be votedon by a show of hands.

Article 103 Resolutions submitted to ashareholders’ general meeting shall be voted bypoll, but subject to the requirements of relevantlaws, regulations and the listing rules of theplaces where shares of the Company are listed,the chairman of the meeting may in good faithallow resolutions purely related to procedural oradministrative matters to be voted on by a show ofhands.

Article 78 A poll shall be taken at such time andplace as specified, not being later than 30 daysfrom the date of the meeting or adjourned meetingat which a vote will be taken on a poll in suchmanner (including the use of ballot or votingpapers or tickets) as the chairman directs. Nonotice need be given of a poll not takenimmediately. The result of the poll shall bedeemed to be the resolution of the meeting atwhich the poll was taken.

Where a resolution is voted by a show of hands aspermitted under the Listing Rules, a declaration bythe chairman that a resolution has on a show ofhands been carried, or carried unanimously, or bya particular majority, or lost, and an entry to thateffect in the minute book of the Company shall beconclusive evidence of that fact without proof ofthe number or proportion of the votes recorded infavor of or against such resolution.

Article 104 A poll shall be taken at such time andplace as specified, not being later than 30 daysfrom the date of the meeting or adjourned meetingat which a vote will be taken on a poll in suchmanner (including the use of ballot or votingpapers or tickets) as the chairman directs. Nonotice need be given of a poll not takenimmediately. The result of the poll shall bedeemed to be the resolution of the meeting atwhich the poll was taken.


Article 79 A poll demanded on the election of thechairman or the adjournment of the meeting shallbe taken forthwith. A poll demanded on any othermatters shall be taken at such time as thechairman may decide, and the meeting mayproceed to discuss other matters. The results of thepoll shall still be taken as a resolution adopted atthat meeting.

Article 105 A poll demanded on the election ofthe chairman or the adjournment of the meetingshall be taken forthwith. A poll demanded on anyother matters shall be taken at such time as thechairman may decide, and the meeting mayproceed to discuss other matters. The results of thepoll shall still be taken as a resolution adopted atthat meeting.

Article 80 When voting by poll, a shareholder(including a proxy) entitled to two or more votesneed not cast all his votes in the same way.

Article 106 When voting by poll, a shareholder(including a proxy) entitled to two or more votesneed not cast all his votes in the same way.

Article 81 In the case of an equality of votes,whether by a show of hands or by poll, thechairman of the meeting shall have a casting vote.

Article 107 In the case of an equality of votes,whether by a show of hands or by poll, thechairman of the meeting shall have a casting vote.



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Article 82 The following matters shall be resolvedby ordinary resolution at a shareholders’ generalmeeting:

1) work reports of the Board and the supervisoryCommittee;

2) plans for profit distribution and for making uplosses prepared by the Board;

3) appointment or removal of directors andsupervisors not being staff representatives, andtheir remuneration and manner of payment thereof;

4) the Company’s annual financial budgets andfinal accounts, balance sheets, income statementsand other financial statements;

5) the Company’s annual report;

6) matters other than those required by the laws,administrative regulations, Hong Kong ListingRules or the Articles of Association to beapproved by special resolution.

Article 108 The following matters shall beresolved by ordinary resolution at a shareholders’general meeting:

1) work reports of the Board and the supervisoryCommittee;

2) plans for profit distribution and for making uplosses prepared by the Board;

3) appointment or removal of directors andsupervisors not being staff representatives, andtheir remuneration and manner of payment thereof;

4) the Company’s annual financial budgets andfinal accounts, balance sheets, income statementsand other financial statements;

5) the Company’s annual report;

6) matters other than those required by the laws,administrative regulations, the listing rules of theplaces where the shares of the Company arelisted or the Articles of Association to beapproved by special resolution.



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Article 83 The following matters shall be resolvedby special resolution at a shareholders’ generalmeeting:

1) increase or reduction of the Company’s sharecapital, repurchase of the Company’s shares andissue of shares of any class, warrants and othersimilar securities;

2) issue of debentures of the Company;

3) demerger, merger, dissolution, liquidation andchange of corporate form of the Company;

4) amendment to the Articles of Association;

5) purchases or sales of material assets of theCompany in excess of 30 percent of the net assetsof the Company within a year;

6) share incentive plans;

7) any other matters stipulated by the laws,administrative regulations, Hong Kong ListingRules or the Articles of Association or determinedby an ordinary resolution at a shareholders’general meeting as having a material impact on theCompany and requiring to be resolved by specialresolution.

Article 109 The following matters shall beresolved by special resolution at a shareholders’general meeting:

1) increase or reduction of the Company’s sharecapital, repurchase of the Company’s shares andissue of shares of any class, warrants and othersimilar securities;

2) issue of debentures of the Company;

3) demerger, merger, dissolution, liquidation andchange of corporate form of the Company;

4) amendment to the Articles of Association;

5) purchases or sales of material assets of theCompany in excess of 30 percent of the net assetsof the Company within a year;

6) share incentive plans;

7) any other matters stipulated by the laws,administrative regulations, the listing rules of theplaces where the shares of the Company arelisted or the Articles of Association or determinedby an ordinary resolution at a shareholders’general meeting as having a material impact on theCompany and requiring to be resolved by specialresolution.

None Article 110 Shareholders (including proxiesthereof) shall exercise their voting rights inproportion to the amount of voting shares theyrepresent. Each share shall carry the right toone vote.

When material issues affecting the interests ofmedium and minority investors are consideredat the shareholders’ general meeting, the votesof medium and minority investors shall becounted separately.



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The separate votes counting results shall bedisclosed publicly in a timely manner. TheCompany shall have no voting rights for theshares it holds, and such portion of the sharesshall be excluded from the total number ofvoting shares represented by the shareholdersattending the general meeting.

The soliciting of voting rights can be carriedout by the Board, independent directors, andthe shareholders who comply with relevantregulations. Information including the specificvoting preference shall be fully provided to theshareholders for whom voting rights are beingsolicited.

Consideration or de facto consideration forsoliciting shareholders’ voting rights isprohibited. The Company shall not impose anyminimum shareholding limitation for solicitingvoting rights.

None Article 111 When connected transactions arevoted on at a shareholders’ general meeting, theconnected shareholders shall not participate invoting. The voting shares held by them shall notbe counted in the total number of shares validfor voting. The announcement on the resolutionspassed at the shareholders’ general meetingshould fully disclose the details of voting byunconnected shareholders.

None Article 112 The Company shall, subject to theshareholders’ general meetings being legallyand validly held, make it convenient for theshareholders to attend the shareholders’ generalmeetings through various means, includingusing modern information technology toestablish an online voting platform in priority.



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Article 84 The following procedures shall befollowed by shareholders or the supervisoryCommittee when requesting for convening ofextraordinary general meetings or class meetings:

1) Shareholders who individually hold 10% ormore of the shares carrying the right to vote in themeeting are entitled to propose to convene anextraordinary general meeting or a class meetingto the Board in writing. Two or more shareholdersholding a total of 10% or more of the sharescarrying the right to vote at the meeting sought tobe held may sign one or more written requests ofidentical form and substance requesting the Boardto convene an extraordinary general meeting or aclass meeting and stating the subject of themeeting. The Board shall convene theextraordinary general meeting or the class meetingas soon as possible after having received theabove-mentioned written request. The shareholdingreferred to above shall be calculated as of the dateon which the written request is made byshareholder(s).

2) If the Board fails to issue a notice of such ameeting within 30 days after having received theabove-mentioned written notice, the shareholderswho made such request may convene the meetingby themselves within four (4) months after theBoard received the request. The proceduresaccording to which they convene such meetingshall, to the extent possible, be identical to theprocedures according to which general meetingsare to be convened by the Board.

All reasonable expenses incurred in convening andholding the meeting by shareholders due to thefailure of the Board to hold such meeting inresponse to the aforesaid request shall be borne bythe Company and shall be deducted from theamounts due by the Company to the defaultingdirector(s).

Article 113 The following procedures shall befollowed by shareholders or the supervisoryCommittee when requesting for convening ofextraordinary general meetings or class meetings:

1) Shareholders who individually hold 10% ormore of the shares carrying the right to vote in themeeting are entitled to propose to convene anextraordinary general meeting or a class meetingto the Board in writing. Two or more shareholdersholding a total of 10% or more of the sharescarrying the right to vote at the meeting sought tobe held may sign one or more written requests ofidentical form and substance requesting the Boardto convene an extraordinary general meeting or aclass meeting and stating the subject of themeeting. The Board shall convene theextraordinary general meeting or the class meetingas soon as possible after having received theabove-mentioned written request. The shareholdingreferred to above shall be calculated as of the dateon which the written request is made byshareholder(s).

2) If the Board fails to issue a notice of such ameeting within 30 days after having received theabove-mentioned written notice, the shareholderswho made such request may convene the meetingby themselves within four (4) months after theBoard received the request. The proceduresaccording to which they convene such meetingshall, to the extent possible, be identical to theprocedures according to which general meetingsare to be convened by the Board.

All reasonable expenses incurred in convening andholding the meeting by shareholders due to thefailure of the Board to hold such meeting inresponse to the aforesaid request shall be borne bythe Company and shall be deducted from theamounts due by the Company to the defaultingdirector(s).



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Article 85 A general meeting shall be convenedby the Board, and presided over and chaired bythe chairman of the Board. If the chairperson isunable or fails to perform his duties, themeetings shall be presided over by a directorjointly recommended by more than half of thedirectors, and take the chair of the meeting in hisstead. If no chairman of the meeting has beendesignated, shareholders present shall choose one(1) person to be the chairman of the meeting.Where the shareholders fail to elect a chairman forany reasons, the shareholder (including his proxy)presents in person or by proxy who holds thelargest number of shares carrying the right to votethereat shall be the chairman of the meeting.

If the Board is unable or fails to fulfill theobligation of convening the general meeting, thesupervisory Committee shall convene andpreside over such meeting. If the supervisoryCommittee does not convene and preside oversuch meeting, the shareholders individually orjointly holding no less than 10% of the sharesfor no less than 90 consecutive days mayconvene and preside over such meeting on theirown.

If a general meeting is convened by thesupervisory Committee, the chairman of thesupervisory Committee shall preside over themeeting. If the chairman of the supervisoryCommittee is unable to or will not discharge hisduties, more than half of the supervisors shallnominate a supervisor to preside over the meeting.

If a general meeting is convened by theshareholders themselves, the convener willnominate a representative to conduct the meeting.

In a general meeting, if the chairman of themeeting contravenes the meeting procedures,making the meeting impossible to proceed, withconsent from more than half of the attendantshareholders with voting rights, the shareholdersmay nominate one person to serve as the chairmanof the meeting and continue with the meeting.

Article 114 A general meeting convened by theBoard, shall be presided over and chaired by thechairman of the Board. If the chairman is unableor fails to perform his duties, the meetings shallbe presided over by a director jointlyrecommended by more than half of thedirectors, and take the chair of the meeting in hisstead. If no chairman of the meeting has beendesignated, shareholders present shall choose one(1) person to be the chairman of the meeting.Where the shareholders fail to elect a chairman forany reasons, the shareholder (including his proxy)presents in person or by proxy who holds thelargest number of shares carrying the right to votethereat shall be the chairman of the meeting.

If the Board is unable or fails to fulfill theobligation of convening the general meeting, thesupervisory Committee shall convene andpreside over such meeting. If the supervisoryCommittee does not convene and preside oversuch meeting, the shareholders individually orjointly holding no less than 10% of the sharesfor no less than 90 consecutive days mayconvene and preside over such meeting on theirown.

If a general meeting is convened by thesupervisory Committee, the chairman of thesupervisory Committee shall preside over themeeting. If the chairman of the supervisoryCommittee is unable to or will not discharge hisduties, more than half of the supervisors shallnominate a supervisor to preside over the meeting.

If a general meeting is convened by theshareholders themselves, the convener willnominate a representative to conduct the meeting.

In a general meeting, if the chairman of themeeting contravenes the meeting procedures,making the meeting impossible to proceed, withconsent from more than half of the attendantshareholders with voting rights, the shareholdersmay nominate one person to serve as the chairmanof the meeting and continue with the meeting.



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Article 86 Minutes of general meetings shall betaken by the secretary to the Board and includethe following information:

1) time, place and agenda of meeting, and thename of the convener;

2) names of the chairman of the meeting, thedirectors, supervisors, chief risk officer, generalmanager and other senior management attending orpresent at the meeting;

3) number of shareholders and proxies attendingthe meeting, total number of the shares carryingvoting rights held by them, and the percentage ofshares carrying voting rights held by them inrelation to the total number of shares of theCompany;

4) process of consideration, key points of thespeech and voting results for each proposal;

5) shareholders’ explanations; enquiries orrecommendations and corresponding answers orexplanations;

6) names of the lawyer, the vote counter and thescrutineer;

7) other matters which shall be recorded in themeeting minutes pursuant to these Articles ofAssociation.

The directors, supervisors, the secretary to theBoard, the convener of the meeting or hisrepresentative and the chairman of the meetingattending the meeting shall sign on the meetingminutes. The meeting minutes should bemaintained together with the signature book ofattending shareholders and letters of attorney oftheir proxies and information on voting viainternet and other means for a period of ten years.

Article 115 Minutes of general meetings shall betaken by the secretary to the Board and includethe following information:

1) time, place and agenda of meeting, and thename of the convener;

2) names of the chairman of the meeting, thedirectors, supervisors, chief risk officer, generalmanager and other senior management attending orpresent at the meeting;

3) number of shareholders and proxies attendingthe meeting, total number of the shares carryingvoting rights held by them, and the percentage ofshares carrying voting rights held by them inrelation to the total number of shares of theCompany;

4) process of consideration, key points of thespeech and voting results for each proposal;

5) shareholders’ explanations; enquiries orrecommendations and corresponding answers orexplanations;

6) names of the lawyer, the vote counter and thescrutineer;

7) other matters which shall be recorded in themeeting minutes pursuant to these Articles ofAssociation.

The convener shall ensure the truthfulness,accuracy and completeness of the meetingminutes. The directors, supervisors, the secretaryto the Board, the convener of the meeting or hisrepresentative and the chairman of the meetingattending the meeting shall sign on the meetingminutes. The meeting minutes should bemaintained together with the signature book ofattending shareholders and letters of attorney oftheir proxies and information on voting viainternet and other means for a period of ten years.



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None Article 116 The convener(s) shall ensure thegeneral meeting goes on smoothly until finalresolutions are made. Where the generalmeeting is adjourned or unable to make anyresolution due to any special reasons, e.g., forcemajeure, necessary measures shall be taken toresume or terminate the meeting as soon aspossible, and an announcement shall be made ina timely manner. And the convener(s) shallreport it to the local office of the CSRC in theregion where the Company operates and thestock exchange.

Article 87 The list of candidates for directors andsupervisors shall be submitted to shareholders’general meetings for voting by way of a motion.

When a voting is made on the election of directorsor supervisors at a shareholders’ general meeting,the cumulative voting system may be adopted inaccordance with the provisions of these Articles ofAssociation or the resolutions of the shareholders’general meeting.

The “cumulative voting system” as mentioned inthe preceding paragraph means that each shareshall have the same voting right as the number ofdirectors or supervisors to be elected, and thevoting right held by the shareholders may be usedcollectively when the directors or supervisors areelected at the shareholders’ general meeting. TheBoard shall simultaneously provide shareholderswith the biographical details and basic informationabout the candidates for directors and supervisors.

Save and except for the cumulative voting system,the shareholders’ general meeting shall vote on allmotions item by item, and shall vote on themotions in time sequence when various proposalsare put forward for a single matter.

Article 117 The list of candidates for directors andsupervisors shall be submitted to shareholders’general meetings for voting by way of a motion.

When a voting is made on the election of directorsor supervisors at a shareholders’ general meeting,the cumulative voting system may be adopted inaccordance with the provisions of these Articles ofAssociation or the resolutions of the shareholders’general meeting.

The “cumulative voting system” as mentioned inthe preceding paragraph means that each shareshall have the same voting right as the number ofdirectors or supervisors to be elected, and thevoting right held by the shareholders may be usedcollectively when the directors or supervisors areelected at the shareholders’ general meeting. TheBoard shall simultaneously provide shareholderswith the biographical details and basic informationabout the candidates for directors and supervisors.

Save and except for the cumulative voting system,the shareholders’ general meeting shall vote on allmotions item by item, and shall vote on themotions in time sequence when various proposalsare put forward for a single matter. The generalmeeting shall not put on hold or take no voteson any proposal, unless the meeting isadjourned or it is impossible to make anyresolution due to any special reasons, e.g., forcemajeure.



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None Article 118 When reviewing any proposal, thegeneral meeting shall make no change to theproposal; otherwise, the relevant alteration shallbe deemed as a new proposal and shall not bevoted at the current general meeting.

None Article 119 Any voting right may be exercisedthrough only one means, namely on site, onlineor any other means. The first voting result shallprevail where one voting right is repeatedlyexercised.

None Article 120 The general meeting shall, prior tothe voting on any proposal, elect tworepresentatives from shareholders to take partin vote counting and polling scrutiny. In caseany shareholder is involved in any matter to beconsidered, the shareholder and his/her proxyshall not take part in vote counting and pollingscrutiny.

When the general meeting votes on anyproposals, lawyers, representatives ofshareholders and supervisors shall be jointlyresponsible for vote counting and pollingscrutiny, and the voting result will beannounced forthwith. Voting on the resolutionswill be recorded in the minutes of meeting.

Shareholders or their proxies who vote onlineor by any other means shall be entitled to checktheir voting results via the relevant votingsystem.

None Article 121 The on-the-spot general meetingshall not end earlier than the end of themeeting held online or by any other means, andthe presider of the meeting shall announce thevoting results on each proposal at theon-the-spot meeting and whether the proposal isadopted based on the voting results. All partiesinvolved in the voting on the spot, online or byany other means at the general meeting,including the Company, vote counters,scrutineers, major shareholders and networkservice providers, shall be obliged to keepconfidential the voting before the voting resultsare formally announced.



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None Article 122 Shareholders attending the generalmeeting shall vote “Yes”, “No” or “Abstain” oneach proposal presented. Except for thesecurities registration and settlementinstitutions which, being the nominal holders ofshares subject to Shanghai-Hong Kong StockConnect, shall make declaration according tothe intentions of actual holders.

The un-filled, wrongly-filled, illegible and un–voted votes shall be deemed as the voters’waiver of voting rights, and the voting by theshares held by them shall be counted as“Abstain”.

Article 88 If the chairman of the meeting has anydoubts about the voting result of a resolution, hemay count the number of votes cast. If thechairman of the meeting fails to count the votes, ashareholder or proxy attending the meeting whodissent from the result announced by the chairmanof the meeting shall be entitled to request countingof votes immediately after such announcement, inwhich case the chairman of the meeting shallimmediately count the votes.

Article 123 If the chairman of the meeting hasany doubts about the voting result of a resolution,he may count the number of votes cast. If thechairman of the meeting fails to count the votes, ashareholder or proxy attending the meeting whodissent from the result announced by the chairmanof the meeting shall be entitled to request countingof votes immediately after such announcement, inwhich case the chairman of the meeting shallimmediately count the votes.

None Article 124 Resolutions adopted at theshareholders’ general meeting shall beannounced in time, with information about thenumber of shareholders and proxies whoattended the meeting, the total number ofvoting shares held by them and the proportionthereof in the total number of voting shares ofthe Company, voting method, and voting resultof each proposal, and details of all resolutionspassed.

Article 89 If votes are counted at theshareholders’ general meeting, the counting resultshall be recorded in the minutes.

The minutes together with the attendance registerof the attending shareholders and the proxy formsshall be kept at the domicile of the Company.

Article 125 If votes are counted at theshareholders’ general meeting, the counting resultshall be recorded in the minutes.

The minutes together with the attendance registerof the attending shareholders and the proxy formsshall be kept at the domicile of the Company.



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Article 90 Copies of the minutes shall, during thebusiness hours of the Company, be open forinspection by any shareholder free of charge. If ashareholder demands from the Company a copy ofsuch minutes, the Company shall send a copywithin seven days following the receipt of areasonable charge.

Article 126 Copies of the minutes shall, duringthe business hours of the Company, be open forinspection by any shareholder free of charge. If ashareholder demands from the Company a copy ofsuch minutes, the Company shall send a copywithin seven days following the receipt of areasonable charge.

None Article 127 In the event that any proposal is notpassed or any change is made in any resolutionpassed at any previous general meeting, specialreminders shall be made in the announcementon the resolutions of the general meeting.

None Article 128 If any proposal with respect to theelection of any director or supervisor isapproved at the shareholders’ general meeting,the term of office of such new director orsupervisor shall commence immediately afterthe meeting.

None Article 129 In the event that any proposalregarding cash distribution, bonus issue ortransfer from capital reserve to share capital ispassed at the general meeting, the Companyshall implement the specific plans within 2months after conclusion of the general meeting.

CHAPTER 9 SPECIAL PROCEDURES FORVOTING BY CLASS SHAREHOLDERS

CHAPTER 9 SPECIAL PROCEDURES FORVOTING BY CLASS SHAREHOLDERS

Article 91 Shareholders holding different classesof shares shall be referred to as class shareholders.

A holder of class shares shall, in accordance withlaws, administrative regulations and the Articles ofAssociation, enjoy rights and assume obligations.

Where the share capital of the Company includesshares which do not carry voting rights, thedesignation of such shares shall bear the wording“non-voting”.

Where the share capital of the Company includesshares with different voting rights, the designationof each class of shares (except shares with themost privileged voting rights) shall bear thewording “restricted voting” or “limited voting”.

Article 130 Shareholders holding different classesof shares shall be referred to as class shareholders.

A holder of class shares shall, in accordance withlaws, administrative regulations and the Articles ofAssociation, enjoy rights and assume obligations.

Where the share capital of the Company includesshares which do not carry voting rights, thedesignation of such shares shall bear the wording“non-voting”.

Where the share capital of the Company includesshares with different voting rights, the designationof each class of shares (except shares with themost privileged voting rights) shall bear thewording “restricted voting” or “limited voting”.



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Article 92 Rights conferred to class shareholdersmay not be varied or abrogated unless approvedby way of special resolution at a shareholders’general meeting and by the affected classshareholders at a separate shareholders’ meetingconvened in accordance with Articles 94 to 98.

Article 131 Rights conferred to class shareholdersmay not be varied or abrogated unless approvedby way of special resolution at a shareholders’general meeting and by the affected classshareholders at a separate shareholders’ meetingconvened in accordance with Articles 133 to 137.

Article 93 The following circumstances shall betaken to be a variation or abrogation of the rightsof shareholders of a particular class:

1) to increase or decrease the number of shares ofsuch class, or to increase or decrease the numberof shares of a class having a voting right or a rightto dividends or other privileges equal or superiorto the shares of such class;

2) to effect an exchange of all or part of theshares of such class into those of another class orto effect an exchange of or grant a right ofexchange of all or part of the shares of anotherclass into those of such class;

3) to remove or reduce the rights to acquireaccrued dividends or cumulative dividendsattached to the shares of such class;

4) to reduce or remove the rights with a priorityto acquire dividends or property distributionduring the liquidation of the Company attached tothe shares of such class;

5) to add, remove or reduce the conversion,options, voting, transfer or pre-emptive rights orthe rights to acquire securities of the Companyattached to the shares of such class;

6) to remove or reduce the rights to receivepayables from the Company in a particularcurrency attached to the shares of such class;

7) to create a new class of shares with votingright, right to dividends or other privileges equalor superior to those of the shares of such class;

Article 132 The following circumstances shall betaken to be a variation or abrogation of the rightsof shareholders of a particular class:

1) to increase or decrease the number of shares ofsuch class, or to increase or decrease the numberof shares of a class having a voting right or a rightto dividends or other privileges equal or superiorto the shares of such class;

2) to effect an exchange of all or part of theshares of such class into those of another class orto effect an exchange of or grant a right ofexchange of all or part of the shares of anotherclass into those of such class;

3) to remove or reduce the rights to acquireaccrued dividends or cumulative dividendsattached to the shares of such class;

4) to reduce or remove the rights with a priorityto acquire dividends or property distributionduring the liquidation of the Company attached tothe shares of such class;

5) to add, remove or reduce the conversion,options, voting, transfer or pre-emptive rights orthe rights to acquire securities of the Companyattached to the shares of such class;

6) to remove or reduce the rights to receivepayables from the Company in a particularcurrency attached to the shares of such class;

7) to create a new class of shares with votingright, right to dividends or other privileges equalor superior to those of the shares of such class;



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8) to restrict the transfer of ownership of theshares of such class or to impose additionalrestrictions thereon;

9) to grant the right to subscribe for, or convertinto, the shares of such or another class;

10) to increase the rights or privileges of theshares of another class;

11) to cause the holders of different classes ofshares to bear a disproportionate burden ofobligations during the restructuring scheme of theCompany;

12) to vary or abrogate any provision of thisChapter.

8) to restrict the transfer of ownership of theshares of such class or to impose additionalrestrictions thereon;

9) to grant the right to subscribe for, or convertinto, the shares of such or another class;

10) to increase the rights or privileges of theshares of another class;

11) to cause the holders of different classes ofshares to bear a disproportionate burden ofobligations during the restructuring scheme of theCompany;

12) to vary or abrogate any provision of thisChapter.

Article 94 Shareholders of the affected class,whether or not entitled to vote at general meetings,shall nevertheless be entitled to vote at classmeetings in respect of matters concerningsubparagraphs (2) to (8), (11) and (12) of Article92, but interested shareholder(s) shall not beentitled to vote at class meetings.

“Interested shareholder(s)” as mentioned in thepreceding paragraph represents:

1) in case of an offer for share repurchase on apro rata basis to all shareholders or a sharebuyback through public dealings on a stockexchange in compliance with Article 29 of theArticles of Association, a controlling shareholderwithin the meaning of Article 54 of the Articles ofAssociation;

2) in case of a share buyback by way of anoff-market agreement in compliance with Article29 of the Articles of Association, a shareholderwho is involved in the entering into of suchagreement; and

3) in case of the Company’s reorganization, ashareholder of one class who bears less than aproportionate burden imposed on othershareholders of that class or who has an interestdifferent from those of other shareholders of thatclass.

Article 133 Shareholders of the affected class,whether or not entitled to vote at general meetings,shall nevertheless be entitled to vote at classmeetings in respect of matters concerningsubparagraphs (2) to (8), (11) and (12) of thepreceding Article, but interested shareholder(s)shall not be entitled to vote at class meetings.

“Interested shareholder(s)” as mentioned in thepreceding paragraph represents:

1) in case of an offer for share repurchase on apro rata basis to all shareholders or a sharebuyback through public dealings on a stockexchange in compliance with Article 31 of theArticles of Association, a controlling shareholderwithin the meaning of Article 61 of the Articles ofAssociation;

2) in case of a share buyback by way of anoff-market agreement in compliance with Article31 of the Articles of Association, a shareholderwho is involved in the entering into of suchagreement; and

3) in case of the Company’s reorganization, ashareholder of one class who bears less than aproportionate burden imposed on othershareholders of that class or who has an interestdifferent from those of other shareholders of thatclass.



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Article 95 Resolutions proposed at a class meetingshall be passed by shareholders present at themeeting representing two-thirds or more of theshare interests with voting rights according toArticle 94.

Article 134 Resolutions proposed at a classmeeting shall be passed by shareholders present atthe meeting representing two-thirds or more of theshare interests with voting rights according toArticle 133.

Article 96 In the event that the Companyconvenes a class meeting, it shall notify allshareholders whose names appear on the registerof shareholders of such class, specifying thematters to be considered at, and the date andlocation for, the meeting by way of publicannouncement before the period stipulated inArticle 65 of the Articles of Association.Shareholders who intend to attend the meetingshall serve the written reply to the Companywithin the period stipulated in the meetingnotice.

Article 135 In the event that the Companyconvenes a class meeting, it shall notify allshareholders whose names appear on the registerof shareholders of such class, specifying thematters to be considered at, and the date andlocation for, the meeting by way of publicannouncement before the period stipulated inArticle 79 of the Articles of Association.Shareholders who intend to attend the meetingshall serve the written reply to the Companywithin the period stipulated in the meetingnotice.

Article 97 Notice of a class meeting shall begiven only to shareholders entitled to vote at themeeting.

A class meeting shall be conducted as similarly interms of procedure to a shareholders’ generalmeeting as possible. The provisions concerning theprocedures of a general meeting set out in theArticles of Associations shall also apply to classmeetings.

Article 136 Notice of a class meeting shall begiven only to shareholders entitled to vote at themeeting.

A class meeting shall be conducted as similarly interms of procedure to a shareholders’ generalmeeting as possible. The provisions concerning theprocedures of a general meeting set out in theArticles of Associations shall also apply to classmeetings.



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Article 98 Apart from the holders of other classesof shares, the holders of domestic shares andoverseas listed foreign shares shall be taken to beshareholders of different classes.

The special procedures for voting by classshareholders shall not apply to the followingcircumstances:

1) where the Company issues, upon approval byway of a special resolution at a general meeting,either separately or concurrently once every twelvemonths, domestic shares and overseas listedforeign shares, to the extent that the number of theshares to be issued does not exceed twenty percentof the total number of the issued shares of theirrespective class;

2) where the Company’s plan to issue domesticshares and overseas listed foreign shares upon itsincorporation is completed within fifteen monthsfrom the date of approval by the SecuritiesCommittee of the State Council; or

3) where the domestic shares of the Company aretransferred by the holder to overseas investors andare subsequently listed and traded on overseasstock exchanges with the approval by thesecurities regulatory agency of the State Council.

Article 137 Apart from the holders of otherclasses of shares, the holders of domestic sharesand overseas listed foreign shares shall be taken tobe shareholders of different classes.

The special procedures for voting by classshareholders shall not apply to the followingcircumstances:

1) where the Company issues, upon approval byway of a special resolution at a general meeting,either separately or concurrently once every twelvemonths, domestic shares and overseas listedforeign shares, to the extent that the number of theshares to be issued does not exceed twenty percentof the total number of the issued shares of theirrespective class;

2) where the Company’s plan to issue domesticshares and overseas listed foreign shares upon itsincorporation is completed within fifteen monthsfrom the date of approval by the SecuritiesCommittee of the State Council; or

3) where the domestic shares of the Company aretransferred by the holder to overseas investors andare subsequently listed and traded on overseasstock exchanges with the approval by thesecurities regulatory agency of the State Council.



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CHAPTER 10 PARTY ORGANIZATION CHAPTER 10 PARTY ORGANIZATION

Article 99 The Company shall establish the PartyCommittee consisting of one secretary and severalother members. Unless approved by higher levelparty committee, the chairman of the Board andthe secretary of the Party Committee shall beassumed by the same person in principle and theParty Committee shall set up a special position ofdeputy secretary in principle who mainly takes incharge of the work of Party building. Eligiblemembers of the Party Committee may join theBoard, the supervisory Committee and themanagement through legal procedures, and eligibleParty members in the Board, the supervisoryCommittee and the management may join theParty Committee in accordance with relevantregulations and procedures. The Company shallestablish the Discipline Committee in accordancewith relevant regulations.

Article 138 The Company shall establish the PartyCommittee consisting of one secretary and severalother members. Unless approved by higher levelparty committee, the chairman of the Board andthe secretary of the Party Committee shall beassumed by the same person in principle and theParty Committee shall set up a special position ofdeputy secretary in principle who mainly takes incharge of the work of Party building. Eligiblemembers of the Party Committee may join theBoard, the supervisory Committee and themanagement through legal procedures, and eligibleParty members in the Board, the supervisoryCommittee and the management may join theParty Committee in accordance with relevantregulations and procedures. The Company shallestablish the Discipline Committee in accordancewith relevant regulations.

Article 100 The Party Committee of the Companyshall perform its duties in accordance with theConstitution of Communist Party of China andregulations of the Party.

1) To monitor the implementation of the principlesand policies of the Party and of the country withinthe Company, and to implement material strategicdecisions made by the Central Committee of theParty, the State Council and Jiangsu ProvincialCommittee’s provincial government, as well asother important works deployment assigned by theParty committee of the Jiangsu State– ownedAssets Supervision and AdministrationCommission and other Party organizations ofhigher levels.

Article 139 The Party Committee of the Companyshall perform its duties in accordance with theConstitution of Communist Party of China andregulations of the Party.

1) To monitor the implementation of the principlesand policies of the Party and of the country withinthe Company, and to implement material strategicdecisions made by the Central Committee of theParty, the State Council and Jiangsu ProvincialCommittee’s provincial government, as well asother important works deployment assigned by theParty committee of the Jiangsu State– ownedAssets Supervision and AdministrationCommission and other Party organizations ofhigher levels.



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2) To persist in combining the principle of theParty supervising the performance of officials withthe legitimate selection by the Board of themanagers and the legitimate use of humanresources by the managers. The Party Committeeshall consider and provide opinions on thecandidates nominated by the Board or the generalmanager, or recommend nominees to the Board orthe general manager; evaluate the proposedcandidates in conjunction with the Board,collectively consider and make suggestions.

3) To consider and discuss the matters on thereform, development and stability of the Company,major operation and management matters as wellas key issues involving the vital interests ofemployees, and make suggestions.

4) To take full responsibility for the strictdiscipline of the Party. To take the lead on theideological and political work, united front work,construction of spiritual civilization, constructionof enterprise culture and the work of the tradeunion and the Communist Youth League and othermass groups and organizations. To take the lead onimproving Party conduct and upholding integrityand to support the performance by the DisciplineCommittee of its supervision duties.

2) To persist in combining the principle of theParty supervising the performance of officials withthe legitimate selection by the Board of themanagers and the legitimate use of humanresources by the managers. The Party Committeeshall consider and provide opinions on thecandidates nominated by the Board or the generalmanager, or recommend nominees to the Board orthe general manager; evaluate the proposedcandidates in conjunction with the Board,collectively consider and make suggestions.

3) To consider and discuss the matters on thereform, development and stability of the Company,major operation and management matters as wellas key issues involving the vital interests ofemployees, and make suggestions.

4) To take full responsibility for the strictdiscipline of the Party. To take the lead on theideological and political work, united front work,construction of spiritual civilization, constructionof enterprise culture and the work of the tradeunion and the Communist Youth League and othermass groups and organizations. To take the lead onimproving Party conduct and upholding integrityand to support the performance by the DisciplineCommittee of its supervision duties.

CHAPTER 11 BOARD OF DIRECTORS CHAPTER 11 BOARD OF DIRECTORS

Section 1 Directors Section 1 Directors

Article 101 Director of the Company shall meetthe following conditions:

1) have engaged in futures, securities and otherfinancial business, or in legal, accountingoperations for more than 3 years, or in economicmanagement field for more than 5 years;

2) have the educational background of graduate ofjunior college or above.

Article 140 Directors of the Company shall meetthe following conditions:

1) have engaged in futures, securities and otherfinancial business, or in legal, accountingoperations for more than 3 years, or in economicmanagement field for more than 5 years;

2) have the educational background of graduate ofjunior college or above.



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Article 102 Director shall be elected at generalmeetings. A director shall serve a term of threeyears, and may seek reelection upon expiry of thesaid term.

For written notice of intention to nominate acandidate for the post of director and thecandidate’s acceptance to be nominated as director,the notice of nomination and acceptance of thenomination by the Company shall be no less thanseven (7) days. Such seven (7)-day period shallcommence no earlier than the second day after theissue of the notice of the meeting at which suchelection shall be conducted and no later than seven(7) days prior to the shareholders’ general meeting.

The chairman and vice chairman shall be electedand removed by more than one-half of all thedirectors. The term of office of the chairman andvice-chairman, who shall be entitled to reelectionand reappointment, shall be three (3) years.

Subject to the relevant laws and administrativeregulations, a director may be removed from officeprior to the expiration of his term of office bymeans of an ordinary resolution at a shareholders’general meeting. (However, any claims which maybe lodged according to any contracts shall remainunaffected thereby).

The director need not be the shareholders of theCompany.

Article 141 Director shall be elected at generalmeetings. A director shall serve a term of threeyears, and may seek reelection upon expiry of thesaid term.

Directors can be concurrently served bymanagers or other senior managers. However,the total number of Directors who concurrentlyhold the positions of general manager or othersenior management personnel and directorsheld by employee representatives shall notexceed 1/2 of the total number of Directors ofthe company.

For written notice of intention to nominate acandidate for the post of director and thecandidate’s acceptance to be nominated as director,the notice of nomination and acceptance of thenomination by the Company shall be no less thanseven (7) days. Such seven (7)-day period shallcommence no earlier than the second day after theissue of the notice of the meeting at which suchelection shall be conducted and no later than seven(7) days prior to the shareholders’ general meeting.

The chairman and vice chairman shall be electedand removed by more than one-half of all thedirectors. The term of office of the chairman andvice-chairman, who shall be entitled to reelectionand reappointment, shall be three (3) years.

Subject to the relevant laws and administrativeregulations, a director may be removed from officeprior to the expiration of his term of office bymeans of an ordinary resolution at a shareholders’general meeting. (However, any claims which maybe lodged according to any contracts shall remainunaffected thereby).

The director need not be the shareholders of theCompany.



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None Article 142 Directors shall comply with thelaws, administrative regulations and the Articlesof Association of the Company and shallperform their loyal duties to the Company asfollows:

1) not to abuse his/her position to accept bribesor other illegal income or appropriate theproperties of the Company;

2) not to appropriate the capital of theCompany;

3) not to set up accounts in his/her own nameor in any other name to deposit any of theassets or capital of the Company;

4) not to lend the funds of the Company to anyother person or use the property of theCompany to provide guarantee for any otherperson without the consent of the generalmeeting or the Board in contravention ofprovision of the Articles of Association of theCompany;

5) not to enter into contracts or carry outtransactions with the Company in violation ofthe provisions of the Articles of Association orwithout the consent of the general meeting;

6) not to, without the consent of the generalmeeting, abuse his/her position to appropriatethe business opportunities for himself/herself orother persons which should otherwise belong tothe Company, or operate businesses similar tothose of the Company for himself or otherpersons;

7) not to misappropriate the commissionobtained from transactions entered into by theCompany;

8) not to disclose confidential information ofthe Company without permission;



– XI-73 –



9) not to use his/her connected relations withthe Company to prejudice the interests of theCompany;

10) other loyal duties as required by the laws,administrative regulations, departmental rulesor the Articles of Association of the Company.

Any income obtained by directors in violationof any provisions of this Article shall belong tothe Company. The director shall be accountableto indemnify the Company against any lossincurred.

None Article 143 The directors shall comply with thelaws, administrative regulations and the Articlesof Association of the Company and shallperform their diligent duties to the Company asfollows:

1) to exercise the rights conferred by theCompany in a cautious, thoughtful and diligentmanner so as to ensure the commercialbehaviors of the Company comply with thelaws, administrative regulations and economicpolicies of the PRC, and the commercialactivities shall not go beyond the scope ofbusiness stipulated in the business license;

2) to treat all shareholders fairly;

3) to keep informed of the operation andmanagement position of the Company on atimely basis;

4) to sign the regular reports of the Companyfor confirmation of their comments to ensurethe truthfulness, accuracy and completeness ofthe information disclosed by the Company;

5) to provide information and data to thesupervisory Committee, and not to interferewith the supervisory Committee or supervisorsin their exercise of powers;

6) other diligent duties as required by the laws,administrative regulations, departmental rulesor the Articles of Association of the Company.



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None Article 144 Where a director fails to attend andfails to delegate any other director to attend themeetings of the Board for two timesconsecutively, it shall be deemed that thedirector is unable to exercise his/her duties, andthe Board shall suggest the shareholders’general meeting to remove such director.

None Article 145 Where the Director’s resignationtakes effect or the term of office expires, alltransfer procedures should be completed withthe Board. His loyalty obligations to theCompany and shareholders will not beautomatically released when the resignationreport is not yet effective or within 2 yearsafter the resignation report is effective or within2 years after the expiry of the term of office.His obligations to keep the Company’scommercial confidential matters will remainvalid after the end of tenure, until the mattersbecome public information. The Directors whohave not finished their positions shall be liablefor compensation for the losses caused to theCompany due to their unauthorized resignation.

None Article 146 No director shall act on behalf ofthe Company or the Board in the name of his/her own unless required by the Articles ofAssociation or legally authorized by the Board.When the director acts in the name of his/herown, he/she shall declare his/her position andidentity in advance in the event that the thirdparty may think reasonably that the directoracts on behalf of the Company or the Board.

None Article 147 If a director violates laws,administrative regulations, departmental rulesor the Articles of Association when performinghis/her duties in the Company, such directorshall indemnify the Company against lossesincurred by the Company due to such violation.

None Article 148 Independent directors shall conductaccording to the relevant requirements of thelaws, administrative regulations anddepartmental rules.



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Section 2 Board Section 2 Board

Article 103 The Company shall have a Boardcomprising of 8 directors, including threeindependent non-executive directors, among which,at least one of the independent directors must haveappropriate professional qualifications oraccounting or related financial managementexpertise. The Company has one chairman.

Article 149 The Company shall have a Boardcomprising of 8 directors, including threeindependent non-executive directors, among which,at least one of the independent directors must haveappropriate professional qualifications oraccounting or related financial managementexpertise. The Company has one chairman.

Article 104 The Board shall be accountable to thegeneral meeting and exercise the followingfunctions and powers:

1) to convene general meetings and report togeneral meetings;

2) to execute resolutions of general meetings;

3) to resolve on the Company’s business plansand investment plans;

4) to prepare the annual financial budgets andfinal accounting plans of the Company;

5) to prepare the profit distribution plan and lossmakeup plan of the Company;

6) to prepare plans for the increase or decrease ofthe registered capital of the Company and for theissuance of corporate bonds and other securitiesand listing scheme;

7) to formulate plans for material acquisitions,purchase of Shares of the Company, merger,division, dissolution or transformation of theCompany;

8) to decide on external investment, acquisitionand disposal of assets, asset mortgage, consignedfinancial management, connected transactions, etc.of the Company within the authority granted bythe general meeting;

9) to resolve on the establishment of internalmanagement organizations of the Company;

Article 150 The Board shall be accountable to thegeneral meeting and exercise the followingfunctions and powers:

1) to convene general meetings and report togeneral meetings;

2) to execute resolutions of general meetings;

3) to resolve on the Company’s business plansand investment plans;

4) to prepare the annual financial budgets andfinal accounting plans of the Company;

5) to prepare the profit distribution plan and lossmakeup plan of the Company;

6) to prepare plans for the increase or decrease ofthe registered capital of the Company and for theissuance of corporate bonds and other securitiesand listing scheme;

7) to formulate plans for material acquisitions,purchase of Shares of the Company, merger,division, dissolution or transformation of theCompany;

8) to decide on external investment, acquisitionand disposal of assets, asset mortgage, consignedfinancial management, connected transactions, etc.of the Company within the authority granted bythe general meeting;

9) to resolve on the establishment of internalmanagement organizations of the Company;



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10) to appoint or dismiss the general manager,chief risk officer and secretary of the Board; todecide to appoint or dismiss the Company’sdeputy general manager, chief financial officer andother senior management as nominated by thechairman or the general manager, and to determinetheir remunerations and disciplinary matters;

11) to set up the basic management system of theCompany, including transaction marginmanagement system and risk management system;

12) to formulate the proposals for any amendmentto the Articles of Association;

13) to manage the disclosure of the Company’sinformation;

14) to propose the appointment or replacement ofan accounting firm that performs audits for theCompany at the general meeting;

15) to listen to the work report of the chief riskofficer and the general manager of the Companyand examine on their work;

16) to approve the setting up of branches which issubject to approval from the Board in accordanceto rules of regulatory departments;

17) to check and approve the Company’s anymajor transactions, very substantial disposals, verysubstantial acquisitions and reverse takeoversunder Hong Kong Listing Rules and submit it forShareholder’s approval;

18) to check and approve any transactions thatshall be disclosed except the Company’s anymajor transactions, very substantial disposals, verysubstantial acquisitions or reverse takeovers underHong Kong Listing Rules;

19) to approve the connected transactions that arenot subject to approval or announcement of thegeneral meeting under Hong Kong Listing Rules;

20) to check the connected transactions that shallbe approved by the general meeting under HongKong Listing Rules;

10) to appoint or dismiss the general manager,chief risk officer and secretary of the Board; todecide to appoint or dismiss the Company’sdeputy general manager, chief financial officer andother senior management as nominated by thechairman or the general manager, and to determinetheir remunerations and disciplinary matters;

11) to set up the basic management system of theCompany, including transaction marginmanagement system and risk management system;

12) to formulate the proposals for any amendmentto the Articles of Association;

13) to manage the disclosure of the Company’sinformation;

14) to propose the appointment or replacement ofan accounting firm that performs audits for theCompany at the general meeting;

15) to listen to the work report of the chief riskofficer and the general manager of the Companyand examine on their work;

16) to approve the setting up of branches which issubject to approval from the Board in accordanceto rules of regulatory departments;

17) to check and approve the Company’s anymajor transactions, very substantial disposals, verysubstantial acquisitions and reverse takeoversunder Hong Kong Listing Rules and submit it forShareholder’s approval;

18) to check and approve any transactions thatshall be disclosed except the Company’s anymajor transactions, very substantial disposals, verysubstantial acquisitions or reverse takeovers underHong Kong Listing Rules;

19) to approve the connected transactions that arenot subject to approval or announcement of thegeneral meeting under Hong Kong Listing Rules;

20) to check the connected transactions that shallbe approved by the general meeting under HongKong Listing Rules;



– XI-77 –



21) to exercise other functions and powers asstipulated by laws, administrative regulations,department rules or these Articles of Association.

The Board may resolve on the issues specified inthe preceding paragraph by approval of more thanhalf of the directors save for the issues specifiedin (6), (7), and (12), in which approval of twothirds of the directors is required.

The Board shall seek opinions from the PartyCommittee before making decisions on thematerial issues of the Company.

The Board shall determine the scope ofauthorization in respect of external investment,acquisition and disposal of assets, asset mortgage,external guarantee, consigned financialmanagement, as well as connected transactions. Itshall establish strict inspection anddecision-making procedures. The Board shall havethe rights to approve and make decision on thefollowing matters:

1) External investment (including consignedfinancial management, entrusted loan, trustproduct, asset management plan, security, bond,fund and other financial asset investment, equityinvestment, and fixed asset investment etc.): TheBoard is granted the authorization in respect ofstandalone external investment of not more than30% of the latest audited net assets of theCompany;

2) Acquisition and disposal of assets: The Board isgranted the authorization in respect of standaloneasset disposal (including acquisition, disposal,transfer, retirement and liquidation) of not morethan 30% of the latest audited net assets of theCompany;

3) Asset mortgage: The Board is granted theauthorization in respect of standalone assetmortgage of not more than 30% of the latestaudited net assets of the Company;

4) Asset written-off: The Board is granted theauthorization in respect of asset written-off of notmore than RMB10 million;

21) to exercise other functions and powers asstipulated by laws, administrative regulations,department rules or these Articles of Association.

The Board may resolve on the issues specified inthe preceding paragraph by approval of more thanhalf of the directors save for the issues specifiedin (6), (7), and (12), in which approval of twothirds of the directors is required.

The Board shall seek opinions from the PartyCommittee before making decisions on thematerial issues of the Company.


1) External investment (including consignedfinancial management, entrusted loan, trustproduct, asset management plan, security, bond,fund and other financial asset investment, equityinvestment, and fixed asset investment etc.): TheBoard is granted the authorization in respect ofstandalone external investment of not more than30% of the latest audited net assets of theCompany;

2) Acquisition and disposal of assets: The Board isgranted the authorization in respect of standaloneasset disposal (including acquisition, disposal,transfer, retirement and liquidation) of not morethan 30% of the latest audited net assets of theCompany;

3) Asset mortgage: The Board is granted theauthorization in respect of standalone assetmortgage of not more than 30% of the latestaudited net assets of the Company;

4) Asset written-off: The Board is granted theauthorization in respect of asset written-off of notmore than RMB10 million;



– XI-78 –



5) Connected transaction: Connected transactionsbetween the Company and its connected personswhich satisfied the following standards shall besubmitted to the Board for consideration andapproval:

(1) any contemplated connected transactionbetween the Company and its connected naturalperson in an amount more thanRMB300,000;

(2) any contemplated connected transactionbetween the Company and its connected legalperson in an amount more than RMB3 million andaccounting for more than 0.5% of the latestaudited absolute value of net assets of theCompany.

Any contemplated connected transaction betweenthe Company and its connected person in anamount more than RMB30 million and accountingfor more than 5% of the latest audited absolutevalue of net assets of the Company shall besubmitted to the general meeting for considerationafter such transaction is considered and approvedby the Board;

6) External donation;

7) For other matters which are necessary but didnot meet the above criteria, they can be proposedto the Board for consideration.

5) Connected transaction: Connected transactionsbetween the Company and its connected personswhich satisfied the following standards shall besubmitted to the Board for consideration andapproval:

(1) any contemplated connected transactionbetween the Company and its connected naturalperson in an amount more than RMB300,000;

(2) any contemplated connected transactionbetween the Company and its connected legalperson in an amount more than RMB3 million andaccounting for more than 0.5% of the latestaudited absolute value of net assets of theCompany.

Any contemplated connected transaction betweenthe Company and its connected person in anamount more than RMB30 million and accountingfor more than 5% of the latest audited absolutevalue of net assets of the Company shall besubmitted to the general meeting for considerationafter such transaction is considered and approvedby the Board;

6) External donation;

7) For other matters which are necessary but didnot meet the above criteria, they can be proposedto the Board for consideration.



– XI-79 –



When conducting the above transactions, theCompany shall apply the aforesaid provisions tocorresponding transactions under the samecategory based on the principle of aggregationwithin a twelve (12) month period. Fortransactions in which relevant obligations havebeen performed according to the aforesaidprovisions, such transactions shall not be subjectto the scope of aggregation. In the event there areother special rules in respect of the aforesaidapproval authorization by relevant regulatoryauthorities or the stock exchange on which theshares of the Company are listed, transactionsshall be conducted in accordance with the rules ofrelevant regulatory authorities or the stockexchange on which the shares of the Company arelisted. For other significant matters outside thescope stipulated above, the Board shall conductreview with relevant experts and professionals, andpropose such matters at general meeting forapproval.

When conducting the above transactions, theCompany shall apply the aforesaid provisions tocorresponding transactions under the samecategory based on the principle of aggregationwithin a twelve (12) month period. Fortransactions in which relevant obligations havebeen performed according to the aforesaidprovisions, such transactions shall not be subjectto the scope of aggregation. In the event there areother special rules in respect of the aforesaidapproval authorization by relevant regulatoryauthorities or the stock exchange on which theshares of the Company are listed, transactionsshall be conducted in accordance with the rules ofrelevant regulatory authorities or the stockexchange on which the shares of the Company arelisted. For other significant matters outside thescope stipulated above, the Board shall conductreview with relevant experts and professionals, andpropose such matters at general meeting forapproval.

Article 105 The Board shall not, without the priorapproval of shareholders at a general meeting,dispose of or agree to dispose of any fixed assetsof the Company where the aggregate of theexpected value of the fixed assets proposed fordisposal and the value of the fixed assets disposedof within the four months before the proposeddisposal exceeds 33% of the value of theCompany’s fixed assets as stated in the latestbalance sheet considered at a general meeting.

The term “disposal of fixed assets” referred to inthis Article includes an act involving the transferof an interest in certain assets, but does notinclude an act of the provision of guarantees withthe fixed assets.

Breach of the first paragraph of this Article shallnot affect the validity of any transaction enteredinto by the Company in disposing of fixed assets.

Article 151 The Board shall not, without the priorapproval of shareholders at a general meeting,dispose of or agree to dispose of any fixed assetsof the Company where the aggregate of theexpected value of the fixed assets proposed fordisposal and the value of the fixed assets disposedof within the four months before the proposeddisposal exceeds 33% of the value of theCompany’s fixed assets as stated in the latestbalance sheet considered at a general meeting.

The term “disposal of fixed assets” referred to inthis Article includes an act involving the transferof an interest in certain assets, but does notinclude an act of the provision of guarantees withthe fixed assets.

Breach of the first paragraph of this Article shallnot affect the validity of any transaction enteredinto by the Company in disposing of fixed assets.

None Article 152 The Board shall give explanations atthe general meeting on the qualified auditingopinions issued by the certified publicaccountants to the Company’s financial reports.



– XI-80 –



None Article 153 The Board shall formulate the rulesof procedures for its meetings to ensure that theBoard have put into action the resolutionspassed at the general meeting so as to promotework efficiency and make scientific decisions.

The rules shall set out holding and votingprocedures of the Board meeting. The rules ofprocedures of the Board shall be included in theCompany’s Articles of Association or attachedto the Company’s Articles of Association, whichshall be drawn up by the Board and approvedby the general meeting.

Article 106 Chairman of the Company shall meetthe following conditions:

1) have a minimum of 3 years’ experience infutures business, or a minimum of 4 years’experience in other financial businesses, or aminimum of 5 years’ experience in legal oraccounting practice;

2) have educational background of graduate ofcollege or university or above in relevant field orholding a bachelor degree or above;

3) have passed the qualification test accepted bythe CSRC.

Article 154 Chairman of the Company shall meetthe following conditions:



3) have passed the qualification test accepted bythe CSRC.



– XI-81 –



Article 107 The chairman shall exercise thefollowing functions and powers:

1) to preside over general meetings and to conveneand preside over the Board meetings;

2) to examine the implementation of theresolutions of the Board;

3) to sign the shares, bonds and other negotiablesecurities of the Company;

4) to sign important documents of the Board;

5) in any emergent force majeure event, such asextraordinarily serious natural disasters, to exercisethe special right of disposal in respect of thebusiness of the Company in compliance with laws,regulations and in the interests of the Company,and report to the Board and the general meeting ofthe Company afterwards;

6) to nominate the general manager and the chiefrisk officer of the Company, and submit to theBoard’s decision;

7) to exercise other functions and powersconferred by the Board or Hong Kong ListingRules.

In the event that the chairman is incapable ofperforming or not performing his duties, a directornominated by more than half of director shallpreside over the meeting.

Article 155 The chairman shall exercise thefollowing functions and powers:

1) to preside over general meetings and to conveneand preside over the Board meetings;

2) to examine the implementation of theresolutions of the Board;

3) to sign the shares, bonds and other negotiablesecurities of the Company;

4) to sign important documents of the Board;

5) in any emergent force majeure event, such asextraordinarily serious natural disasters, to exercisethe special right of disposal in respect of thebusiness of the Company in compliance with laws,regulations and in the interests of the Company,and report to the Board and the general meeting ofthe Company afterwards;

6) to nominate the general manager and the chiefrisk officer of the Company, and submit to theBoard’s decision;

7) to exercise other functions and powersconferred by the Board or listing rules the placeswhere shares of the Company are listed.

In the event that the chairman is incapable ofperforming or not performing his duties, a directornominated by more than half of director shallpreside over the meeting.



– XI-82 –



Article 108 Board meetings shall be held regularlyat least four times every year at approximatelyquarterly intervals, and shall be convened by thechairman, with the notice of meeting sent inwriting to all the director 14 days in advance. Inany of the following circumstances, the chairmanshall convene and preside over an interim meetingof the Board within 10 days:

1) when the chairman deems necessary;

2) proposed by shareholders representing morethan 1/10 of the voting rights;

3) jointly proposed by more than one third of thedirector;

4) proposed by the supervisory Committee;

5) required by the relevant regulatory authorities.

Article 156 Board meetings shall be held regularlyat least four times every year at approximatelyquarterly intervals, and shall be convened by thechairman, with the notice of meeting sent inwriting to all the director 14 days in advance. Inany of the following circumstances, the chairmanshall convene and preside over an interim meetingof the Board within 10 days:

1) when the chairman deems necessary;

2) proposed by shareholders representing morethan 1/10 of the voting rights;

3) jointly proposed by more than one third of thedirector;

4) proposed by the supervisory Committee;

5) required by laws, regulations and the listingrules of places where shares of the Companyare listed.

None Article 157 Where the Board convenes anextraordinary Board meeting, it shall notify alldirectors and supervisors 5 days before themeeting is held. If the situation is urgent and itis necessary to convene a meeting of the Boardas soon as possible, a meeting notice may beissued at any time and the meeting may beconvened, but the convener shall make anexplanation at the meeting.



– XI-83 –



Article 109 A notice of the Board meeting shall atleast contain the following contents:

1) date and place of the meeting;

2) means of convening the meeting;

3) the matters to be considered at (SessionProposal);

4) convener and presider of the meeting, proposerof the interim meeting and its written proposals;

5) request of the director to attend the meeting inperson or by entrusting other director;

6) contact person and contact method;

7) date of issuing the notice.

Verbal notice of a meeting shall at least includethe contents of items (1) and (2) above and theexplanation for emergency situations where aninterim meeting of the Board needs to beconvened as soon as possible.

Article 158 A notice of the Board meeting shall atleast contain the following contents:

1) date and place of the meeting;

2) means of convening the meeting;

3) the matters to be considered at (SessionProposal);

4) convener and presider of the meeting, proposerof the interim meeting and its written proposals;

5) request of the director to attend the meeting inperson or by entrusting other director;

6) contact person and contact method;

7) date of issuing the notice.

Verbal notice of a meeting shall at least includethe contents of items (1) and (2) above and theexplanation for emergency situations where aninterim meeting of the Board needs to beconvened as soon as possible.

Article 110 A Board meeting shall be attended bymore than one half of the director.

Every director shall have one vote. Resolutionsmade by the Board shall be passed by more thanhalf of all directors.

If the pros and cons are the same, the chairmanshall be entitled to an additional vote.

Article 159 A Board meeting shall be attended bymore than one half of the director.

Every director shall have one vote. Resolutionsmade by the Board shall be passed by more thanhalf of all directors.

If the pros and cons are the same, the chairmanshall be entitled to an additional vote.



– XI-84 –



None Article 160 If any director of the Company isassociated with the enterprises that are involvedin the matters to be resolved at the Boardmeetings, he or she shall not exercise his or hervoting rights for such matters, nor shall suchdirector exercise voting rights on behalf ofother directors. Such Board meetings shall beconvened by a majority of the directors presentthereat who are not connected. The resolutionof the Board meeting shall be passed by morethan half of the non-connected directors. If thenumber of non-connected directors attendingthe meetings is less than 3, such resolutionsshall be submitted to the general meeting forapproval.

Article 111 Director shall attend Board meetingsin person. If any director cannot attend themeeting for any reason, he may authorize inwriting another director to act on his behalf. Thescope of authorization shall be specified in thepower of attorney.

The appointed director attending the meeting shallonly exercise the rights of a director within thescope of authorization. Should a director neitherattend a Board meeting nor appoint arepresentative to attend on his behalf, the saiddirector shall be taken to have waived his right tovote at the meeting.

Article 161 Director shall attend Board meetingsin person. If any director cannot attend themeeting for any reason, he may authorize inwriting another director to act on his behalf. Thename of proxy, matters on behalf of appointer,scope of authorization and the validity period shallbe specified in the power of attorney, which shallbe signed or sealed by the appointer*bold

The appointed director attending the meeting shallonly exercise the rights of a director within thescope of authorization. Independent Directorsmay not appoint non-independent Directors tovote on their behalf. Should a director neitherattend a Board meeting nor appoint arepresentative to attend on his behalf, the saiddirector shall be taken to have waived his right tovote at the meeting.



– XI-85 –



Article 112 Interim meeting of the Board may beheld by means of communication includingtelephone conference or video conference providedthat director can fully express their views, anddirector attending the meetings shall sign on theresolutions.

The Board may accept meetings of the Board inthe form of communications over writtenresolutions to replace meetings on-site. However,such motions must be delivered to each director byhand, mail, telegraph, email or facsimile. After theBoard has delivered the motion to all the directorand that the number of director giving consent andsignature to the motion has reached the quorum,such motion, if delivered to the secretary to theBoard by means of communication referred above,shall become a Board resolution and no conveningof the meeting of the Board shall be required.

Article 162 Interim meeting of the Board may beheld by means of communication includingtelephone conference or video conference providedthat director can fully express their views, anddirector attending the meetings shall sign on theresolutions.

The Board may accept meetings of the Board inthe form of communications over writtenresolutions to replace meetings on-site. However,such motions must be delivered to each director byhand, mail, telegraph, email or facsimile. After theBoard has delivered the motion to all the directorand that the number of director giving consent andsignature to the motion has reached the quorum,such motion, if delivered to the secretary to theBoard by means of communication referred above,shall become a Board resolution and no conveningof the meeting of the Board shall be required.

Article 113 The Board shall keep minutes ofresolutions on matters discussed at the meeting.The minutes shall be signed by the directorpresent at the meeting and by the person whorecorded the minutes. The director shall beresponsible for the resolutions of the Board. If anyresolution runs counter to the laws, administrativeregulations or these Articles of Association, andcauses any material losses to the Company,director who votes for the said resolution shall beliable for compensation to the Company. If anydirector raises an objection to the resolution andthe said objection is recorded in the minutes, thesaid director may be exempt from any liability.

Opinions expressed by independent director shallbe stated in the resolution of the Board.

Article 163 The Board shall keep minutes ofresolutions on matters discussed at the meeting.The minutes of the meeting of the Board shallbe true, accurate and complete. The minutesshall be signed by the director present at themeeting, secretary to the Board and by theperson who recorded the minutes. The directorshall be responsible for the resolutions of theBoard. If any resolution runs counter to the laws,administrative regulations or these Articles ofAssociation, and causes any material losses to theCompany, director who votes for the saidresolution shall be liable for compensation to theCompany. If any director raises an objection to theresolution and the said objection is recorded in theminutes, the said director may be exempt from anyliability.

Opinions expressed by independent director shallbe stated in the resolution of the Board.

The minutes of the meeting of the Board shallbe kept as corporate files for a period of notless than 10 years.



– XI-86 –



Article 114 The minutes shall consist of thefollowing:

1) the session of the meeting, time, venue andform of the meeting;

2) the particulars of issuing the notice of themeeting;

3) the names of the convener and the chairman ofthe meeting;

4) the director attending in person or by proxy;

5) the proposals reviewed in the meeting, the mainpoints of speeches and major opinions by eachdirector on relevant matters;

6) the voting result of each proposal (specifyingnumbers of affirmative, opposing and abstentionvotes);

7) such other matters to be recorded as thedirector attending the meeting considerappropriate.

Article 164 The minutes shall consist of thefollowing:

1) the session of the meeting, time, venue andform of the meeting;

2) the particulars of issuing the notice of themeeting;

3) the names of the convener and the chairman ofthe meeting;

4) the director attending in person or by proxy;

5) the proposals reviewed in the meeting, the mainpoints of speeches and major opinions by eachdirector on relevant matters;

6) the voting result of each proposal (specifyingnumbers of affirmative, opposing and abstentionvotes);

7) such other matters to be recorded as thedirector attending the meeting considerappropriate.



– XI-87 –



Section 3 Special Committees under the Board Section 3 Special Committees under the Board

Article 115 The Company shall set up four specialcommittees under the Board such as an auditcommittee, a nomination committee, aremuneration committee and a risk managementcommittee under the Board.

Each special committee shall be accountable to theBoard, and shall consist of director.

The audit committee must comprise a minimum ofthree members, and most members shall beindependent director. At least one of the membersof audit committee is a member with appropriateprofessional qualifications or accounting or relatedfinancial management expertise as required underHong Kong Listing Rules. The one who acts as thechairman of audit committee must be anindependent director.

Most members of remuneration committee shall beindependent director. The one who acts as thechairman of remuneration committee must be anindependent director.

The one who acts as the chairman of nominationcommittee must be chairman or an independentdirector, and most members of nominationcommittee shall be independent director.

Article 165 The Company shall set up four specialcommittees under the Board such as an auditcommittee, a nomination committee, aremuneration committee and a risk managementcommittee under the Board.

Each special committee shall be accountable to theBoard, and shall consist of director.

The audit committee must comprise a minimum ofthree members, and most members shall beindependent director. At least one of the membersof audit committee is a member with appropriateprofessional qualifications or accounting or relatedfinancial management expertise as required underHong Kong Listing Rules. The one who acts as thechairman of audit committee must be anindependent director.

Most members of remuneration committee shall beindependent director. The one who acts as thechairman of remuneration committee must be anindependent director.

The one who acts as the chairman of nominationcommittee must be chairman or an independentdirector, and most members of nominationcommittee shall be independent director.

Article 116 The Company shall formulate rules ofprocedures for special committees under the Boardand approved by the Board. Each specialcommittees under the Board exercises its powersin accordance with its rules of procedures andthese Articles of Association, be accountable to theBoard and report to the Board.

Article 166 The Company shall formulate rules ofprocedures for special committees under the Boardand approved by the Board. Each specialcommittees under the Board exercises its powersin accordance with its rules of procedures andthese Articles of Association, be accountable to theBoard and report to the Board.

Section 4 Independent directors Section 4 Independent directors

Article 117 Independent directors of the Companyare directors holding no positions other than thatof director in the Company, and having norelationship with the Company and its substantialshareholders and its related parties as to hindertheir independent and objective judgments.

Article 167 Independent directors of the Companyare directors holding no positions other than thatof director in the Company, and having norelationship with the Company and its substantialshareholders and its related parties as to hindertheir independent and objective judgments.



– XI-88 –



Article 118 The following persons shall not act asindependent director of the Company:

1) persons employed by the Company or itsrelated parties and their immediate familymembers and major social connections;

2) natural person shareholders directly orindirectly holding more than 1% of the Company’sissued shares or of top ten shareholder of theCompany and their immediate family members;

3) persons and their immediate family membersand major social connections employed by theShareholder entities which hold or control morethan 5% of the Company’s equity or which are topfive Shareholder entities of the Company, or byinstitutions which have business connection orinterests relationship with the Company;

4) persons providing financial, legal or consultingservices to the Company and its related parties andtheir immediate family members;

5) persons who belonged to categories (1) to (4)within the preceding year;

6) persons holding positions other thanindependent director in other futures companies;

7) other persons specified in laws and regulations,or unfit to serve as independent director uponconfirmation by CSRC.

Article 168 The following persons shall not act asindependent director of the Company:

1) persons employed by the Company or itsrelated parties and their immediate familymembers and major social connections;

2) natural person shareholders directly orindirectly holding more than 1% of the Company’sissued shares or of top ten shareholder of theCompany and their immediate family members;

3) persons and their immediate family membersand major social connections employed by theShareholder entities which hold or control morethan 5% of the Company’s equity or which are topfive Shareholder entities of the Company, or byinstitutions which have business connection orinterests relationship with the Company;

4) persons providing financial, legal or consultingservices to the Company and its related parties andtheir immediate family members;

5) persons who belonged to categories (1) to (4)within the preceding year;

6) persons holding positions other thanindependent director in other futures companies;

7) other persons specified in laws and regulations,or unfit to serve as independent director uponconfirmation by CSRC.



– XI-89 –



Article 119 Independent directors of the Companyshall meet the following conditions:

1) have engaged in such financial business asfutures or securities or in legal or accountingoperations for more than 5 years, or have relevantsenior academic title for teaching or researches;

2) have educational background of graduate ofcollege or university or above in relevant field andholding a bachelor degree or above;

3) are familiar with the laws and administrativeregulations of futures and the requirements ofthe CSRC, and possess professional expertise infutures;

4) have time and energy necessary to performtheir duties;

5) other qualifications required by relevant laws,regulations, normative documents and regulatoryprovisions at the location where the Company’sshares are listed.

Independent director of the Company is allowed toassume the positions of independent director in notmore than 2 futures companies.

Article 169 Independent directors of the Companyshall meet the following conditions:

1) have engaged in such financial business asfutures or securities or in legal or accountingoperations for more than 5 years, or have relevantsenior academic title for teaching or researches;

2) have educational background of graduate ofcollege or university or above in relevant field andholding a bachelor degree or above;

3) are familiar with the laws and administrativeregulations of futures and the requirements ofthe CSRC, and possess professional expertise infutures;

4) have time and energy necessary to performtheir duties;

5) other qualifications required by relevant laws,regulations, normative documents and regulatoryprovisions at the location where the Company’sshares are listed.

Independent director of the Company is allowed toassume the positions of independent director in notmore than 2 futures companies.

Article 120 More than 1/3 (and at least 3) of theBoard shall be independent directors, and mostmembers of audit committee, nominationcommittee and remuneration committee under theBoard shall be independent directors.

Independent directors shall serve the same periodfor each term of office as that of other directors atthe Company. Independent directors may bereelected upon the expiration of their terms ofoffice, however, for a period not exceeding six (6)years in succession.

Article 170 More than 1/3 (and at least 3) of theBoard shall be independent directors, and mostmembers of audit committee, nominationcommittee and remuneration committee under theBoard shall be independent directors.

Independent directors shall serve the same periodfor each term of office as that of other directors atthe Company. Independent directors may bereelected upon the expiration of their terms ofoffice, however, for a period not exceeding six (6)years in succession.



– XI-90 –



Article 121 The Company shall form a workingsystem for independent directors, with a specificdefinition of the qualifications, nomination,election and replacement, rights and obligations,legal responsibilities, etc. Such system shall beapproved by the general meeting.

For matters not covered in this section, laws,regulations, rules and listing rules at the locationwhere the Company’s shares are listed and theprovisions on directors of the Company in theseArticles of Association shall also apply toindependent directors.

Article 171 The Company shall form a workingsystem for independent directors, with a specificdefinition of the qualifications, nomination,election and replacement, rights and obligations,legal responsibilities, etc. Such system shall beapproved by the general meeting.

For matters not covered in this section, laws,regulations, rules and listing rules at the locationwhere the Company’s shares are listed and theprovisions on directors of the Company in theseArticles of Association shall also apply toindependent directors.

CHAPTER 12 GENERAL MANAGER ANDOTHER SENIOR MANAGEMENT OF THE

COMPANY

CHAPTER 12 GENERAL MANAGER ANDOTHER SENIOR MANAGEMENT OF THE

COMPANY

Section 1 General Section 1 General

Article 122 General manager and other seniormanagement of the Company shall meet thefollowing conditions:

1) have futures practitioner qualification;


3) some senior management shall pass thequalification test accepted by the CSRC asrequired.

Article 172 General manager and other seniormanagement of the Company shall meet thefollowing conditions:

1) have futures practitioner qualification;


3) some senior management shall pass thequalification test accepted by the CSRC asrequired.

Article 123 General manager and deputy generalmanager of the Company shall, in addition to theconditions as prescribed in Article 119, meet thefollowing conditions:


2) have held the post of a person-in-charge of adepartment or above in such financial institutionsas a futures company, a securities company etc. formore than 2 years or have experience ofmanagement of equivalent post.

Article 173 General manager and deputy generalmanager of the Company shall, in addition to theconditions as prescribed in preceding Article, meetthe following conditions:


2) have held the post of a person-in-charge of adepartment or above in such financial institutionsas a futures company, a securities company etc. formore than 2 years or have experience ofmanagement of equivalent post.



– XI-91 –



None Article 174 The provisions on the loyalobligations in Article 145 and the diligentobligations in Article 146 (IV) ~ (VI) of theArticles of Association for the directors are alsoapplicable to senior management.

None Article 175 The persons who hold posts otherthan directors in the entities of the controllingshareholder or actual controller of the Companyshall not hold the post of senior management inthe Company.

Article 124 Chief risk officer of the Companyshall, in addition to the conditions as prescribed inArticle 119, have a minimum of 3 years’experience in futures business and have held thepost of a person-in-charge of trade, settlement andrisk management or the position of a qualifiedperson-in-charge in a futures company for morethan 2 years; or have a minimum of 1 year’sexperience in futures business and a minimum of 3years’ experience in risk management orcompliance operations of financial institutionssuch as a securities company.

Article 176 Chief risk officer of the Companyshall, in addition to the conditions as prescribed inArticle 176, have a minimum of 3 years’experience in futures business and have held thepost of a person-in-charge of trade, settlement andrisk management or the position of a qualifiedperson-in-charge in a futures company for morethan 2 years; or have a minimum of 1 year’sexperience in futures business and a minimum of 3years’ experience in risk management orcompliance operations of financial institutionssuch as a securities company.

Article 125 Chief financial officer of theCompany shall meet the following conditions:

(1) have futures practitioner qualifications;

(2) have educational background of graduate ofcollege or university or above in relevant field orholding a bachelor degree or above;

(3) have a professional accountant title or above orCPA qualifications.

Article 177 Chief financial officer of theCompany shall meet the following conditions:

(1) have futures practitioner qualifications;


(3) have a professional accountant title or above orCPA qualifications.

None Article 178 If a senior management memberviolates any laws, administrative rules,departmental rules and regulations and theprovisions stipulated in the Articles ofAssociation in the course of performing his/herduties for the Company and subsequentlycauses losses to the Company, he/she shall beliable for compensation.



– XI-92 –



Section 2 Secretary of the Board of theCompany

Section 2 Secretary of the Board of theCompany

Article 126 The Board shall have a secretary, whois a senior management of the Company.

Article 179 The Board shall have a secretary, whois a senior management of the Company. Thesecretary is in charge of preparing theshareholders’ general meeting and the Boardmeeting, keeping files, and managing thematerials regarding the shareholders of theCompany, as well as dealing with informationdisclosure and other matters.

The secretary of the Board shall observe laws,administrative regulations, department rules andrelevant provisions of the Articles of Association.

Article 127 The secretary of the Board shall be anatural person with necessary professionalknowledge and experience, and shall be appointedby the Board. The main duties of the secretary ofthe Board are:

1) to ensure that the Company has completeorganization documents and records;

2) to ensure that the Company legally preparesand submits reports and documents as required bythe competent authorities;

3) to ensure that the shareholders’ register of theCompany is established appropriately and that thepersons who have the right of access to therelevant records and documents of the Companyobtain the same in due time.

Article 180 The secretary of the Board shall be anatural person with necessary professionalknowledge and experience, and shall be appointedby the Board. The main duties of the secretary ofthe Board are:

1) to ensure that the Company has completeorganization documents and records;

2) to ensure that the Company legally preparesand submits reports and documents as required bythe competent authorities;

3) to ensure that the shareholders’ register of theCompany is established appropriately and that thepersons who have the right of access to therelevant records and documents of the Companyobtain the same in due time.

Article 128 Director or other senior managementof the Company may concurrently act as thesecretary to the Board. The accountant(s) of theaccounting firm which has been appointed by theCompany shall not concurrently act as thesecretary to the Board.

Where the secretary to the Board is heldconcurrently by a director and an act is required tobe done by a director and a secretary to the Boardseparately, the person who concurrently holds theoffices of director and secretary to the Board maynot perform the act in a dual capacity.

Article 181 Director or other senior managementof the Company may concurrently act as thesecretary to the Board. The accountant(s) of theaccounting firm which has been appointed by theCompany shall not concurrently act as thesecretary to the Board.

Where the secretary to the Board is heldconcurrently by a director and an act is required tobe done by a director and a secretary to the Boardseparately, the person who concurrently holds theoffices of director and secretary to the Board maynot perform the act in a dual capacity.



– XI-93 –



Section 3 General Manager and Deputy GeneralManager of the Company

Section 3 General Manager and Deputy GeneralManager of the Company

Article 129 The Company shall have one generalmanager and several deputy general managers,who shall be appointed or dismissed by the Board.The deputy general managers shall assist thegeneral manager in his work and be accountable tothe general manager. In absence or incapability ofthe general manager in performing his duties forany reasons, such duties shall be performed by thedeputy general manager(s). The Board of theCompany may decide upon whether a member ofthe Board shall concurrently act as the generalmanager, but the chairman shall not serveconcurrently as general manager.

Each general manager and other seniormanagement shall have an every term of office ofthree (3) years, and shall be eligible for re–election.

Article 182 The Company shall have one generalmanager and several deputy general managers,who shall be appointed or dismissed by the Board.The deputy general managers shall assist thegeneral manager in his work and be accountable tothe general manager. In absence or incapability ofthe general manager in performing his duties forany reasons, such duties shall be performed by thedeputy general manager(s). The Board of theCompany may decide upon whether a member ofthe Board shall concurrently act as the generalmanager, but the chairman shall not serveconcurrently as general manager.

Each general manager and other seniormanagement shall have an every term of office ofthree (3) years, and shall be eligible for re–election.



– XI-94 –



Article 130 The general manager of the Companyshall be accountable to the Board and exercise thefollowing functions and powers:

1) to manage the business operations of theCompany, organize execution of the resolutions ofthe Board and the Party Committee, and report tothe Board and the Party Committee;

2) to organize to execute the Company’s annualbusiness plans and investment plans;

3) to prepare the plan for the internal managementsetup of the Company;

4) to draft the basic management system of theCompany;

5) to formulate the Company’s specific rules;

6) to propose to the Board to appoint or dismissthe deputy general manager, chief financial officerof the Company;

7) to decide to appoint or dismiss executives otherthan those appointed or dismissed by the Board;

8) base on actual production and operationcondition of the Company, the general manager isentitled to approve external investment (includingconsigned financial management, entrusted loan,trust product, asset management plan, security,bond, fund and other financial asset investment,and equity investment) of not more than RMB30million, fixed asset investment of not more thanRMB10 million, asset disposal (includingacquisition, disposal, transfer, retirement andliquidation) of not more than RMB2 million, assetwritten-off of not more than RMB2 million, andstandalone asset mortgage of not more than 10%of the latest audited net assets of the Company.

Article 183 The general manager of the Companyshall be accountable to the Board and exercise thefollowing functions and powers:

1) to manage the business operations of theCompany, organize execution of the resolutions ofthe Board and the Party Committee, and report tothe Board and the Party Committee;

2) to organize to execute the Company’s annualbusiness plans and investment plans;

3) to prepare the plan for the internal managementsetup of the Company;

4) to draft the basic management system of theCompany;

5) to formulate the Company’s specific rules;

6) to propose to the Board to appoint or dismissthe deputy general manager, chief financial officerof the Company;

7) to decide to appoint or dismiss executives otherthan those appointed or dismissed by the Board;

8) base on actual production and operationcondition of the Company, the general manager isentitled to approve external investment (includingconsigned financial management, entrusted loan,trust product, asset management plan, security,bond, fund and other financial asset investment,and equity investment) of not more than RMB30million, fixed asset investment of not more thanRMB10 million, asset disposal (includingacquisition, disposal, transfer, retirement andliquidation) of not more than RMB2 million, assetwritten-off of not more than RMB2 million, andstandalone asset mortgage of not more than 10%of the latest audited net assets of the Company.



– XI-95 –



As for connected transactions between theCompany and its connected persons, should theconnected transactions not reach the standardsfor consideration and approval specified inArticle 104 in these Articles of Association, thegeneral manager is entitled to make the decisionof consideration and approval.

For any disposal on the same asset or relevantassets or any external investment conducted by theCompany in phases within twelve (12) consecutivemonths, the accumulated amount during theaforesaid period shall not exceed the above limits.

9) to exercise other functions and powersconferred in these Articles of Association and bythe Board.

As for connected transactions between theCompany and its connected persons, should theconnected transactions not reach the standardsfor consideration and approval specified inArticle 104 in these Articles of Association, thegeneral manager is entitled to make the decisionof consideration and approval.

For any disposal on the same asset or relevantassets or any external investment conducted by theCompany in phases within twelve (12) consecutivemonths, the accumulated amount during theaforesaid period shall not exceed the above limits.

9) to exercise other functions and powersconferred in these Articles of Association and bythe Board.

None Article 184 The working rules of the managershall be prepared by the general manager andbe implemented upon approval of the Board.

None Article 185 The working rules of the managerinclude the following particulars:

1) conditions, procedures and participants ofthe manager’s meeting;

2) specific duties of the manager and othersenior management;

3) use of corporate funds and assets, authorityto enter into material contracts and systems forreporting to the Board and the supervisoryCommittee;

4) such other matters as are deemed necessaryby the Board.

None Article 186 The manager may resign before theexpiration of his/her term of office. The detailedprocedures for the manager’s resignation shallbe set out in the labor contract between themanager and the Company.

Article 131 The general manager of the Companyshall attend Board meetings and, if not a director,shall not have voting right thereat.

Article 187 The general manager of the Companyshall attend Board meetings and, if not a director,shall not have voting right thereat.



– XI-96 –



Article 132 The general manager and deputygeneral manager of the Company, in exercisingtheir functions and powers, shall act honestly anddiligently in accordance with the laws,administrative regulations and these Articles ofAssociation.

Article 188 The general manager and deputygeneral manager of the Company, in exercisingtheir functions and powers, shall act honestly anddiligently in accordance with the laws,administrative regulations and these Articles ofAssociation.

Section 4 Chief Risk Officer Section 4 Chief Risk Officer

Article 133 A chief risk officer is a member of thesenior management of the Company who shallconduct supervision over and inspection on thelegal compliance and risk management of theoperations and management of the Company.

Article 189 A chief risk officer is a member of thesenior management of the Company who shallconduct supervision over and inspection on thelegal compliance and risk management of theoperations and management of the Company.

Article 134 The Company shall have one chiefrisk officer, who shall be appointed or dismissedby the Board and accountable to the Board. Thenomination and appointment of a chief risk officershall be approved by all independent directors.

Article 190 The Company shall have one chiefrisk officer, who shall be appointed or dismissedby the Board and accountable to the Board. Thenomination and appointment of a chief risk officershall be approved by all independent directors.



– XI-97 –



Article 135 The chief risk officer shall interrogateand investigate the possible violation matters andhidden risk dangers in the process of operationand management of the Company and layemphasis on the inspection whether or not theCompany comply with laws, administrativeregulations and relevant regulations and establishsound and effective implementation of thefollowing systems or matters:

1) safe deposits system for margin deposits ofclients of the Company;

2) system for risk-based regulation indicatormanagement of the Company;

3) administration and internal control system ofthe Company;

4) brokerage business rules, asset managementbusiness rules, clearing business rules, riskmanagement system for clients and Informationsecurity system of the Company;

5) reporting system of the positions held by therelatives of the Company;

6) other system to ensure the security of clientassets and transactions, which shall have acontinuous important influence on the business ofthe futures company, and other related businesssystems required by CSRC;

7) other matters related to legal compliance andrisk management which shall be supervised andinspected by the chief risk officer of futurescompanies in accordance with laws, regulationsand regulatory documents.

Article 191 The chief risk officer shall interrogateand investigate the possible violation matters andhidden risk dangers in the process of operationand management of the Company and layemphasis on the inspection whether or not theCompany comply with laws, administrativeregulations and relevant regulations and establishsound and effective implementation of thefollowing systems or matters:

1) safe deposits system for margin deposits ofclients of the Company;

2) system for risk-based regulation indicatormanagement of the Company;

3) administration and internal control system ofthe Company;

4) brokerage business rules, asset managementbusiness rules, clearing business rules, riskmanagement system for clients and Informationsecurity system of the Company;

5) reporting system of the positions held by therelatives of the Company;

6) other system to ensure the security of clientassets and transactions, which shall have acontinuous important influence on the business ofthe futures company, and other related businesssystems required by CSRC;

7) other matters related to legal compliance andrisk management which shall be supervised andinspected by the chief risk officer of futurescompanies in accordance with laws, regulationsand regulatory documents.



– XI-98 –



Article 136 The chief risk officer may, as neededto perform his/her duties, exercise the followingfunctions and powers:

1) to participate in or attend the Board meetings,the supervisory Committee meetings and thegeneral manager office meetings;

2) to refer to the documents, files and informationrelating to the futures company and to raisequeries on and investigate relevant matters of theCompany;

3) to conduct interviews with relevant staff of theCompany, as well as personnel of the intermediaryservice organizations providing audit, legal andother services to the Company;

4) to comprehend the business operation of theCompany, to supervise and inspect the complianceof the Company’s business operation, and toconduct risk assessment and give warnings;

5) to provide comments and recommendations onthe designation of the Company’s departmentheads in respect of risk management, compliancereview, settlement, trading, technology and otherkey positions, and the business department head;

6) to provide comments and recommendations oncompliance issues concerning the Company’smajor decisions, management systems, businessrules and processes;

7) to identify documents, notifications andregulatory measures issued by regulatoryauthorities, self-regulatory organizations to theCompany;

8) to exercise other rights specified in theseArticles of Association.

Article 192 The chief risk officer may, as neededto perform his/her duties, exercise the followingfunctions and powers:

1) to participate in or attend the Board meetings,the supervisory Committee meetings and thegeneral manager office meetings;

2) to refer to the documents, files and informationrelating to the futures company and to raisequeries on and investigate relevant matters of theCompany;

3) to conduct interviews with relevant staff of theCompany, as well as personnel of the intermediaryservice organizations providing audit, legal andother services to the Company;

4) to comprehend the business operation of theCompany, to supervise and inspect the complianceof the Company’s business operation, and toconduct risk assessment and give warnings;

5) to provide comments and recommendations onthe designation of the Company’s departmentheads in respect of risk management, compliancereview, settlement, trading, technology and otherkey positions, and the business department head;

6) to provide comments and recommendations oncompliance issues concerning the Company’smajor decisions, management systems, businessrules and processes;

7) to identify documents, notifications andregulatory measures issued by regulatoryauthorities, self-regulatory organizations to theCompany;

8) to exercise other rights specified in theseArticles of Association.



– XI-99 –



Article 137 The chief risk officer is prohibited to:

1) commit unauthorized absence, fail to performhis/her duties without cause or reason, or authorizeothers to perform duties on his/her behalf;

2) hold any other positions in the Company otherthan the head of the compliance department, orengage in activities that may affect theindependent performance of his/her duties;

3) withhold the information about, delay to reportor make false report on, any illegal behavior andirregularity or significant potential risk in theCompany’s operation and management;

4) take advantage of his/her position for personalgain;

5) abuse his/her power to intervene the Company’snormal operation;

6) do harm to the legitimate interests of thefutures company or customers by leaking theCompany secrets or customer information to thirdparties unrelated to the performance of his/herduties;

7) prejudice the legitimate interests of customersor the Company in any other ways.

Article 193 The chief risk officer is prohibited to:

1) commit unauthorized absence, fail to performhis/her duties without cause or reason, or authorizeothers to perform duties on his/her behalf;

2) hold any other positions in the Company otherthan the head of the compliance department, orengage in activities that may affect theindependent performance of his/her duties;

3) withhold the information about, delay to reportor make false report on, any illegal behavior andirregularity or significant potential risk in theCompany’s operation and management;

4) take advantage of his/her position for personalgain;

5) abuse his/her power to intervene the Company’snormal operation;

6) do harm to the legitimate interests of thefutures company or customers by leaking theCompany secrets or customer information to thirdparties unrelated to the performance of his/herduties;

7) prejudice the legitimate interests of customersor the Company in any other ways.

Article 138 In the event of being aware that thereare other problems in addition to those illegalbehaviors and irregularities or significant potentialrisks listed in Article 139 of these Articles ofAssociation with regards to the legal complianceand risk management in the Company’s operationand management, the chief risk officer shallprovide suggestions on rectifications to generalmanager or person in charge in a timely manner.

In case of general manager or the person in chargefailing to rectify the existing problem or therectification results failing to meet therequirements, the chief risk officer shall promptlyreport to the Chairman or the Board ofSupervisors, and to, if necessary, the CSRC’sagency at the Company’s domicile.

Article 194 In the event of being aware that thereare other problems in addition to those illegalbehaviors and irregularities or significant potentialrisks listed in Article 193 of these Articles ofAssociation with regards to the legal complianceand risk management in the Company’s operationand management, the chief risk officer shallprovide suggestions on rectifications to generalmanager or person in charge in a timely manner.

In case of general manager or the person in chargefailing to rectify the existing problem or therectification results failing to meet therequirements, the chief risk officer shall promptlyreport to the Chairman or the Board ofSupervisors, and to, if necessary, the CSRC’sagency at the Company’s domicile.



– XI-100 –



Article 139 In the event of being aware that theCompany commits following illegal behaviors andirregularities or exposes to significant potentialrisks, the chief risk officer shall promptly report tothe CSRC’s agency at the Company’s domicileand to the Board and the supervisory Committee:

1) alleged occupation, misappropriation ofcustomers’ security deposits and other behaviorsviolating the customers’ rights and interests;

2) the Company assets have been withdrawn,occupied, misappropriated, seized, frozen or usedas security;

3) the Company’s net capital is unable toconsistently meet regulatory standards;

4) the Company may expose to significant risksdue to significant litigation or arbitration;

5) shareholders intervene the Company’s normaloperation;

6) other circumstances specified by the CSRC.

In case of the above circumstances, the Companyshall implement rectification measures assuggested by the CSRC’s agency at the Company’sdomicile. The chief risk officer shall cooperatewith rectification and report the same to theCSRC’s agency at the Company’s domicile.

Article 195 In the event of being aware that theCompany commits following illegal behaviors andirregularities or exposes to significant potentialrisks, the chief risk officer shall promptly report tothe CSRC’s agency at the Company’s domicileand to the Board and the supervisory Committee:

1) alleged occupation, misappropriation ofcustomers’ security deposits and other behaviorsviolating the customers’ rights and interests;

2) the Company assets have been withdrawn,occupied, misappropriated, seized, frozen or usedas security;

3) the Company’s net capital is unable toconsistently meet regulatory standards;

4) the Company may expose to significant risksdue to significant litigation or arbitration;

5) shareholders intervene the Company’s normaloperation;

6) other circumstances specified by the CSRC.

In case of the above circumstances, the Companyshall implement rectification measures assuggested by the CSRC’s agency at the Company’sdomicile. The chief risk officer shall cooperatewith rectification and report the same to theCSRC’s agency at the Company’s domicile.

Article 140 The chief risk officer shall, in thecourse of his/her work, make and keep workingpapers and working records to truly and fullyreflect the performance of duties.

The working papers and working records shall bekept for at least 20 years.

Article 196 The chief risk officer shall, in thecourse of his/her work, make and keep workingpapers and working records to truly and fullyreflect the performance of duties.

The working papers and working records shall bekept for at least 20 years.



– XI-101 –



Article 141 Directors, senior management andeach department shall support and cooperate withthe work of the chief risk officer, and shall not, byreason of commercial secrets concerns orotherwise, limit or obstruct the performance ofduties by the chief risk officer.

Shareholders and directors shall not violate theprocedures provided by the Company to giveinstructions directly to the chief risk officer bybypassing the Board or interfere with the work ofthe chief risk officer.

Article 197 Directors, senior management andeach department shall support and cooperate withthe work of the chief risk officer, and shall not, byreason of commercial secrets concerns orotherwise, limit or obstruct the performance ofduties by the chief risk officer.

Shareholders and directors shall not violate theprocedures provided by the Company to giveinstructions directly to the chief risk officer bybypassing the Board or interfere with the work ofthe chief risk officer.

Chapter 13 Legal Adviser Chapter 13 Legal Adviser

Article 142 The Company shall engage legaladvisers to specifically focus on legal affairs, withthe right to handle legal affairs arising from theoperation, management and decision making of theCompany, as well as other rights conferred bylaws, regulations, rules and the Company.

Article 198 The Company shall engage legaladvisers to specifically focus on legal affairs, withthe right to handle legal affairs arising from theoperation, management and decision making of theCompany, as well as other rights conferred bylaws, regulations, rules and the Company.

Chapter 14 supervisory Committee Chapter 14 supervisory Committee

Article 143 The Company shall have a supervisoryCommittee. The supervisory Committee is astanding supervisory agency of the Companywhich is responsible of the supervision of theBoard and its members and senior managementsuch as the general manager so as to prevent themfrom the misuse of authority and infringing uponlawful rights of the shareholder, the Company andthe Company’s employees.

Article 199 The Company shall have a supervisoryCommittee. The supervisory Committee is astanding supervisory agency of the Companywhich is responsible of the supervision of theBoard and its members and senior managementsuch as the general manager so as to prevent themfrom the misuse of authority and infringing uponlawful rights of the shareholder, the Company andthe Company’s employees.

Article 144 The supervisory Committee shall becomposed of three members. The supervisoryCommittee shall have one chairman. A supervisorshall serve a term of three years and be reelectedfor successive terms.

Chairman of the supervisory Committee shall beappointed or removed by the votes of more thantwo thirds of the members of the supervisoryCommittee.

Article 200 The supervisory Committee shall becomposed of three members. The supervisoryCommittee shall have one chairman. A supervisorshall serve a term of three years and be reelectedfor successive terms.

Chairman of the supervisory Committee shall beappointed or removed by the votes of more thantwo thirds of the members of the supervisoryCommittee.



– XI-102 –



Article 145 The position of supervisor shall beassumed by 2 Shareholder representatives and 1employee representative.

Shareholder representatives shall be elected orreplaced at general meeting, employee supervisorshall be elected or removed democratically byemployees of the Company.

Article 201 The position of supervisor shall beassumed by 2 Shareholder representatives and 1employee representative, of which the proportionof employee representatives shall not be lessthan 1/3.

Shareholder representatives shall be elected orreplaced at general meeting, employee supervisorshall be elected or removed democratically byemployees of the Company.

Article 146 director, general manager and seniormanagement of the Company shall notconcurrently act as supervisor.

Article 202 director, general manager and seniormanagement of the Company shall notconcurrently act as supervisor.

Article 147 Qualifications of chairman required inArticle 103 apply to chairman of the supervisoryCommittee.

Article 203 Qualifications of chairman required inArticle 158 apply to chairman of the supervisoryCommittee.

Article 148 The supervisory Committee shall holdat least two meetings each year, and shall beconvened by the chairman of the supervisoryCommittee.

Article 204 The supervisory Committee shall holdat least two meetings each year, convene at leastone meeting every six months, and shall beconvened by the chairman of the supervisoryCommittee. Where the chairman of thesupervisory Committee is incapable ofperforming or fails to perform his/her duties, asupervisor elected by not less than half of thesupervisors shall convene and preside over themeeting of the supervisory Committee.

Article 149 The supervisory Committee shall beaccountable to the general meeting and exercisethe following functions and powers in accordancewith the laws:

1) to examine financial operations of theCompany;

2) to supervise the performance of duties by thedirector, general manager and senior managementof the Company, and propose dismissal of directorand senior management who have violated laws,administrative regulations, these Articles ofAssociation or the resolutions of general meetings;

3) to require director, general manager and seniormanagement to make corrections if their conducthas damaged the interests of the Company;

Article 205 The supervisory Committee shall beaccountable to the general meeting and exercisethe following functions and powers in accordancewith the laws:

1) to examine financial operations of theCompany;

2) to supervise the performance of duties by thedirector, general manager and senior managementof the Company, and propose dismissal of directorand senior management who have violated laws,administrative regulations, these Articles ofAssociation or the resolutions of general meetings;

3) to require director, general manager and seniormanagement to make corrections if their conducthas damaged the interests of the Company;



– XI-103 –



4) to review the financial reports, operatingreports and profit distribution schemes to besubmitted by the Board to the general meetings; toengage certified public accountants and practicingauditors in the name of the Company to assistreviewing if there is any doubt;

5) to propose the convening of extraordinarygeneral meetings and, in case the Board does notperform the obligations to convene and presideover the general meetings, to convene and presideover the general meetings;

6) to coordinate with director and seniormanagement on behalf of the Company or initiatelegal proceedings against director and seniormanagement in accordance with the laws;

7) to propose motions to the general meeting;

8) to propose to convene an interim meeting ofthe Board;

9) to exercise other functions and powersspecified in these Articles of Association.

The supervisor may attend Board meetings.

4) to review the financial reports, operatingreports and profit distribution schemes to besubmitted by the Board to the general meetings; toengage certified public accountants and practicingauditors in the name of the Company to assistreviewing if there is any doubt;

5) to propose the convening of extraordinarygeneral meetings and, in case the Board does notperform the obligations to convene and presideover the general meetings, to convene and presideover the general meetings;

6) to coordinate with director and seniormanagement on behalf of the Company or initiatelegal proceedings against director and seniormanagement in accordance with the laws;

7) to propose motions to the general meeting;

8) to propose to convene an interim meeting ofthe Board;

9) to initiate investigations into anyirregularities identified in the operation of theCompany and, where necessary, may engageprofessional institutions, such as accountingfirms or law firms, to assist their work withexpenses borne by the Company;

10) to exercise other functions and powersspecified in these Articles of Association.

The supervisor may attend Board meetings, andraise questions or suggestions on the resolutionsof the Board.

Article 150 Meetings of supervisory Committeeshall not be held unless over half of supervisorsare present.

Every supervisor shall have the right to one vote.Resolutions made by the supervisory Committeeshall be approved by more than two thirds of themembers of the supervisory Committee.

Article 206 Meetings of supervisory Committeeshall not be held unless over half of supervisorsare present.

Every supervisor shall have the right to one vote.Resolutions made by the supervisory Committeeshall be approved by more than two thirds of themembers of the supervisory Committee.



– XI-104 –



None Article 207 supervisors shall comply with thelaws, administrative regulations and the Articlesof Association and have obligations of loyaltyand diligence towards the Company and shallnot abuse their rights to accept bribes or otherillegal income and shall not misappropriate theproperties of the Company.

None Article 208 If the number of supervisors fallsbelow the required number as the result of theresignation of a supervisor during his/her termof office and no supervisor is elected forreplacement in a timely manner, the resigningsupervisor shall continue to perform his/herduties in accordance with the laws,administrative regulations and Articles ofAssociation until a supervisor is elected forreplacement.

None Article 209 supervisors may attend Boardmeetings and make enquiries or proposals inrespect of Board resolutions.

None Article 210 supervisors shall not use theirconnections to harm the interests of theCompany, and any supervisor who has causedloss to the Company shall be liable forcompensation.

None Article 211 In the event of any loss caused tothe Company as a result of violation ofapplicable laws, administrative regulations orthe Articles of Association by supervisors whenperforming their duties, the supervisors shall beliable for compensation.

None Article 212 The supervisory Committee shallformulate its rules of procedures and define itsmode of discussion and voting procedure toensure working efficiency and scientificdecision-making of the supervisory Committee.



– XI-105 –



None Article 213 Minutes shall be taken for themeeting convened by the supervisory Committeeand the supervisors attending the meeting shallsign on the minutes. Supervisors shall have theright to request to record in the minutes detailsof the speech made by them at the meeting. Theminutes of the meeting convened by thesupervisory Committee shall be kept as theCompany’s files for a period of not less than 10years.

None Article 214 Notices of the supervisoryCommittee meeting shall contain:

(1) date, place and duration of the meeting;

(2) reasons and topics for discussion;

(3) date of the notice.

Article 151 The Company shall bear all reasonablefees incurred in the retaining of such professionalsas lawyers, certified public accountants, andpracticing auditors by the supervisory Committeein the exercise of its functions and powers.

Article 215 The Company shall bear all reasonablefees incurred in the retaining of such professionalsas lawyers, certified public accountants, andpracticing auditors by the supervisory Committeein the exercise of its functions and powers.

Article 152 A supervisor shall carry out hissupervisory duties honestly and faithfully inaccordance with laws, administrative regulationsand these Articles of Association.

Article 216 A supervisor shall carry out hissupervisory duties honestly and faithfully inaccordance with laws, administrative regulationsand these Articles of Association.



– XI-106 –



CHAPTER 15 QUALIFICATIONS ANDOBLIGATIONS OF DIRECTORS,

SUPERVISORS, GENERAL MANAGER ANDOTHER SENIOR MANAGEMENT OF THE

COMPANY

CHAPTER 15 QUALIFICATIONS ANDOBLIGATIONS OF DIRECTORS,

SUPERVISORS, GENERAL MANAGER ANDOTHER SENIOR MANAGEMENT OF THE

COMPANY

Article 153 In any of the following circumstances,a person shall not serve as director, supervisor,general manager or other senior management ofthe Company:

1) without capacity or with limited capacity forcivil conduct;

2) has been sentenced to criminal punishment dueto corruption, bribery, embezzlement of property,misappropriation of property or disrupting theorder of economy, and less than five years haveelapsed since the punishment is fully executed; orhas been deprived of political rights due to anycriminal offences and less than five years haveelapsed since the punishment is fully executed;

3) has served as a director, factory manager ormanager of a company or an enterprise that wasbankrupt and liquidated, and was personally liablefor the bankruptcy of the company or enterprisebecause of mismanagement, and less than threeyears have elapsed since the date of completion ofthe bankruptcy liquidation of the company orenterprise;

4) has served as the legal representative of acompany or an enterprise whose Business Licensewas revoked due to illegal activities or wasordered to be wound-up and was personallyliable for such punishment, and less than threeyears has elapsed since the date of revocation ofthe business license of the company or enterprise;

5) has large amount of overdue debts;

Article 217 In any of the following circumstances,a person shall not serve as director, supervisor,general manager or other senior management ofthe Company:

1) without capacity or with limited capacity forcivil conduct;

2) has been sentenced to criminal punishment dueto corruption, bribery, embezzlement of property,misappropriation of property or disrupting theorder of economy, and less than five years haveelapsed since the punishment is fully executed; orhas been deprived of political rights due to anycriminal offences and less than five years haveelapsed since the punishment is fully executed;

3) has served as a director, factory manager ormanager of a company or an enterprise that wasbankrupt and liquidated, and was personally liablefor the bankruptcy of the company or enterprisebecause of mismanagement, and less than threeyears have elapsed since the date of completion ofthe bankruptcy liquidation of the company orenterprise;

4) has served as the legal representative of acompany or an enterprise whose Business Licensewas revoked due to illegal activities or wasordered to be wound-up and was personallyliable for such punishment, and less than threeyears have elapsed since the date of revocation ofthe business license of the company or enterprise;

5) has large amount of overdue debts;



– XI-107 –



6) is under investigation by the judiciary authorityfor violation of the criminal law, and the case isstill pending;

7) is disqualified as corporate leader in laws andadministrative regulations;

8) is not a natural person;

9) was ruled by the relevant regulatory authoritythat he has violated the relevant securitiesregulations and committed any fraudulent ordishonest act, and less than five years haveelapsed since such ruling was made;

10) has served as the person-in-charge of a futuresexchange, securities exchange, or securitiesdepository and clearing institution, or the director,supervisor or senior manager of a futures companyor securities company who was dismissed from hisposition for violating laws or disciplines where notmore than 5 years have elapsed since the date ofhis dismissal;

11) has served as a lawyer, a certified publicaccountant or a professional of an investmentconsultative agency, financial advisory organ,credit rating institution, assets assessmentinstitution and verification institution, whosequalifications have been revoked for violating lawsor disciplines, where not more than 5 years haveelapsed since the date of the revocation;

12) has served as a business practitioner of afutures exchange, securities exchange, securitiesdepository and clearing institution, securitiesservice agency, futures company, or securitiescompany or a state organ functionary who wasexpelled for violating laws or disciplines, wherenot more than 5 years have elapsed as at the dateof his expulsion;

6) is under investigation by the judiciary authorityfor violation of the criminal law, and the case isstill pending;

7) is disqualified as corporate leader in laws andadministrative regulations;

8) is not a natural person;

9) was ruled by the relevant regulatory authoritythat he has violated the relevant securitiesregulations and committed any fraudulent ordishonest act, and less than five years haveelapsed since such ruling was made;

10) has served as the person-in-charge of a futuresexchange, securities exchange, or securitiesdepository and clearing institution, or the director,supervisor or senior manager of a futures companyor securities company who was dismissed from hisposition for violating laws or disciplines where notmore than 5 years have elapsed since the date ofhis dismissal;

11) has served as a lawyer, a certified publicaccountant or a professional of an investmentconsultative agency, financial advisory organ,credit rating institution, assets assessmentinstitution and verification institution, whosequalifications have been revoked for violating lawsor disciplines, where not more than 5 years haveelapsed since the date of the revocation;

12) has served as a business practitioner of afutures exchange, securities exchange, securitiesdepository and clearing institution, securitiesservice agency, futures company, or securitiescompany or a state organ functionary who wasexpelled for violating laws or disciplines, wherenot more than 5 years have elapsed as at the dateof his expulsion;



– XI-108 –



13) has served as a state organ functionary andthose who are prohibited from assuming positionsconcurrently in a company according to laws andadministrative regulations;

14) was given administrative sanction by thefinancial regulatory authority for violating laws ordisciplines, where not more than 3 years haveelapsed since the expiration of the enforcementperiod;

15) was determined to be an unsuitable candidateby the CSRC or its dispatched organ, where notmore than 2 years have elapsed since the date ofthe decision;

16) has served as a person-in-charge who bearsliability and other directly responsible persons of afinancial institution and its branch which wereordered to suspend business for rectification,entrusted for custody, taken over or revoked by theregulatory body for violating laws or disciplines orfor emergence of major risks, where not more than3 years have elapsed since the date when thefinancial institution and its branch were ordered tosuspend business for rectification, entrusted, takenover or revoked by the regulatory body;

17) was involved in other circumstances asprescribed by the CSRC.

If the aforesaid rules are violated in electing orappointing director, supervisor and seniormanagement, such election, appointment oremployment shall be invalid.

Where a circumstance prescribed in this articleoccurs during the term of office of director,supervisor or senior management, the Companyshall dismiss them.

13) has served as a state organ functionary andthose who are prohibited from assuming positionsconcurrently in a company according to laws andadministrative regulations;

14) was given administrative sanction by thefinancial regulatory authority for violating laws ordisciplines, where not more than 3 years haveelapsed since the expiration of the enforcementperiod;

15) was determined to be an unsuitable candidateby the CSRC or its dispatched organ, where notmore than 2 years have elapsed since the date ofthe decision;

16) has served as a person-in-charge who bearsliability and other directly responsible persons of afinancial institution and its branch which wereordered to suspend business for rectification,entrusted for custody, taken over or revoked by theregulatory body for violating laws or disciplines orfor emergence of major risks, where not more than3 years have elapsed since the date when thefinancial institution and its branch were ordered tosuspend business for rectification, entrusted, takenover or revoked by the regulatory body;

17) was involved in other circumstances asprescribed by the CSRC.

If the aforesaid rules are violated in electing orappointing director, supervisor and seniormanagement, such election, appointment oremployment shall be invalid.

Where a circumstance prescribed in this articleoccurs during the term of office of director,supervisor or senior management, the Companyshall dismiss them.

Article 154 The validity of an act of a director,general manager and other senior management ofthe Company on behalf of the Company for a bonafide third person is not affected by anyincompliance in the appointment, election orqualification thereof.

Article 218 The validity of an act of a director,general manager and other senior management ofthe Company on behalf of the Company for a bonafide third person is not affected by anyincompliance in the appointment, election orqualification thereof.



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Article 155 In addition to the obligations requiredby laws, administrative regulations or the listingrules of the stock exchanges where the Company’sshares are listed, each of the Company’s director,supervisor, general manager and seniormanagement shall assume the followingobligations in respect of each shareholder in theexercise of the functions and powers conferred onhim by the Company:

1) not to cause the Company to exceed the scopeof the business stipulated in its business license;

2) to sincerely act in the best interest of theCompany;

3) not to deprive the Company of its property inany way, including (but not limited to) anyopportunity favorable to the Company;

4) not to deprive shareholders of their personalinterests, including (but not limited to) the rightsto distribution and voting rights, but excluding therestructuring of the Company submitted to ashareholders’ general meeting for approval inaccordance with these Articles of Association.

Article 219 In addition to the obligations requiredby laws, administrative regulations or the listingrules of the stock exchanges where the Company’sshares are listed, each of the Company’s director,supervisor, general manager and seniormanagement shall assume the followingobligations in respect of each shareholder in theexercise of the functions and powers conferred onhim by the Company:

1) not to cause the Company to exceed the scopeof the business stipulated in its business license;


3) not to deprive the Company of its property inany way, including (but not limited to) anyopportunity favorable to the Company;

4) not to deprive shareholders of their personalinterests, including (but not limited to) the rightsto distribution and voting rights, but excluding therestructuring of the Company submitted to ashareholders’ general meeting for approval inaccordance with these Articles of Association.

Article 156 Each of the Company’s director,supervisor, the general manager and seniormanagement shall in the exercise of his powers ordischarge of his obligations act what he shall actby exercising the due care, due diligence and skillsthat a reasonably prudent person should exercisein comparable circumstances.

Article 220 Each of the Company’s director,supervisor, the general manager and seniormanagement shall in the exercise of his powers ordischarge of his obligations act what he shall actby exercising the due care, due diligence and skillsthat a reasonably prudent person should exercisein comparable circumstances.



– XI-110 –



Article 157 In fulfilling duties, the director,supervisor, the general manager and other seniormanagement shall observe the principle of honestyand shall not set themselves in a position wheretheir own interests conflict with their obligations.The said principle includes (but not limited to) thefollowing obligations:


2) to exercise powers within his terms of referencewithout ultra vires;

3) to exercise the discretion vested in himpersonally and not to allow himself to act underthe control of any other party; unless permitted bylaws and administrative regulations or with theinformed consent of the shareholders’ generalmeeting, delegation of discretionary powers toothers is prohibited;

4) to treat shareholders of the same class equallyand to treat shareholders of different classes fairly;

5) unless otherwise provided in the Articles ofAssociation or with the informed approval of theshareholders’ general meeting, not to enter intoany contract, transaction or arrangement with theCompany;

6) not to use the Company’s assets for personalbenefits in any manner without the informedconsent of the shareholders’ general meeting;

7) not to use his authority to accept bribes or otherillegal income or embezzle the Company’sproperty in any manner, including (but not limitedto) any opportunity favorable to the Company;

8) not to accept commissions in connection withthe Company’s transactions without the informedconsent of the shareholders’ general meeting;

Article 221 In fulfilling duties, the director,supervisor, the general manager and other seniormanagement shall observe the principle of honestyand shall not set themselves in a position wheretheir own interests conflict with their obligations.The said principle includes (but not limited to) thefollowing obligations:


2) to exercise powers within his terms of referencewithout ultra vires;

3) to exercise the discretion vested in himpersonally and not to allow himself to act underthe control of any other party; unless permitted bylaws and administrative regulations or with theinformed consent of the shareholders’ generalmeeting, delegation of discretionary powers toothers is prohibited;

4) to treat shareholders of the same class equallyand to treat shareholders of different classes fairly;

5) unless otherwise provided in the Articles ofAssociation or with the informed approval of theshareholders’ general meeting, not to enter intoany contract, transaction or arrangement with theCompany;

6) not to use the Company’s assets for personalbenefits in any manner without the informedconsent of the shareholders’ general meeting;

7) not to use his authority to accept bribes or otherillegal income or embezzle the Company’sproperty in any manner, including (but not limitedto) any opportunity favourable to the Company;

8) not to accept commissions in connection withthe Company’s transactions without the informedconsent of the shareholders’ general meeting;



– XI-111 –



9) to comply with the Articles of Association, toperform duties faithfully, to safeguard theCompany’s interests and not to seek personal gainsby taking advantage of his position and authorityin the Company;

10) not to compete with the Company in any waywithout the informed consent of the shareholders’general meeting;

11) not to misappropriate the Company’s funds orto lend such funds to any other persons, not to setup accounts in his own name or in the any othernames for depositing the Company’s assets, andnot to provide guarantees for the debts ofshareholders of the Company or any other personalliabilities with the assets of the Company; and

12) not to release any confidential information inrelation to the Company which he has obtainedduring his term of office without the informedconsent of the shareholders’ general meeting; notto use such information other than for the benefitof the Company, save that such information maybe disclosed to the court or other competentauthorities of the government if:

1. stipulated by laws;

2. required in the public interests;

3. required in the interests of the relevantdirectors, supervisors, general manager and othersenior management.

9) to comply with the Articles of Association, toperform duties faithfully, to safeguard theCompany’s interests and not to seek personal gainsby taking advantage of his position and authorityin the Company;

10) not to compete with the Company in any waywithout the informed consent of the shareholders’general meeting;

11) not to misappropriate the Company’s funds orto lend such funds to any other persons, not to setup accounts in his own name or in the any othernames for depositing the Company’s assets, andnot to provide guarantees for the debts ofshareholders of the Company or any other personalliabilities with the assets of the Company; and

12) not to release any confidential information inrelation to the Company which he has obtainedduring his term of office without the informedconsent of the shareholders’ general meeting; notto use such information other than for the benefitof the Company, save that such information maybe disclosed to the court or other competentauthorities of the government if:



3. required in the interests of the relevantdirectors, supervisors, general manager and othersenior management.



– XI-112 –



Article 158 Where no re-election is made in timeupon expiry of the term of a director or anydirector’s resignation causes the number ofmembers of the Board or the number ofindependent directors to fall below the statutorynumber under the PRC Company Law and listingrules with which the Company shall comply, theoriginal director shall, prior to a new directortaking up the office, continue to perform his dutiesas a director in accordance with the provisions oflaws, administrative regulations and the Articles ofAssociation.

A director may resign before the expiry of histenure. The resigning director shall submit to theBoard a written resignation. The Board shalldisclose the relevant information within two days.

The resignation of a director shall becomeeffective when the written resignation is served onthe Board. However, if the resignation of adirector causes the number of members of theBoard or the number of independent directors tofall below the statutory number as provided in thepreceding clause, the resignation of such directorshall become effective when the director reelectedtakes office.

Article 222 Where no re-election is made in timeupon expiry of the term of a director or anydirector’s resignation causes the number ofmembers of the Board or the number ofindependent directors to fall below the statutorynumber under the PRC Company Law and listingrules with which the Company shall comply, theoriginal director shall, prior to a new directortaking up the office, continue to perform his dutiesas a director in accordance with the provisions oflaws, administrative regulations and the Articles ofAssociation.





– XI-113 –



Article 159 Each director, supervisor, generalmanager and any other senior management of theCompany shall not direct the following persons orinstitutions (“related person”) to do what they areprohibited from doing:

1) the spouse or minor child of the director,supervisor, general manager or other seniormanagement;

2) the trustee of the Company’s director,supervisor, general manager or other seniormanagement or any person referred to insubparagraph (1) of this Article;

3) the partner of the Company’s director,supervisor, general manager or other seniormanagement or any person referred to insubparagraphs (1) and (2) of this Article;

4) a company in which the Company’s director,supervisor, general manager or other seniormanagement has sole de facto control, or acompany in which the Company’s director,supervisor or senior management has joint de factocontrol with the person referred to insubparagraphs (1), (2) and (3) of this Article orother directors, supervisors, general managers andother senior management of the Company; and

5) the directors, supervisors, general managers andother senior management of the controlledcompany referred to in sub-paragraph (4) of thisArticle.

Article 223 Each director, supervisor, generalmanager and any other senior management of theCompany shall not direct the following persons orinstitutions (“related person”) to do what they areprohibited from doing:

1) the spouse or minor child of the director,supervisor, general manager or other seniormanagement;

2) the trustee of the Company’s director,supervisor, general manager or other seniormanagement or any person referred to insubparagraph (1) of this Article;

3) the partner of the Company’s director,supervisor, general manager or other seniormanagement or any person referred to insubparagraphs (1) and (2) of this Article;

4) a company in which the Company’s director,supervisor, general manager or other seniormanagement has sole de facto control, or acompany in which the Company’s director,supervisor or senior management has joint de factocontrol with the person referred to insubparagraphs (1), (2) and (3) of this Article orother directors, supervisors, general managers andother senior management of the Company; and

5) the directors, supervisors, general managers andother senior management of the controlledcompany referred to in sub-paragraph (4) of thisArticle.

Article 160 The fiduciary duties of the directors,supervisors, general managers and other seniormanagement of the Company shall not necessarilycease upon termination of their tenures. The dutyof confidentiality in respect of trade secrets of theCompany shall survive the termination of theirtenures. Other duties may continue for such periodas the principle of fairness may require, dependingon the length of time which has elapsed betweenthe occurrence of the event concerned and thetermination of tenure, and the circumstances andconditions under which the relationships betweenthem and the Company are terminated.

Article 224 The fiduciary duties of the directors,supervisors, general managers and other seniormanagement of the Company shall not necessarilycease upon termination of their tenures. The dutyof confidentiality in respect of trade secrets of theCompany shall survive the termination of theirtenures. Other duties may continue for such periodas the principle of fairness may require, dependingon the length of time which has elapsed betweenthe occurrence of the event concerned and thetermination of tenure, and the circumstances andconditions under which the relationships betweenthem and the Company are terminated.



– XI-114 –



Article 161 Except for the circumstancesstipulated in Article 54 of the Articles ofAssociation, a director, supervisor, generalmanager or other senior management of theCompany may be relieved of the liability for aspecific breach of his obligations with theinformed consent of the shareholders’ generalmeeting.

Article 225 Except for the circumstancesstipulated in Article 59 of the Articles ofAssociation, a director, supervisor, generalmanager or other senior management of theCompany may be relieved of the liability for aspecific breach of his obligations with theinformed consent of the shareholders’ generalmeeting.

Article 162 Where a director, supervisor, generalmanager or other senior management of theCompany is, directly or indirectly, materiallyinterested in a concluded or contemplated contract,transaction or arrangement with the Company(other than his contract of service with theCompany), he shall declare the nature and extentof his interests to the Board as soon as possible,whether or not such matter is subject to theapproval or consent of the Board under normalcircumstances.

Unless the interested director, supervisor, generalmanager or other senior management of theCompany discloses his interests in accordance withthe preceding paragraph of this Article and therelevant matters are approved by the Board at ameeting in which he is not counted towards thequorum and abstains from voting, the Companyshall have the right to rescind the contract,transaction or arrangement, except as against abona fide party thereto who does not have noticeof the breach of duty by the interested director,supervisor, general manager or other seniormanagement.

Article 226 Where a director, supervisor, generalmanager or other senior management of theCompany is, directly or indirectly, materiallyinterested in a concluded or contemplated contract,transaction or arrangement with the Company(other than his contract of service with theCompany), he shall declare the nature and extentof his interests to the Board as soon as possible,whether or not such matter is subject to theapproval or consent of the Board under normalcircumstances.

Unless the interested director, supervisor, generalmanager or other senior management of theCompany discloses his interests in accordance withthe preceding paragraph of this Article and therelevant matters are approved by the Board at ameeting in which he is not counted towards thequorum and abstains from voting, the Companyshall have the right to rescind the contract,transaction or arrangement, except as against abona fide party thereto who does not have noticeof the breach of duty by the interested director,supervisor, general manager or other seniormanagement.



– XI-115 –



A director, supervisor, general manager or othersenior management of the Company shall be takento be interested in a contract, transaction orarrangement in which his related person isinterested.

Save for the circumstances specified below, adirector shall not vote on any resolution of theBoard in relation to any contract, transaction,arrangement or other proposals in which he or anyof his associates (as defined in the applicableHong Kong Listing Rules in force from time totime) is materially interested. In determining thequorum of the meeting, the relevant director shallnot be counted towards the quorum:

1) the giving of any security or indemnity to thedirector or his associate(s) in respect of moneylent or obligations incurred or undertaken by himor his associate(s) at the request of or for thebenefit of the Company or any of its subsidiaries;or

the giving of any security or indemnity to a thirdparty in respect of a debt or obligation of theCompany or any of its subsidiaries for which thedirector or his associate(s) has/have himself/themselves assumed responsibility in whole or inpart and whether alone or jointly under aguarantee or indemnity or by the giving ofsecurity;

2) any proposal concerning an offer of shares ordebentures or other securities of or by any otherperson or company which the Company maypromote or be interested in for subscription orpurchase where the director or his associate(s) is/are or is/are to be interested as a participant in theunderwriting or sub-underwriting of the offer;

A director, supervisor, general manager or othersenior management of the Company shall be takento be interested in a contract, transaction orarrangement in which his related person isinterested.

Save for the circumstances specified below, adirector shall not vote on any resolution of theBoard in relation to any contract, transaction,arrangement or other proposals in which he or anyof his associates (as defined in the applicableHong Kong Listing Rules in force from time totime) is materially interested. In determining thequorum of the meeting, the relevant director shallnot be counted towards the quorum:

1) the giving of any security or indemnity to thedirector or his associate(s) in respect of moneylent or obligations incurred or undertaken by himor his associate(s) at the request of or for thebenefit of the Company or any of its subsidiaries;or

the giving of any security or indemnity to a thirdparty in respect of a debt or obligation of theCompany or any of its subsidiaries for which thedirector or his associate(s) has/have himself/themselves assumed responsibility in whole or inpart and whether alone or jointly under aguarantee or indemnity or by the giving ofsecurity;

2) any proposal concerning an offer of shares ordebentures or other securities of or by any otherperson or company which the Company maypromote or be interested in for subscription orpurchase where the director or his associate(s) is/are or is/are to be interested as a participant in theunderwriting or sub-underwriting of the offer;



– XI-116 –



3) any proposal or arrangement concerning thebenefit of employees of the Company or itssubsidiaries including:

1. the adoption, modification or implementation ofany employees’ share scheme or any shareincentive or share option scheme under which adirector or his associate(s) may benefit;

2. the adoption, modification or implementation ofa pension fund or retirement, death or disabilitybenefits scheme which relates both director, hisassociate(s) and employees of the Company or anyof its subsidiaries and does not provide in respectof any director (or his associate(s)) as such anyprivilege or advantage not generally accorded tothe class of persons to which such scheme or fundrelates; and

4) any contract or arrangement in which thedirector or his associate(s) is/are interested in thesame manner as other holders of shares ordebentures or other securities of the Company byvirtue only of his interest in shares or debenturesor other securities of the Company.

3) any proposal or arrangement concerning thebenefit of employees of the Company or itssubsidiaries including:

1. the adoption, modification or implementation ofany employees’ share scheme or any shareincentive or share option scheme under which adirector or his associate(s) may benefit;

2. the adoption, modification or implementation ofa pension fund or retirement, death or disabilitybenefits scheme which relates both director, hisassociate(s) and employees of the Company or anyof its subsidiaries and does not provide in respectof any director (or his associate(s)) as such anyprivilege or advantage not generally accorded tothe class of persons to which such scheme or fundrelates; and

4) any contract or arrangement in which thedirector or his associate(s) is/are interested in thesame manner as other holders of shares ordebentures or other securities of the Company byvirtue only of his interest in shares or debenturesor other securities of the Company.

Article 163 Where a director, supervisor, generalmanager or other senior management of theCompany gives to the Board a notice in writingstating that, by reason of the facts specified in thenotice, he is interested in a contract, transaction orarrangement which may subsequently be made bythe Company, such notice shall be taken for thepurposes of the preceding Article of this Chapterto be a sufficient declaration of his interests, so faras the content stated in such notice is concerned,provided that such notice shall have been givenbefore the date on which the entering into of therelevant contract, transaction or arrangement isfirst taken into consideration by the Company.

Article 227 Where a director, supervisor, generalmanager or other senior management of theCompany gives to the Board a notice in writingstating that, by reason of the facts specified in thenotice, he is interested in a contract, transaction orarrangement which may subsequently be made bythe Company, such notice shall be taken for thepurposes of the preceding Article of this Chapterto be a sufficient declaration of his interests, so faras the content stated in such notice is concerned,provided that such notice shall have been givenbefore the date on which the entering into of therelevant contract, transaction or arrangement isfirst taken into consideration by the Company.

Article 164 The Company shall not in any mannerpay taxes for its directors, supervisors, generalmanager or other senior management.

Article 228 The Company shall not in any mannerpay taxes for its directors, supervisors, generalmanager or other senior management.



– XI-117 –



Article 165 The Company shall not directly orindirectly make a loan to a director, supervisor,general manager or other senior management ofthe Company or of the Company’s parent companyor to any of their respective related person.

The provisions in the foregoing paragraph shallnot apply to the following circumstances:

1) the provision by the Company of a loan to itssubsidiaries;

2) the provision by the Company of a loan to anyof its directors, supervisors, general manager orother senior management for him to settleexpenditures incurred or to be incurred by him forthe purposes of the Company or for the purpose ofenabling him to perform his duties properly, inaccordance with the terms of a service contractapproved by the shareholders’ general meeting;

3) if the ordinary scope of business of theCompany includes the lending of money, theCompany may make a loan to any of the relevantdirectors, supervisors, general manager or othersenior management or their respective relatedperson on normal commercial terms.

Article 229 The Company shall not directly orindirectly make a loan to a director, supervisor,general manager or other senior management ofthe Company or of the Company’s parent companyor to any of their respective related person.

The provisions in the foregoing paragraph shallnot apply to the following circumstances:

1) the provision by the Company of a loan to itssubsidiaries;

2) the provision by the Company of a loan to anyof its directors, supervisors, general manager orother senior management for him to settleexpenditures incurred or to be incurred by him forthe purposes of the Company or for the purpose ofenabling him to perform his duties properly, inaccordance with the terms of a service contractapproved by the shareholders’ general meeting;

3) if the ordinary scope of business of theCompany includes the lending of money, theCompany may make a loan to any of the relevantdirectors, supervisors, general manager or othersenior management or their respective relatedperson on normal commercial terms.

Article 166 Any person who receives funds from aloan which has been made by the Company inbreach of the preceding Article shall, irrespectiveof the terms of the loan, forthwith repay suchfunds.

Article 230 Any person who receives funds from aloan which has been made by the Company inbreach of the preceding Article shall, irrespectiveof the terms of the loan, forthwith repay suchfunds.



– XI-118 –



Article 167 In addition to any rights and remediesprovided by the laws and administrativeregulations, where a director, supervisor, generalmanager or other senior management of theCompany is in breach of his duties owed to theCompany, the Company shall have a right to:

1) demand such director, supervisor, generalmanager or other senior management tocompensate the Company for the losses sustainedthereby as a result of such breach;

2) rescind any contract or transaction which hasbeen entered into by the Company with suchdirector, supervisor, general manager or othersenior management or with a third party (wheresuch third party knows or should have known thatsuch director, supervisor or senior management hasbreached his duties owed to the Company);

3) demand such director, supervisor, generalmanager or other senior management to surrenderprofits made as a result of the breach of his duties;

4) recover any monies received by the director,supervisor, general manager or other seniormanagement which should have been received bythe Company, including (but without limitation to)commissions;

5) demand repayment of interest earned or whichmay have been earned by such director, supervisor,general manager or other senior management onthe monies that should have been paid to theCompany.

Article 231 In addition to any rights and remediesprovided by the laws and administrativeregulations, where a director, supervisor, generalmanager or other senior management of theCompany is in breach of his duties owed to theCompany, the Company shall have a right to:

1) demand such director, supervisor, generalmanager or other senior management tocompensate the Company for the losses sustainedthereby as a result of such breach;

2) rescind any contract or transaction which hasbeen entered into by the Company with suchdirector, supervisor, general manager or othersenior management or with a third party (wheresuch third party knows or should have known thatsuch director, supervisor or senior management hasbreached his duties owed to the Company);

3) demand such director, supervisor, generalmanager or other senior management to surrenderprofits made as a result of the breach of his duties;

4) recover any monies received by the director,supervisor, general manager or other seniormanagement which should have been received bythe Company, including (but without limitation to)commissions;

5) demand repayment of interest earned or whichmay have been earned by such director, supervisor,general manager or other senior management onthe monies that should have been paid to theCompany.



– XI-119 –



Article 168 The Company shall enter into acontract in writing with each of the directors,supervisors, general manager and other seniormanagement, including the following contents atleast:

1) the directors, supervisors, general manager andother senior management shall undertake to theCompany that they will comply with the CompanyLaw, Special Regulations, the Articles ofAssociation, the Codes on Takeovers and Mergers,Share Buy-backs Code and other provisions of theHong Kong Stock Exchange, and agree that theCompany is entitled to access the remedialmeasures as stipulated in the Articles ofAssociation. The contract and his position shallnot be transferred;

2) the directors, supervisors, general manager andother senior management shall undertake to theCompany that they will observe and perform theirobligations to shareholders stipulated in theArticles of Association; and

3) the arbitration clauses as provided in Article211 of the Articles of Association.

The Company shall, with the prior approval of theshareholders’ general meeting, enter into a contractin writing with a director or supervisor regardinghis emoluments. The aforesaid emoluments shallinclude:

1) the emoluments in respect of his service as adirector, supervisor or senior management of theCompany;

2) the emoluments in respect of his service as adirector, supervisor or senior management of anysubsidiary of the Company;

3) the emoluments in respect of the provision ofother services in connection with the managementof the affairs of the Company and any of itssubsidiaries; and

4) the payment for compensation for the loss ofoffice, or as a consideration for or in connectionwith his retirement from office.

Article 232 The Company shall enter into acontract in writing with each of the directors,supervisors, general manager and other seniormanagement, including the following contents atleast:

1) the directors, supervisors, general manager andother senior management shall undertake to theCompany that they will comply with the CompanyLaw, Special Regulations, the Articles ofAssociation, the Codes on Takeovers and Mergers,Share Buy-backs Code and other provisions of theHong Kong Stock Exchange, and agree that theCompany is entitled to access the remedialmeasures as stipulated in the Articles ofAssociation. The contract and his position shallnot be transferred;

2) the directors, supervisors, general manager andother senior management shall undertake to theCompany that they will observe and perform theirobligations to shareholders stipulated in theArticles of Association; and

3) the arbitration clauses as provided in Article292 of the Articles of Association.

The Company shall, with the prior approval of theshareholders’ general meeting, enter into a contractin writing with a director or supervisor regardinghis emoluments. The aforesaid emoluments shallinclude:

1) the emoluments in respect of his service as adirector, supervisor or senior management of theCompany;

2) the emoluments in respect of his service as adirector, supervisor or senior management of anysubsidiary of the Company;

3) the emoluments in respect of the provision ofother services in connection with the managementof the affairs of the Company and any of itssubsidiaries; and

4) the payment for compensation for the loss ofoffice, or as a consideration for or in connectionwith his retirement from office.



– XI-120 –



No proceedings may be brought by a director orsupervisor against the Company for any benefitreceivable in respect of the aforesaid mattersexcept pursuant to the aforesaid contract.

No proceedings may be brought by a director orsupervisor against the Company for any benefitreceivable in respect of the aforesaid mattersexcept pursuant to the aforesaid contract.

Article 169 The contracts concerning emolumentsentered into between the Company and itsdirectors or supervisors shall provide that in theevent that the Company is acquired, theCompany’s directors and supervisors shall, subjectto the prior approval of the shareholders’ generalmeeting, have the right to receive compensation orother payment in respect of his loss of office orretirement.

For the purposes of the preceding paragraph,acquisition of the Company shall include any ofthe following:

1) an acquisition offer made by any person to allshareholders; or

2) an acquisition offer made by any person with aview to making the offeror a controllingshareholder. The term “controlling shareholder”has the same meaning as defined in Article 54 ofthe Articles of Association.

If the relevant director or supervisor does notcomply with this Article, any sum so received byhim shall belong to those persons who have soldtheir shares as a result of accepting such offer. Theexpenses incurred in distributing such sum on apro rata basis amongst such persons shall be borneby the relevant director or supervisor and shall notbe deducted from such sum.

Article 233 The contracts concerning emolumentsentered into between the Company and itsdirectors or supervisors shall provide that in theevent that the Company is acquired, theCompany’s directors and supervisors shall, subjectto the prior approval of the shareholders’ generalmeeting, have the right to receive compensation orother payment in respect of his loss of office orretirement.

For the purposes of the preceding paragraph,acquisition of the Company shall include any ofthe following:

1) an acquisition offer made by any person to allshareholders; or

2) an acquisition offer made by any person with aview to making the offeror a controllingshareholder. The term “controlling shareholder”has the same meaning as defined in Article 54 ofthe Articles of Association.

If the relevant director or supervisor does notcomply with this Article, any sum so received byhim shall belong to those persons who have soldtheir shares as a result of accepting such offer. Theexpenses incurred in distributing such sum on apro rata basis amongst such persons shall be borneby the relevant director or supervisor and shall notbe deducted from such sum.

CHAPTER 16 FINANCIAL ANDACCOUNTING SYSTEM, PROFITDISTRIBUTION AND AUDITING

CHAPTER 16 FINANCIAL ANDACCOUNTING SYSTEM, PROFITDISTRIBUTION AND AUDITING

Article 170 The Company shall establish itsfinancial and accounting system in accordancewith the laws, administrative regulations and PRCaccounting standards formulated by the competentfinance authorities of the State Council.

Article 234 The Company shall establish itsfinancial and accounting system in accordancewith the laws, administrative regulations and PRCaccounting standards formulated by the competentfinance authorities of the State Council.

Article 171 At the end of each accounting year,the Company shall prepare a financial reportwhich shall be audited and verified.

Article 235 At the end of each accounting year,the Company shall prepare a financial reportwhich shall be audited and verified.



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Article 172 The Board shall present to theshareholders at every annual general meeting thefinancial reports prepared by the Company asrequired by the relevant laws, administrativeregulations and regulatory documents promulgatedby the local governments and competentauthorities. The settlement date for the Company’sannual financial reports shall not exceed sixmonths from the date of the annual generalmeeting.

Article 236 The Board shall present to theshareholders at every annual general meeting thefinancial reports prepared by the Company asrequired by the relevant laws, administrativeregulations and regulatory documents promulgatedby the local governments and competentauthorities. The settlement date for the Company’sannual financial reports shall not exceed sixmonths from the date of the annual generalmeeting.

Article 173 The Company’s financial reports shallbe made available for shareholders’ inspection atthe Company twenty days before the date of anannual general meeting. Each shareholder of theCompany shall have the right to receive a copy ofsuch financial reports referred to in this Chapter.

Unless otherwise specified by these Articles ofAssociation, the Company shall send to eachshareholder of overseas listed foreign shares byhand or prepaid mail or by other means (includingthrough posting at the Company website or otherwebsites designated by the relevant stockexchange) permitted by the stock exchange of theplace where the shares of the Company are listedthe copy of (i) the aforesaid reports or directors’report together with the balance sheet and thestatement of profit and loss or statement of incomeof the Company; or (ii) the report of financialsummary not later than twenty-one days before thedate of convening the annual general meeting, tothe registered address of each shareholder shownin the register of members.

Article 237 The Company’s financial reports shallbe made available for shareholders’ inspection atthe Company twenty days before the date of anannual general meeting. Each shareholder of theCompany shall have the right to receive a copy ofsuch financial reports referred to in this Chapter.

Unless otherwise specified by these Articles ofAssociation, the Company shall send to eachshareholder of overseas listed foreign shares byhand or prepaid mail or by other means (includingthrough posting at the Company website or otherwebsites designated by the relevant stockexchange) permitted by the stock exchange of theplace where the shares of the Company are listedthe copy of (i) the aforesaid reports or directors’report together with the balance sheet and thestatement of profit and loss or statement of incomeof the Company; or (ii) the report of financialsummary not later than twenty-one days before thedate of convening the annual general meeting, tothe registered address of each shareholder shownin the register of members.

Article 174 The financial statements of theCompany shall be prepared in accordance with thePRC accounting standards and regulations.

Article 238 The financial statements of theCompany shall be prepared in accordance with thePRC accounting standards and regulations.

Article 175 Any interim results or financialinformation published or disclosed by theCompany shall be prepared and presented inaccordance with the PRC accounting standards andregulations.

Article 239 Any interim results or financialinformation published or disclosed by theCompany shall be prepared and presented inaccordance with the PRC accounting standards andregulations, and also in accordance with eitherinternational accounting standards or those of theoverseas place where the Company’s shares arelisted.



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Article 176 The Company shall publish its resultswithin two months and dispatch an interimfinancial report within three months after theexpiration of the first six months of eachaccounting year. The results shall be publishedwithin three months after the end of an accountingyear and an annual financial report shall bedispatched within four months.

If the securities regulatory authorities of the placewhere the Company’s shares are listed provideotherwise, such provisions shall prevail.

Article 240 The Company shall publish relevantresults within 2 months from the end of the first 6months of each accounting year and submitinterim financial and accounting reports to thedispatched office of the CSRC and the stockexchange; publish relevant results within 3 monthsfrom the end of each accounting year and submitannual financial reports to the CSRC and thestock exchange within 4 months; and quarterlyfinancial and accounting reports shall besubmitted to the dispatched office of the CSRCand the stock exchange within 1 month fromthe end of the first 3 months and 9 months ofeach accounting year.

If the securities regulatory authorities of the placewhere the Company’s shares are listed provideotherwise, such provisions shall prevail.

The aforesaid financial and accounting reportsshall be prepared in accordance with theprovisions of relevant laws, administrativeregulations and departmental rules.

Article 177 The Company shall not maintainaccounts separately other than those provided bylaw.

The Company’s assets shall not be deposited in anaccount maintained in the name of any individual.

Article 241 The Company shall not maintainaccounts separately other than those provided bylaw.

The Company’s assets shall not be deposited in anaccount maintained in the name of any individual.



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Article 178 In distributing the current year’s profitafter tax, 10% of the profit shall be allocated tothe Company’s statutory reserve fund. When theaggregate amount of the statutory reserve fund hasreached 50% or more of the Company’s registeredcapital, further appropriations are not required.

If the statutory reserve fund of the Company isinsufficient to make up the losses of the previousyear, the profits of the current year shall be usedto make up such losses before allocating to thestatutory reserve fund in accordance with thepreceding paragraph.

After allocation of its profits after tax to itsstatutory reserve fund, the Company may allocateits profits after tax to its discretionary reserve fundupon a resolution of the shareholders’ generalmeeting.

The remaining profits after tax after the Companyhas made up its losses and allocated to its reservefunds may be distributed to its shareholders inproportion to their shareholdings.

If a shareholders’ general meeting has, in violationof the preceding paragraph, distributed profits toshareholders before making up losses andallocating to the statutory reserve fund,shareholders shall return to the Company theprofits distributed in violation of the provisions.

The shares held by the Company shall not beentitled to any profit distribution.

Article 242 In distributing the current year’s profitafter tax, 10% of the profit shall be allocated tothe Company’s statutory reserve fund. When theaggregate amount of the statutory reserve fund hasreached 50% or more of the Company’s registeredcapital, further appropriations are not required.

If the statutory reserve fund of the Company isinsufficient to make up the losses of the previousyear, the profits of the current year shall be usedto make up such losses before allocating to thestatutory reserve fund in accordance with thepreceding paragraph.

After allocation of its profits after tax to itsstatutory reserve fund, the Company may allocateits profits after tax to its discretionary reserve fundupon a resolution of the shareholders’ generalmeeting.

The remaining profits after tax after the Companyhas made up its losses and allocated to its reservefunds may be distributed to its shareholders inproportion to their shareholdings.

If a shareholders’ general meeting has, in violationof the preceding paragraph, distributed profits toshareholders before making up losses andallocating to the statutory reserve fund,shareholders shall return to the Company theprofits distributed in violation of the provisions.

The shares held by the Company shall not beentitled to any profit distribution.

Article 179 The capital reserve fund shall includethe following amounts:

1) the premiums received when shares are issuedat a premium to their par value;

2) any other income required to be included in thecapital reserve fund by the competent financeauthorities of the State Council.

Article 243 The capital reserve fund shall includethe following amounts:

1) the premiums received when shares are issuedat a premium to their par value;

2) any other income required to be included in thecapital reserve fund by the competent financeauthorities of the State Council.



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Article 180 The Company’s reserve funds shall beused to make up the losses or expand theproduction operations, or be converted to increasethe share capital of the Company. However, thecapital reserve fund shall not be used to make upthe losses of the Company.

When the statutory reserve fund is converted intocapital, the remainder of the fund shall not be lessthan 25% of the Company’s registered capitalprior to such conversion.

Article 244 The Company’s reserve funds shall beused to make up the losses or expand theproduction operations, or be converted to increasethe share capital of the Company. However, thecapital reserve fund shall not be used to make upthe losses of the Company.

When the statutory reserve fund is converted intocapital, the remainder of the fund shall not be lessthan 25% of the Company’s registered capitalprior to such conversion.

Article 181 The Company will give fullconsideration to the interests of shareholders andmake the implementation of a reasonable profitdistribution policy according to business situationand market environment annually. The Companymay distribute dividends in the form of:

1) cash;

2) shares.

Article 245 The Company will give fullconsideration to the interests of shareholders andmake the implementation of a reasonable profitdistribution policy according to business situationand market environment annually. The Companymay distribute dividends in the form of:

1) cash;

2) shares.

None Article 246 The basic principles of the profitdistribution of the Company are as follows:

1) the Company shall take full consideration ofthe return to investors while considering theoverall interest of its shareholders and thesustainable development of the Company, anddistribute dividends to the shareholders on ayearly basis in a fixed proportion out of theprofit realized for the year concerneddistributable to the parent company;

2) the Company shall fully take into accountthe opinions of the independent directors andpublic investors in making decision on andjustifying the profit distribution policy;

3) the Company shall distribute its profit byway of cash dividend as priority.



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None Article 247 Profit distribution policies of theCompany are specified as follows:

1) form of profit distribution: the Companymay distribute dividends in cash, in shares or ina combination of both cash and shares. Interimprofit distribution may be made by theCompany if it deems appropriate.

2) save as special circumstances, if theCompany’s profit for the year and itsaccumulated undistributed profit are positive,the Company may distribute dividend in cashand the profit to be distributed in cash perannum will not be less than 10% of thedistributable profit of the Company realized forthat year.

3) where the Company’s business is in a soundcondition, and the Board considers that theshare price of the Company does not reflect itsshare capital size and that distributing dividendin shares will be favorable to the shareholdersof the Company as a whole, the Company maypropose dividend distribution in shares,provided that the above conditions of dividenddistribution in cash are fully satisfied.

None Article 248 Procedures for considering theprofit distribution plan of the Company are asfollows:

1) The Board of the Company shall thoroughlydiscuss the rationality of the profit distributionplan and form detailed minutes. Theindependent directors shall give specific opinionon the profit distribution plan. The profitdistribution plan shall form a special resolutionbefore submitting to the shareholders’ generalmeeting for consideration. In considering theprofit distribution plan, the Company shallmake Internet voting accessible to theshareholders.



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2) where the Company has no cash dividenddistribution proposal under the specialcircumstances, the Board shall explain thespecific reasons for not distributing cashdividends, the exact purpose for the retainedprofit and the estimated investment return,submit the same to the shareholders’ generalmeeting for consideration after independentdirectors have expressed their opinions thereon,and disclose the same in the designated mediaof the Company.

None Article 249 After the profit distribution planhas been resolved at the general meeting, theBoard shall complete the dividend (or share)distribution within 2 months after the date ofthe general meeting.

None Article 250 In case of force majeure events,such as war and natural disasters, or materialchanges in the external operating environmentof the Company which have significant impacton the operation of the Company, or significantchanges in the Company’s own operatingcondition, the Company can adjust its profitdistribution policy.

The Board shall make a special disquisition onany adjustment to the Company’s profitdistribution policy, demonstrate the detailedreasons for the adjustment, prepare a writtenreport thereon, and then submit it to theshareholders’ general meeting of the Companyfor approval as a special resolution after over 2/3 (inclusive) independent directors pass it byvoting. While considering the changes in theprofit distribution policy, the Company shalloffer Internet voting to the shareholders.



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Article 182 Monies paid for any Shares before thedate specified by the Company for payment ofShare (“payment day”) shall have interests, but theholders of Shares are not entitled to dividendsannounced later for the said monies.

Subject to the relevant laws and regulations, theCompany may exercise its right of forfeiture overunclaimed dividends, provided that such right onlycan be exercised after the expiration of therelevant applicable limitation.

The Company shall have the power to ceasesending dividend warrants by post to a holder ofoverseas listed foreign shares, provided that suchpower shall not be exercised until such dividendwarrants have been so left uncashed on twoconsecutive occasions. Such power may beexercised after the first occasion in which such awarrant is returned undelivered.

If the Company is authorized to issue warrants toholders of bearer shares, no new warrants shall beissued to replace the lost ones unless the Companyis able to confirm reasonably that the originalwarrants have been destroyed.

The Company shall have the power to sell theshares of a holder of the overseas listed foreignshares who is untraceable by the ways consideredappropriate by the Board under the followingcircumstances:

1) the Company has, during a period of twelveyears, paid at least three dividends in respect ofthe shares in question and no dividend during thatperiod has been claimed; and

2) upon the expiry of the period of twelve years,the Company gives notice of its intention to sellthe shares by way of an advertisement publishedin one or more newspapers in the place where theCompany’s shares are listed, and notifies the stockexchange on which such shares are listed of suchintention.

Article 251 Monies paid for any Shares before thedate specified by the Company for payment ofShare (“payment day”) shall have interests, but theholders of Shares are not entitled to dividendsannounced later for the said monies.

Subject to the relevant laws and regulations, theCompany may exercise its right of forfeiture overunclaimed dividends, provided that such right onlycan be exercised after the expiration of therelevant applicable limitation.

The Company shall have the power to ceasesending dividend warrants by post to a holder ofoverseas listed foreign shares, provided that suchpower shall not be exercised until such dividendwarrants have been so left uncashed on twoconsecutive occasions. Such power may beexercised after the first occasion in which such awarrant is returned undelivered.

If the Company is authorized to issue warrants toholders of bearer shares, no new warrants shall beissued to replace the lost ones unless the Companyis able to confirm reasonably that the originalwarrants have been destroyed.

The Company shall have the power to sell theshares of a holder of the overseas listed foreignshares who is untraceable by the ways consideredappropriate by the Board under the followingcircumstances:

1) the Company has, during a period of twelveyears, paid at least three dividends in respect ofthe shares in question and no dividend during thatperiod has been claimed; and

2) upon the expiry of the period of twelve years,the Company gives notice of its intention to sellthe shares by way of an advertisement publishedin one or more newspapers in the place where theCompany’s shares are listed, and notifies the stockexchange on which such shares are listed of suchintention.



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Article 183 The Company shall appoint areceiving agent for the holders of overseas listedforeign shares. The receiving agent shall receiveon behalf of such shareholders any dividends orother amounts payable by the Company to them inrespect of the overseas listed foreign shares.

The receiving agent appointed by the Companyshall satisfy the requirements of the laws of theplace where the Company’s shares are listed or therules of the relevant stock exchange.

The receiving agent appointed by the Company forholders of overseas listed foreign shares listed inHong Kong shall be a trust company registeredunder the Trustee Ordinance of Hong Kong.

Article 252 The Company shall appoint areceiving agent for the holders of overseas listedforeign shares. The receiving agent shall receiveon behalf of such shareholders any dividends orother amounts payable by the Company to them inrespect of the overseas listed foreign shares.

The receiving agent appointed by the Companyshall satisfy the requirements of the laws of theplace where the Company’s shares are listed or therules of the relevant stock exchange.

The receiving agent appointed by the Company forholders of overseas listed foreign shares listed inHong Kong shall be a trust company registeredunder the Trustee Ordinance of Hong Kong.

CHAPTER 17 INTERNAL AUDIT

None Article 253 The Company shall put in place aninternal audit system and designate auditors tocarry out internal audit and supervision on thefinancial income and expenses as well as theeconomic activities of the Company.

None Article 254 The internal audit system of theCompany and the duties of auditors shall comeinto effect upon the approval of the Board. Theperson in charge of audit shall be accountableto and report to the Board.



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CHAPTER 17 APPOINTMENT OFACCOUNTING FIRMS

CHAPTER 18 APPOINTMENT OFACCOUNTING FIRMS

Article 184 The Company shall appoint anindependent accounting firm which is qualifiedunder the relevant regulations of the PRC to auditthe Company’s annual financial reports, andreview other financial reports of the Company.

The first accounting firm of the Company may beappointed at the inaugural meeting of theCompany before the first annual general meeting.The accounting firm so appointed shall hold officeuntil the conclusion of the first annual generalmeeting.

If the inaugural meeting does not exercise itspowers under the preceding paragraph, thosepowers shall be exercised by the Board.

Article 255 The Company shall appoint anindependent accounting firm which is qualifiedunder the relevant regulations of the PRC andholds the qualification for engaging insecurities-related business to audit theCompany’s annual financial reports, review otherfinancial reports of the Company and provideother relevant consulting services.

The first accounting firm of the Company may beappointed at the inaugural meeting of theCompany before the first annual general meeting.The accounting firm so appointed shall hold officeuntil the conclusion of the first annual generalmeeting.

If the inaugural meeting does not exercise itspowers under the preceding paragraph, thosepowers shall be exercised by the Board.

None Article 256 The Company shall ensure that itwill provide true and complete accountingevidences, books, financial accounting reportsand other accounting information to theaccounting firms without refusal, concealingand false information.

Article 185 The accounting firm appointed by theCompany shall hold office from the conclusion ofthe annual general meeting at which theappointment is made until the conclusion of thenext annual general meeting.

Article 257 The accounting firm appointed by theCompany shall hold office from the conclusion ofthe annual general meeting at which theappointment is made until the conclusion of thenext annual general meeting.



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Article 186 The accounting firm appointed by theCompany shall have the following rights:

1) the right to review the books, records andvouchers of the Company at any time; and theright to require the directors, general manager orother senior management of the Company tosupply relevant information and explanations;

2) the right to require the Company to take allreasonable steps to obtain from its subsidiariessuch information and explanations necessary forthe accounting firm to discharge its duties; and

3) the right to be in attendance at shareholders’meetings and to receive all notices of, and othercommunications relating to, any shareholders’meeting which any shareholder is entitled toreceive, and to speak at any shareholders’ meetingon matters concerning its role as the Company’saccounting firm.

Article 258 The accounting firm appointed by theCompany shall have the following rights:

1) the right to review the books, records andvouchers of the Company at any time; and theright to require the directors, general manager orother senior management of the Company tosupply relevant information and explanations;

2) the right to require the Company to take allreasonable steps to obtain from its subsidiariessuch information and explanations necessary forthe accounting firm to discharge its duties; and

3) the right to be in attendance at shareholders’meetings and to receive all notices of, and othercommunications relating to, any shareholders’meeting which any shareholder is entitled toreceive, and to speak at any shareholders’ meetingon matters concerning its role as the Company’saccounting firm.

Article 187 If there is a vacancy in the position ofaccounting firm of the Company, the Board mayappoint an accounting firm to fill such vacancybefore the convening of a shareholders’ generalmeeting. However, if there is another incumbentaccounting firm during the period of such vacancy,such accounting firm may continue to act.

Article 259 If there is a vacancy in the position ofaccounting firm of the Company, the Board mayappoint an accounting firm to fill such vacancybefore the convening of a shareholders’ generalmeeting. However, if there is another incumbentaccounting firm during the period of such vacancy,such accounting firm may continue to act.

Article 188 The shareholders’ general meetingmay by ordinary resolution remove an accountingfirm before the expiration of its term of office,irrespective of the provisions in the contractbetween the accounting firm and the Company. Ifthe accounting firm has the right to claimcompensation for its removal, that right shall notbe affected thereby.

Article 260 The shareholders’ general meetingmay by ordinary resolution remove an accountingfirm before the expiration of its term of office,irrespective of the provisions in the contractbetween the accounting firm and the Company. Ifthe accounting firm has the right to claimcompensation for its removal, that right shall notbe affected thereby.

Article 189 The remuneration of an accountingfirm or the manner in which such remuneration isdetermined shall be decided by a shareholders’general meeting. The remuneration of theaccounting firm appointed by the Board shall bedetermined by the Board.

Article 261 The remuneration of an accountingfirm or the manner in which such remuneration isdetermined shall be decided by a shareholders’general meeting. The remuneration of theaccounting firm appointed by the Board shall bedetermined by the Board.



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Article 190 The Company’s appointment, removaland non-reappointment of an accounting firm shallbe decided by a shareholders’ general meeting andreport the relevant information to the localoffice of the CSRC as its place of domicilewithin five business days upon decision is made;for removal of an accounting firm, theCompany shall explain the reason.

Where a resolution at a shareholders’ generalmeeting is intended to be passed to appoint anaccounting firm other than the incumbentaccounting firm to fill a casual vacancy in theoffice of accounting firm, to reappoint anaccounting firm that was appointed by the Boardto fill a vacancy, or to remove an accounting firmbefore the expiration of its term of office, thefollowing provisions shall apply:

1) the proposal for the appointment or removalshall be sent (before notice of meeting is given tothe shareholders) to the accounting firm proposedto be appointed or proposed to vacate its post, orto the accounting firm which has vacated its postin the relevant accounting year.

Vacating a post shall include removal, resignationand retirement.

2) if the accounting firm vacating its post makesrepresentations in writing and requests theCompany to notify its shareholders of suchrepresentations, the Company shall (unless therepresentations are received too late) take thefollowing measures:

1. in any notice of meeting held for making theresolution, state the fact that representations havebeen made by the vacating accounting firm; and

2. attach a copy of the representations to thenotice and send it to the shareholders in themanner stipulated in the Articles of Association.

3) if the Company fails to send out the accountingfirm’s representations in the manner set out insub-paragraph (2) of this Article, such accountingfirm may require that the representations be readout at a shareholders’ general meeting and maymake further complaints.

Article 262 The Company’s appointment, removaland non-reappointment of an accounting firm shallbe decided by a shareholders’ general meeting andreport the relevant information to the localoffice of the CSRC as its place of domicilewithin five business days upon decision is made;for removal of an accounting firm, theCompany shall explain the reason.

Where a resolution at a shareholders’ generalmeeting is intended to be passed to appoint anaccounting firm other than the incumbentaccounting firm to fill a casual vacancy in theoffice of accounting firm, to reappoint anaccounting firm that was appointed by the Boardto fill a vacancy, or to remove an accounting firmbefore the expiration of its term of office, thefollowing provisions shall apply:

1) the proposal for the appointment or removalshall be sent (before notice of meeting is given tothe shareholders) to the accounting firm proposedto be appointed or proposed to vacate its post, orto the accounting firm which has vacated its postin the relevant accounting year.

Vacating a post shall include removal, resignationand retirement.

2) if the accounting firm vacating its post makesrepresentations in writing and requests theCompany to notify its shareholders of suchrepresentations, the Company shall (unless therepresentations are received too late) take thefollowing measures:

1. in any notice of meeting held for making theresolution, state the fact that representations havebeen made by the vacating accounting firm; and

2. attach a copy of the representations to thenotice and send it to the shareholders in themanner stipulated in the Articles of Association.

3) if the Company fails to send out the accountingfirm’s representations in the manner set out insub-paragraph (2) of this Article, such accountingfirm may require that the representations be readout at a shareholders’ general meeting and maymake further complaints.



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4) an accounting firm which is vacating its postshall be entitled to attend:

1. the shareholders’ general meeting at which itsterm of office would otherwise have expired;

2. the shareholders’ general meeting at which it isproposed to fill the vacancy caused by its removal;

3. the shareholders’ general meeting which isconvened as a result of its resignation.

And to receive all notices of, and othercommunications relating to, any such meetings,and to speak at any such meetings on mattersconcerning its role as the former accounting firmof the Company.

4) an accounting firm which is vacating its postshall be entitled to attend:

1. the shareholders’ general meeting at which itsterm of office would otherwise have expired;

2. the shareholders’ general meeting at which it isproposed to fill the vacancy caused by its removal;

3. the shareholders’ general meeting which isconvened as a result of its resignation.

And to receive all notices of, and othercommunications relating to, any such meetings,and to speak at any such meetings on mattersconcerning its role as the former accounting firmof the Company.

Article 191 If the Company proposes to removean accounting firm or not to renew theappointment thereof, it shall notify the accountingfirm in advance, and the latter shall have the rightto state its opinions at a shareholders’ generalmeeting. If the accounting firm resigns, it shallexplain to the shareholders’ general meetingwhether there has been any impropriety on the partof the Company.

The accounting firm may resign from its office bydepositing a written notice of resignation at thelegal address of the Company. The notice shallbecome effective on the date of such deposit or onsuch later date as may be stated therein. Thenotice shall contain the following statements:

1) a statement to the effect that there are nocircumstances connected with its resignation whichit considers shall be brought to the notice of theshareholders or creditors of the Company; or

2) a statement of any such circumstances thatshall be explained.

Article 263 If the Company proposes to removean accounting firm or not to renew theappointment thereof, it shall notify the accountingfirm in advance, and the latter shall have the rightto state its opinions at a shareholders’ generalmeeting. If the accounting firm resigns, it shallexplain to the shareholders’ general meetingwhether there has been any impropriety on the partof the Company.

The accounting firm may resign from its office bydepositing a written notice of resignation at thelegal address of the Company. The notice shallbecome effective on the date of such deposit or onsuch later date as may be stated therein. Thenotice shall contain the following statements:

1) a statement to the effect that there are nocircumstances connected with its resignation whichit considers shall be brought to the notice of theshareholders or creditors of the Company; or

2) a statement of any such circumstances thatshall be explained.



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The Company shall, within fourteen days afterreceipt of the written notice referred to in thepreceding clause, send a copy of the notice to therelevant competent authorities. If the noticecontains a statement under subparagraph (2) of thepreceding Article, a copy of such statement shallbe placed at the Company for shareholders’inspection. The Company shall also send a copy ofsuch statement by prepaid mail to every holder ofoverseas listed foreign Shares at the addressregistered in the register of shareholders.

If the accounting firm’s notice of resignationcontains a statement of any such circumstancesthat shall be explained, the accounting firm mayrequest the Board to convene an extraordinarygeneral meeting to listen to the explanation on theresignation.

The Company shall, within fourteen days afterreceipt of the written notice referred to in thepreceding clause, send a copy of the notice to therelevant competent authorities. If the noticecontains a statement under subparagraph (2) of thepreceding Article, a copy of such statement shallbe placed at the Company for shareholders’inspection. The Company shall also send a copy ofsuch statement by prepaid mail to every holder ofoverseas listed foreign Shares at the addressregistered in the register of shareholders.

If the accounting firm’s notice of resignationcontains a statement of any such circumstancesthat shall be explained, the accounting firm mayrequest the Board to convene an extraordinarygeneral meeting to listen to the explanation on theresignation.

CHAPTER 18 MERGER, DEMERGER,DISSOLUTION AND LIQUIDATION OF THE

COMPANY

CHAPTER 19 MERGER, DEMERGER,DISSOLUTION AND LIQUIDATION OF THE

COMPANY

Article 192 In the event of a merger or demergerof the Company, a plan shall be proposed by theBoard and shall be approved in accordance withthe procedures stipulated in the Articles ofAssociation. The Company shall then go throughthe relevant approval process according to the law.Shareholders who oppose the plan of merger ordemerger of the Company shall have the right torequest the Company or the shareholders whoconsent to such plan to purchase their shares at afair price. The contents of the resolution on themerger or demerger of the Company shallconstitute special documents which shall beavailable for inspection by shareholders of theCompany.

For H shareholders, the aforesaid document shallbe sent by mail. The address of the recipient shallbe the address shown on the register ofshareholders.

Merger, demerger, capital increase, capitalreduction, dissolution or liquidation of theCompany is subject to resolution adopted by theshareholders’ general meeting and approval fromCSRC and relevant regulatory authorities.

Article 264 In the event of a merger or demergerof the Company, a plan shall be proposed by theBoard and shall be approved in accordance withthe procedures stipulated in the Articles ofAssociation. The Company shall then go throughthe relevant approval process according to the law.Shareholders who oppose the plan of merger ordemerger of the Company shall have the right torequest the Company or the shareholders whoconsent to such plan to purchase their shares at afair price. The contents of the resolution on themerger or demerger of the Company shallconstitute special documents which shall beavailable for inspection by shareholders of theCompany.

For H shareholders, the aforesaid document shallbe sent by mail. The address of the recipient shallbe the address shown on the register ofshareholders.

Merger, demerger, capital increase, capitalreduction, dissolution or liquidation of theCompany is subject to resolution adopted by theshareholders’ general meeting and approval fromCSRC and relevant regulatory authorities.



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Article 193 A merger of the Company may takethe form of either a merger by absorption or amerger by establishment of a new entity.

In the event of a merger, the parties to the mergershall enter into a merger agreement, and preparebalance sheets and lists of property. The Companyshall notify its creditors within ten days from thedate of the Company’s resolution on the mergerand shall publish an announcement for at least 3times in the newspaper within thirty days from thedate of such resolution.

Upon completion of the merger, the rights inrelation to debtors and indebtedness of each of themerged parties shall be assumed by the companywhich survives the merger or by the newlyestablished company.

Article 265 A merger of the Company may takethe form of either a merger by absorption or amerger by establishment of a new entity.

For a merger by absorption, a company absorbsany other company and the absorbed companyis dissolved; for a merger by formation of anew corporation, two or more companiescombine together for the establishment of a newone, and the existing ones are dissolved.

In the event of a merger, the parties to the mergershall enter into a merger agreement, and preparebalance sheets and lists of property. The Companyshall notify its creditors within ten days from thedate of the Company’s resolution on the mergerand shall publish an announcement for at least 3times in the newspaper within thirty days from thedate of such resolution.

Upon completion of the merger, the rights inrelation to debtors and indebtedness of each of themerged parties shall be assumed by the companywhich survives the merger or by the newlyestablished company.

None Article 266 After the merger, the credits anddebts of the companies involved shall besucceeded by the surviving company or by thenewly established company.

Article 194 Upon separation of the Company, it’sproperty shall be split correspondingly.

For the separation of the Company, all the partiesinvolved in the separation should sign anagreement on the separation, and formulate abalance sheet and lists of property. The Companyshall inform the creditors in 10 days after the dateof making the resolution for such merger, andmake at least 3 times of newspaper announcementsin 30 days as provided for by the applicable laws,administrative regulations or the regulatoryprovisions of the place where the Company’sshares are listed.

Debts incurred by the Company before itsseparation shall be borne by the companies afterthe separation according to the agreement reached.

Article 267 Upon separation of the Company, it’sproperty shall be split correspondingly.

For the separation of the Company, all the partiesinvolved in the separation should sign anagreement on the separation, and formulate abalance sheet and lists of property. The Companyshall inform the creditors in 10 days after the dateof making the resolution for such merger, andmake at least 3 times of newspaper announcementsin 30 days as provided for by the applicable laws,administrative regulations or the regulatoryprovisions of the place where the Company’sshares are listed.

Debts incurred by the Company before itsseparation shall be borne by the companies afterthe separation according to the agreement reached.



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None Article 268 The companies after division shallbear joint liability for the debts of the Companybefore division, save as otherwise specified inthe written agreement on debt repaymentreached between the Company and its creditorsbefore division.

Article 195 Change in registered particularsarising from merger or division of the Companyshall be registered with the company registrationauthority according to law and subject to theapproval of the competent authority if necessary.Where the company is dissolved, an applicationshall be made to register the cancellation inaccordance with the law. If a new company isestablished, such establishment shall be registeredaccording to law and approved by the CSRC.

Increase or decrease of the registered capital of theCompany must be registered with the companyregistration authorities in accordance with law.

Article 269 Change in registered particularsarising from merger or division of the Companyshall be registered with the company registrationauthority according to law and subject to theapproval of the competent authority if necessary.Where the company is dissolved, an applicationshall be made to register the cancellation inaccordance with the law. If a new company isestablished, such establishment shall be registeredaccording to law and approved by the CSRC.

Increase or decrease of the registered capital of theCompany must be registered with the companyregistration authorities in accordance with law.



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Article 196 In any of the following circumstances,the Company shall be dissolved upon approval byCSRC:

1) a shareholders’ general meeting resolves todissolve the Company;

2) dissolution is necessary due to a merger ordemerger of the Company;

3) the Company is declared bankrupt according tothe law due to its failure to settle liabilities due;

4) the Company is ordered to close down becauseof its violation of laws or administrativeregulations;

5) where the Company has experienced materialdifficulties in operation and management, and thecontinuous operation thereof would lead tosubstantial loss to the benefits of its shareholderswhich cannot be resolved by other means,shareholders holding 10% or more of the totalvoting rights of the Company may appeal to thepeople’s court for dissolution of the Company.

Article 270 In any of the following circumstances,the Company shall be dissolved upon approval byCSRC:

1) the operation term expires as provided inthese Articles of Association or any eventtriggering the dissolution as listed in theseArticles of Association occurs;

2) a shareholders’ general meeting resolves todissolve the Company;

3) dissolution is necessary due to a merger ordemerger of the Company;

4) the Company is declared bankrupt according tothe law due to its failure to settle liabilities due;

5) the business license of the Company isrevoked or the Company is ordered to close downor gets deregistered because of its violation oflaws or administrative regulations;

6) where the Company has experienced materialdifficulties in operation and management, and thecontinuous operation thereof would lead tosubstantial loss to the benefits of its shareholderswhich cannot be resolved by other means,shareholders holding 10% or more of the totalvoting rights of the Company may appeal to thepeople’s court for dissolution of the Company.



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Article 197 Where the Company is dissolvedpursuant to sub-paragraph (1) of the precedingArticle, a liquidation committee shall be set upwithin fifteen days, and the composition of theliquidation committee shall be determined by anordinary resolution at a shareholders’ generalmeeting.

Where the Company is dissolved pursuant tosub-paragraph (2) of the preceding Article, theliquidation work shall be conducted by the partiesinvolved in the merger or division according to thecontracts entered into at the time of merger ordivision.

Where the Company is dissolved pursuant tosub-paragraphs (3) and (5) of the precedingArticle, the people’s court shall, according to therelevant laws, organize the shareholders, relevantauthorities and relevant professionals to establish aliquidation committee to carry out the liquidation.

Where the Company is dissolved pursuant tosub-paragraph (4) of the preceding Article, therelevant competent authorities shall organize theshareholders, relevant authorities and relevantprofessionals to establish a liquidation committeeto carry out the liquidation.

Article 271 Where the Company falls underItem (1) of the preceding Article, it may surviveby amending the Articles of Association.

Any amendment to the Articles of Association inaccordance with the preceding paragraph shallbe approved by 2/3 or more of the voting rightsheld by the Shareholders attending theShareholders’ General Meeting.

Where the Company is dissolved pursuant tosub-paragraphs 1), 2), 5) and 6) of precedingArticle, a liquidation committee shall be set upwithin fifteen days, and the composition of theliquidation committee shall be determined by anordinary resolution at a shareholders’ generalmeeting. The liquidation team is composed ofDirectors or persons determined by the generalmeeting. If the liquidation team is not formedwithin the time frame, the creditor may submitan application to the people’s court to designaterelevant personnel to form a liquidation team toconduct the liquidation.

Where the Company is dissolved pursuant tosub-paragraph (3) of preceding Article, theliquidation work shall be conducted by the partiesinvolved in the merger or division according to thecontracts entered into at the time of merger ordivision.

Where the Company is dissolved pursuant tosub-paragraphs (4) and (6) of preceding Article,the people’s court shall, according to the relevantlaws, organize the shareholders, relevantauthorities and relevant professionals to establish aliquidation committee to carry out the liquidation.

Where laws and regulations provide otherwisefor dissolution and liquidation, the relevantprovisions shall be implemented.



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Article 198 Where the Board decides to liquidatethe Company for any reason other than theCompany’s declaration of its own bankruptcy, theBoard shall include a statement in its noticeconvening a shareholders’ general meeting toconsider the proposal to the effect that, aftermaking full inquiry into the affairs of theCompany, the Board is of the opinion that theCompany will be able to pay its debts in fullwithin twelve months from the commencement ofthe liquidation.

All the functions and powers of the Board shallcease immediately upon the passing of theresolution by the shareholders’ general meeting forthe liquidation of the Company.

The liquidation committee shall act in accordancewith the instructions of the shareholders’ generalmeeting to make a report at least once every yearto the shareholders’ general meeting on thecommittee’s income and expenses, the business ofthe Company and the progress of the liquidation;and to present a final report to the shareholders’general meeting on completion of the liquidation.

Article 272 Where the Board decides to liquidatethe Company for any reason other than theCompany’s declaration of its own bankruptcy, theBoard shall include a statement in its noticeconvening a shareholders’ general meeting toconsider the proposal to the effect that, aftermaking full inquiry into the affairs of theCompany, the Board is of the opinion that theCompany will be able to pay its debts in fullwithin twelve months from the commencement ofthe liquidation.

All the functions and powers of the Board shallcease immediately upon the passing of theresolution by the shareholders’ general meeting forthe liquidation of the Company.

The liquidation committee shall act in accordancewith the instructions of the shareholders’ generalmeeting to make a report at least once every yearto the shareholders’ general meeting on thecommittee’s income and expenses, the business ofthe Company and the progress of the liquidation;and to present a final report to the shareholders’general meeting on completion of the liquidation.

Article 199 The liquidation committee shall notifyall creditors within 10 days after its establishmentand shall make at least 3 newspaperannouncements within 60 days. Creditors should,within 30 days from the date of receipt of notice,or (if no written notice is received in person)within 45 days from the date of the first notice,claim for their creditors’ rights to the liquidationcommittee. Any overdue unclaimed creditors’rights shall be deemed as a waiver of the same.Creditors, when filing their claims, shouldillustrate those claim-related issues and providesupporting documentation thereon. The liquidationcommittee should register such claims.

Article 273 The liquidation committee shall notifyall creditors within 10 days after its establishmentand shall make at least 3 newspaperannouncements within 60 days. Creditors should,within 30 days from the date of receipt of notice,or (if no written notice is received in person)within 45 days from the date of the first notice,claim for their creditors’ rights to the liquidationcommittee. Any overdue unclaimed creditors’rights shall be deemed as a waiver of the same.Creditors, when filing their claims, shouldillustrate those claim-related issues and providesupporting documentation thereon. The liquidationcommittee should register such claims.



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Article 200 During the liquidation period, theliquidation committee shall exercise the followingfunctions and powers:

1) to sort out the Company’s assets and prepare abalance sheet and an inventory of assetsrespectively;

2) to notify creditors by sending notice or bymaking an announcement;

3) to dispose of and liquidate any unfinishedbusinesses of the Company;

4) to pay outstanding taxes as well as taxesarising in the course of the liquidation;

5) to settle claims and debts;

6) to dispose of the remaining assets of theCompany after the repayment of debts; and

7) to represent the Company in any civilproceedings.

Article 274 During the liquidation period, theliquidation committee shall exercise the followingfunctions and powers:

1) to sort out the Company’s assets and prepare abalance sheet and an inventory of assetsrespectively;

2) to notify creditors by sending notice or bymaking an announcement;

3) to dispose of and liquidate any unfinishedbusinesses of the Company;

4) to pay outstanding taxes as well as taxesarising in the course of the liquidation;

5) to settle claims and debts;

6) to dispose of the remaining assets of theCompany after the repayment of debts; and

7) to represent the Company in any civilproceedings.



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Article 201 After sorting out the Company’s assetsand preparing a balance sheet and an inventory ofassets, the liquidation committee shall formulate aliquidation plan and submit it to a shareholders’general meeting or to the relevant competentauthorities for confirmation.

The assets of the Company shall be applied tosettle payments in the following order:

1) liquidation expenses;

2) unpaid staff wages, social insurance expenses;

3) outstanding taxes;

4) the Company’s debts.

The remaining assets of the Company aftersettlement of payments in accordance with thepreceding paragraph shall be distributed toshareholders of the Company according to theclass of shares held by them and in proportion totheir respective shareholdings.

During the liquidation period, the Company shallnot commence any new business activities.

Article 275 After sorting out the Company’s assetsand preparing a balance sheet and an inventory ofassets, the liquidation committee shall formulate aliquidation plan and submit it to a shareholders’general meeting or to the relevant competentauthorities for confirmation.

The assets of the Company shall be applied tosettle payments in the following order:

1) liquidation expenses;

2) unpaid staff wages, social insurance expenses;

3) outstanding taxes;

4) the Company’s debts.

The remaining assets of the Company aftersettlement of payments in accordance with thepreceding paragraph shall be distributed toshareholders of the Company according to theclass of shares held by them and in proportion totheir respective shareholdings.

During the liquidation period, the Company shallnot commence any new business activities.

Article 202 If, after sorting out the Company’sassets and preparing a balance sheet and aninventory of assets in connection with theliquidation of the Company due to its dissolution,the liquidation committee discovers that theCompany’s assets are insufficient to repay theCompany’s debts in full, it shall immediatelyapply to the people’s court for a declaration ofbankruptcy.

After the Company is declared bankrupt by aruling of the people’s court, the liquidationcommittee shall hand over all matters arising fromthe liquidation to the people’s court.

Article 276 If, after sorting out the Company’sassets and preparing a balance sheet and aninventory of assets in connection with theliquidation of the Company due to its dissolution,the liquidation committee discovers that theCompany’s assets are insufficient to repay theCompany’s debts in full, it shall immediatelyapply to the people’s court for a declaration ofbankruptcy.

After the Company is declared bankrupt by aruling of the people’s court, the liquidationcommittee shall hand over all matters arising fromthe liquidation to the people’s court.



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Article 203 Upon completion of the liquidation,the liquidation committee shall prepare aliquidation report, a statement of the income andexpenses during the liquidation period andfinancial accounts, which shall be verified by PRCcertified public accountants, and then submit themto a shareholders’ general meeting forconfirmation and to CSRC for approval. Theliquidation committee shall, within thirty daysafter such confirmation given by the shareholders’general meeting or other relevant competentauthorities, submit the aforesaid documents to thecompany registration authorities and apply forcancellation of registration of the Company, andpublish an announcement relating to thetermination of the Company.

Article 277 Upon completion of the liquidation,the liquidation committee shall prepare aliquidation report, a statement of the income andexpenses during the liquidation period andfinancial accounts, which shall be verified by PRCcertified public accountants, and then submit themto a shareholders’ general meeting forconfirmation and to CSRC for approval. Theliquidation committee shall, within thirty daysafter such confirmation given by the shareholders’general meeting or other relevant competentauthorities, submit the aforesaid documents to thecompany registration authorities and apply forcancellation of registration of the Company, andpublish an announcement relating to thetermination of the Company.

None Article 278 The members of the liquidationcommittee shall be loyal to their duties andperform their liquidation obligations inaccordance with the law.

The members of the liquidation committee shallnot use their power to accept bribes or otherillegal income and shall not misappropriate theproperty of the Company.

If the members of the liquidation committeecause losses to the Company or creditors due tointentional or gross negligence, they shall bearthe liability for compensation.

None Article 279 If the Company is declaredbankrupt according to law, the bankruptcyliquidation shall be carried out in accordancewith the law on enterprise bankruptcy.

Article 204 If the Company is in dissolution orbankruptcy, proper handling of customer assetsshall be arranged first, and settle future business.If the Company is in dissolution or bankruptcy, thecustomer assets are not bankruptcy or liquidationassets.

Article 280 If the Company is in dissolution orbankruptcy, proper handling of customer assetsshall be arranged first, and settle future business.If the Company is in dissolution or bankruptcy, thecustomer assets are not bankruptcy or liquidationassets.



– XI-142 –



CHAPTER 19 NOTICE ANDANNOUNCEMENT

CHAPTER 20 NOTICE ANDANNOUNCEMENT

Article 205 The notice of the Company may beserved as follows:

1) by personal delivery;

2) by mail;

3) by fax or e-mail;

4) by making announcement on the Company’swebsite or the websites designated by Hong KongStock Exchange in compliance with laws,regulations, regulatory documents and listing rulesof the place where the Company’s shares listed;

5) by announcement;

6) by other means agreed by the Company and therecipient of the notice in advance or recognized bythe recipient of the notice after receiving suchnotice;

7) through other means recognized by regulatoryauthorities of the place where the Company’sshares are listed and other means stated in theArticles of Association.

Article 281 The notice of the Company may beserved as follows:

1) by personal delivery;

2) by mail;

3) by fax or e-mail;

4) by making announcement on the Company’swebsite or the websites designated by Hong KongStock Exchange in compliance with laws,regulations, regulatory documents and listing rulesof the place where the Company’s shares listed;

5) by announcement;

6) by other means agreed by the Company and therecipient of the notice in advance or recognized bythe recipient of the notice after receiving suchnotice;

7) through other means recognized by regulatoryauthorities of the place where the Company’sshares are listed and other means stated in theArticles of Association.

Article 206 Where a notice of the Company isserved by announcement, the notice shall bedeemed as received by the relevant persons once itis published. Where there are regulations specifiedby the regulatory authority at the place where theCompany’s shares are listed, the relevantregulations shall prevail.

Article 282 Where a notice of the Company isserved by announcement, the notice shall bedeemed as received by the relevant persons once itis published. Where there are regulations specifiedby the regulatory authority at the place where theCompany’s shares are listed, the relevantregulations shall prevail.



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For notice issued by the Company to Hshareholders (by way of announcement), theCompany shall on the same day submit anelectronic version to the Hong Kong StockExchange through the Hong Kong Stock ExchangeEPS for immediate release on the website of theHong Kong Stock Exchange in accordance withthe rules of the listing place. The announcementshall also be published on the Company’s website.In addition, the notice shall be delivered to eachof the registered addresses as appeared in theregister of H shareholders by personal delivery orpostage paid mail in accordance with the locallisting rules so as to give the shareholderssufficient notice and time to exercise their rightsor act in accordance with the terms of the notice.

H shareholders of the Company may choose inwriting to receive the corporate communicationthat the Company must send to shareholders eitherby post or using electronic means, and also chooseto receive the English language version only or theChinese language version only or both the Englishand Chinese language versions. They shall havethe right at any time by reasonable prior writtennotice served on the Company to change theirchoices as to the manner of receiving the sameand the language versions in accordance withapplicable procedures.

In order to prove that such notices, documents,information or written statements have beenalready sent, shareholders or directors shallprovide evidence to prove that such notice,document, information or written statement havebeen sent within the prescribed time in the normalway or by sending with postage prepaid to thecorrect address of the Company.

For notice issued by the Company to Hshareholders (by way of announcement), theCompany shall on the same day submit anelectronic version to the Hong Kong StockExchange through the Hong Kong Stock ExchangeEPS for immediate release on the website of theHong Kong Stock Exchange in accordance withthe rules of the listing place. The announcementshall also be published on the Company’s website.In addition, the notice shall be delivered to eachof the registered addresses as appeared in theregister of H shareholders by personal delivery orpostage paid mail in accordance with the locallisting rules so as to give the shareholderssufficient notice and time to exercise their rightsor act in accordance with the terms of the notice.

H shareholders of the Company may choose inwriting to receive the corporate communicationthat the Company must send to shareholders eitherby post or using electronic means, and also chooseto receive the English language version only or theChinese language version only or both the Englishand Chinese language versions. They shall havethe right at any time by reasonable prior writtennotice served on the Company to change theirchoices as to the manner of receiving the sameand the language versions in accordance withapplicable procedures.

In order to prove that such notices, documents,information or written statements have beenalready sent, shareholders or directors shallprovide evidence to prove that such notice,document, information or written statement havebeen sent within the prescribed time in the normalway or by sending with postage prepaid to thecorrect address of the Company.



– XI-144 –



Notwithstanding the aforesaid provision whichspecifies providing and/or dispatching writtencorporate communication to shareholders, for thepurpose of the means by which the Companyprovides and/or dispatches its corporatecommunication to shareholders according to theHong Kong Listing Rules, if the Company hasobtained shareholders’ prior written consent ordeemed consent according to the relevant laws andregulations and the Hong Kong Listing Rules asamended from time to time, the Company maydispatch or provide corporate communication to itsshareholders by electronic means or via itswebsite. Corporate communication includes but notlimited to circulars, annual reports, interim reports,quarterly reports, notices of shareholders’ generalmeetings, and other types of corporatecommunication as specified in the Hong KongListing Rules.

Notwithstanding the aforesaid provision whichspecifies providing and/or dispatching writtencorporate communication to shareholders, for thepurpose of the means by which the Companyprovides and/or dispatches its corporatecommunication to shareholders according to theHong Kong Listing Rules, if the Company hasobtained shareholders’ prior written consent ordeemed consent according to the relevant laws andregulations and the Hong Kong Listing Rules asamended from time to time, the Company maydispatch or provide corporate communication to itsshareholders by electronic means or via itswebsite. Corporate communication includes but notlimited to circulars, annual reports, interim reports,quarterly reports, notices of shareholders’ generalmeetings, and other types of corporatecommunication as specified in the Hong KongListing Rules.

None Article 283 The notice of Board meeting of theCompany shall be sent by personal delivery,e-mail, fax, express mail service or notified byannouncement.

None Article 284 The notice of supervisoryCommittee meeting of the Company shall besent by personal delivery, e-mail, fax, expressmail service or notified by announcement.

None Article 285 For any notice sent by personaldelivery, receiver shall sign (or seal) on replyslip with the receiving date as the delivery date;for notice sent by mail, the 3rd working dayafter the posting is the delivery date; for noticemade by announcement, the first publishingdate is the delivery date.

None Article 286 The Company designates [�] as themedia to publish the announcements and otherinformation of the Company.



– XI-145 –



CHAPTER 20 LABOUR UNION CHAPTER 21 LABOUR UNION

Article 203 The employees of the Company shall,according to the Labor Union Law of the People’sRepublic of China, organize a labor union, whichshall carry out union activities and safeguard thelawful rights and interests of the employees. TheCompany shall provide necessary conditions for itslabor union to carry out activities. The labor unionshall, on behalf of the employees, conclude thecollective contract with the Company with respectto the remuneration, working hours, welfare,insurance, work safety and sanitation and othermatters.

Pursuant to the Constitution and other relevantlaws, the Company shall implement democraticmanagement in the form of meeting of therepresentatives of the employees or any otherways.

Article 287 The employees of the Company shall,according to the Labor Union Law of the People’sRepublic of China, organize a labor union, whichshall carry out union activities and safeguard thelawful rights and interests of the employees. TheCompany shall provide necessary conditions for itslabor union to carry out activities. The labor unionshall, on behalf of the employees, conclude thecollective contract with the Company with respectto the remuneration, working hours, welfare,insurance, work safety and sanitation and othermatters.

Pursuant to the Constitution and other relevantlaws, the Company shall implement democraticmanagement in the form of meeting of therepresentatives of the employees or any otherways.

CHAPTER 21 AMENDMENTS TO THEARTICLES OF ASSOCIATION

CHAPTER 22 AMENDMENTS TO THEARTICLES OF ASSOCIATION

Article 208 The Company shall amend the Articlesof Association under any of the followingcircumstances:

1) upon amendments to the Company Law orrelevant laws and administrative regulations orHong Kong Listing Rules, the matters stipulated inthe Articles of Association conflict with theprovisions of the amended laws and administrativeregulations or Hong Kong Listing Rules;

2) the changes arising in the Company are notconsistent with the items set out in the Articles ofAssociation;

3) a shareholder’s general meeting decides toamend the Articles of Association.

Article 288 The Company shall amend the Articlesof Association under any of the followingcircumstances:

1) upon amendments to the Company Law orrelevant laws and administrative regulations orHong Kong Listing Rules, the matters stipulated inthe Articles of Association conflict with theprovisions of the amended laws and administrativeregulations or Hong Kong Listing Rules;

2) the changes arising in the Company are notconsistent with the items set out in the Articles ofAssociation;

3) a shareholder’s general meeting decides toamend the Articles of Association.

None Article 289 The Board shall amend theseArticles of Association pursuant to theresolution of shareholders at the shareholders’general meeting for amending the Articles ofAssociation and the approval opinions of thecompetent authority.



– XI-146 –



Article 209 Any amendment to these Articles ofAssociation involving anything set out in theMandatory Provisions shall become effective uponapproval by the company approval departmentauthorized by the State Council and the SecuritiesCommission of the State Council. If there is anychange relating to the registered particulars of theCompany, application shall be made for thechanges in accordance with the laws.

Article 290 Any amendment to these Articles ofAssociation involving anything set out in theMandatory Provisions as approved by the generalmeeting shall become effective upon approval bythe company approval department authorized bythe State Council and the Securities Commissionof the State Council. If there is any changerelating to the registered particulars of theCompany, application shall be made for thechanges in accordance with the laws.

Article 210 Where the matters to be amended inthe Articles of Association are required to bedisclosed according to laws and regulations, thesame shall be announced as required.

Article 291 Where the matters to be amended inthe Articles of Association are required to bedisclosed according to laws and regulations, thesame shall be announced as required.

CHAPTER 22 SETTLEMENT OF DISPUTES CHAPTER 23 SETTLEMENT OF DISPUTES

Article 211 The Company shall abide by thefollowing principles for settlement of disputes:

1) any disputes or claims of rights between theholders of the overseas listed foreign shares andthe Company, the holders of the overseas listedforeign shares and the Company’s directors,supervisors, general manager or other seniormanagement, or the holders of the overseas listedforeign shares and the holders of domestic sharesarising from any rights or obligations under theArticles of Association, the Company Law, otherrelevant laws or administrative regulations inconnection with the affairs of the Company, shallbe referred by the relevant parties to arbitration.

Where the aforesaid disputes or claims of rightsare referred to arbitration, the entire claims ordisputes must be referred to arbitration, and allpersons who have a cause of action based on thesame facts giving rise to the disputes or claims orwhose participation is necessary for the resolutionof such disputes or claims, shall, where suchperson is the Company or a shareholder, director,supervisor, general manager or other seniormanagement of the Company, submit to thearbitration.

Article 292 The Company shall abide by thefollowing principles for settlement of disputes:

1) any disputes or claims of rights between theholders of the overseas listed foreign shares andthe Company, the holders of the overseas listedforeign shares and the Company’s directors,supervisors, general manager or other seniormanagement, or the holders of the overseas listedforeign shares and the holders of domestic sharesarising from any rights or obligations under theArticles of Association, the Company Law, otherrelevant laws or administrative regulations inconnection with the affairs of the Company, shallbe referred by the relevant parties to arbitration.

Where the aforesaid disputes or claims of rightsare referred to arbitration, the entire claims ordisputes must be referred to arbitration, and allpersons who have a cause of action based on thesame facts giving rise to the disputes or claims orwhose participation is necessary for the resolutionof such disputes or claims, shall, where suchperson is the Company or a shareholder, director,supervisor, general manager or other seniormanagement of the Company, submit to thearbitration.



– XI-147 –



Disputes over the definition of shareholders andthe register of shareholders need not be resolvedby arbitration.

2) a claimant may elect arbitration to be carriedout at either the China International Economic andTrade Arbitration Commission in accordance withits rules or the Hong Kong InternationalArbitration Centre in accordance with itsSecurities Arbitration Rules. Once a claimantrefers a dispute or a claim to arbitration, the otherparty must conduct arbitration at the arbitral bodyelected by the claimant.

If a claimant elects arbitration to be carried out atthe Hong Kong International Arbitration Centre,any party to the dispute or claim may apply for ahearing to take place in Shenzhen in accordancewith the Securities Arbitration Rules of the HongKong International Arbitration Centre.

3) if any disputes or claims of rights are settled byway of arbitration in accordance withsubparagraph (1) above, the laws of the People’sRepublic of China shall apply, save as otherwiseprovided in laws and administrative regulations.

4) the award of an arbitral body shall be final andbinding on all parties.

Disputes over the definition of shareholders andthe register of shareholders need not be resolvedby arbitration.

2) a claimant may elect arbitration to be carriedout at either the China International Economic andTrade Arbitration Commission in accordance withits rules or the Hong Kong InternationalArbitration Centre in accordance with itsSecurities Arbitration Rules. Once a claimantrefers a dispute or a claim to arbitration, the otherparty must conduct arbitration at the arbitral bodyelected by the claimant.

If a claimant elects arbitration to be carried out atthe Hong Kong International Arbitration Centre,any party to the dispute or claim may apply for ahearing to take place in Shenzhen in accordancewith the Securities Arbitration Rules of the HongKong International Arbitration Centre.

3) if any disputes or claims of rights are settled byway of arbitration in accordance withsubparagraph (1) above, the laws of the People’sRepublic of China shall apply, save as otherwiseprovided in laws and administrative regulations.

4) the award of an arbitral body shall be final andbinding on all parties.



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CHAPTER 23 INTERPRETATION OF THEARTICLES OF ASSOCIATION

CHAPTER 24 INTERPRETATION OF THEARTICLES OF ASSOCIATION

None Article 293 Definitions

1) Controlling shareholder refers to the personas defined in Article 61 of these Articles ofAssociation.

2) Actual controller refers to the person who isnot the shareholder of the Company, but couldcontrol the act of the Company actually throughinvestment, agreement or other arrangement.

3) Connected relation refers to the relationamong controlling shareholder, actual controller,directors, supervisors, senior managementpersonnel of the Company and the enterprisesthat they control directly or indirectly, andother relation that may cause the transfer ofinterest of the Company. However, the relationbetween fellow state– controlled enterprisesshall not be deemed as connected relationmerely because they are both controlled by thestate.

Article 212 The Articles of Association are writtenin Chinese. In the event of any discrepanciesbetween the Articles of Association in otherlanguages or different versions and the Articles ofAssociation in Chinese, the latest approved andregistered Chinese version verified by thecompany registration authorities shall prevail.

Article 294 The Articles of Association are writtenin Chinese. In the event of any discrepanciesbetween the Articles of Association in otherlanguages or different versions and the Articles ofAssociation in Chinese, the latest approved andregistered Chinese version verified by thecompany registration authorities shall prevail.

Article 213 The figure itself shall be included ifthese Articles of Association refers to any suchwords as “above”, “within” or “below”; the figureitself shall not be included if these Articles ofAssociation refers to any such words as “lowerthan”, “over”, “less than” or “more than”.

Article 295 The figure itself shall be included ifthese Articles of Association refers to any suchwords as “above”, “within” or “below”; the figureitself shall not be included if these Articles ofAssociation refers to any such words as “lowerthan”, “over”, “less than” or “more than”.

Article 214 The meaning of “accounting firms”,“related” and “related parties” referred to in theseArticles of Association is the same as the“auditor”, “related” and “related parties” referredto in the Hong Kong Listing Rules.

Article 296 The meaning of “accounting firms”,“related” and “related parties” referred to in theseArticles of Association is the same as the“auditor”, “related” and “related parties” referredto in the Hong Kong Listing Rules.

Article 215 The appendices to these Articles ofAssociation include rules of procedures of thegeneral meeting, the Board and the supervisoryCommittee.

Article 297 The appendices to these Articles ofAssociation include rules of procedures of thegeneral meeting, the Board and the supervisoryCommittee.



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Article 216 The power of interpretation of theArticles of Association shall be vested in theCompany’s Board. Any matters not covered in theArticles of Association shall be proposed by theBoard at a shareholders’ general meeting forapproval by means of resolution.

Article 298 The power of interpretation of theArticles of Association shall be vested in theCompany’s Board. Any matters not covered in theArticles of Association shall be proposed by theBoard at a shareholders’ general meeting forapproval by means of resolution.



– XI-150 –


Table of Amendments to the Rules of Procedures of the Shareholders’ General Meeting(Applicable upon the Listing of A Shares)

Existing Rules of the Rules of Procedures ofthe Shareholders’ General Meeting1

Amended Rules ofthe Rules of Procedures of

the Shareholders’ General Meeting(Applicable upon the Listing of A Shares)

Chapter I General Provisions Chapter I General Provisions

Rule 1 In order to safeguard the legitimate rightsand interests of all Shareholders, to regulate theacts of Holly Futures Co., Ltd. (the “Company”),and ensure that the Shareholders’ General Meetingoperate in a standard, efficient and stable way andthat Shareholders equally and effectively exercisetheir authorities, these rules are specificallyformulated in accordance with the domestic andoverseas laws, regulations and regulatorydocuments for listed companies, including theCompany Law of the People’s Republic of China(the “Company Law”), the Securities Law of thePeople’s Republic of China, the SpecialRegulations of the State Council on the OverseasOffering and Listing of Shares by Joint StockLimited Companies and the Articles of Associationof Holly Futures Co., Ltd. (the “Articles ofAssociation”).

The Rules shall comply with the Rules Governingthe Listing of Securities on the Stock Exchange ofHong Kong Limited (the “Hong Kong ListingRules”) and other laws and regulations amendedfrom time to time. In case of any inconformity,inconsistency or dispute between relevant laws,regulations, the Articles of Association, the HongKong Listing Rules and the Rules, the mostrigorous clauses will prevail according to theprinciple of strictness.

Rule 1 In order to safeguard the legitimate rightsand interests of all Shareholders, to regulate theacts of Holly Futures Co., Ltd. (the “Company”),and ensure that the Shareholders’ General Meetingoperate in a standard, efficient and stable way andthat Shareholders equally and effectively exercisetheir authorities, these rules are specificallyformulated in accordance with the domestic andoverseas laws, regulations and regulatorydocuments for listed companies, including theCompany Law of the People’s Republic of China(the “Company Law”), the Securities Law of thePeople’s Republic of China, the SpecialRegulations of the State Council on the OverseasOffering and Listing of Shares by Joint StockLimited Companies, the Rules GoverningShareholders’ General Meetings of ListedCompanies, the Standards for the Governanceof Listed Companies, the Guidelines on theArticles of Association for Listed Companiesand the Articles of Association of Holly FuturesCo., Ltd. (the “Articles of Association”).

The Rules shall comply with the Rules Governingthe Listing of Securities on the Stock Exchange ofHong Kong Limited (the “Hong Kong ListingRules”) and other laws and regulations amendedfrom time to time. In case of any inconformity,inconsistency or dispute between relevant laws,regulations, the Articles of Association, the listingrules of the places where shares of theCompany are listed and the Rules, the mostrigorous clauses will prevail according to theprinciple of strictness.

1 Note: The bold rules under the Existing Rules of the Rules of Procedures of the Board of Directors shallbecome effective upon the consideration and approval at the annual general meeting to be held by theCompany.

APPENDIX XII COMPARISON OF THE EXISTING RULES OF PROCEDURES OF THE GENERALMEETINGS AGAINST THE RULES OF PROCEDURES OF THE GENERAL MEETINGS TOBE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

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Rule 2 These Rules are applicable to theShareholders’ General Meeting of the Company,and binding upon the Company, all Shareholders,authorized proxies of Shareholders (the “proxies”),Directors, Supervisors, general manager and othersenior management and relevant personnel who arepresent at the meeting.

Rule 2 These Rules are applicable to theShareholders’ General Meeting of the Company,and binding upon the Company, all Shareholders,authorized proxies of Shareholders (the “proxies”),Directors, Supervisors, general manager and othersenior management and relevant personnel who arepresent at the meeting.

Rule 3 The Shareholders’ General Meetingcomprising all Shareholders of the Company,exercises the authorities stipulated by the laws,administrative regulations, normative documentsand the Articles of Association, and any entity andindividual shall not interfere unlawfully with theShareholders’ disposal of their own rights.

Rule 3 The Shareholders’ General Meetingcomprising all Shareholders of the Company,exercises the authorities stipulated by the laws,administrative regulations, normative documentsand the Articles of Association, and any entity andindividual shall not interfere unlawfully with theShareholders’ disposal of their own rights.

Rule 4 Shareholders and their authorized proxiesattending the Shareholders’ General Meetings shallstrictly observe the provisions of relevant laws,regulations, the Articles of Association and theseRules, and keep order consciously of the meeting,and shall not infringe upon the legitimate rightsand interests of other Shareholders.

Rule 4 Shareholders and their authorized proxiesattending the Shareholders’ General Meetings shallstrictly observe the provisions of relevant laws,regulations, the Articles of Association and theseRules, and keep order consciously of the meeting,and shall not infringe upon the legitimate rightsand interests of other Shareholders.

Rule 5 The Company shall strictly observe theprovisions of the laws, administrative regulations,the Articles of Association and these Rules onconvening a Shareholders’ General Meeting, andensure that the Shareholders may exercise theirrights according to law.

The Company’s Board of Directors shall bediligent and dutiful to ensure that theShareholders’ General Meeting will be convenedas usual and exercise its authorities according tolaw. The Shareholders’ General Meeting shallexercise its authority within the scope specified bythe Company Law and the Articles of Association.

Rule 5 The Company shall strictly observe theprovisions of the laws, administrative regulations,the Articles of Association and these Rules onconvening a Shareholders’ General Meeting, andensure that the Shareholders may exercise theirrights according to law.

The Company’s Board of Directors shall bediligent and dutiful to ensure that theShareholders’ General Meeting will be convenedas usual and exercise its authorities according tolaw. The Shareholders’ General Meeting shallexercise its authority within the scope specified bythe Company Law and the Articles of Association.


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Chapter II Functions and Powers of theShareholders’ General Meeting

Chapter II Functions and Powers of theShareholders’ General Meeting

Rule 6 The Shareholders’ General Meeting is theorgan of authority of the Company and shallexercise the following functions and powers inaccordance with the law:

(1) to decide the Company’s operational guidelinesand investment schemes;

(2) to elect and remove Directors not being staffrepresentatives and to determine matters relating tothe Directors’ remunerations;

(3) to elect and remove supervisors not beingShareholders’ representatives and to determinematters relating to the supervisors’ remunerations;

(4) to consider and approve the reports of theBoard;

(5) to consider and approve the reports of theBoard of Supervisors;

(6) to consider and approve the Company’s annualfinancial budgets and final accounts;

(7) to consider and approve the Company’s profitdistribution plan and plan for making up losses;

(8) to resolve on an increase or a reduction in theCompany’s registered capital and acquisition ofthe Company’s shares;

(9) to resolve on matters such as merger,demerger, dissolution, liquidation or change ofcorporate form of the Company;

(10) to resolve on the issue of debentures by theCompany;

(11) to resolve on the appointment, dismissal ornon-reappointment of the accounting firms;

Rule 6 The Shareholders’ General Meeting is theorgan of authority of the Company and shallexercise the following functions and powers inaccordance with the law:

(1) to decide the Company’s operational guidelinesand investment schemes;

(2) to elect and remove Directors not being staffrepresentatives and to determine matters relating tothe Directors’ remunerations;

(3) to elect and remove supervisors not beingShareholders’ representatives and to determinematters relating to the supervisors’ remunerations;

(4) to consider and approve the reports of theBoard;

(5) to consider and approve the reports of theBoard of Supervisors;

(6) to consider and approve the Company’s annualfinancial budgets and final accounts;

(7) to consider and approve the Company’s profitdistribution plan and plan for making up losses;

(8) to resolve on an increase or a reduction in theCompany’s registered capital and acquisition ofthe Company’s shares;

(9) to resolve on matters such as merger,demerger, dissolution, liquidation or change ofcorporate form of the Company;

(10) to resolve on the issue of debentures by theCompany;

(11) to resolve on the appointment, dismissal ornon-reappointment of the accounting firms;


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(12) to amend the Articles of Association;

(13) to consider proposals put forward by anyShareholder representing 3% or more of theCompany’s shares with voting rights;

(14) to consider the purchases or sales of anymaterial assets of the Company within a year inexcess of 30% of the Company’s audited netassets in the latest period;

(15) to consider and approve long term materialinvestment, acquisition or disposal asset, assetchange, related transactions or pledged loans ofthe Company to be approved by Shareholders’General Meeting;

(16) to consider related transactions to be resolvedby Shareholders’ General Meeting as required bylisting rules of the place where the Company’sshares are listed;

(17) to consider and approve matters relating tochange of the use of raised funds;

(18) to consider share incentive plans;

(19) to consider any other matters to be resolvedby Shareholders’ General Meeting as require bythe laws, administrative regulations, departmentalrules, the listing rules of the places where sharesof the Company are listed and the Articles ofAssociation.

(12) to amend the Articles of Association;

(13) to consider proposals put forward by anyShareholder representing 3% or more of theCompany’s shares with voting rights;

(14) to consider the purchases or sales of anymaterial assets of the Company within a year inexcess of 30% of the Company’s audited netassets in the latest period;

(15) to consider and approve long term materialinvestment, acquisition or disposal asset, assetchange, related transactions or pledged loans ofthe Company to be approved by Shareholders’General Meeting;

(16) to consider related transactions to be resolvedby Shareholders’ General Meeting as required bylisting rules of the place where the Company’sshares are listed;

(17) to consider and approve matters relating tochange of the use of raised funds;

(18) to consider share incentive plans;

(19) to consider any other matters to be resolvedby Shareholders’ General Meeting as required bythe laws, administrative regulations, departmentalrules, the listing rules of the places where sharesof the Company are listed and the Articles ofAssociation.


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Rule 7 Matters that shall be decided by theGeneral Meeting as prescribed by the relevantlaws, administrative regulations, these Articles ofAssociation and the Hong Kong Listing Rules,must be considered and resolved by theShareholders’ General Meeting in order tosafeguard the decision-making power of theShareholders of the Company on these matters.

Where necessary, reasonable and not in violationof laws, regulations, mandatory provisionsspecified in the Hong Kong Listing Rules, forspecific matters that is related to the matters to beresolved and cannot be decided immediately onthe Shareholders’ General Meeting, theShareholders’ General Meeting may authorize orentrust the Board to make decisions within thescope of authority as prescribed.

The Company shall not enter into any contractwith any party other than the Directors,supervisors, general manager and other seniormanagement without the prior approval of theShareholders’ General Meeting, pursuant to whichsuch party shall be in charge of management ofthe whole or any substantial part of theCompany’s business.

Rule 7 Matters that shall be decided by theShareholders’ General Meeting as prescribed bythe relevant laws, administrative regulations, theseArticles of Association, the listing rules of placeswhere shares of the Company are listed must beconsidered and resolved by the Shareholders’General Meeting in order to safeguard thedecision– making power of the Shareholders of theCompany on these matters.

Where necessary, reasonable and not in violationof laws, regulations, mandatory provisionsspecified in the listing rules of places whereshares of the Company are listed for specificmatters that is related to the matters to be resolvedand cannot be decided immediately on theShareholders’ General Meeting, the Shareholders’General Meeting may authorize or entrust theBoard of Directors to make decisions within thescope of authority as prescribed.

Except in special circumstances such as crisis ofthe Company, the Company shall not enter intoany contract with any party other than theDirectors, supervisors, general manager and othersenior management without the prior approval ofthe Shareholders’ General Meeting by way ofspecial resolution, pursuant to which such partyshall be in charge of management of the whole orany substantial part of the Company’s business.


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Chapter III System of the Shareholders’General Meeting

Chapter III System of the Shareholders’General Meeting

Rule 8 A Shareholders’ General Meeting shalleither be an annual general meeting or anextraordinary general meeting. The Shareholders’General Meetings shall be convened by the Board.

Annual general meetings shall be held once everyyear and within six months from the close of thepreceding financial year. The extraordinaryGeneral Meeting may be held from time to timeand shall be held within two months where any ofcircumstances as set forth in Rule 9 of the Rulesoccurs.

Shareholders holding different classes of sharesshall be referred to as class Shareholders. Exceptfor other class Shareholders, holders of domesticshares and H shares shall be deemed as differentclass Shareholders. If the Company intends to alteror abolish the rights of class Shareholders, theproposed resolution shall be approved by way of aspecial resolution at a Shareholders’ GeneralMeeting in accordance with the provisions of theArticles of Association, and a class meeting shallbe called and held. Only class Shareholders mayattend the class meeting.

Rule 8 A Shareholders’ General Meeting shalleither be an annual general meeting or anextraordinary general meeting. The Shareholders’General Meetings shall be convened by the Board.

Annual general meetings shall be held once everyyear and within six months from the close of thepreceding financial year. The extraordinaryGeneral Meeting may be held from time to timeand shall be held within two months where any ofcircumstances as set forth in Rule 9 of the Rulesoccurs.

In case that the Company is unable to hold aGeneral Meeting within the aforesaid timeframe, it shall be reported and explained to thelocal office of the China Securities RegulatoryCommission (“CSRC”) in the region where theCompany operates and the stock exchangewhere its stock is traded, and make anannouncement.

Shareholders holding different classes of sharesshall be referred to as class Shareholders. Exceptfor other class Shareholders, holders of domesticshares and H shares shall be deemed as differentclass Shareholders. If the Company intends to alteror abolish the rights of class Shareholders, theproposed resolution shall be approved by way of aspecial resolution at a Shareholders’ GeneralMeeting in accordance with the provisions of theArticles of Association, and a class meeting shallbe called and held. Only class Shareholders mayattend the class meeting.


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Rule 9 An extraordinary general meeting shall beconvened within two months of the occurrence ofany one of the following circumstances:

(1) the number of Directors is less than thenumber stipulated in the Company Law or twothirds of the number required in the Articles ofAssociation;

(2) when the losses of the Company not made upfor amount to one-third of the total amount of itsshare capital;

(3) where any Shareholder individually or jointlyholding 10% or more of the Company’s issuedshares carrying voting rights requests in writingthe convening of an extraordinary general meeting;

(4) when considered necessary by the Board;

(5) when requested by the Board of Supervisors;

(6) when requested by more than 1/2 independentDirectors;

(7) other circumstances stipulated by laws,administrative regulations, departmental rules orthe Articles of Association.

Rule 9 An extraordinary general meeting shall beconvened within two months of the occurrence ofany one of the following circumstances:

(1) the number of Directors is less than thenumber stipulated in the Company Law or twothirds of the number required in the Articles ofAssociation;

(2) when the losses of the Company not made upfor amount to one-third of the total amount of itsshare capital;

(3) where any Shareholder individually or jointlyholding 10% or more of the Company’s issuedshares carrying voting rights requests in writingthe convening of an extraordinary general meeting;

(4) when considered necessary by the Board;

(5) when requested by the Board of Supervisors;

(6) when requested by more than 1/2 independentDirectors;

(7) other circumstances stipulated by laws,administrative regulations, departmental rules, theArticles of Association or the Rules.

Rule 10 Shareholders and their authorized proxiesshall be entitled to attend the Shareholders’General Meeting and enjoy various rights such asthe right to know, the right to speak, the right toinquire and the right to vote pursuant to the laws.

Rule 10 Shareholders and their authorized proxiesshall be entitled to attend the Shareholders’General Meeting and enjoy various rights such asthe right to know, the right to speak, the right toinquire and the right to vote pursuant to the laws.


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None Rule 11 When the Company calls aShareholders’ General Meeting, it shall retainan attorney to issue a legal opinion on thefollowing matters and announce the same:

(1) whether the procedures for convening andholding the meeting are consistent with thelaws, administrative regulations, the Articles ofAssociation and the Rules;

(2) whether the qualifications of the personsattending meeting and of the convener arelawful and valid;

(3) whether the voting procedure at and thevoting results of the meeting are lawful andvalid; and

(4) other relevant issues as requested by theCompany.

Chapter IV Convening of the Shareholders’General Meetings

Chapter IV Convening of the Shareholders’General Meetings

Rule 11 The Board of Directors shall convene theShareholders’ General Meeting within the timelimit specified in Rule 8 of these Rules.

Rule 12 The Board of Directors shall convene theShareholders’ General Meeting within the timelimit specified in Rule 8 of these Rules.

Rule 12 More than half independent Directorsshall be entitled to propose to the Board toconvene an extraordinary general meeting.Regarding the proposal requesting to convene anextraordinary general meeting by the independentDirectors, the Board shall, pursuant to the relevantlaws, administrative regulations and the Articles ofAssociation, give a written reply stating itsconsent or reject for the convening of theextraordinary general meeting within 10 (ten) daysafter receiving the proposal.

If the Board agrees to convene the extraordinarygeneral meeting, a notice for convening suchmeeting shall be issued within 5 (five) days afterthe resolution is made by the Board. If the Boardrefuses to convene an extraordinary generalmeeting, an explanation shall be made.

Rule 13 Independent Directors shall be entitled topropose to the Board to convene an extraordinarygeneral meeting. Regarding the proposalrequesting to convene an extraordinary generalmeeting by the independent Directors, the Boardshall, pursuant to the relevant laws, administrativeregulations and the Articles of Association, give awritten reply stating its consent or reject for theconvening of the extraordinary general meetingwithin 10 (ten) days after receiving the proposal.

If the Board agrees to convene the extraordinarygeneral meeting, a notice for convening suchmeeting shall be issued within 5 (five) days afterthe resolution is made by the Board. If the Boardrefuses to convene an extraordinary generalmeeting, an explanation and relevantannouncement shall be made.


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Rule 13 The Board of Supervisors shall have theright to propose to the Board of Directors inwriting that it call an extraordinary Shareholders’General Meeting. The Board shall, pursuant to therelevant laws, administrative regulations and theArticles of Association, give a written reply statingits consent or reject for the convening of theextraordinary general meeting within 10 (ten) daysafter receiving the proposal.

If the Board agrees to convene the extraordinarygeneral meeting, a notice for convening suchmeeting shall be issued within 5 (five) days afterthe resolution is made by the Board. The consentof the Board of Supervisors shall be secured if anychange is to be made to the original motion in thenotice.

If the Board of Directors does not agree to callsuch meeting, or fails to give a response within 10(ten) days after receipt of the proposal, it shall bedeemed to be unable to or have failed to performits duty of convening the Shareholders’ GeneralMeeting, and the Board of Supervisors may itselfconvene and preside over such meeting.

Rule 14 The Board of Supervisors shall have theright to propose to the Board of Directors inwriting that it call an extraordinary Shareholders’General Meeting. The Board shall, pursuant to therelevant laws, administrative regulations and theArticles of Association, give a written reply statingits consent or reject for the convening of theextraordinary general meeting within 10 (ten) daysafter receiving the proposal.

If the Board agrees to convene the extraordinarygeneral meeting, a notice for convening suchmeeting shall be issued within 5 (five) days afterthe resolution is made by the Board. The consentof the Board of Supervisors shall be secured if anychange is to be made to the original motion in thenotice.

If the Board of Directors does not agree to callsuch meeting, or fails to give a response within 10(ten) days after receipt of the proposal, it shall bedeemed to be unable to or have failed to performits duty of convening the Shareholders’ GeneralMeeting, and the Board of Supervisors may itselfconvene and preside over such meeting.


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Rule 14 The following procedures shall befollowed by Shareholders when requesting forconvening of extraordinary general meetings orclass meetings:

(1) Shareholders who individually hold 10% ormore of the shares carrying the right to vote in themeeting are entitled to propose to convene anextraordinary general meeting or a class meetingto the Board in writing. Two or more Shareholdersholding a total of 10% or more of the sharescarrying the right to vote at the meeting sought tobe held may sign one or more written requests ofidentical form and substance requesting the Boardto convene an extraordinary general meeting or aclass meeting and stating the subject of themeeting. The Board shall convene theextraordinary general meeting or the class meetingas soon as possible after having received theabove– mentioned written request. Theshareholding referred to above shall be calculatedas of the date on which the written request ismade by Shareholder(s).

(2) the Board fails to issue a notice of such ameeting within 30 days after having received theabove-mentioned written notice, the Shareholderswho made such request may convene the meetingby themselves within four (4) months after theBoard received the request. The proceduresaccording to which they convene such meetingshall, to the extent possible, be identical to theprocedures according to which general meetingsare to be convened by the Board.

Rule 15 The following procedures shall befollowed by Shareholders when requesting forconvening of extraordinary general meetings orclass meetings:

(1) Shareholders who individually hold 10% ormore of the shares carrying the right to vote in themeeting are entitled to propose to convene anextraordinary general meeting or a class meetingto the Board in writing. Two or more Shareholdersholding a total of 10% or more of the sharescarrying the right to vote at the meeting sought tobe held may sign one or more written requests ofidentical form and substance requesting the Boardto convene an extraordinary general meeting or aclass meeting and stating the subject of themeeting. The Board of Directors shall, inaccordance with laws, administrativeregulations and the Articles of Association, givea written response on whether or not it agreesto call such a meeting within 10 days afterreceipt of the request. The shareholding referredto above shall be calculated as of the date onwhich the written request is made byShareholder(s).

(2) Board fails to issue a notice of such a meetingwithin 30 days after having received theabove-mentioned written notice, the Shareholderswho made such request may convene the meetingby themselves within four (4) months after theBoard received the request. The proceduresaccording to which they convene such meetingshall, to the extent possible, be identical to theprocedures according to which general meetingsare to be convened by the Board.


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If the Board of Directors agrees to call anextraordinary Shareholders’ General Meeting, itshall issue a notice calling such meeting within5 days after it has so resolved. The consent ofthe relevant Shareholder(s) shall be secured ifany change is to be made in the notice to theoriginal request.

If the Board of Directors does not agree to callsuch meeting, or fails to give a response within10 days after receipt of the request, theShareholder alone or Shareholders togetherholding at least 10 percent of the shares shallhave the right to propose to the Board ofSupervisors in writing that it call theextraordinary Shareholders’ General Meeting.

If the Board of Supervisors agrees to call theextraordinary Shareholders’ General Meeting, itshall issue a notice calling such meeting within5 days after receipt of the request. The consentof the relevant Shareholder(s) shall be securedif any change is to be made in the notice to theoriginal request.

If the Board of Supervisors fails to issue anotice calling the Shareholders’ GeneralMeeting by the prescribed deadline, it shall bedeemed to have failed to convene and presideover such meeting, and a Shareholder whoalone has held or Shareholders who togetherhave held at least 10 percent of the shares ofthe Company for at least 90 days in successionmay himself/themselves convene and presideover such meeting.


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Rule 15 When the Board of Supervisors orShareholders itself/themselves convene aShareholders’ General Meeting, the Board ofDirectors and the Secretary to the Board shall givetheir cooperation. The Board of Directors shallprovide the register of Shareholders as of the dateof record. If the Board of Directors fails toprovide the register of Shareholders, the convenermay apply to the securities registration andclearance institution to obtain the same on thestrength of the relevant announcement conveningthe Shareholders’ General Meeting. The register ofShareholders obtained by the convener may not beused for any purpose other than to hold theShareholders’ General Meeting.

Rule 16 When the Board of Supervisors orShareholders itself/themselves convene aShareholders’ General Meeting, they shall notifythe Board of Directors in writing, the Board ofDirectors and the Secretary to the Board shall givetheir cooperation, and the meeting shall be filedwith the local office of CSRC and the stockexchange where the Company is located. TheBoard of Directors shall provide the register ofShareholders as of the date of record. If the Boardof Directors fails to provide the register ofShareholders, the convener may apply to thesecurities registration and clearance institution toobtain the same on the strength of the relevantannouncement convening the Shareholders’General Meeting. The register of Shareholdersobtained by the convener may not be used for anypurpose other than to hold the Shareholders’General Meeting.

Prior to the announcement of the resolutions ofthe general meeting of, the conveningshareholders shall hold no less than 10% of theshares.

The board of supervisors and conveningshareholders shall submit relevant certificationmaterials to the dispatched office of the ChinaSecurities Regulatory Commission and the stockexchange in the place where the Company islocated when issuing the notice of the generalmeeting and the announcement of theresolutions of the general meeting.

Rule 16 When the Board of Supervisors orShareholders itself/themselves convene aShareholders’ General Meeting, reasonableexpenses incurred from the meeting shall be borneby the Company, and shall be deducted from thepayment to those Directors who failed to performtheir duties.

Rule 17 When the Board of Supervisors orShareholders itself/themselves convene aShareholders’ General Meeting, reasonableexpenses incurred from the meeting shall be borneby the Company, and shall be deducted from thepayment to those Directors who failed to performtheir duties.


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Chapter V Proposal and Notice of theShareholders’ General Meetings

Chapter V Proposal and Notice of theShareholders’ General Meetings

Rule 17 The contents of proposal before theShareholders’ General Meeting shall fall withinthe scope of the functions and powers of theShareholders’ General Meeting, contain a cleartopic and a specific resolution and comply withrelevant provisions of laws, administrativeregulations, these Articles of Association and theHong Kong Listing Rules.

Rule 18 The contents of proposal before theShareholders’ General Meeting shall fall withinthe scope of the functions and powers of theShareholders’ General Meeting, contain a cleartopic and a specific resolution and comply withrelevant provisions of laws, administrativeregulations, these Articles of Association and asrequired by the securities regulatory authorityof the place where the company is listed.

Rule 18 Where the Company convenes a generalmeeting, the Board, the Board of Supervisors andShareholder(s) severally or jointly holding 3% ormore Shares are entitled to submit written newproposals to the Company. Matters mentioned inproposals which are within the scope of thepowers of the general meeting shall be included inthe meeting agenda.


Except as provided in the preceding paragraph, theconvener may not make any changes to theproposals set forth in the notice of theShareholders’ General Meeting or add any newproposals once the notice and announcement of theShareholders’ General Meeting have been issued.

Rule 19 Where the Company convenes a generalmeeting, the Board, the Board of Supervisors andShareholder(s) severally or jointly holding 3% ormore Shares are entitled to submit written newproposals to the Company. Matters mentioned inproposals which are within the scope of thepowers of the general meeting shall be included inthe meeting agenda.


Except as provided in the preceding paragraph, theconvener may not make any changes to theproposals set forth in the notice of theShareholders’ General Meeting or add any newproposals once the notice and announcement of theShareholders’ General Meeting have been issued.


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Rule 19 Where the Company convenes an annualgeneral meeting, a written notice shall be given atleast 20 working days prior to the date of themeeting to notify all the Shareholders; where theCompany convenes an extraordinary generalmeeting, a public announcement shall bepublished at least 10 working days or 15 days(whichever is longer) prior to the date of themeeting to notify all the Shareholders. AnyShareholder who intends to attend the meetingshall deliver to the Company a written replystating his or her intention to attend within theperiod stipulated in the meeting notice.


Rule 20 Where the Company convenes an annualgeneral meeting, a written notice shall be given atleast 20 working days prior to the date of themeeting to notify all the Shareholders; where theCompany convenes an extraordinary generalmeeting, a public announcement shall bepublished at least 10 working days or 15 days(whichever is longer) prior to the date of themeeting to notify all the Shareholders. AnyShareholder who intends to attend the meetingshall deliver to the Company a written replystating his or her intention to attend within theperiod stipulated in the meeting notice.


Rule 20 Proposals not set out in the notice ofgeneral meeting or not complying with theprovision herein shall not be voted on orresolved at the general meeting.

Rule 21 Proposals not set out in the notice ofgeneral meeting or not complying with theprovision herein shall not be voted on orresolved at the general meeting.


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Rule 21 The notice of a Shareholders’ meetingshall:

(1) be in writing;

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

(3) state the matters to be considered at themeeting;

(4) set out the record date for Shareholders whoare entitled to attend the Shareholders’ generalmeeting;

(5) provide Shareholders with such informationand explanation as necessary for them to makeinformed decisions on the matters to beconsidered. This principle includes (but is notlimited to), where a proposal on merger,repurchase of shares, restructuring of share capitalor other restructuring is put forward by theCompany, the provision of the specific conditionsand the contracts (if any) of the transactionscontemplated, and the causes and consequences ofsuch proposals shall be properly explained;

Rule 22 The notice of a Shareholders’ meetingand supplementary notices shall:

(1) be in writing;

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

(3) matters and proposals submitted to themeeting;

(4) set out the record date for Shareholders whoare entitled to attend the Shareholders’ generalmeeting;

(5) provide Shareholders with such informationand explanation as necessary for them to makeinformed decisions on the matters to beconsidered. This principle includes (but is notlimited to), where a proposal on merger,repurchase of shares, restructuring of share capitalor other restructuring is put forward by theCompany, the provision of the specific conditionsand the contracts (if any) of the transactionscontemplated, and the causes and consequences ofsuch proposals shall be properly explained;


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(6) disclose the nature and extent of the materialinterest, if any, of any Director, supervisor, generalmanager and senior management officer in thematters to be considered; and provide anexplanation of the differences, if any, between theway in which the matter to be considered wouldaffect such Director, supervisor, general manageror senior management officer as a Shareholder andthe way in which such matter would affect otherShareholders of the same class;

(7) set out the full text of any special resolutionproposed to be passed at the meeting;

(8) contain an express statement that a Shareholderentitled to attend and vote has the right to appointone or more proxies to attend and vote on hisbehalf and that such proxy need not be aShareholder;

(9) specify the time and place for lodging proxyforms for the meeting;

(10) the name and telephone number of thestanding contact person for meeting affairs.

(6) disclose the nature and extent of the materialinterest, if any, of any Director, supervisor, generalmanager and senior management officer in thematters to be considered; and provide anexplanation of the differences, if any, between theway in which the matter to be considered wouldaffect such Director, supervisor, general manageror senior management officer as a Shareholder andthe way in which such matter would affect otherShareholders of the same class;

(7) set out the full text of any special resolutionproposed to be passed at the meeting;

(8) contain an express statement that a Shareholderentitled to attend and vote has the right to appointone or more proxies to attend and vote on hisbehalf and that such proxy need not be aShareholder;

(9) specify the time and place for lodging proxyforms for the meeting;

(10) the name and telephone number of thestanding contact person for meeting affairs.


– XII-16 –




Rule 22 The notice of a Shareholders’ generalmeeting shall be sent to the Shareholders (whetheror not entitled to vote at the Shareholders’ generalmeeting) by hand or prepaid mail to the address ofthe recipients as shown in the register ofShareholders. For holders of domestic shares, thenotice of a Shareholders’ general meeting may begiven by way of an announcement.

The announcement referred to in the precedingparagraph shall be published on the website ofthe stock exchange and the media that meet therequirements of the securities regulatoryauthority of the State Council within the periodstipulated in Rule 19 of these Rules ofProcedures; after the publication of theannouncement, all holders of domestic shares shallbe taken to have received notice of the relevantShareholders’ meeting.


Rule 23 The notice of a Shareholders’ generalmeeting shall be sent to the Shareholders (whetheror not entitled to vote at the Shareholders’ generalmeeting) by hand or prepaid mail to the address ofthe recipients as shown in the register ofShareholders. For holders of domestic shares, thenotice of a Shareholders’ general meeting may begiven by way of an announcement.

The announcement referred to in the precedingparagraph shall be published on the website ofthe stock exchange and the media that meet therequirements of the securities regulatoryauthority of the State Council within the periodstipulated in Rule 20 of these Rules ofProcedures; after the publication of theannouncement, all holders of domestic shares shallbe taken to have received notice of the relevantShareholders’ meeting.


Rule 23 Details of all proposals as well as all ofinformation or explanations required forShareholders to make sound judgment of thematters to be discussed shall be disclosed on a fulland complete basis in the notice andsupplementary notice of General Meeting. Whereopinions from independent Directors are requiredon any matters to be discussed, such opinions andreasons from independent Directors shall bedisclosed, while a notice or supplementary noticeof General Meeting is given.

Rule 24 Details of all proposals as well as all ofinformation or explanations required forShareholders to make sound judgment of thematters to be discussed shall be disclosed on a fulland complete basis in the notice andsupplementary notice of General Meeting. Whereopinions from independent Directors are requiredon any matters to be discussed, such opinions andreasons from independent Directors shall bedisclosed, while a notice or supplementary noticeof General Meeting is given.


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Rule 24 If the election of Directors or supervisorsis to be discussed at a Shareholders’ GeneralMeeting, detailed information on the candidatesfor such positions will be fully disclosed in thenotice of the Shareholders’ General Meeting,which shall at minimum include the following:

(1) personal information, such as their educationalbackgrounds, working experience, concurrentpositions, etc.;

(2) whether they have a connected relationshipwith the Company or the Company’s controllingShareholder or actual controller;

(3) the quantity of the Company’s shares held bythem;

(4) whether they have been punished by the CSRCor other relevant authority or been reprimanded bya stock exchange;

(5) other matters required to be disclosed by thelisting rules of the place where the company islisted.

Rule 25 If the election of Directors or supervisorsis to be discussed at a Shareholders’ GeneralMeeting, detailed information on the candidatesfor such positions will be fully disclosed in thenotice of the Shareholders’ General Meeting,which shall at minimum include the following:

(1) personal information, such as their educationalbackgrounds, working experience, concurrentpositions, etc.;

(2) whether they have a connected relationshipwith the Company or the Company’s controllingShareholder or actual controller;

(3) the quantity of the Company’s shares held bythem;

(4) whether they have been punished by the CSRCor other relevant authority or been reprimanded bya stock exchange;

(5) other matters required to be disclosed by lawand regulations, and the listing rules of the placewhere the company is listed.

Rule 25 Where the Company intends to convene aShareholders’ general meeting, the Board or theconvener of the Shareholders’ general meetingshall fix a record date for the registration of theshareholdings, and Shareholders whose nameappear on the register of Shareholders at the closeof business of the record date shall beShareholders of the Company.

Any laws, regulations and listing rules of theplace where the shares of the Company arelisted concerning the book closure period priorto the holding of a general meeting to dividenddistributions by the Company before the recorddate for the Company’s distribution ofdividends shall be observed.

Rule 26 Where the Company intends to convene aShareholders’ general meeting, the Board or theconvener of the Shareholders’ general meetingshall fix a record date for the registration of theshareholdings, and Shareholders whose nameappear on the register of Shareholders at the closeof business of the record date shall beShareholders of the Company.

Any laws, regulations and listing rules of theplace where the shares of the Company arelisted concerning the book closure period priorto the holding of a general meeting to dividenddistributions by the Company before the recorddate for the Company’s distribution ofdividends shall be observed.


– XII-18 –




Rule 26 Once a Shareholders’ General Meetingnotice has been issued, such meeting may not bepostponed or cancelled or the motions listedtherein cancelled without a legitimate reason. Inthe event of a postponement or cancellation, theconvener shall notify all Shareholders and give thereason therefor at least two working days prior tothe originally scheduled date for the meeting. Forgeneral meetings postponed, the convening date ofthe meeting shall also be included in the notice.

Rule 27 Once a Shareholders’ General Meetingnotice has been issued, such meeting may not bepostponed or cancelled or the motions listedtherein cancelled without a legitimate reason. Inthe event of a postponement or cancellation, theconvener shall notify all Shareholders andannounce the reason therefor at least two workingdays prior to the originally scheduled date for themeeting. For general meetings postponed, theconvening date of the meeting shall also beincluded in the notice.

Chapter VI Convening of the Shareholders’General Meetings

Chapter VI Convening of the Shareholders’General Meetings

Rule 27 The general meeting of the Companyshall be convened in the address of the Companyor venues designated in the notice of the generalmeeting.

The general meeting shall be provided withmeeting venue and convened in the form ofon-spot meetings. Under the precondition ofensuring a legal and effective general meeting, theCompany may provide convenience forShareholders to participate in the meeting by usingsafe, economic and convenient phone call, networkor other means in light of actual needs.Shareholders participating in the general meetingby aforesaid means will be deemed attend themeeting.

If the Shareholders’ General Meeting is to be heldoff-site, the time of the vote and the method ofvoting online or by other means shall be expresslystated in the notice of the Shareholders’ GeneralMeeting.

Rule 28 The general meeting of the Companyshall be convened in the address of the Companyor venues designated in the Articles ofAssociation.

The general meeting shall be provided withmeeting venue and convened in the form ofon-spot meetings. Under the precondition ofensuring a legal and effective general meeting, theCompany may provide convenience forShareholders to participate in the meeting by usingsafe, economic and convenient phone call, networkor other means in light of laws, administrativeregulations, CSRC or the Articles ofAssociation. Shareholders participating in thegeneral meeting by aforesaid means will bedeemed attend the meeting. If the Shareholders’General Meeting is to be held online or by othersuch means, the time of the vote and the methodof voting online or by other means shall beexpressly stated in the notice of the Shareholders’General Meeting.


– XII-19 –




Rule 28 The Board of Directors of the Companyand other conveners will take necessary measuresto ensure the normal order of a Shareholders’General Meeting. It/they will take measures to haltacts that disrupt the Shareholders’ GeneralMeeting, seek to cause trouble or infringe uponthe lawful rights and interests of Shareholders andpromptly report the same to the relevantauthorities to investigate and deal with the matter.

Rule 29 The Board of Directors of the Companyand other conveners will take necessary measuresto ensure the normal order of a Shareholders’General Meeting. It/they will take measures to haltacts that disrupt the Shareholders’ GeneralMeeting, seek to cause trouble or infringe uponthe lawful rights and interests of Shareholders andpromptly report the same to the relevantauthorities to investigate and deal with the matter.

Rule 29 All the Shareholders or their proxiesregistered on the equity confirmation date (equityregistration date) shall be entitled to attend aGeneral Meeting and exercise their voting right inaccordance with relevant laws, regulations, theArticle of Association and the Hong Kong ListingRules, and the Company or the convener(s) shallnot refuse them for whatever reasons.

Rule 30 All the Shareholders or their proxiesregistered on the equity registration date shall beentitled to attend a General Meeting and exercisetheir voting right in accordance with relevant laws,regulations, the Article of Association, and thelisting rules of places where shares of theCompany are listed, and the Company or theconvener(s) shall not refuse them for whateverreasons.

Rule 30 A Shareholder may attend a GeneralMeeting in person and exercise his voting right, ormay entrust other person to attend the meeting andexercise the voting right to the extent of theauthorization given.

Rule 31 A Shareholder may attend a GeneralMeeting in person and exercise his voting right, ormay entrust other person to attend the meeting andexercise the voting right to the extent of theauthorization given.

Rule 31 The instrument appointing a proxy mustbe made in writing and signed under the hand ofthe appointer or his attorney duly authorized inwriting. If the appointer is a legal person, theinstrument shall be made under its corporate sealor signed under the hand of its Director orattorney duly authorized. The power of attorneyshall state the number of shares represented by thesaid proxy; in the case where more than one proxyis appointed, the instrument shall state the numberof shares respectively represented by each proxyof the Shareholder.

Rule 32 The instrument appointing a proxy mustbe made in writing and signed under the hand ofthe appointer or his attorney duly authorized inwriting. If the appointer is a legal person, theinstrument shall be made under its corporate sealor signed under the hand of its Director orattorney duly authorized. The power of attorneyshall state the number of shares represented by thesaid proxy; in the case where more than one proxyis appointed, the instrument shall state the numberof shares respectively represented by each proxyof the Shareholder.


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Rule 32 Individual Shareholders attending themeeting in person shall present their identity cardsor other valid documents or proof that can provetheir identity, and the share certificates. Forpersons attending the meeting by proxy, theproxies shall present their own valid identitydocuments and the written proxy form signed bythe appointer or the proxy entrusted by theappointer in writing. The proxy form shall specifythe execution date.

Corporate Shareholder should attend the meetingby its legal representatives or the proxy appointedby the legal representative. Legal representativewho attends the meeting should produce his ownidentity card, valid certificates evidencing hiscapacity as a legal representative. Whileappointing proxy to attend the meeting, the proxyshould produce his identity card and the writtenproxy form affixed with the corporate seal orsigned by its proxy authorised duly. The proxyform shall specify the execution date.

Rule 33 Individual Shareholders attending themeeting in person shall present their identity cardsor other valid documents or proof that can provetheir identity, and the share certificates. Forpersons attending the meeting by proxy, theproxies shall present their own valid identitydocuments and the written proxy form signed bythe appointer or the proxy entrusted by theappointer in writing. The proxy form shall specifythe execution date.

Corporate Shareholder should attend the meetingby its legal representatives or the proxy appointedby the legal representative. Legal representativewho attends the meeting should produce his ownidentity card, valid certificates evidencing hiscapacity as a legal representative. Whileappointing proxy to attend the meeting, the proxyshould produce his identity card and the writtenproxy form affixed with the corporate seal orsigned by its proxy authorised duly. The proxyform shall specify the execution date.

Rule 33 The form of proxy appointing anotherperson to attend a Shareholders’ general meetingproduced by a Shareholder shall state thefollowing:

(1) Name of the proxy;

(2) whether he/she has the voting right and thenumber of shares held by the appointor for whomthe proxy represents;

(3) instructions as to vote for or vote against orabstain from voting in relation to each matter onthe agenda to be examined at the Shareholders’general meeting;

(4) issuing date and validity period of the proxyform;

(5) signature (or chop) of the appointor. If theappointor is a corporate Shareholder, thecorporation’s seal shall be affixed.

Rule 34 The form of proxy appointing anotherperson to attend a Shareholders’ general meetingproduced by a Shareholder shall state thefollowing:

(1) Name of the proxy;

(2) whether he/she has the voting right and thenumber of shares held by the appointor for whomthe proxy represents;

(3) instructions as to vote for or vote against orabstain from voting in relation to each matter onthe agenda to be examined at the Shareholders’general meeting;

(4) issuing date and validity period of the proxyform;

(5) signature (or chop) of the appointor. If theappointor is a corporate Shareholder, thecorporation’s seal shall be affixed.


– XII-21 –




Such proxy form shall state whether the proxymay vote as he thinks fit in the absence ofinstructions from the Shareholder.

Any proxy form issued to a Shareholder by theBoard of the Company for appointing a proxy ofShareholder shall allow the Shareholder to freelyinstruct the proxy to cast vote in favour of oragainst or abstain from, and to give separateinstructions for each matter to be resolved at themeeting. The proxy is deemed to be entitled tovote at his/her discretion for any resolution lack ofspecific instruction by the Shareholder.

Such proxy form shall state whether the proxymay vote as he thinks fit in the absence ofinstructions from the Shareholder.

Any proxy form issued to a Shareholder by theBoard of the Company for appointing a proxy ofShareholder shall allow the Shareholder to freelyinstruct the proxy to cast vote in favour of oragainst or abstain from, and to give separateinstructions for each matter to be resolved at themeeting. The proxy is deemed to be entitled tovote at his/her discretion for any resolution lack ofspecific instruction by the Shareholder.

Rule 34 The proxy form shall be deposited at thedomicile of the Company or any other placespecified in the notice for convening the meetingnot less than twenty-four hours prior to theconvening of the meeting or twenty-four hoursprior to the time appointed for voting. Where theproxy form is signed by a person authorized bythe appointer, the power of attorney or otherauthorization instruments shall be notarized. Thepower of attorney or other authorizationinstruments so notarized, together with the proxyform, shall be deposited at the domicile of theCompany or such other place as specified in thenotice for convening the meeting.

Where the appointer is a legal person, its legalrepresentative or other persons authorized byresolution of the board of Directors or otherdecision-making organs may attend theShareholders’ meeting of the Company as arepresentative of the appointer.

Rule 35 The proxy form shall be deposited at thedomicile of the Company or any other placespecified in the notice for convening the meetingnot less than twenty-four hours prior to theconvening of the meeting or twenty-four hoursprior to the time appointed for voting. Where theproxy form is signed by a person authorized bythe appointer, the power of attorney or otherauthorization instruments shall be notarized. Thepower of attorney or other authorizationinstruments so notarized, together with the proxyform, shall be deposited at the domicile of theCompany or such other place as specified in thenotice for convening the meeting.

Where the appointer is a legal person, its legalrepresentative or other persons authorized byresolution of the board of Directors or otherdecision-making organs may attend theShareholders’ meeting of the Company as arepresentative of the appointer.


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Where the Shareholder is a recognised clearinghouse (or its proxy), the Shareholder mayauthorise one or more persons it considersappropriate as its representative(s) at anyShareholders’ general meeting or any categoryShareholders meeting; however, if more than oneperson are authorised, the power of attorney shallcontain the number and class of shares for whichsuch persons are authorised, and shall be signedby an authorised personnel of the recognisedclearing house. The person(s) so authorised canrepresent the recognised clearing house (or itsproxy) to attend the meeting and exercise its right,as if the persons are the Company’s individualShareholders, and shall not be required to produceevidence of shareholding, the notarised power ofattorney and/or further evidence to prove that he/she/they have been duly authorised.

Where the Shareholder is a recognised clearinghouse (or its proxy), the Shareholder mayauthorise one or more persons it considersappropriate as its representative(s) at anyShareholders’ general meeting or any categoryShareholders meeting; however, if more than oneperson are authorised, the power of attorney shallcontain the number and class of shares for whichsuch persons are authorised, and shall be signedby an authorised personnel of the recognisedclearing house. The person(s) so authorised canrepresent the recognised clearing house (or itsproxy) to attend the meeting and exercise its right,as if the persons are the Company’s individualShareholders, and shall not be required to produceevidence of shareholding, the notarised power ofattorney and/or further evidence to prove that he/she/they have been duly authorised.

Rule 35 Where the appointer has deceased,become incapacitated, withdrawn the appointmentor the power of attorney, or where the relevantshares have been transferred prior to the voting, avote given by the proxy in accordance with thepower of attorney shall remain valid provided thatno written notice of such event has been receivedby the Company prior to the commencement of therelevant meeting.

Rule 36 Where the appointer has deceased,become incapacitated, withdrawn the appointmentor the power of attorney, or where the relevantshares have been transferred prior to the voting, avote given by the proxy in accordance with thepower of attorney shall remain valid provided thatno written notice of such event has been receivedby the Company prior to the commencement of therelevant meeting.


– XII-23 –




Rule 36 If the certificates submitted by attendeeshave one of the following situations, thequalification for attending this meeting will bedeemed as invalid:

(1) The identification certificates of principal orattendees are forged, expired or altered;

(2) The identification certificates of principal orattendees are beyond recognition;

(3) When the same Shareholder entrusts multiplepersonnel to attend the meeting, the signaturesamples on the power of attorney are obviouslyinconsistent;

(4) The power of attorney has no signature or sealof the principal;

(5) The power of attorney for voting proxy has notbeen notarized which need to be notarized; and

(6) Relevant certificates submitted by principal orpersonnel attending the meeting on his/her behalfobviously violate laws, regulations and the Articlesof Associations of the Company.

Rule 37 If the certificates submitted by attendeeshave one of the following situations, thequalification for attending this meeting will bedeemed as invalid:

(1) The identification certificates of principal orattendees are forged, expired or altered;

(2) The identification certificates of principal orattendees are beyond recognition;

(3) When the same Shareholder entrusts multiplepersonnel to attend the meeting, the signaturesamples on the power of attorney are obviouslyinconsistent;

(4) The power of attorney has no signature or sealof the principal;

(5) The power of attorney for voting proxy has notbeen notarized which need to be notarized; and

(6) Relevant certificates submitted by principal orpersonnel attending the meeting on his/her behalfobviously violate laws, regulations and the Articlesof Associations of the Company.

Rule 37 If the qualification of the principal andhis/her proxy to attend the meeting is recognizedinvalid due to unclear authorization of principal orrelevant certificates submitted by the proxy toprove the legal identity and entrustment relationfailing to comply with laws, regulations andArticles of Associations of the Company, theprincipal or proxy shall undertake correspondinglegal consequences.

Rule 38 If the qualification of the principal andhis/her proxy to attend the meeting is recognizedinvalid due to unclear authorization of principal orrelevant certificates submitted by the proxy toprove the legal identity and entrustment relationfailing to comply with laws, regulations andArticles of Associations of the Company, theprincipal or proxy shall undertake correspondinglegal consequences.


– XII-24 –




Rule 38 Shareholders, Shareholders’representatives and proxies to be presented at theShareholders’ General Meeting shall register withthe registry of the Shareholders’ General Meetingin accordance with the time and requirements setout in the notice of convening the Shareholders’General Meeting.

The Company shall be responsible for preparingthe attendance register of persons attending themeeting in person. The attendance register shallspecify such particulars as an attendee’s name (orthe name of his entity), identity card number,home address, number of voting shares held orrepresented, name of the proxy’s principal (or thename of the principal’s entity), etc.

Rule 39 Shareholders, Shareholders’representatives and proxies to be presented at theShareholders’ General Meeting shall register withthe registry of the Shareholders’ General Meetingin accordance with the time and requirements setout in the notice of convening the Shareholders’General Meeting.

The Company shall be responsible for preparingthe attendance register of persons attending themeeting in person. The attendance register shallspecify such particulars as an attendee’s name (orthe name of his entity), identity card number,home address, number of voting shares held orrepresented, name of the proxy’s principal (or thename of the principal’s entity), etc.

Rule 39 The registered Shareholders shall sign onthe meeting register upon the certificates stated inRule 32.

The unregistered Shareholders shall not attend theShareholder’s meeting in principle. Upon specialapproval of the chairman of the meeting, theunregistered Shareholders shall submit thedocuments regulated in the Rules. After confirmedcomplying with the conditions regulated on themeeting notice, the unregistered Shareholders canattend the Shareholder’s meeting after sign on themeeting register.

Rule 40 The registered Shareholders shall sign onthe meeting register upon the certificates stated inRule 33.

The unregistered Shareholders shall not attend theShareholder’s meeting in principle. Upon specialapproval of the chairman of the meeting, theunregistered Shareholders shall submit thedocuments regulated in the Rules. After confirmedcomplying with the conditions regulated on themeeting notice, the unregistered Shareholders canattend the Shareholder’s meeting after sign on themeeting register.

Rule 40 The convener will jointly verify thelawfulness of Shareholders’ qualifications againstthe register of Shareholders provided by thesecurities depository and clearing institution andregister the Shareholders’ names and the numberof voting shares that they hold. Registration shallbe completed by the time the chairman of themeeting announces the number of Shareholdersand proxies present at the meeting conducted inperson and the total number of voting shares thatthey hold.

Rule 41 The convener and the attorney willjointly verify the lawfulness of Shareholders’qualifications against the register of Shareholdersprovided by the securities depository and clearinginstitution and register the Shareholders’ namesand the number of voting shares that they hold.Registration shall be completed by the time thechairman of the meeting announces the number ofShareholders and proxies present at the meetingconducted in person and the total number ofvoting shares that they hold.

Rule 41 Shareholders shall reach the venue priorto the meeting and latecomers shall be permittedby the chairman of the meeting.

Rule 42 Shareholders shall reach the venue priorto the meeting and latecomers shall be permittedby the chairman of the meeting.


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Rule 42 When convening a Shareholders’ GeneralMeeting, all Directors, Supervisors and Secretaryto the Board shall attend the meeting whilegeneral manager and other senior managementofficers shall attend the meeting unless there isreasonable ground.

Rule 43 When convening a Shareholders’ GeneralMeeting, all Directors, Supervisors and Secretaryto the Board shall attend the meeting whilegeneral manager and other senior managementofficers shall attend the meeting unless there isreasonable ground.


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Rule 43 A Shareholders’ General Meetings shallbe convened by the Board of Directors, and theChairman of the Board shall serve as chairmanand preside over the meeting. If the chairman isunable or fails to perform his duties, themeetings shall be presided over by a directorjointly recommended by more than half of thedirectors, and take the chair of the meeting in hisstead. If no chairman of the meeting has beendesignated, shareholders present shall choose one(1) person to be the chairman of the meeting.Where the shareholders fail to elect a chairman forany reasons, the shareholder (including his proxy)presents in person or by proxy who holds thelargest number of shares carrying the right to votethereat shall be the chairman of the meeting.

If the Board is unable to perform or fails toperform the duties of convening the generalmeeting, the board of supervisors shall conveneand preside over the meeting in a timelymanner. If the Board of supervisors does notconvene and preside over the meeting, theshareholders who individually or collectivelyhold more than 10% of the Company’s sharesfor more than 90 consecutive days may conveneand preside over the meeting.

At a Shareholders’ General Meeting convened bythe Board of Supervisors, the chairman of theBoard of Supervisors shall preside. If the chairmanof the Board of Supervisors fails or is unable toperform his or her duties, the meeting shall bepresided over by the supervisor jointly elected byat least one half of the supervisors.

If a Shareholders’ General Meeting is convened bya Shareholder himself or Shareholders themselves,the meeting shall be presided over by therepresentative selected by the convener(s).

When a Shareholders’ General Meeting is held, ifthe chairman of the meeting violates the rules ofprocedures, making continuance of theShareholders’ General Meeting impossible, withthe consent of Shareholders holding more than onehalf of the voting rights present at the meeting, theShareholders’ General Meeting may elect a personto serve as chairman of the meeting and themeeting shall continue.

Rule 44 A Shareholders’ General Meetings shallbe convened by the Board of Directors, and theChairman of the Board shall serve as chairmanand preside over the meeting. If the chairman isunable or fails to perform his duties, themeetings shall be presided over by a directorjointly recommended by more than half of thedirectors, and take the chair of the meeting in hisstead. If no chairman of the meeting has beendesignated, shareholders present shall choose one(1) person to be the chairman of the meeting.Where the shareholders fail to elect a chairman forany reasons, the shareholder (including his proxy)presents in person or by proxy who holds thelargest number of shares carrying the right to votethereat shall be the chairman of the meeting.

If the Board is unable to perform or fails toperform the duties of convening the generalmeeting, the board of supervisors shall conveneand preside over the meeting in a timelymanner. If the Board of supervisors does notconvene and preside over the meeting, theshareholders who individually or collectivelyhold more than 10% of the Company’s sharesfor more than 90 consecutive days may conveneand preside over the meeting.

At a Shareholders’ General Meeting convened bythe Board of Supervisors, the chairman of theBoard of Supervisors shall preside. If the chairmanof the Board of Supervisors fails or is unable toperform his or her duties, the meeting shall bepresided over by the supervisor jointly elected byat least one half of the supervisors.

If a Shareholders’ General Meeting is convened bya Shareholder himself or Shareholders themselves,the meeting shall be presided over by therepresentative selected by the convener(s).

When a Shareholders’ General Meeting is held, ifthe chairman of the meeting violates the rules ofprocedures, making continuance of theShareholders’ General Meeting impossible, withthe consent of Shareholders holding more than onehalf of the voting rights present at the meeting, theShareholders’ General Meeting may elect a personto serve as chairman of the meeting and themeeting shall continue.


– XII-27 –




Rule 44 The Chairman of meeting shall announcethe beginning of the meeting as scheduled. Themeeting may begin later than the scheduled timein exceptional cases.

Rule 45 The Chairman of meeting shall announcethe beginning of the meeting as scheduled. Themeeting may begin later than the scheduled timein exceptional cases.

Rule 45 After the announcement of beginning ofthe meeting, the Chairman shall firstly announceattendance of Shareholders (including theirproxies) and shares carrying voting rightrepresented by them. The number of Shareholdersand proxies present at the meeting as well as thetotal number of voting shares held by them shallbe that as indicated in the register of the meeting.

Rule 46 After the announcement of beginning ofthe meeting, the Chairman shall firstly announceattendance of Shareholders (including theirproxies) and shares carrying voting rightrepresented by them. The number of Shareholdersand proxies present at the meeting as well as thetotal number of voting shares held by them shallbe that as indicated in the register of the meeting.

Rule 46 Presided over by the Chairman, issuesand proposals included into the agenda shall beresolved item-by-item. For issues included in theagenda of meeting, the Chairman may determinein accordance with the status of the meeting themode of report and mass consideration and votingshall be adopted, also for complicated issue, theChairman may adopt case-by-case mode for report,consideration and voting of complicated issues.Reasonable time shall be given for the discussionof each issue at the Shareholders’ GeneralMeeting.

Rule 47 Presided over by the Chairman, issuesand proposals included into the agenda shall beresolved item-by-item. For issues included in theagenda of meeting, the Chairman may determinein accordance with the status of the meeting themode of report and mass consideration and votingshall be adopted, also for complicated issue, theChairman may adopt case-by-case mode for report,consideration and voting of complicated issues.Reasonable time shall be given for the discussionof each issue at the Shareholders’ GeneralMeeting.

Rule 47 At the annual general meeting, the boardof Directors shall report the implementationsituations of each matter in resolutions it handledsince the previous annual general meeting to theShareholders’ general meeting, and eachindependent Director shall make reports on work.

Rule 48 At the annual general meeting, the boardof Directors shall report the implementationsituations of each matter in resolutions it handledsince the previous annual general meeting to theShareholders’ general meeting, and eachindependent Director shall make reports on work.


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Rule 48 At the annual general meeting, the Boardof Supervisors shall declare the special supervisionreport on the Company for the preceding year,including the following:

(1) inspection on financial performance of theCompany;

(2) due diligence of the Directors and officers intheir performance of duties for the Company andtheir compliance with the relevant laws andregulations, Articles and resolutions of generalmeetings;

(3) other important matters as deemed by theBoard of Supervisors to be reported at the generalmeeting.

The Board of Supervisors may, wherever it holdsas necessary, provide comments on the proposalsdiscussed at the Shareholders’ General Meeting,and submit its independent report thereto.

Rule 49 At the annual general meeting, the Boardof Supervisors shall declare the special supervisionreport on the Company for the preceding year,including the following:

(1) inspection on financial performance of theCompany;

(2) due diligence of the Directors and officers intheir performance of duties for the Company andtheir compliance with the relevant laws andregulations, Articles and resolutions of generalmeetings;

(3) other important matters as deemed by theBoard of Supervisors to be reported at the generalmeeting.

The Board of Supervisors may, wherever it holdsas necessary, provide comments on the proposalsdiscussed at the Shareholders’ General Meeting,and submit its independent report thereto.

Rule 49 Shareholders or their proxies shall declaretheir opinions briefly when considering issues andcan make inquiries on issues affecting theirjudgment and vote and ask reporters to giveexplanation.

Rule 50 Shareholders or their proxies shall declaretheir opinions briefly when considering issues andcan make inquiries on issues affecting theirjudgment and vote and ask reporters to giveexplanation.

Rule 50 Except for confidential information of theCompany, which must not be disclosed at theShareholders’ General Meeting, Directors, theBoard of Supervisors and senior executives shallprovide answers and explanations in response toenquiries and suggestions from Shareholders at theShareholders’ General Meeting.

Rule 51 Except for confidential information of theCompany, which must not be disclosed at theShareholders’ General Meeting, Directors, theBoard of Supervisors and senior executives shallprovide answers and explanations in response toenquiries and suggestions from Shareholders at theShareholders’ General Meeting.


– XII-29 –




Chapter VII Voting and Resolution of theShareholders’ General Meeting

Chapter VII Voting and Resolution of theShareholders’ General Meeting

Rule 51 Proposals submitted to the Shareholders’General Meeting shall be passed by way of voting.The Company has no voting right for the Shares itholds, and such part of Shares shall be excludedfrom the total number of voting Shares representedby the Shareholders attending the general meeting.Shareholders (including proxies thereof) shallexercise their voting rights as per the votingShares they represent. Each Share carries the rightto one vote.

Where any Shareholder is, under the Hong KongListing Rules, required to abstain from voting onany particular resolution or restricted to votingonly for or against any particular resolution, anyvotes cast by or on behalf of such Shareholder incontravention of such requirement or restrictionshall not be counted.

Rule 52 Proposals submitted to the Shareholders’General Meeting shall be passed by way of voting.The Company has no voting right for the Shares itholds, and such part of Shares shall be excludedfrom the total number of voting Shares representedby the Shareholders attending the general meeting.Shareholders (including proxies thereof) shallexercise their voting rights as per the votingShares they represent. Each Share carries the rightto one vote.

Where a Shareholder is involved in any matterto be reviewed at the Shareholders’ GeneralMeeting, he/she shall avoid the voting process,and the voting shares he holds shall not beincluded in the total number of voting sharesheld by Shareholders present at the meeting.

When the deliberation in the Shareholders’general meeting affects the significant mattersof medium and small investors’ benefits, thevoting of medium and small investors shall becounted separately. The result of separate votecounting shall be disclosed publicly in a timelymanner.

Where any Shareholder is, under relevant laws,regulations and the listing rules of places whereshares of the Company are listed, required toabstain from voting on any particular resolution orrestricted to voting only for or against anyparticular resolution, any votes cast by or onbehalf of such Shareholder in contravention ofsuch requirement or restriction shall not becounted.

Rule 52 Resolutions submitted to a Shareholders’general meeting shall be voted by poll, but subjectto the requirements of the Hong Kong ListingRules, the chairman of the meeting may in goodfaith allow resolutions purely related to proceduralor administrative matters to be voted on by a showof hands.

Rule 53 Resolutions submitted to a Shareholders’general meeting shall be voted by poll, but subjectto the requirements of laws, regulations and theplaces where shares of the Company are listed,the chairman of the meeting may in good faithallow resolutions purely related to procedural oradministrative matters to be voted on by a show ofhands.


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None Rule 54 The board of Directors, independentDirectors and Shareholders who meet therelevant requirements may collect votes fromShareholders publicly. When collecting votesfrom Shareholders, the information such asspecific voting intention shall be disclosed fullyto the ones collected from. It is forbidden tocollect votes from Shareholders by paid ordisguised paid ways. The Company shall notpropose minimum holding proportion restrictionfor the collection of votes.

The solicitation of voting rights shall beconducted in a gratuitous manner, and thespecific voting intention and other informationshall be fully disclosed to the solicited persons.It is not allowed to solicit shareholder votingrights in a paid or disguised form ofcompensation.

Rule 53 When voting by poll, a Shareholder(including a proxy) entitled to two or more votesneed not cast all his votes in the same way.

Rule 55 When voting by poll, a Shareholder(including a proxy) entitled to two or more votesneed not cast all his votes in the same way.

Rule 54 In the case of an equality of votes,whether by a show of hands or by poll, thechairman of the meeting shall have a casting vote.

Rule 56 In the case of an equality of votes,whether by a show of hands or by poll, thechairman of the meeting shall have a casting vote.

Rule 55 Resolutions of Shareholders’ generalmeetings shall be classified as ordinary resolutionsand special resolutions.

To adopt an ordinary resolution, a majority of thevoting rights represented by the Shareholders(including proxies) present at the meeting must becast in favour of the resolution.

To adopt a special resolution, not less thantwo-thirds of the voting rights represented by theShareholders (including proxies) present at themeeting must be cast in favour of the resolution.

Rule 57 Resolutions of Shareholders’ generalmeetings shall be classified as ordinary resolutionsand special resolutions.

To adopt an ordinary resolution, a majority of thevoting rights represented by the Shareholders(including proxies) present at the meeting must becast in favour of the resolution.

To adopt a special resolution, not less thantwo-thirds of the voting rights represented by theShareholders (including proxies) present at themeeting must be cast in favour of the resolution.


– XII-31 –




Rule 56 The following matters shall be resolvedby ordinary resolution at a Shareholders’ generalmeeting:

(1) work reports of the Board and the Board ofSupervisors;

(2) plans for profit distribution and for making uplosses prepared by the Board;

(3) appointment or removal of Directors andsupervisors not being staff representatives, andtheir remuneration and manner of payment thereof;

(4) the Company’s annual financial budgets andfinal accounts, balance sheets, income statementsand other financial statements;

(5) the Company’s annual report;

(6) matters other than those required by the laws,regulations, Hong Kong Listing Rules or theArticles of Association to be approved by specialresolution.

Rule 58 The following matters shall be resolvedby ordinary resolution at a Shareholders’ generalmeeting:

(1) work reports of the Board and the Board ofSupervisors;

(2) plans for profit distribution and for making uplosses prepared by the Board;

(3) appointment or removal of Directors andsupervisors not being staff representatives, andtheir remuneration and manner of payment thereof;

(4) the Company’s annual financial budgets andfinal accounts, balance sheets, income statementsand other financial statements;

(5) the Company’s annual report;

(6) matters other than those required by the laws,regulations, the listing rules of places whereshares of the Company are listed and theArticles of Association to be approved by specialresolution


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Rule 57 The following matters shall be resolvedby special resolution at a Shareholders’ generalmeeting:

(1) increase or reduction of the Company’s sharecapital, repurchase of the Company’s shares andissue of shares of any class, warrants and othersimilar securities;

(2) issue of debentures of the Company;

(3) demerger, merger, dissolution, liquidation andchange of corporate form of the Company;

(4) amendment to the Articles of Association;

(5) purchases or sales of material assets of theCompany in excess of 30 percent of the net assetsof the Company within a year;

(6) share incentive plans;

(7) any other matters stipulated by the laws,administrative regulations, Hong Kong ListingRules or the Articles of Association or determinedby an ordinary resolution at a Shareholders’general meeting as having a material impact on theCompany and requiring to be resolved by specialresolution.

Rule 59 The following matters shall be resolvedby special resolution at a Shareholders’ generalmeeting:

(1) increase or reduction of the Company’s sharecapital, repurchase of the Company’s shares andissue of shares of any class, warrants and othersimilar securities;

(2) issue of debentures of the Company;

(3) demerger, merger, dissolution, liquidation andchange of corporate form of the Company;

(4) amendment to the Articles of Association;

(5) purchases or sales of material assets of theCompany in excess of 30 percent of the net assetsof the Company within a year;

(6) share incentive plans;

(7) any other matters stipulated by the laws,administrative regulations, the listing rules of theplaces where shares of the Company are listedor the Articles of Association or determined by anordinary resolution at a Shareholders’ generalmeeting as having a material impact on theCompany and requiring to be resolved by specialresolution.


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Rule 58 When the Shareholders’ General Meetingconsiders matters relating to a related transaction,the related Shareholders shall not participate in thevote, and the number of voting shares representedby them shall not count toward the total number ofvalid voting shares.

Prior to the Completion of consideration andvoting on related transactions by the Shareholders’General Meeting, related Shareholders shall applyto the presider for abstaining from voting, and thepresider shall make announcement in connectiontherewith at the Shareholders’ General Meeting.When voting on related transactions, relatedShareholders shall abstain from voting under thesupervision of Supervisors, independent Directorsattending the meeting. Prior to the Completion ofconsideration and voting on related transactions bythe Shareholders’ General Meeting, non-relatedShareholders and their proxies, Supervisors andindependent Directors shall have the right tosubmit to the presider an application on requiringthe abstaining from voting on a resolution by arelated Shareholder and specify the reason, therelated Shareholder concerned shall not cast his/her vote if he/she has no objection to therequirement on abstain from voting; If theShareholder being asked to abstain from voting isfound to be a related Shareholder, he/she shall notcast his/her vote. In the event such situationoccurs, the person taking the minutes for theShareholders’ General Meeting shall keep a recordof such details in the minutes as illustrated above.

Rule 60 When the Shareholders’ General Meetingconsiders matters relating to a related transaction,the related Shareholders shall not participate in thevote, and the number of voting shares representedby them shall not count toward the total number ofvalid voting shares.

Prior to the Completion of consideration andvoting on related transactions by the Shareholders’General Meeting, related Shareholders shall applyto the presider for abstaining from voting, and thepresider shall make announcement in connectiontherewith at the Shareholders’ General Meeting.When voting on related transactions, relatedShareholders shall abstain from voting under thesupervision of Supervisors, independent Directorsattending the meeting. Prior to the Completion ofconsideration and voting on related transactions bythe Shareholders’ General Meeting, non-relatedShareholders and their proxies, Supervisors andindependent Directors shall have the right tosubmit to the presider an application on requiringthe abstaining from voting on a resolution by arelated Shareholder and specify the reason, therelated Shareholder concerned shall not cast his/her vote if he/she has no objection to therequirement on abstain from voting; If theShareholder being asked to abstain from voting isfound to be a related Shareholder, he/she shall notcast his/her vote. In the event such situationoccurs, the person taking the minutes for theShareholders’ General Meeting shall keep a recordof such details in the minutes as illustrated above.


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An ordinary resolution on related matters shall bepassed by votes representing more than one-half ofthe voting rights held or represented by thenon-related Shareholders (including their proxies)present at the Shareholders’ general meeting. Aspecial resolution shall be passed by votesrepresenting more than two-thirds of the votingrights held or represented by the non– relatedShareholders (including their proxies) present atthe meeting.

The resolutions of the Shareholders’ GeneralMeeting shall fully disclose the way the non–related Shareholders voted.

An ordinary resolution on related matters shall bepassed by votes representing more than one-half ofthe voting rights held or represented by thenon-related Shareholders (including their proxies)present at the Shareholders’ general meeting. Aspecial resolution shall be passed by votesrepresenting more than two-thirds of the votingrights held or represented by the non– relatedShareholders (including their proxies) present atthe meeting.

The resolutions of the Shareholders’ GeneralMeeting shall fully disclose the way the non–related Shareholders voted.

Rule 59 The list of candidates for Directors andsupervisors shall be submitted to Shareholders’general meetings for voting by way of a motion.

When a voting is made on the election ofDirectors or supervisors at a Shareholders’ generalmeeting, the cumulative voting system may beadopted in accordance with the provisions of thisArticles of Association or the resolutions of theShareholders’ general meeting.

The “cumulative voting system” as mentioned inthe preceding paragraph means that each shareshall have the same voting right as the number ofDirectors or supervisors to be elected, and thevoting right held by the Shareholders may be usedcollectively when the Directors or supervisors areelected at the Shareholders’ general meeting. TheBoard shall simultaneously provide Shareholderswith the biographical details and basic informationabout the candidates for Directors and supervisors.

Rule 61 The list of candidates for Directors andsupervisors shall be submitted to Shareholders’general meetings for voting by way of a motion.

When a voting is made on the election ofDirectors or supervisors at a Shareholders’ generalmeeting, the cumulative voting system may beadopted in accordance with the provisions of thisArticles of Association or the resolutions of theShareholders’ general meeting.

The “cumulative voting system” as mentioned inthe preceding paragraph means that each shareshall have the same voting right as the number ofDirectors or supervisors to be elected, and thevoting right held by the Shareholders may be usedcollectively when the Directors or supervisors areelected at the Shareholders’ general meeting. TheBoard shall simultaneously provide Shareholderswith the biographical details and basic informationabout the candidates for Directors and supervisors.

Rule 60 Save and except for the cumulative votingsystem, the Shareholders’ general meeting shallvote on all motions item by item, and shall voteon the motions in time sequence when variousproposals are put forward for a single matter. TheShareholders’ General Meeting will not set asideor not vote on a motion, unless the Shareholders’General Meeting is suspended or if it is unablereach a resolution due to force majeure or othersuch special reason.

Rule 62 Save and except for the cumulative votingsystem, the Shareholders’ general meeting shallvote on all motions item by item, and shall voteon the motions in time sequence when variousproposals are put forward for a single matter. TheShareholders’ General Meeting will not set asideor not vote on a motion, unless the Shareholders’General Meeting is suspended or if it is unablereach a resolution due to force majeure or othersuch special reason.


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Rule 61 When considering a motion, theShareholders’ General Meeting may not revise it,and should it do so, such amendment shall bedeemed a new motion and may not be voted on atthe current Shareholders’ General Meeting.

Rule 63 When considering a motion, theShareholders’ General Meeting may not revise it,and should it do so, such amendment shall bedeemed a new motion and may not be voted on atthe current Shareholders’ General Meeting.

Rule 62 When a vote is cast it may be cast byonly one of the following methods, in person,online or by other voting method. If one vote iscast by more than one method, the first vote shallprevail.

Rule 64 When a vote is cast it may be cast byonly one of the following methods, in person,online or by other voting method. If one vote iscast by more than one method, the first vote shallprevail.

Rule 63 Votes at Shareholders’ General Meetingshall be cast by disclosed ballot.

The Shareholders or their proxies present at aShareholders’ General Meeting shall express oneof the following opinions on motions that are putto a vote: consent, opposition or abstention.

If a ballot is blank, marked erroneously, illegibleor has not been cast, the voter shall be deemed tohave waived his or her right to vote and the votingresults for the number of shares that he or sheholds shall be recorded as “abstained”.

Rule 65 Votes at Shareholders’ General Meetingshall be cast by disclosed ballot.

The Shareholders or their proxies present at aShareholders’ General Meeting shall express oneof the following opinions on motions that are putto a vote: consent, opposition or abstention, exceptfor the securities registration and settlementinstitutions which, being the nominal holders ofshares subject to Shanghai-Hong Kong StockConnect, shall make declaration according tothe intentions of actual holders.

If a ballot is blank, marked erroneously, illegibleor has not been cast, the voter shall be deemed tohave waived his or her right to vote and the votingresults for the number of shares that he or sheholds shall be recorded as “abstained”.


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Rule 64 A poll shall be taken at such time andplace as specified, not being later than 30 daysfrom the date of the meeting or adjourned meetingat which a vote will be taken on a poll in suchmanner (including the use of ballot or votingpapers or tickets) as the chairman directs. Nonotice need be given of a poll not takenimmediately. The result of the poll shall bedeemed to be the resolution of the meeting atwhich the poll was taken.


Rule 66 A poll shall be taken at such time andplace as specified, not being later than 30 daysfrom the date of the meeting or adjourned meetingat which a vote will be taken on a poll in suchmanner (including the use of ballot or votingpapers or tickets) as the chairman directs. Nonotice need be given of a poll not takenimmediately. The result of the poll shall bedeemed to be the resolution of the meeting atwhich the poll was taken.


Rule 65 Before the Shareholders’ General Meetingvotes on a motion, vote counters and scrutineersshall be elected to participate in the vote countingand vote scrutiny by law. When a Shareholder hasa material interest in a matter being considered, heor she and his or her proxies may not participatein the vote counting or vote scrutiny.

When the Shareholders’ General Meeting votes ona motion, vote counters and scrutineers shall bejointly responsible for counting the votes andscrutinizing the vote count and shall announce theresults of the vote on the spot. The results of thevotes on the resolutions shall be entered into theminutes of the meeting.

Rule 67 Before the Shareholders’ General Meetingvotes on a motion, two Shareholderrepresentatives shall be elected to participate inthe vote counting and vote scrutiny by law. Whena Shareholder has a material interest in a matterbeing considered, he or she and his or her proxiesmay not participate in the vote counting or votescrutiny.

When the Shareholders’ General Meeting votes ona motion, the attorney, Shareholders’representatives and supervisors’ representativesshall be jointly responsible for counting thevotes and scrutinizing the vote count and shallannounce the results of the vote on the spot. Theresults of the votes on the resolutions shall beentered into the minutes of the meeting.

Shareholders or their proxies who cast theirvotes online or by other means shall have theright to check the results of their votes by wayof the pertinent voting system.


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Rule 66 Vote counters and scrutineers shall countthe voting results for each resolution after theclose of voting at the Shareholders’ generalmeeting. The chairman of the Shareholders’General Meeting shall announce the outcome andresults of the vote on each motion and announcewhether each such motion has been carried basedon the results of the votes.

Until the formal announcement of the votingresults, relevant parties, such as the listedcompany, the vote counters, scrutineers, majorShareholders, website service suppliers etc.,involved in the voting in person, online or byother voting method at the Shareholders’ GeneralMeeting shall bear an obligation of confidentialityin respect of how the Shareholders voted.

Rule 68 The on-site voting shall not end earlierthan the network voting or any other method ofvoting at the Shareholders’ General Meeting.The chairman of the Shareholders’ GeneralMeeting shall announce the outcome and results ofthe vote on each motion and announce whethereach such motion has been carried based on theresults of the votes.

Until the formal announcement of the votingresults, relevant parties, such as the listedcompany, the vote counters, scrutineers, majorShareholders, website service suppliers etc.,involved in the voting in person, online or byother voting method at the Shareholders’ GeneralMeeting shall bear an obligation of confidentialityin respect of how the Shareholders voted.

None Rule 69 The resolution of a Shareholders’general meeting shall be publicly announced intime and the public announcement shall includethe numbers of Shareholders (and proxies)attending the meeting, the total numbers ofvoting shares held by them, their proportion tothe total voting shares of the Company, themeans of votes, the result of every motion anddetails of every resolution passed.

Rule 67 Shareholders’ right (including but notlimited to the votes cast) exercised by or exercisedon behalf by attendees with invalid eligibility shallbe invalid. Such invalid voting ballot shall not beincluded into the total of shares carrying votingright held by Shareholders attending the meeting.

If the chairman of the meeting has any doubtsabout the voting result of a resolution, he maycount the number of votes cast. If the chairman ofthe meeting fails to count the votes, a Shareholderor proxy attending the meeting who dissent fromthe result announced by the chairman of themeeting shall be entitled to request counting ofvotes immediately after such announcement, inwhich case the chairman of the meeting shallimmediately count the votes.

Rule 70 Shareholders’ right (including but notlimited to the votes cast) exercised by or exercisedon behalf by attendees with invalid eligibility shallbe invalid. Such invalid voting ballot shall not beincluded into the total of shares carrying votingright held by Shareholders attending the meeting.

If the chairman of the meeting has any doubtsabout the voting result of a resolution, he maycount the number of votes cast. If the chairman ofthe meeting fails to count the votes, a Shareholderor proxy attending the meeting who dissent fromthe result announced by the chairman of themeeting shall be entitled to request counting ofvotes immediately after such announcement, inwhich case the chairman of the meeting shallimmediately count the votes.


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Rule 68 The convener shall ensure that the generalmeeting is being conducted continuingly untilresolutions have been resulted. In the event ofspecial reasons such as force majeure resulting inthe termination of meeting or the failure ofresulting in resolutions, necessary measures shallbe taken to resume the general meeting as soon aspracticable.

Rule 71 The convener shall ensure that the generalmeeting is being conducted continuingly untilresolutions have been resulted. In the event ofspecial reasons such as force majeure resulting inthe termination of meeting or the failure ofresulting in resolutions, necessary measures shallbe taken to resume the general meeting as soon aspracticable; alternatively, the meeting may beterminated in such circumstances with anannouncement timely made. At the same time,the convener shall deliver a report to thebranch office of the China Securities RegulatoryCommission at the place where the Companyresides and the stock exchange.

Rule 69 The resolutions regarding the proposalsraised by Shareholders shall list out the name ortrade name of the Shareholders, the shareholdingpercentage and the content of such proposals.

Rule 72 The resolutions regarding the proposalsraised by Shareholders shall list out the name ortrade name of the Shareholders, the shareholdingpercentage and the content of such proposals.

Rule 70 If a motion is not carried or if theShareholders’ General Meeting modified aresolution from the previous Shareholders’ GeneralMeeting, the same shall be specifically mentionedin the announcement of the resolutions of theShareholders’ General Meeting.

Rule 73 If a motion is not carried or if theShareholders’ General Meeting modified aresolution from the previous Shareholders’ GeneralMeeting, the same shall be specifically mentionedin the announcement of the resolutions of theShareholders’ General Meeting.


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Rule 71 The contents of all resolutions made atthe Shareholders’ general meeting shall complywith laws and the Articles of Associations of theCompany. The contents of the resolution whichviolate laws and administrative regulations areinvalid.

If the convening procedures and voting methods ofthe Shareholders’ general meeting violate laws,administrative regulations or Articles ofAssociations of the Company, or the contents ofresolution violate the Articles of Associations ofthe Company, the Shareholder can request thepeople’s court to cancel within 60 days since theresolution is adopted.

Rule 74 The contents of all resolutions made atthe Shareholders’ general meeting shall complywith laws and the Articles of Associations of theCompany. The contents of the resolution whichviolate laws and administrative regulations areinvalid.

The controlling Shareholders and actualcontrollers of the Company shall not restrict orhinder medium and small investors to exercisevoting rights and harm the legitimate rights ofthe Company as well as medium and smallinvestors.

If the convening procedures and voting methods ofthe Shareholders’ general meeting violate laws,administrative regulations or Articles ofAssociations of the Company, or the contents ofresolution violate the Articles of Associations ofthe Company, the Shareholder can request thepeople’s court to cancel within 60 days since theresolution is adopted.


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Chapter VIII Minutes of the Shareholders’General Meeting

Chapter VIII Minutes of the Shareholders’General Meeting

Rule 72 Minutes of general meetings shall betaken by the secretary to the Board and includethe following information:

(1) time, place and agenda of meeting, and thename of the convener;

(2) names of the chairman of the meeting, theDirectors, supervisors, chief risk officer, generalmanager and other senior management attending orpresent at the meeting;

(3) number of Shareholders and proxies attendingthe meeting, total number of the shares carryingvoting rights held by them, and the percentage ofshares carrying voting rights held by them inrelation to the total number of shares of theCompany;

(4) process of consideration, key points of thespeech and voting results for each proposal;

(5) Shareholders’ enquiries or recommendationsand corresponding answers or explanations;

(6) names of the lawyer, the vote counter and thescrutineer;

(7) other matters which shall be recorded in themeeting minutes pursuant to this Articles ofAssociation.

Rule 75 Minutes of general meetings shall betaken by the secretary to the Board and includethe following information:

(1) time, place and agenda of meeting, and thename of the convener;

(2) names of the chairman of the meeting, theDirectors, supervisors, chief risk officer, generalmanager and other senior management attending orpresent at the meeting;

(3) number of Shareholders and proxies attendingthe meeting, total number of the shares carryingvoting rights held by them, and the percentage ofshares carrying voting rights held by them inrelation to the total number of shares of theCompany;

(4) process of consideration, key points of thespeech and voting results for each proposal;

(5) Shareholders’ enquiries or recommendationsand corresponding answers or explanations;

(6) names of the lawyer, the vote counter and thescrutineer;

(7) other matters which shall be recorded in themeeting minutes pursuant to this Articles ofAssociation.

Rule 73 The convener shall warrant that thecontents of the minutes are true, accurate andcomplete. The Directors, supervisors, the Secretaryto the Board, the convener of the meeting or hisrepresentative and the chairman of the meetingattending the meeting shall sign on the meetingminutes. The meeting minutes should bemaintained together with the signature book ofattending Shareholders and letters of attorney oftheir proxies and information on voting viainternet and other means for a period of ten years.

Rule 76 The convener shall warrant that thecontents of the minutes are true, accurate andcomplete. The Directors, supervisors, the Secretaryto the Board, the convener of the meeting or hisrepresentative and the chairman of the meetingattending the meeting shall sign on the meetingminutes. The meeting minutes should bemaintained together with the signature book ofattending Shareholders and letters of attorney oftheir proxies and information on voting viainternet and other means for a period of ten years.


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Rule 74 Copies of the minutes shall, during thebusiness hours of the Company, be open forinspection by any Shareholder free of charge. If aShareholder demands from the Company a copy ofsuch minutes, the Company shall send a copywithin seven days following the receipt of areasonable charge.

Rule 77 Copies of the minutes shall, during thebusiness hours of the Company, be open forinspection by any Shareholder free of charge. If aShareholder demands from the Company a copy ofsuch minutes, the Company shall send a copywithin seven days following the receipt of areasonable charge.

Chapter IX Disciplines of the Shareholders’General Meeting

Chapter IX Disciplines of the Shareholders’General Meeting

Rule 75 Registered Shareholders or their proxies,Directors, Supervisors, general managers and othersenior management, notary, visitors and reportersinvited by the Board can attend the meeting. Anyother person shall be required to exit from themeeting as his/her admittance is refused.

Rule 78 Registered Shareholders or their proxies,Directors, Supervisors, general managers and othersenior management, notary, visitors and reportersinvited by the Board can attend the meeting. Anyother person shall be required to exit from themeeting as his/her admittance is refused.

Rule 76 The Chairman of the general meeting mayrequire the following personnel to exit from themeeting:

(1) Ineligible attendees;

(2) personnel who disorder the meeting;

(3) personnel who dress in an indecent way;

(4) personnel who carry weapons or hazardousmaterials;

(5) other circumstances.

The Chairman of the general meeting may takenecessary action to force personnel who defy theorder of exit to exit from the meeting.

Rule 79 The Chairman of the general meeting mayrequire the following personnel to exit from themeeting:

(1) Ineligible attendees;

(2) personnel who disorder the meeting;

(3) personnel who dress in an indecent way;

(4) personnel who carry weapons or hazardousmaterials;

(5) other circumstances.

The Chairman of the general meeting may takenecessary action to force personnel who defy theorder of exit to exit from the meeting.


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Rule 77 Upon the consideration of proposals, onlyShareholder or their proxies has the speaking rightand the speaker shall show hands to ask forapproval of the Chairman and then speak at theirseat or a designated seat.

When more than one Shareholder shows hands, theChairman shall appoint speakers.

The Chairman shall specify speaking time limitand times for each speaker on a practical basis.Speech of Shareholders shall not be interruptedwithin the time limit, to ensure sufficient speakingright of Shareholders.

The Chairman may refuse or stop Shareholderswho breach such speaking provisions specified inthe preceding three paragraphs.

Directors, Supervisors, general managers, othersenior management member of the Company andthose approved by the Chairman may speak.

Rule 80 Upon the consideration of proposals, onlyShareholder or their proxies has the speaking rightand the speaker shall show hands to ask forapproval of the Chairman and then speak at theirseat or a designated seat.

When more than one Shareholder shows hands, theChairman shall appoint speakers.

The Chairman shall specify speaking time limitand times for each speaker on a practical basis.Speech of Shareholders shall not be interruptedwithin the time limit, to ensure sufficient speakingright of Shareholders.

The Chairman may refuse or stop Shareholderswho breach such speaking provisions specified inthe preceding three paragraphs.

Directors, Supervisors, general managers, othersenior management member of the Company andthose approved by the Chairman may speak.

Rule 78 Speaking Shareholders or proxies shallintroduce their Shareholders’ identity, companiesthey represented and their shareholding beforegiving opinion.

Rule 81 Speaking Shareholders or proxies shallintroduce their Shareholders’ identity, companiesthey represented and their shareholding beforegiving opinion.

Rule 79 The general meeting shall be convened byadhering to the principles of cost-saving andsimplicity. No additional benefits shall be grantedto the Shareholders (or their authorised proxies)attending such a meeting.

Rule 82 The general meeting shall be convened byadhering to the principles of cost-saving andsimplicity. No additional benefits shall be grantedto the Shareholders (or their authorised proxies)attending such a meeting.


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Chapter X Authorisation to the Board by theShareholders’ General Meeting

Chapter X Authorisation to the Board by theShareholders’ General Meeting

Rule 80 Issues which require approval by theShareholders’ General Meeting as stipulated bylaws, administrative regulations and the Articles ofAssociation shall be considered and resolved at theShareholders’ General Meeting. When considerednecessary, reasonable and in compliance withrelevant laws, any specific matters related to theforegoing issues which are unable or unnecessaryto be decided immediately at the Shareholders’General Meeting may be decided by the Boardupon authorization by the Shareholders’ GeneralMeeting.

An authorisation to the Board that falls into thescope of an ordinary resolution shall be approvedby Shareholders (including their proxies)representing more than one-half of the votingrights present at the meeting. An authorization tothe Board that falls into the scope of a specialresolution shall be approved by Shareholders(including their proxies) representing more thantwo thirds of the voting rights present at themeeting. The contents of the authorization shall beclear, definite and specific.

Rule 83 Issues which require approval by theShareholders’ General Meeting as stipulated bylaws, administrative regulations and the Articles ofAssociation shall be considered and resolved at theShareholders’ General Meeting. When considerednecessary, reasonable and in compliance withrelevant laws, any specific matters related to theforegoing issues which are unable or unnecessaryto be decided immediately at the Shareholders’General Meeting may be decided by the Boardupon authorization by the Shareholders’ GeneralMeeting.

An authorisation to the Board that falls into thescope of an ordinary resolution shall be approvedby Shareholders (including their proxies)representing more than one-half of the votingrights present at the meeting. An authorization tothe Board that falls into the scope of a specialresolution shall be approved by Shareholders(including their proxies) representing more thantwo thirds of the voting rights present at themeeting. The contents of the authorization shall beclear, definite and specific.

Rule 81 When the Board makes decision on thematters authorised by the general meeting, it shalldiscuss and verify the matters thoroughly and mayappoint intermediaries to provide advice ifnecessary, to ensure scientific and correctdecision-making on the matters.

The Company shall perform its informationdisclosure obligation in respect of the Board’sdecision on the matters authorised under thesupervision of Shareholders, Board of Supervisorsof the Company and relevant securities regulatoryauthorities in accordance with the laws andadministrative regulations.

Rule 84 When the Board makes decision on thematters authorised by the general meeting, it shalldiscuss and verify the matters thoroughly and mayappoint intermediaries to provide advice ifnecessary, to ensure scientific and correctdecision-making on the matters.

The Company shall perform its informationdisclosure obligation in respect of the Board’sdecision on the matters authorised under thesupervision of Shareholders, Board of Supervisorsof the Company and relevant securities regulatoryauthorities in accordance with the laws andadministrative regulations.


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Chapter XI Adjournment and Conclusion of theShareholders’ General Meeting

Chapter XI Adjournment and Conclusion of theShareholders’ General Meeting

Rule 82 The Chairman of the meeting has theright to announce the adjournment of meeting inaccordance with the procession and the timearrangement of the meeting. The Chairman of themeeting also has the right to announce theadjournment of the meeting as necessary.

Rule 85 The Chairman of the meeting has theright to announce the adjournment of meeting inaccordance with the procession and the timearrangement of the meeting. The Chairman of themeeting also has the right to announce theadjournment of the meeting as necessary.

Rule 83 The Chairman of the meeting can onlyannounce the conclusion of the meeting when thevoting results of all proposals at Shareholders’General Meeting receive no objection fromShareholders.

Rule 86 The Chairman of the meeting can onlyannounce the conclusion of the meeting when thevoting results of all proposals at Shareholders’General Meeting receive no objection fromShareholders.

Chapter XII Implementation of Resolutions ofthe Shareholders’ General Meeting

Chapter XII Implementation of Resolutions ofthe Shareholders’ General Meeting

Rule 84 The Board is responsible for theimplementation of the resolutions passed at theShareholders’ General Meeting and asking for theGeneral Manager to organize relevant staff toimplement the resolutions in detail; For resolutionneed to be implemented by the Board ofSupervisors, it shall be organized and implementedby the Board of Supervisors directly.

Rule 87 The Board is responsible for theimplementation of the resolutions passed at theShareholders’ General Meeting and asking for theGeneral Manager to organize relevant staff toimplement the resolutions in detail; for resolutionneed to be implemented by the Board ofSupervisors, it shall be organized and implementedby the Board of Supervisors directly.

Rule 85 Chairman of the Board shall supervise theimplementation of resolutions passed at thegeneral meeting (exclusive those implemented bythe Board of Supervisors), and conveneextraordinary Board meeting to hear and considerthe report on implementation of such resolutionswhen necessary.

Rule 88 Chairman of the Board shall supervise theimplementation of resolutions passed at thegeneral meeting (exclusive those implemented bythe Board of Supervisors), and conveneextraordinary Board meeting to hear and considerthe report on implementation of such resolutionswhen necessary.


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Chapter XIII Supplementary Provisions Chapter XIII Supplementary Provisions

Rule 86 For provisions not stipulated in the Rulesor should the Rules be inconsistent with the laws,regulations, normative documents, Hong KongListing Rules and the Articles of Association, suchlaws, regulations, normative documents, HongKong Listing Rules and the Articles of Associationshall prevail.

Unless otherwise specified, the terms used in theRules shall have the same meanings as that in theArticles of Association.

Rule 89 For provisions not stipulated in the Rulesor should the Rules be inconsistent with the laws,regulations, normative documents, the listingrules of the places where shares of theCompany are listed and the Articles ofAssociation, such laws, regulations, normativedocuments, the listing rules of the places whereshares of the Company are listed and theArticles of Association shall prevail.

Unless otherwise specified, the terms used in theRules shall have the same meanings as that in theArticles of Association.

Rule 87 Announcements or notices referred to inthe Rules shall mean related informationdisclosures published on newspapers designated byCSRC. For lengthy announcements or notices, theCompany may opt to disclose summaries of suchannouncements or notices on newspapersdesignated by CSRC, however, the full text ofsuch shall be published at the same time onwebsites designated by CSRC.

Supplemental notices of Shareholders’ GeneralMeetings referred to in the Rules shall bepublished on the same designated newspaperwhere the meeting notice has been published.

Rule 90 Announcements or notices referred to inthe Rules shall mean related informationdisclosures published on newspapers designated byCSRC. For lengthy announcements or notices, theCompany may opt to disclose summaries of suchannouncements or notices on newspapersdesignated by CSRC, however, the full text ofsuch shall be published at the same time onwebsites designated by CSRC.

Supplemental notices of Shareholders’ GeneralMeetings referred to in the Rules shall bepublished on the same designated newspaperwhere the meeting notice has been published.

Rule 88 The words herein of “more” and “within”include the figure itself; while the words of“exceeding”, “below” and “over” exclude thefigure itself. The term “related” and “relatedparty” used herein shall have the same meaningwhen used in the Hong Kong Listing Rules.

Rule 91 The words herein of “more” and “within”include the figure itself; while the words of“exceeding”, “below” and “over” exclude thefigure itself.


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Rule 89 Any modification to the Rules shall bemade by way of amendments proposed by theBoard and submitted to the Shareholders’ GeneralMeeting for consideration and approval.

The Company shall amend the Rules under any ofthe following circumstances:

(1) Subsequent to the amendments to the CompanyLaw, relevant laws, administrative regulations orHong Kong Listing Rules, matters provided for inthe Articles of Association are in conflict with theprovisions of the amended laws, administrativeregulations or Hong Kong Listing Rules;

(2) Subsequent to the amendments to the Articlesof Association, matters provided for in the Rulesare in conflict with the Articles of Association.


The Company shall amend the Rules under any ofthe following circumstances:

(1) Subsequent to the amendments to the CompanyLaw, relevant laws, administrative regulations orthe listing rules of places where shares of theCompany are listed, matters provided for in theArticles of Association are in conflict with theprovisions of the amended laws, administrativeregulations or Hong Kong Listing Rules;

(2) Subsequent to the amendments to the Articlesof Association, matters provided for in the Rulesare in conflict with the Articles of Association.

Rule 90 The Rules shall be subject to theinterpretation of the Board.


Rule 91 The Rules shall take effect from the dateof initial public offering and listing of theCompany in Hong Kong, after being consideredand approved by the Shareholders’ GeneralMeeting.

Rule 94 The Rules shall take effect from the dateof initial public offering of the Companydomestically and its listing on a domesticsecurities exchange, after being considered andapproved by the Shareholders’ General Meeting.The existing rules shall become void and nullafter coming into effect of the Rules.


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Table of Amendments to the Rules of Procedures of the Board of Directors(Applicable upon the Listing of A Shares)

Existing Rules of the Rules of Procedures of theBoard of Directors1

Amended Rules of the Rules of Procedures ofthe Board of Directors (Applicable upon the


Chapter I General Provisions Chapter I General Provisions

Rule 1 These rules (the “Rules”) are specificallyformulated in accordance with domestic andoverseas laws, regulations and regulatorydocuments, including the Company Law of thePeople’s Republic of China (the “Company Law”),the Securities Law of the People’s Republic ofChina (the “Securities Law”), the Rules Governingthe Listing of Securities on The Stock Exchangeof Hong Kong Limited (the “Hong Kong ListingRules”) and the Articles of Association (the“Articles of Association”) of Holly Futures Co.,Ltd. (the “Company”), for the purposes of furtherdefining the terms of reference of the Board,regulating the manner of the proceedings anddecision-making procedures of the Board,facilitating the Directors and the Board ineffectively discharging their duties and enhancingthe standards of the Board in its regulatedoperation and scientific decision– making.

The Rules shall comply with the listing rules ofthe jurisdiction where the shares of the Companyare listed as well as other laws and regulationsamended from time to time. In case of anyinconformity, inconsistency or dispute betweenrelevant laws, regulations, the Articles ofAssociation, the listing rules of the jurisdictionwhere the shares of the Company are listed andthe Rules, the most rigorous clauses will prevailaccording to the principle of strictness.

Rule 1 These rules (the “Rules”) are specificallyformulated in accordance with domestic andoverseas laws, regulations and regulatorydocuments, including the Company Law of thePeople’s Republic of China (the “Company Law”),the Securities Law of the People’s Republic ofChina (the “Securities Law”), the Guidelines onthe Articles of Association for ListedCompanies, the Standards for the Governanceof Listed Companies, the listing rules of theplaces where shares of the Company are listedand the Articles of Association (the “Articles ofAssociation”) of Holly Futures Co., Ltd. (the“Company”), for the purposes of further definingthe terms of reference of the Board, regulating themanner of the proceedings and decision-makingprocedures of the Board, facilitating the Directorsand the Board in effectively discharging theirduties and enhancing the standards of the Board inits regulated operation and scientific decision–making.

The Rules shall comply with the listing rules ofthe jurisdiction where the shares of the Companyare listed as well as other laws and regulationsamended from time to time. In case of anyinconformity, inconsistency or dispute betweenrelevant laws, regulations, the Articles ofAssociation, the listing rules of the jurisdictionwhere the shares of the Company are listed andthe Rules, the most rigorous clauses will prevailaccording to the principle of strictness.

1 Note: The bold rules under the Existing Rules of the Rules of Procedures of the Board of Directors shallbecome effective upon the consideration and approval at the annual general meeting to be held by theCompany.

APPENDIX XIII COMPARISON OF THE EXISTING RULES OF PROCEDURES OF THE BOARD OFDIRECTORS AGAINST THE RULES OF PROCEDURES OF THE BOARD OF DIRECTORS TO BE

EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

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Rule 2 The Board shall lawfully manage theoperations of the Company as authorized by theArticles of Association, Rules of Procedures forShareholders’ General Meeting of Holly FuturesCo., Ltd. and Shareholders’ General Meeting, andshall be accountable to and report to theShareholders’ General Meeting. The Board shalldischarge its duties in accordance with therequirements of the Company Law, the Articles ofAssociation, the Rules as well as other relevantlaws and regulations and regulatory documents.

Rule 2 The Board shall lawfully manage theoperations of the Company as authorized by theArticles of Association, Rules of Procedures forShareholders’ General Meeting of Holly FuturesCo., Ltd. and Shareholders’ General Meeting, andshall be accountable to and report to theShareholders’ General Meeting. The Board shalldischarge its duties in accordance with therequirements of the Company Law, the Articles ofAssociation, the Rules as well as other relevantlaws and regulations and regulatory documents.

Rule 3 The Board shall have an office forhandling the daily affairs of the Board.

The secretary to the Board shall serve concurrentlyas the officer in charge of the office of the Boardand keep the seals of the Board and the office ofthe Board.

Rule 3 The Board shall have an office forhandling the daily affairs of the Board.

The secretary to the Board shall serve concurrentlyas the officer in charge of the office of the Boardand keep the seals of the Board and the office ofthe Board.

Rule 4 Directors shall be natural persons and theyare not required to hold equity shares in theCompany.

Rule 4 Directors shall be natural persons and theyare not required to hold equity shares in theCompany.

Rule 5 The Rules shall apply to the Board, thespecial committees under the Board, Directors, andrelevant departments and persons of the Companyinvolved in the Rules.

Rule 5 The Rules shall apply to the Board, thespecial committees under the Board, Directors, andrelevant departments and persons of the Companyinvolved in the Rules.



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Chapter II Composition and Functions andPowers of the Board

Chapter II Composition and Functions andPowers of the Board

Rule 6 The Board shall comprise 8 Directors,including three Independent Non-executiveDirectors, among which, at least one of theindependent Directors must have appropriateprofessional qualifications or accounting or relatedfinancial management expertise. The Company hasone chairman.

Directors shall be elected by the Shareholders’General Meeting, shall serve a term of three years,and is eligible for reelection upon the expiry ofthe term. Directors shall not be dismissed by theShareholders’ General Meeting without anyparticular reason before the expiry of his/her termof service.

The chairman and vice-chairman shall be electedand removed by more than one-half of all theDirectors. The term of office of the chairman andvice-chairman, who shall be entitled to re–election and reappointment, shall be three (3)years.

Subject to compliance with all relevant laws andadministrative regulations, the Shareholders’General Meeting may by ordinary resolutionremove any Director before the expiration of histerm of office. However, the Director’s right toclaim for damages which arises out of his removalunder any agreement shall not be affected thereby.

Rule 6 The Board shall comprise 8 Directors,including three Independent Non-executiveDirectors, among which, at least one of theindependent Directors must have appropriateprofessional qualifications or accounting or relatedfinancial management expertise. The Company hasone chairman.

Directors shall be elected by the Shareholders’General Meeting, shall serve a term of three years,and is eligible for reelection upon the expiry ofthe term. Directors shall not be dismissed by theShareholders’ General Meeting without anyparticular reason before the expiry of his/her termof service.

The chairman shall be elected and removed bymore than one-half of all the Directors. The termof office of the chairman, who shall be entitled tore-election and reappointment, shall be three (3)years.

Subject to compliance with all relevant laws andadministrative regulations, the Shareholders’General Meeting may by ordinary resolutionremove any Director before the expiration of histerm of office. However, the Director’s right toclaim for damages which arises out of his removalunder any agreement shall not be affected thereby.

Rule 7 The Board shall have a reasonableprofessional structure, and its members shall havenecessary knowledge, skills and quality to performtheir duties.

Rule 7 The Board shall have a reasonableprofessional structure, and its members shall havenecessary knowledge, skills and quality to performtheir duties.



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Rule 8 The Board shall exercise the followingfunctions and powers:

(1) to convene general meetings and report togeneral meetings;

(2) to execute resolutions of general meetings;

(3) to resolve on the Company’s business plansand investment plans;

(4) to prepare the annual financial budgets andfinal accounting plans of the Company;

(5) to prepare the profit distribution plan and planfor making up losses of the Company;

(6) to prepare plans for the increase or decrease ofthe registered capital of the Company and for theissuance of corporate bonds or other securities andlisting scheme;

(7) to formulate plans for material acquisitions,purchase of Shares of the Company, merger,demerger, dissolution and transformation of theCompany;

(8) to decide on external investment, acquisitionand disposal of assets, asset mortgage, consignedfinancial management, connected transactions, etc.of the Company within the authority granted bythe general meeting;

(9) to resolve on the establishment of internalmanagement organizations of the Company;

(10) to appoint or dismiss the general manager,chief risk officer and secretary of the Board; toappoint or dismiss the Company’s deputy generalmanager, chief financial officer and other seniormanagement as nominated by the chairman or thegeneral manager, and to determine theirremunerations and disciplinary matters;

Rule 8 The Board shall exercise the followingfunctions and powers:

(1) to convene general meetings and report togeneral meetings;

(2) to execute resolutions of general meetings;

(3) to resolve on the Company’s business plansand investment plans;

(4) to prepare the annual financial budgets andfinal accounting plans of the Company;

(5) to prepare the profit distribution plan and planfor making up losses of the Company;

(6) to prepare plans for the increase or decrease ofthe registered capital of the Company and for theissuance of corporate bonds or other securities andlisting scheme;

(7) to formulate plans for material acquisitions,purchase of Shares of the Company, merger,demerger, dissolution and transformation of theCompany;

(8) to decide on external investment, acquisitionand disposal of assets, asset mortgage, consignedfinancial management, connected transactions, etc.of the Company within the authority granted bythe general meeting;

(9) to resolve on the establishment of internalmanagement organizations of the Company;

(10) to appoint or dismiss the general manager,chief risk officer and secretary of the Board; toappoint or dismiss the Company’s deputy generalmanager, chief financial officer and other seniormanagement as nominated by the chairman or thegeneral manager, and to determine theirremunerations and disciplinary matters;



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(11) to set up the basic management system of theCompany, including transaction marginmanagement system and risk management system;

(12) to formulate the proposals for any amendmentto this Articles of Association;

(13) to manage the disclosure of the Company’sinformation;

(14) to propose the appointment or replacement ofan accounting firm that performs audits for theCompany at the general meeting;

(15) to listen to the work report of the chief riskofficer and the general manager of the Companyand examine on their work;

(16) to approve the setting up of branches whichis subject to approval from the Board inaccordance with rules of regulatory departments;

(17) to check and approve the Company’s anymajor transactions, very substantial disposals, verysubstantial acquisitions and reverse takeoversunder Hong Kong Listing Rules and submit it toShareholders’ approval;

(18) to check and approve any transactions thatshall be disclosed except the Company’s anymajor transactions, very substantial disposals, verysubstantial acquisitions or reverse takeovers underHong Kong Listing Rules;

(19) to approve the connected transactions that arenot subject to approval or announcement of thegeneral meeting under Hong Kong Listing Rules;

(20) to check the connected transactions that shallbe approved by the general meeting under HongKong Listing Rules;

(11) to set up the basic management system of theCompany, including transaction marginmanagement system and risk management system;

(12) to formulate the proposals for any amendmentto this Articles of Association;

(13) to manage the disclosure of the Company’sinformation;

(14) to propose the appointment or replacement ofan accounting firm that performs audits for theCompany at the general meeting;

(15) to listen to the work report of the chief riskofficer and the general manager of the Companyand examine on their work;

(16) to approve the setting up of branches whichis subject to approval from the Board inaccordance with rules of regulatory departments;

(17) to check and approve the Company’s anymajor transactions, very substantial disposals, verysubstantial acquisitions and reverse takeoversunder Hong Kong Listing Rules and submit it toShareholders’ approval;

(18) to check and approve any transactions thatshall be disclosed except the Company’s anymajor transactions, very substantial disposals, verysubstantial acquisitions or reverse takeovers underHong Kong Listing Rules;

(19) to approve the connected transactions that arenot subject to approval or announcement of thegeneral meeting under Hong Kong Listing Rules;

(20) to check the connected transactions that shallbe approved by the general meeting under HongKong Listing Rules;



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(21) to exercise other functions and powers asstipulated by laws, administrative regulations,department rules or this Articles of Association.

The Board may resolve on the issues specified inthe preceding paragraph by approval of more thanhalf of the Director save for the issues specified in(6), (7), and (12), in which approval of two thirdsof the Directors is required.

The Board shall seek opinion from the PartyCommittee before making decisions on materialissues of the Company.


1. External investment (including consignedfinancial management, entrusted loan, trustproduct, asset management plan, security, bond,fund and other financial asset investment, equityinvestment, and fixed asset investment etc.): TheBoard is granted the authorization in respect ofstandalone external investment of not more than30% of the latest audited net assets of theCompany;

2. Acquisition and disposal of assets: The Board isgranted the authorization in respect of standaloneasset disposal (including acquisition, disposal,transfer, retirement and liquidation) of not morethan 30% of the latest audited net assets of theCompany;

(21) to exercise other functions and powers asstipulated by laws, administrative regulations,department rules or this Articles of Association.

The Board may resolve on the issues specified inthe preceding paragraph by approval of more thanhalf of the Director save for the issues specified in(6), (7), and (12), in which approval of two thirdsof the Directors is required.

The Board shall seek opinion from the PartyCommittee before making decisions on materialissues of the Company.


1. External investment (including consignedfinancial management, entrusted loan, trustproduct, asset management plan, security, bond,fund and other financial asset investment, equityinvestment, and fixed asset investment etc.): TheBoard is granted the authorization in respect ofstandalone external investment of not more than30% of the latest audited net assets of theCompany;

2. Acquisition and disposal of assets: The Board isgranted the authorization in respect of standaloneasset disposal (including acquisition, disposal,transfer, retirement and liquidation) of not morethan 30% of the latest audited net assets of theCompany;



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3. Asset mortgage: The Board is granted theauthorization in respect of standalone assetmortgage of not more than 30% of the latestaudited net assets of the Company;

4. Asset written-off: The Board is granted theauthorization in respect of asset written-off of notmore than RMB10 million;

5. Connected transaction: Connected transactionsbetween the Company and its connected personswhich satisfied the following standards shall besubmitted to the Board for consideration andapproval:

(1) any contemplated connected transactionbetween the Company and its connected naturalperson in an amount over RMB300,000;

(2) any contemplated connected transactionbetween the Company and its connected legalperson in an amount over RMB3,000,000 andaccounting for 0.5% or more of the latest auditedabsolute value of net assets of the Company.

Any contemplated connected transaction betweenthe Company and its connected person in anamount over RMB30,000,000 and accounting for5% or more of the latest audited absolute value ofnet assets of the Company shall be submitted tothe general meeting for consideration after suchtransaction is considered and approved by theBoard;

6. External donation;

7. For other matters which are necessary but didnot meet the above criteria, they can be proposedto the Board for consideration.

3. Asset mortgage: The Board is granted theauthorization in respect of standalone assetmortgage of not more than 30% of the latestaudited net assets of the Company;

4. Asset written-off: The Board is granted theauthorization in respect of asset written-off of notmore than RMB10 million;

5. Connected transaction: Connected transactionsbetween the Company and its connected personswhich satisfied the following standards shall besubmitted to the Board for consideration andapproval:

(1) any contemplated connected transactionbetween the Company and its connected naturalperson in an amount over RMB300,000;

(2) any contemplated connected transactionbetween the Company and its connected legalperson in an amount over RMB3,000,000 andaccounting for 0.5% or more of the latest auditedabsolute value of net assets of the Company.

Any contemplated connected transaction betweenthe Company and its connected person in anamount over RMB30,000,000 and accounting for5% or more of the latest audited absolute value ofnet assets of the Company shall be submitted tothe general meeting for consideration after suchtransaction is considered and approved by theBoard;

6. External donation;

7. For other matters which are necessary but didnot meet the above criteria, they can be proposedto the Board for consideration.



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When conducting the above transactions, theCompany shall apply the aforesaid provisions tocorresponding transactions under the samecategory based on the principle of aggregationwithin twelve (12) consecutive months. Fortransactions in which relevant obligations havebeen performed according to the aforesaidprovisions, such transactions shall not be subjectto the scope of aggregation. In the event there areother special rules in respect of the aforesaidapproval authorization by relevant regulatoryauthorities or the stock exchange on which theshares of the Company are listed, transactionsshall be conducted in accordance with the rules ofrelevant regulatory authorities or the stockexchange on which the shares of the Company arelisted. For other significant matters outside thescope stipulated above, the Board shall conductreview with relevant experts and professionals, andpropose such matters at general meeting forapproval.

When conducting the above transactions, theCompany shall apply the aforesaid provisions tocorresponding transactions under the samecategory based on the principle of aggregationwithin twelve (12) consecutive months. Fortransactions in which relevant obligations havebeen performed according to the aforesaidprovisions, such transactions shall not be subjectto the scope of aggregation. In the event there areother special rules in respect of the aforesaidapproval authorization by relevant regulatoryauthorities or the stock exchange on which theshares of the Company are listed, transactionsshall be conducted in accordance with the rules ofrelevant regulatory authorities or the stockexchange on which the shares of the Company arelisted. For other significant matters outside thescope stipulated above, the Board shall conductreview with relevant experts and professionals, andpropose such matters at general meeting forapproval.

Rule 9 The Board may exercise the functions andpowers above by written resolutions passed byconvening on-site Board meeting, teleconference,video conference or communication voting.

Rule 9 The Board may exercise the functions andpowers under Rule 8 by written resolutions passedby convening on-site Board meeting,teleconference, video conference or communicationvoting.



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Rule 10 For disposal of any fixed assets by theBoard, if the aggregate of the expected value ofthe fixed assets proposed to be disposed of and thevalue of the fixed assets which had been disposedof within four months immediately preceding suchproposal for disposal exceeds 33% of the fixedassets value shown in the most recent balancesheet reviewed by the Shareholders’ GeneralMeeting, the Board shall not dispose or agree todispose of such fixed assets before obtaining theapproval of the Shareholders’ General Meeting.

Disposal of fixed assets referred to in this Articleincludes the transfer of interests of certain assets,but excludes the provision of fixed assets aspledges to any guarantees.

The validity of transactions conducted by theCompany in relation to the disposal of fixed assetsshall not be affected notwithstanding any violationof the requirements set out in the first paragraphof this Article.

Rule 10 For disposal of any fixed assets by theBoard, if the aggregate of the expected value ofthe fixed assets proposed to be disposed of and thevalue of the fixed assets which had been disposedof within four months immediately preceding suchproposal for disposal exceeds 33% of the fixedassets value shown in the most recent balancesheet reviewed by the Shareholders’ GeneralMeeting, the Board shall not dispose or agree todispose of such fixed assets before obtaining theapproval of the Shareholders’ General Meeting.

Disposal of fixed assets referred to in this Articleincludes the transfer of interests of certain assets,but excludes the provision of fixed assets aspledges to any guarantees.

The validity of transactions conducted by theCompany in relation to the disposal of fixed assetsshall not be affected notwithstanding any violationof the requirements set out in the first paragraphof this Article.

Rule 11 The Company shall set up four specialcommittees under the Board such as an auditcommittee, a nomination committee, aremuneration committee and a risk managementcommittee. The Board may establish other specialcommittees and adjust the existing committeeswhen necessary.

Rule 11 The Company shall set up four specialcommittees under the Board such as an auditcommittee, a nomination committee, aremuneration committee and a risk managementcommittee. The Board may establish other specialcommittees and adjust the existing committeeswhen necessary.

Rule 12 Each special committee may engageintermediaries to provide professional opinions atthe expense of the Company.

Rule 12 Each special committee may engageintermediaries to provide professional opinions atthe expense of the Company.

Rule 13 Each special committee under the Boardshall discharge its duties in accordance with itsrules of procedures and the Articles ofAssociation, and shall be accountable to and reporttheir work to the Board.

Rule 13 Each special committee under the Boardshall discharge its duties in accordance with itsrules of procedures and the Articles ofAssociation, and shall be accountable to and reporttheir work to the Board.



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Chapter III Directors Chapter III Directors

Rule 14 Directors of the Company shall be naturalpersons. A natural person who falls into any of thefollowing circumstances shall not serve as Directorof the Company:

(1) without capacity or with limited capacity forcivil conduct;

(2) has been sentenced to criminal punishment dueto corruption, bribery, embezzlement of property,misappropriation of property or disrupting theorder of societal economy, and less than five yearshave elapsed since the punishment is fullyexecuted; or has been deprived of political rightsdue to any criminal offences and less than fiveyears have elapsed since the punishment is fullyexecuted;

(3) has served as a Director, factory manager ormanager of a company or an enterprise that isbankrupt and liquidated, and is personally liablefor the bankruptcy of the company or enterprisebecause of mismanagement, and less than threeyears have elapsed since the date of completion ofthe bankruptcy liquidation of the company orenterprise;

(4) has served as the legal representative of acompany or an enterprise whose Business Licensewas revoked due to illegal activities or wasordered to be wound-up and was personallyliable for such punishment, and less than threeyears has elapsed since the date of revocation ofthe business license of the company or enterprise;

(5) has large amount of overdue debts;

(6) is under investigation by the judiciary authorityfor violation of the criminal law;

(7) is disqualified as corporate leader in laws andadministrative regulations;

Rule 14 Directors of the Company shall be naturalpersons. A natural person who falls into any of thefollowing circumstances shall not serve as Directorof the Company:

(1) without capacity or with limited capacity forcivil conduct;

(2) has been sentenced to criminal punishment dueto corruption, bribery, embezzlement of property,misappropriation of property or disrupting theorder of societal economy, and less than five yearshave elapsed since the punishment is fullyexecuted; or has been deprived of political rightsdue to any criminal offences and less than fiveyears have elapsed since the punishment is fullyexecuted;

(3) has served as a Director, factory manager ormanager of a company or an enterprise that isbankrupt and liquidated, and is personally liablefor the bankruptcy of the company or enterprisebecause of mismanagement, and less than threeyears have elapsed since the date of completion ofthe bankruptcy liquidation of the company orenterprise;

(4) has served as the legal representative of acompany or an enterprise whose Business Licensewas revoked due to illegal activities or wasordered to be wound-up and was personallyliable for such punishment, and less than threeyears has elapsed since the date of revocation ofthe business license of the company or enterprise;

(5) has large amount of overdue debts;

(6) is under investigation by the judiciary authorityfor violation of the criminal law;

(7) is disqualified as corporate leader in laws andadministrative regulations;



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(8) is not a natural person;

(9) was ruled by the relevant regulatory authoritythat he has violated the relevant securitiesregulations and committed any fraudulent ordishonest act, and less than five years haveelapsed since such ruling was made;

(10) has served as the person-in-charge of afutures exchange, securities exchange, or securitiesdepository and clearing institution, or the Director,Supervisor and senior management of a futurescompany or securities company who wasdismissed from his position for violating laws ordisciplines where not more than 5 years haveelapsed since the date of his dismissal;

(11) has served as a lawyer, a certified publicaccountant or a professional of an investmentconsultative agency, financial advisory organ,credit rating institution, assets assessmentinstitution and verification institution, whosequalifications have been revoked for violating lawsor disciplines, where not more than 5 years haveelapsed since the date of the revocation;

(12) has served as a business practitioner of afutures exchange, securities exchange, securitiesdepository and clearing institution, securitiesservice agency, futures company, or securitiescompany or a state organ functionary who wasexpelled for violating laws or disciplines, wherenot more than 5 years have elapsed as at the dateof his expulsion;

(13) has served as a state organ functionary andthose who are prohibited from assuming positionsconcurrently in a company according to laws andadministrative regulations;

(14) was given administrative sanction by thefinancial regulatory authority for violating laws ordisciplines, where not more than 3 years haveelapsed since the expiration of the enforcementperiod;

(8) is not a natural person;

(9) was ruled by the relevant regulatory authoritythat he has violated the relevant securitiesregulations and committed any fraudulent ordishonest act, and less than five years haveelapsed since such ruling was made;

(10) has served as the person-in-charge of afutures exchange, securities exchange, or securitiesdepository and clearing institution, or the Director,Supervisor and senior management of a futurescompany or securities company who wasdismissed from his position for violating laws ordisciplines where not more than 5 years haveelapsed since the date of his dismissal;

(11) has served as a lawyer, a certified publicaccountant or a professional of an investmentconsultative agency, financial advisory organ,credit rating institution, assets assessmentinstitution and verification institution, whosequalifications have been revoked for violating lawsor disciplines, where not more than 5 years haveelapsed since the date of the revocation;

(12) has served as a business practitioner of afutures exchange, securities exchange, securitiesdepository and clearing institution, securitiesservice agency, futures company, or securitiescompany or a state organ functionary who wasexpelled for violating laws or disciplines, wherenot more than 5 years have elapsed as at the dateof his expulsion;

(13) has served as a state organ functionary andthose who are prohibited from assuming positionsconcurrently in a company according to laws andadministrative regulations;

(14) was given administrative sanction by thefinancial regulatory authority for violating laws ordisciplines, where not more than 3 years haveelapsed since the expiration of the enforcementperiod;



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(15) was determined to be an unsuitable candidateby the CSRC or its dispatched organ, where notmore than 2 years have elapsed since the date ofthe decision;

(16) has served as a person-in-charge who bearsliability and other directly responsible persons of afinancial institution and its branch which wereordered to suspend business for rectification,entrusted for custody, taken over or revoked by theregulatory body for violating laws or disciplines orfor emergence of major risks, where not more than3 years have elapsed since the date when thefinancial institution and its branch were ordered tosuspend business for rectification, entrusted, takenover or revoked by the regulatory body;

(17) was involved in other circumstances asprescribed by the CSRC.

For any election and appointment of a Director incontravention of the provisions prescribed by thisArticle, such election, appointment or employmentshall be void and null. Where a Director falls intoany of the aforesaid circumstances in his term ofoffice, the Director shall be removed from office.

(15) was determined to be an unsuitable candidateby the CSRC or its dispatched organ, where notmore than 2 years have elapsed since the date ofthe decision;

(16) has served as a person-in-charge who bearsliability and other directly responsible persons of afinancial institution and its branch which wereordered to suspend business for rectification,entrusted for custody, taken over or revoked by theregulatory body for violating laws or disciplines orfor emergence of major risks, where not more than3 years have elapsed since the date when thefinancial institution and its branch were ordered tosuspend business for rectification, entrusted, takenover or revoked by the regulatory body;

(17) was involved in other circumstances asprescribed by the CSRC.

For any election and appointment of a Director incontravention of the provisions prescribed by thisArticle, such election, appointment or employmentshall be void and null. Where a Director falls intoany of the aforesaid circumstances in his term ofoffice, the Director shall be removed from office.

Rule 15 Directors of the Company shall meet thefollowing conditions:

(1) have engaged in futures, securities and otherfinancial business, or in legal, accountingoperations for more than 3 years, or in economicmanagement field for more than 5 years;

(2) have the educational background of graduate ofjunior college or above.

Rule 15 Directors of the Company shall meet thefollowing conditions:

(1) have engaged in futures, securities and otherfinancial business, or in legal, accountingoperations for more than 3 years, or in economicmanagement field for more than 5 years;

(2) have the educational background of graduate ofjunior college or above.

Rule 16 Directors of the first session of the Boardshall be elected at the inaugural meeting of theCompany. Non-employee representative Directorsof the subsequent sessions of the Board shall beelected by the Shareholders’ General Meeting.Employee representative Directors shall be electedand removed by the employees of the Companydemocratically.

Rule 16 Directors of the first session of the Boardshall be elected at the inaugural meeting of theCompany. Non-employee representative Directorsof the subsequent sessions of the Board shall beelected by the Shareholders’ General Meeting.Employee representative Directors shall be electedand removed by the employees of the Companydemocratically.



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Rule 17 The term of office of a Director shallcommence from the date on which the Directorassumes office to the expiry of the current sessionof the Board. If the term of office of a Directorexpires but re-election is not made responsively,the original Director shall continue fulfilling theduties as a Director pursuant to laws,administrative regulations, department rules andthe Articles of Association until a newly electedDirector assumes office. The date on which aDirector assumes office shall be the date on whichthe resolution concerning the election of theDirector is passed at Shareholders’ GeneralMeeting or other date as determined by aresolution at Shareholders’ General Meeting.

Rule 17 The term of office of a Director shallcommence from the date on which the Directorassumes office to the expiry of the current sessionof the Board. If the term of office of a Directorexpires but re-election is not made responsively,the original Director shall continue fulfilling theduties as a Director pursuant to laws,administrative regulations, department rules andthe Articles of Association until a newly electedDirector assumes office. The date on which aDirector assumes office shall be the date on whichthe resolution concerning the election of theDirector is passed at Shareholders’ GeneralMeeting or other date as determined by aresolution at Shareholders’ General Meeting.

Rule 18 A Director may serve concurrently as thegeneral manager or any other senior managementmember of the Company.

Rule 18 A Director may serve concurrently as thegeneral manager or any other senior managementmember of the Company. However, the totalnumber of Directors who concurrently hold thepositions of general manager or other seniormanagement personnel and directors held byemployee representatives shall not exceed 1/2 ofthe total number of Directors of the company.

Rule 19 Where the Shareholders’ General Meetingis considering a proposal for the election ofDirectors, each Director candidate shall be votedone by one. Where a proposal for the election ofDirectors is passed, the newly elected Directorshall assume office immediately after theconclusion of the meeting or at the timedetermined by a resolution of the Shareholders’General Meeting.

Rule 19 Where the Shareholders’ General Meetingis considering a proposal for the election ofDirectors, each Director candidate shall be votedone by one. Where a proposal for the election ofDirectors is passed, the newly elected Directorshall assume office immediately after theconclusion of the meeting or at the timedetermined by a resolution of the Shareholders’General Meeting.



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Rule 20 In fulfilling duties, Directors of theCompany shall observe the principle of good faithand shall not place themselves in a position wheretheir own interests conflict with their obligations.The said principle includes (but not limited to) thefollowing obligations:

(1) to sincerely act in the best interest of theCompany;

(2) to exercise powers within his terms ofreference without ultra vires;

(3) to exercise the discretion vested in himpersonally and not to allow himself to act underthe control of any other party; unless permitted bylaws and administrative regulations or with theinformed consent of the Shareholders’ GeneralMeeting, delegation of discretionary powers toothers is prohibited;

(4) to treat shareholders of the same class equallyand to treat shareholders of different classes fairly;

(5) unless otherwise provided in the Articles ofAssociation or with the informed approval of theShareholders’ General Meeting, not to enter intoany contract, transaction or arrangement with theCompany;

(6) not to use the Company’s assets for personalbenefits in any manner without the informedconsent of the Shareholders’ General Meeting;

(7) not to use his authority to accept bribes orother illegal income or embezzle the Company’sproperty in any manner, including (but not limitedto) any opportunity favourable to the Company;

(8) not to accept commissions in connection withthe Company’s transactions without the informedconsent of the Shareholders’ General Meeting;

(9) to comply with the Articles of Association, toperform duties faithfully, to safeguard theCompany’s interests and not to seek personal gainsby taking advantage of his position and authorityin the Company;

Rule 20 In fulfilling duties, Directors of theCompany shall observe the principle of good faithand shall not place themselves in a position wheretheir own interests conflict with their obligations.The said principle includes (but not limited to) thefollowing obligations:


(2) to exercise powers within his terms ofreference without ultra vires;

(3) to exercise the discretion vested in himpersonally and not to allow himself to act underthe control of any other party; unless permitted bylaws and administrative regulations or with theinformed consent of the Shareholders’ GeneralMeeting, delegation of discretionary powers toothers is prohibited;

(4) to treat shareholders of the same class equallyand to treat shareholders of different classes fairly;

(5) unless otherwise provided in the Articles ofAssociation or with the informed approval of theShareholders’ General Meeting, not to enter intoany contract, transaction or arrangement with theCompany;

(6) not to use the Company’s assets for personalbenefits in any manner without the informedconsent of the Shareholders’ General Meeting;

(7) not to use his authority to accept bribes orother illegal income or embezzle the Company’sproperty in any manner, including (but not limitedto) any opportunity favourable to the Company;

(8) not to accept commissions in connection withthe Company’s transactions without the informedconsent of the Shareholders’ General Meeting;

(9) to comply with the Articles of Association, toperform duties faithfully, to safeguard theCompany’s interests and not to seek personal gainsby taking advantage of his position and authorityin the Company;



– XIII-14 –




(10) not to compete with the Company in any waywithout the informed consent of the Shareholders’General Meeting;

(11) not to misappropriate the Company’s funds orto lend such funds to any other persons, not to setup accounts in his own name or in the any othernames for depositing the Company’s assets, andnot to provide guarantees for the debts ofshareholders of the Company or any other personalliabilities with the assets of the Company;

(12) not to release any confidential information inrelation to the Company which he has obtainedduring his term of office without the informedconsent of the Shareholders’ General Meeting; notto use such information other than for the benefitof the Company, save that such information maybe disclosed to the court or other competentauthorities of the government if:



3. required in the interests of the relevantDirectors.

(10) not to compete with the Company in any waywithout the informed consent of the Shareholders’General Meeting;

(11) not to misappropriate the Company’s funds orto lend such funds to any other persons, not to setup accounts in his own name or in the any othernames for depositing the Company’s assets, andnot to provide guarantees for the debts ofshareholders of the Company or any other personalliabilities with the assets of the Company;

(12) not to release any confidential information inrelation to the Company which he has obtainedduring his term of office without the informedconsent of the Shareholders’ General Meeting; notto use such information other than for the benefitof the Company, save that such information maybe disclosed to the court or other competentauthorities of the government if:



3. required in the interests of the relevantDirectors.



– XIII-15 –




Rule 21 In addition to the obligations required bylaws, administrative regulations or the listing rulesof the stock exchanges where the Company’sshares are listed, each of the Company’s Directorshall assume the following obligations in respectof each shareholder in the exercise of thefunctions and powers conferred on him by theCompany:

(1) not to cause the Company to exceed the scopeof the business stipulated in its business license;


(3) not to deprive the Company of its property inany way, including (but not limited to) anyopportunity favorable to the Company;

(4) not to deprive shareholders of their personalinterests, including (but not limited to) the rightsto distribution and voting rights, but excluding therestructuring of the Company submitted to aShareholders’ General Meeting for approval inaccordance with this Articles of Association.

Rule 21 In addition to the obligations required bylaws, administrative regulations or the listing rulesof the stock exchanges where the Company’sshares are listed, each of the Company’s Directorshall assume the following obligations in respectof each shareholder in the exercise of thefunctions and powers conferred on him by theCompany:

(1) not to cause the Company to exceed the scopeof the business stipulated in its business license;


(3) not to deprive the Company of its property inany way, including (but not limited to) anyopportunity favorable to the Company;

(4) not to deprive shareholders of their personalinterests, including (but not limited to) the rightsto distribution and voting rights, but excluding therestructuring of the Company submitted to aShareholders’ General Meeting for approval inaccordance with this Articles of Association.

Rule 22 A Director shall in the exercise of hispowers or discharge of his obligations act what heshall act by exercising the due care, due diligenceand skills that a reasonably prudent person shouldexercise in comparable circumstances.

Rule 22 A Director shall in the exercise of hispowers or discharge of his obligations act what heshall act by exercising the due care, due diligenceand skills that a reasonably prudent person shouldexercise in comparable circumstances.

Rule 23 No Director shall, in the name of his/herown, act on behalf of the Company or the Boardwithout the requirement of the Articles ofAssociation or the lawful authorization of theBoard. In the event that a Director is acting onhis/her behalf, which may be reasonably deemedto be acting on the behalf of the Company or theBoard by a third party, such Director shall statehis/her stance and identity in advance.

Rule 23 No Director shall, in the name of his/herown, act on behalf of the Company or the Boardwithout the requirement of the Articles ofAssociation or the lawful authorization of theBoard. In the event that a Director is acting onhis/her behalf, which may be reasonably deemedto be acting on the behalf of the Company or theBoard by a third party, such Director shall statehis/her stance and identity in advance.



– XIII-16 –




Rule 24 If a Director is connected with theenterprise involved in the resolution passed by theBoard (excluding employment relationship), he/sheshall disclose the nature and extent of the saidconnected relation to the Board as soon aspossible regardless whether or not the relevantmatters are subject to approval by the Board innormal circumstances.

Rule 24 If a Director is connected with theenterprise involved in the resolution passed by theBoard (excluding employment relationship), he/sheshall disclose the nature and extent of the saidconnected relation to the Board as soon aspossible regardless whether or not the relevantmatters are subject to approval by the Board innormal circumstances.

Rule 25 When the Board meeting is being held,the aforesaid connected Director shall abstain fromany relevant participation voluntarily. If theconnected Director does not abstain from itvoluntarily, any other Director who is aware of thefact has an obligation to request that Director toabstain therefrom.

After the connected Director has abstained fromVoting, the Board shall proceed with the votingwithout counting him/her into the quorum.

Any Shareholder may, within 60 days of passingof any resolution, apply to the people’s court torescind that resolution if, at the time of passing,the connected Director fails to make disclosure tothe Board in accordance with the requirements ofthe preceding paragraph of this Article, theconnected Director has been counted into thequorum and hasn’t abstained from voting.

Rule 25 When the Board meeting is being held,the aforesaid connected Director shall abstain fromany relevant participation voluntarily. If theconnected Director does not abstain from itvoluntarily, any other Director who is aware of thefact has an obligation to request that Director toabstain therefrom.

After the connected Director has abstained fromVoting, the Board shall proceed with the votingwithout counting him/her into the quorum.

Any Shareholder may, within 60 days of passingof any resolution, apply to the people’s court torescind that resolution if, at the time of passing,the connected Director fails to make disclosure tothe Board in accordance with the requirements ofthe preceding paragraph of this Article, theconnected Director has been counted into thequorum and hasn’t abstained from voting.

Rule 26 Where a Director of the Company givesto the Board a notice in writing stating that, byreason of the facts specified in the notice, he isinterested in a contract, transaction or arrangementwhich may subsequently be made by the Company,such notice shall be taken for the purposes of thepreceding Article of this Chapter to be a sufficientdeclaration of his interests, so far as the contentstated in such notice is concerned, provided thatsuch notice shall have been given before the dateon which the entering into of the relevant contract,transaction or arrangement is first taken intoconsideration by the Company.

Rule 26 Where a Director of the Company givesto the Board a notice in writing stating that, byreason of the facts specified in the notice, he isinterested in a contract, transaction or arrangementwhich may subsequently be made by the Company,such notice shall be taken for the purposes of thepreceding Article of this Chapter to be a sufficientdeclaration of his interests, so far as the contentstated in such notice is concerned, provided thatsuch notice shall have been given before the dateon which the entering into of the relevant contract,transaction or arrangement is first taken intoconsideration by the Company.



– XIII-17 –




Rule 27 Any Director who fails to attend, either inperson or by other Directors on his behalf, twoconsecutive Board meetings shall be deemed asdefault of his duties, and shall be removed fromhis office as proposed by the Board to the generalmeeting.

Rule 27 Any Director who fails to attend, either inperson or by other Directors on his behalf, twoconsecutive Board meetings or twice insuccessions shall be deemed as default of hisduties, and shall be removed from his office asproposed by the Board to the general meeting.

Rule 28 A Director may resign from his positionprior to the expiration of his term of service. Theresigning Director shall submit a writtenresignation to the Board.

Rule 28 A Director may resign from his positionprior to the expiration of his term of service. Theresigning Director shall submit a writtenresignation to the Board.

Rule 29 Where no re-election is made in timeupon expiry of the term of a director or anydirector’s resignation causes the number ofmembers of the Board or the number ofindependent directors to fall below the statutorynumber under the PRC Company Law and listingrules with which the Company shall comply, theoriginal director shall, prior to a new directortaking up the office, continue to perform his dutiesas a director in accordance with the provisions oflaws, administrative regulations and the Articles ofAssociation.



Rule 29 Where no re-election is made in timeupon expiry of the term of a director or anydirector’s resignation causes the number ofmembers of the Board or the number ofindependent directors to fall below the statutorynumber under the PRC Company Law and listingrules with which the Company shall comply, theoriginal director shall, prior to a new directortaking up the office, continue to perform his dutiesas a director in accordance with the provisions oflaws, administrative regulations and the Articles ofAssociation.





– XIII-18 –




Rule 30 A Director shall conduct handoverprocedures with the Board upon resignation orexpiration of his term of office. His fiduciaryduties towards the Company and the Shareholdersshall remain valid before his resignation reportbecomes effective or within two years after hisresignation report becomes effective, and withintwo years after expiration of his term of office; theobligation of the Director to keep inconfidentiality the trade secret of the Companyshall be valid after the expiration of his term ofoffice till such trade secret becomes publicinformation. A Director who leaves his officewithout authorisation before the end of his termshall be liable for any loss suffered by theCompany as a result of his departure.

Rule 30 A Director shall conduct handoverprocedures with the Board upon resignation orexpiration of his term of office. His fiduciaryduties towards the Company and the Shareholdersshall remain valid before his resignation reportbecomes effective or within two years after hisresignation report becomes effective, and withintwo years after expiration of his term of office; theobligation of the Director to keep inconfidentiality the trade secret of the Companyshall be valid after the expiration of his term ofoffice till such trade secret becomes publicinformation. A Director who leaves his officewithout authorisation before the end of his termshall be liable for any loss suffered by theCompany as a result of his departure.

Rule 31 A Director shall compensate the Companyfor any losses suffered by the Company resultingfrom his violation of laws, administrativeregulations, department rules and the Articles ofAssociation when performing his duties.

Rule 31 A Director shall compensate the Companyfor any losses suffered by the Company resultingfrom his violation of laws, administrativeregulations, department rules and the Articles ofAssociation when performing his duties.

Chapter IV Chairman Chapter IV Chairman

Rule 32 The Chairman shall be Directors of theCompany (excluding independent Directors).

Rule 32 The Chairman shall be Directors of theCompany (excluding independent Directors).

Rule 33 The Chairman shall abide by therequirements on Directors of the Company set outin Chapter III of the Rules.

Rule 33 The Chairman shall abide by therequirements on Directors of the Company set outin Chapter III of the Rules.

Rule 34 The Board shall, at its sole and exclusivediscretion, appoint and dismiss the Chairman, andno other organs or individuals may interfereunlawfully in the appointment and dismissal by theBoard of the Chairman.

The tenure of office of the Chairman shall be threeyears, and may be reappointed.

Rule 34 The Board shall, at its sole and exclusivediscretion, appoint and dismiss the Chairman, andno other organs or individuals may interfereunlawfully in the appointment and dismissal by theBoard of the Chairman.

The tenure of office of the Chairman shall be threeyears, and may be reappointed.



– XIII-19 –




Rule 35 The specific procedures for election ofChairman are: A candidate for Chairman shall firstbe nominated by one or more Director(s) andrecommended to the Board for discussion. Thesuccessful election requires a vote of a simplemajority of all Directors.

The specific procedures for dismissal of Chairmanare: The proposal on dismissal of Chairman shallbe submitted by one or more Director(s) to theBoard for discussion. The successful dismissalrequires a vote of a simple majority of allDirectors.

Save for the above-mentioned procedures, noDirectors shall submit the proposal onrecommendation of candidate for or dismissal ofChairman to other organs or departments bybypassing the Board.

Rule 35 The specific procedures for election ofChairman are: A candidate for Chairman shall firstbe nominated by one or more Director(s) andrecommended to the Board for discussion. Thesuccessful election requires a vote of a simplemajority of all Directors.

The specific procedures for dismissal of Chairmanare: The proposal on dismissal of Chairman shallbe submitted by one or more Director(s) to theBoard for discussion. The successful dismissalrequires a vote of a simple majority of allDirectors.

Save for the above-mentioned procedures, noDirectors shall submit the proposal onrecommendation of candidate for or dismissal ofChairman to other organs or departments bybypassing the Board.

Rule 36 Chairman of the Company shall meet thefollowing conditions:

(1) have a minimum of 3 years’ experience infutures business, or a minimum of 4 years’experience in other financial businesses, or aminimum of 5 years’ experience in legal oraccounting practice;


(3) have passed the qualification test accepted byCSRC.

Rule 36 Chairman of the Company shall meet thefollowing conditions:

(1) have a minimum of 3 years’ experience infutures business, or a minimum of 4 years’experience in other financial businesses, or aminimum of 5 years’ experience in legal oraccounting practice;


(3) have passed the qualification test accepted byCSRC.



– XIII-20 –




Rule 37 The Chairman shall exercise thefollowing functions and powers:

(1) to preside over general meetings and toconvene and preside over the Board meetings;

(2) to examine the implementation of theresolutions of the Board;

(3) to sign the shares, bonds and other negotiablesecurities of the Company;

(4) to sign important documents of the Board;

(5) in any emergent force majeure event, such asextraordinarily serious natural disasters, to exercisethe special right of disposal in respect of thebusiness of the Company in compliance with laws,regulations and in the interests of the Company,and report to the Board and the general meeting ofthe Company afterwards;

(6) to nominate the general manager and the chiefrisk officer of the Company, and submit to theBoard’s decision;

(7) to exercise other functions and powersconferred by the Board or Hong Kong ListingRules.

If the Chairman is unable or fails to perform his/her duties, a Director elected by more than onehalf of the Directors shall perform such duties.

Rule 37 The Chairman shall exercise thefollowing functions and powers:

(1) to preside over general meetings and toconvene and preside over the Board meetings;

(2) to examine the implementation of theresolutions of the Board;

(3) to sign the shares, bonds and other negotiablesecurities of the Company;

(4) to sign important documents of the Board;

(5) in any emergent force majeure event, such asextraordinarily serious natural disasters, to exercisethe special right of disposal in respect of thebusiness of the Company in compliance with laws,regulations and in the interests of the Company,and report to the Board and the general meeting ofthe Company afterwards;

(6) to nominate the general manager and the chiefrisk officer of the Company, and submit to theBoard’s decision;

(7) to exercise other functions and powersconferred by the Board or the listing rules of thejurisdiction where shares of the Company arelisted.

If the Chairman is unable or fails to perform his/her duties, a Director elected by more than onehalf of the Directors shall perform such duties.



– XIII-21 –




Chapter V Independent Directors Chapter V Independent Directors

Rule 38 Independent Director of the Company areDirector holding no positions other than that ofDirector in the Company, and having norelationship with the Company and its substantialshareholders and its related parties as to hindertheir independent and objective judgments.

Rule 38 Independent Director of the Company areDirector holding no positions other than that ofDirector in the Company, and having norelationship with the Company and its substantialshareholders and its related parties as to hindertheir independent and objective judgments.

Rule 39 The following persons shall not act asindependent Director of the Company:

(1) persons employed by the Company or itsrelated parties and their immediate familymembers and major social connections;

(2) natural person shareholders directly orindirectly holding more than 1% of the Company’sissued shares or of top ten shareholders of theCompany and their immediate family members;

(3) persons and their immediate family membersand major social connections employed by theShareholder entities which hold or control morethan 5% of the Company’s equity or which are topfive Shareholder entities of the Company, or byinstitutions which have business connection orinterests relationship with the Company;

(4) persons providing financial, legal or consultingservices to the Company and its related parties andtheir immediate family members;

(5) persons who belonged to categories (1) to (4)within the preceding year;

(6) persons holding positions other thanindependent Director in other futures companies;

(7) other persons specified in laws and regulations,or unfit to serve as independent Director uponconfirmation by CSRC.

Rule 39 The following persons shall not act asindependent Director of the Company:

(1) persons employed by the Company or itsrelated parties and their immediate familymembers and major social connections;

(2) natural person shareholders directly orindirectly holding more than 1% of the Company’sissued shares or of top ten shareholders of theCompany and their immediate family members;

(3) persons and their immediate family membersand major social connections employed by theShareholder entities which directly or indirectlyhold or control more than 5% of the Company’sequity or which are top five Shareholder entitiesof the Company, or by institutions which havebusiness connection or interests relationship withthe Company;

(4) persons providing financial, legal or consultingservices to the Company and its related parties andtheir immediate family members;

(5) persons who belonged to categories (1) to (4)within the preceding year;

(6) persons holding positions other thanindependent Director in other futures companies;

(7) other persons specified in laws and regulations,or unfit to serve as independent Director uponconfirmation by CSRC.



– XIII-22 –




Rule 40 Independent Director of the Companyshall meet the following conditions:

(1) have engaged in such financial business asfutures or securities or in legal or accountingoperations for more than 5 years, or have relevantsenior academic title for teaching or researches;

(2) have educational background of graduate ofcollege or university or above in relevant field andholding a bachelor degree or above;

(3) are familiar with the laws andadministrative regulations of futures and therequirements of the CSRC, and possessprofessional expertise in futures;

(4) have time and energy necessary to performtheir duties;

(5) other qualifications required by relevant laws,regulations, normative documents and regulatoryprovisions at the location where the Company’sshares are listed.

Independent Director of the Company is allowedto assume the positions of independent Director innot more than 2 futures companies.

Rule 40 Independent Director of the Companyshall meet the following conditions:

(1) have engaged in such financial business asfutures or securities or in legal or accountingoperations for more than 5 years, or have relevantsenior academic title for teaching or researches;

(2) have educational background of graduate ofcollege or university or above in relevant field andholding a bachelor degree or above;

(3) are familiar with the laws andadministrative regulations of futures and therequirements of the CSRC, and possessprofessional expertise in futures;

(4) have time and energy necessary to performtheir duties;

(5) other qualifications required by relevant laws,regulations, normative documents and regulatoryprovisions at the location where the Company’sshares are listed.

Independent Director of the Company is allowedto assume the positions of independent Director innot more than 2 futures companies.

Rule 41 The Board shall have more than 1/3 (andat least 3) independent Directors, and mostmembers of audit committee, nominationcommittee and remuneration committee under theBoard shall be independent Director.

Independent Director shall serve the same periodfor each term of office as that of other Director atthe Company. Independent Director may bereelected upon the expiration of their terms ofoffice, however, for a period not exceeding sixyears in succession.

Rule 41 The Board shall have more than 1/3 (andat least 3) independent Directors, and mostmembers of audit committee, nominationcommittee and remuneration committee under theBoard shall be independent Director.

Independent Director shall serve the same periodfor each term of office as that of other Director atthe Company. Independent Director may bereelected upon the expiration of their terms ofoffice, however, for a period not exceeding sixyears in succession.



– XIII-23 –




Chapter VI Resolutions of the Board Chapter VI Resolutions of the Board

Rule 42 The following persons/organs maypropose a resolution to the Board:

(1) Shareholders individually or jointly holding3% or more of the shares of the Company carryingthe right to vote;

(2) Chairman;

(3) more than one third of the Directors;

(4) Special committees under the Board;

(5) Board of Supervisors;

(6) General Manager.

Rule 42 The following persons/organs maypropose a resolution to the Board:

(1) Shareholders individually or jointly holding3% or more of the shares of the Company carryingthe right to vote;

(2) Chairman;

(3) more than one third of the Directors;

(4) Special committees under the Board;

(5) Board of Supervisors;

(6) General Manager.

Rule 43 Resolutions proposed by the Board shallcomply with the following conditions:

(1) The content shall not contravene anyprovisions of laws, regulations, normativedocuments and the Articles of Association of theCompany and falls within the terms of referenceof the board of Directors;

(2) The subject for discussion is clear and requiresresolution on a specific matter.

If a resolution proposed falls within the terms ofreference of the special committees, it shall firstbe considered by the special committees beforebeing submitted to the Board for consideration.

Rule 43 Resolutions proposed by the Board shallcomply with the following conditions:

(1) The content shall not contravene anyprovisions of laws, regulations, normativedocuments and the Articles of Association of theCompany and falls within the terms of referenceof the board of Directors;

(2) The subject for discussion is clear and requiresresolution on a specific matter.

If a resolution proposed falls within the terms ofreference of the special committees, it shall firstbe considered by the special committees beforebeing submitted to the Board for consideration.

Rule 44 Resolutions of the Board shall besubmitted to the Chairman by the secretary to theBoard. Related materials should be submittedtogether with the written resolution.

Rule 44 Resolutions of the Board shall besubmitted to the Chairman by the secretary to theBoard. Related materials should be submittedtogether with the written resolution.



– XIII-24 –




Rule 45 For any resolution to be discussed at theBoard meeting, such resolution shall be submittedto the Secretary to the Board ten working daysprior to the convening of the Board meeting, andthe Chairman shall decide whether to include itinto the resolution to be considered by the Board.If the Chairman rejects to include a proposal intothe resolution of the Board, the Chairman shallmake explanations to the proposer. If the proposerdisagrees with the Chairman’s decision, theproposal may still be included into the resolutionby way of votes by one half of the Directors.

Rule 45 For any resolution to be discussed at theBoard meeting, such resolution shall be submittedto the Secretary to the Board ten working daysprior to the convening of the Board meeting, andthe Chairman shall decide whether to include itinto the resolution to be considered by the Board.If the Chairman rejects to include a proposal intothe resolution of the Board, the Chairman shallmake explanations to the proposer. If the proposerdisagrees with the Chairman’s decision, theproposal may still be included into the resolutionby way of votes by one half of the Directors.

Chapter VII Convening and Holding of BoardMeetings

Chapter VII Convening and Holding of BoardMeetings

Rule 46 Board meetings are in the form of regularmeetings and interim meetings.

Rule 46 Board meetings are in the form of regularmeetings and interim meetings.

Rule 47 Board meetings shall be held regularly atleast four times every year at approximatelyquarterly intervals, and shall be convened by theChairman, with the notice of meeting sent inwriting to all the Directors 14 days in advance. Inany of the following circumstances, the Chairmanshall convene and preside over an interim meetingof the Board within 10 days:

(1) when the chairman deems necessary;

(2) proposed by shareholders representing morethan 1/10 of the voting rights;

(3) jointly proposed by more than one third of theDirectors;

(4) proposed by the Board of Supervisors;

(5) required by the relevant regulatory authorities;

Rule 47 Board meetings shall be held regularly atleast four times every year at approximatelyquarterly intervals, and shall be convened by theChairman, with the notice of meeting sent inwriting to all the Directors 14 days in advance. Inany of the following circumstances, the Chairmanshall convene and preside over an interim meetingof the Board within 10 days:

(1) when the chairman deems necessary;

(2) proposed by shareholders representing morethan 1/10 of the voting rights;

(3) jointly proposed by more than one third of theDirectors;

(4) proposed by the Board of Supervisors;

(5) required by laws, regulations and thesecurities regulatory authority in the placewhere the shares of the Company are listed;



– XIII-25 –




Rule 48 Before serving the notice of regularmeeting of the Board, the office of the Board shalladequately consult with the Directors, and shallaccordingly formulate a preliminary proposal formeeting and submit the same to the chairman ofthe Board for consideration.

Before deciding a proposal, the chairman may,where necessary, seek opinions of the GeneralManager and other senior executives.

Rule 48 Before serving the notice of regularmeeting of the Board, the office of the Board shalladequately consult with the Directors, and shallaccordingly formulate a preliminary proposal formeeting and submit the same to the chairman ofthe Board for consideration.

Before deciding a proposal, the chairman may,where necessary, seek opinions of the GeneralManager and other senior executives.

Rule 49 Board meetings shall generally be heldonsite, or where necessary, via conference call orvideoconference provided that the Directors canadequately express their views and Directorattending the meetings shall sign on theresolutions.

The Board may accept meetings of the Board inthe form of communications over writtenresolutions to replace meetings on-site. However,such motions must be delivered to each Directorby hand, mail, telegraph, email or facsimile. Afterthe Board has delivered the motion to all theDirector and that the number of Director givingconsent and signature to the motion has reachedthe quorum, such motion, if delivered to thesecretary to the Board by means of communicationreferred above, shall become a Board resolutionand no convening of the meeting of the Boardshall be required.

Rule 49 Board meetings shall generally be heldonsite, or where necessary, via conference call orvideoconference provided that the Directors canadequately express their views and Directorattending the meetings shall sign on theresolutions.

The Board may accept meetings of the Board inthe form of communications over writtenresolutions to replace meetings on-site. However,such motions must be delivered to each Directorby hand, mail, telegraph, email or facsimile. Afterthe Board has delivered the motion to all theDirector and that the number of Director givingconsent and signature to the motion has reachedthe quorum, such motion, if delivered to thesecretary to the Board by means of communicationreferred above, shall become a Board resolutionand no convening of the meeting of the Boardshall be required.



– XIII-26 –




Rule 50 The meeting notice may be served bytelex, telegram, fax, express mail, registered mail,e-mail or in other electronic format, via otherinformation carriers, in person, or other means asrecognised by competent regulatory authorities. Ifthe meeting notice is served personally, thereceiver shall sign (or affix the seal) on the returnreceipt, and the date of signing shall be the date ofservice; if the meeting notice is served by mail,the date on which the mail was received by thepost office shall be the date of service; and if themeeting notice is served by fax or e-mail, thesending date shall be the date of service.

Where a special Board meeting needs to beconvened in emergency, the notice of meeting maybe sent by telephone or by other verbal means, butthe convener shall make explanations at themeeting.

Rule 50 The meeting notice may be served bytelex, telegram, fax, express mail, registered mail,e-mail or in other electronic format, via otherinformation carriers, in person, or other means asrecognised by competent regulatory authorities. Ifthe meeting notice is served personally, thereceiver shall sign (or affix the seal) on the returnreceipt, and the date of signing shall be the date ofservice; if the meeting notice is served by mail,the date on which the mail was received by thepost office shall be the date of service; and if themeeting notice is served by fax or e-mail, thesending date shall be the date of service.

Where a special Board meeting needs to beconvened in emergency, the notice of meeting maybe sent by telephone or by other verbal means, butthe convener shall make explanations at themeeting.

Upon the issuance of the written notice of theregular meeting of the Board, if it is necessaryto change the time, place and other matters ofthe meeting, or to add, change or cancel theresolution(s), a written notice of change shall beissued three days before the original scheduledmeeting date, which explains the situation andthe content and related materials of the newresolution(s). If the notice is issued within threedays from the original meeting date, the date ofthe meeting shall be postponed accordingly orthe meeting shall be held on schedule afterobtaining the approval of all the Directorspresent.

Upon the issuance of the written notice of theextraordinary meeting of the Board, if it isnecessary to change the time, place and othermatters of the meeting, or to add, change orcancel the resolution(s), the approval of allparticipating Directors shall be obtained inadvance and corresponding records shall bemade.



– XIII-27 –




Rule 51 A notice of the Board meeting shall atleast contain the following contents:

(1) date and place of the meeting;

(2) means of convening the meeting;

(3) the matters to be considered at (SessionProposal);

(4) convener and presider of the meeting, proposerof the interim meeting and its written proposals;

(5) request of the Director to attend the meeting inperson or by entrusting other Director;

(6) contact person and contact method;

(7) date of issuing the notice.

Verbal notice of a meeting shall at least includethe content of items (1) and (2) above and theexplanation for emergency situations where aninterim meeting of the Board needs to beconvened as soon as possible.

Rule 51 A notice of the Board meeting shall atleast contain the following contents:

(1) date and place of the meeting;

(2) means of convening the meeting;

(3) the matters to be considered at (SessionProposal);

(4) convener and presider of the meeting, proposerof the interim meeting and its written proposals;

(5) request of the Director to attend the meeting inperson or by entrusting other Director;

(6) contact person and contact method;

(7) date of issuing the notice.

Verbal notice of a meeting shall at least includethe content of items (1) and (2) above and theexplanation for emergency situations where aninterim meeting of the Board needs to beconvened as soon as possible.

Rule 52 A Board meeting shall be attended bymore than half of the Directors. Where anyrelevant Director refuses or fails to attend themeeting resulting in the number of attendants fallsshort of the quorum required for convening themeeting, the Chairman and the Secretary to theBoard shall promptly report to the Shareholders’General Meeting.

Supervisors may attend Board meetings; thegeneral manager and Board secretary who do notconcurrently serve as Director shall attend Boardmeetings. The presider may, where he deemsnecessary, notify other relevant persons to attendBoard meetings.

Rule 52 A Board meeting shall be attended bymore than half of the Directors. Where anyrelevant Director refuses or fails to attend themeeting resulting in the number of attendants fallsshort of the quorum required for convening themeeting, the Chairman and the Secretary to theBoard shall promptly report to the Shareholders’General Meeting.

Supervisors may attend Board meetings; thegeneral manager and Board secretary who do notconcurrently serve as Director shall attend Boardmeetings. The presider may, where he deemsnecessary, notify other relevant persons to attendBoard meetings.



– XIII-28 –




Rule 53 In principle, Directors shall attend Boardmeetings in person. Where a Director is unable toattend a meeting for any reason, he shall perusethe meeting documents in advance, form definiteopinions, and appoint another Director in writingto attend the meeting on his behalf.

The power of attorney shall specify:

(1) the names of the principal and proxy;

(2) reasons of the principal failing to attendmeeting;

(3) the matter and validity of proxy;

(4) outline opinions of the principal on eachproposal;

(5) the principal’s scope of authorization andinstructions about voting intent in relation toproposals;

(6) signature of the principal and proxy, date, etc.

Where any Director signs the regular reports byproxy, the said Director shall specify suchauthorization in the power of attorney.

The proxy Director shall present the written powerof attorney to the presider, and explain proxyattendance in the attendance book.

Rule 53 In principle, Directors shall attend Boardmeetings in person. Where a Director is unable toattend a meeting for any reason, he shall perusethe meeting documents in advance, form definiteopinions, and appoint another Director in writingto attend the meeting on his behalf.

The power of attorney shall specify:

(1) the names of the principal and proxy;

(2) reasons of the principal failing to attendmeeting;

(3) the matter and validity of proxy;

(4) outline opinions of the principal on eachproposal;

(5) the principal’s scope of authorization andinstructions about voting intent in relation toproposals;

(6) signature or seal of the principal and proxy,date, etc.

Where any Director signs the regular reports byproxy, the said Director shall specify suchauthorization in the power of attorney.

The proxy Director shall present the written powerof attorney to the presider, and explain proxyattendance in the attendance book.

Rule 54 The Director attending the meeting byproxy shall exercise rights as granted by theprincipal. If a Director fails to attend a Boardmeeting either in person or by proxy, the saidDirector shall be deemed as having waived hisright to vote at the meeting.

Rule 54 The Director attending the meeting byproxy shall exercise rights as granted by theprincipal. Independent directors shall notentrust non-independent directors to vote ontheir behalf. Director fails to attend a Boardmeeting either in person or by proxy, the saidDirector shall be deemed as having waived hisright to vote at the meeting.



– XIII-29 –




Rule 55 Proxy attendance at Board meetings shallfollow the principles below:

(1) Where connected transactions are considered, anon-connected Director shall not appoint aconnected Director to attend the meeting on hisbehalf, and a connected Director shall also notaccept the appointment of a non-connectedDirector;

(2) An independent Director shall not appoint anon-independent Director to attend the meeting onhis behalf, and a non-independent Director shallalso not accept the appointment of an independentDirector;

(3) A Director shall not give any other Directorcarte blanche to attend the meeting and vote onhis behalf without providing his own opinions andvoting intent on the proposals, and the relevantDirector shall also not accept the carte blanche orany appointment not well defined.

(4) One Director shall not accept appointment bymore than two Directors, and a Director shall alsonot appoint any other Director who has beenappointed by two other Directors to attend themeeting and vote on his behalf.

Rule 55 Proxy attendance at Board meetings shallfollow the principles below:

(1) Where connected transactions are considered, anon-connected Director shall not appoint aconnected Director to attend the meeting on hisbehalf, and a connected Director shall also notaccept the appointment of a non-connectedDirector;

(2) An independent Director shall not appoint anon-independent Director to attend the meeting onhis behalf, and a non-independent Director shallalso not accept the appointment of an independentDirector;

(3) A Director shall not give any other Directorcarte blanche to attend the meeting and vote onhis behalf without providing his own opinions andvoting intent on the proposals, and the relevantDirector shall also not accept the carte blanche orany appointment not well defined.

(4) One Director shall not accept appointment bymore than two Directors, and a Director shall alsonot appoint any other Director who has beenappointed by two other Directors to attend themeeting and vote on his behalf.



– XIII-30 –




Rule 56 A connected Director of the Companyunder this policy shall mean a Director involved inany of the following circumstances:

(1) being the counterparty of a transaction;

(2) being employed by the counterparty of atransaction, by a legal person or other organizationwhich can directly or indirectly control thecounterparty of a transaction, or by a legal personor other organization which is under direct orindirect control of the counterparty of atransaction;

(3) being a close family member of thecounterparty of a transaction or of suchcounterparty’s direct or indirect controllers;

(4) being a close family member of the Directors,supervisors or senior management officers of thecounterparty of a transaction or of suchcounterparty’s direct or indirect controllers;

(5) being a Director whose independent businessjudgment may be affected in accordance withlaws, regulations, the listing rules in thejurisdiction where the shares of the Company arelisted and Articles of Association of the Company.

Rule 56 A connected Director of the Companyunder this policy shall mean a Director involved inany of the following circumstances:

(1) being the counterparty of a transaction;

(2) being employed by the counterparty of atransaction, by a legal person or other organizationwhich can directly or indirectly control thecounterparty of a transaction, or by a legal personor other organization which is under direct orindirect control of the counterparty of atransaction;

(3) being a close family member of thecounterparty of a transaction or of suchcounterparty’s direct or indirect controllers;

(4) being a close family member of the Directors,supervisors or senior management officers of thecounterparty of a transaction or of suchcounterparty’s direct or indirect controllers;

(5) being a Director whose independent businessjudgment may be affected in accordance withlaws, regulations, the listing rules in thejurisdiction where the shares of the Company arelisted and Articles of Association of the Company.

Rule 57 The General Manager, Secretary of theBoard and Supervisors of the Company shallattend Board meetings. Senior executives who arenot Directors and persons connected with theproposal to be discussed may attend the Boardmeeting where necessary. Attendees shall have theright to express their own opinions but withoutvoting rights.

Rule 57 The General Manager, Secretary of theBoard and Supervisors of the Company shallattend Board meetings. Senior executives who arenot Directors and persons connected with theproposal to be discussed may attend the Boardmeeting where necessary. Attendees shall have theright to express their own opinions but withoutvoting rights.



– XIII-31 –




Rule 58 Board meetings shall generally be heldonsite, or where necessary, via videoconference,conference call, fax or email voting provided thatthe Directors can adequately express their viewsand the convener (presider) and proposer grantapproval. Board meetings may also be held onsiteand off-site simultaneously.

Where a Board meeting is held offsite, the numberof attending Directors shall be counted accordingto the Directors shown at the videoconference, theDirectors expressing their views at the conferencecall, valid votes such as faxes or emails receivedwithin the prescribed period, or writtenacknowledgements submitted after the meeting bythe Directors for attending the meeting.

Rule 58 Board meetings shall generally be heldonsite, or where necessary, via videoconference,conference call, fax or email voting provided thatthe Directors can adequately express their viewsand the convener (presider) and proposer grantapproval. Board meetings may also be held onsiteand off-site simultaneously.

Where a Board meeting is held offsite, the numberof attending Directors shall be counted accordingto the Directors shown at the videoconference, theDirectors expressing their views at the conferencecall, valid votes such as faxes or emails receivedwithin the prescribed period, or writtenacknowledgements submitted after the meeting bythe Directors for attending the meeting.

Chapter VIII Procedure and Resolution of theBoard

Chapter VIII Procedure and Resolution of theBoard

Rule 59 The Board shall legally exercise thefunctions and powers as stipulated by the Articlesof Association and the Rules in accordance withthe law.

Rule 59 The Board shall legally exercise thefunctions and powers as stipulated by the Articlesof Association and the Rules in accordance withthe law.

Rule 60 The chairperson of the meeting shall askthe attending Directors for their definite opinionson each of the resolutions.

Rule 60 The chairperson of the meeting shall askthe attending Directors for their definite opinionson each of the resolutions.

Rule 61 The chairperson shall stop any Directorfrom hindering the normal progress of the meetingor disrupting the speech of other Directors.

Rule 61 The chairperson shall stop any Directorfrom hindering the normal progress of the meetingor disrupting the speech of other Directors.

Rule 62 The Board meeting shall not vote on anyresolutions not included in the notice of themeeting unless with the unanimous consent of theattending Directors.

Rule 62 The Board meeting shall not vote on anyresolutions not included in the notice of themeeting unless with the unanimous consent of theattending Directors.

Rule 63 A proxy Director shall not vote on anyproposal not included in the notice of the meetingon behalf of other Directors.

Rule 63 A proxy Director shall not vote on anyproposal not included in the notice of the meetingon behalf of other Directors.



– XIII-32 –




Rule 64 The Directors shall carefully readdocuments relating to the meeting and shallexpress well-informed, independent and discreetopinions.

The Directors may, before the meeting, inquire onthe information required, as part of their decisionmaking process, from the relevant persons orinstitutions such as the Office of the Board, theconvener of the meeting, General Manager andother members of senior management, specialcommittees, the accounting firm and the law firm,or may, while the meeting is underway, suggest tothe chairperson that the aforesaid persons orinstitutions to appear at the meeting and makerelevant explanations.

Rule 64 The Directors shall carefully readdocuments relating to the meeting and shallexpress well-informed, independent and discreetopinions.

The Directors may, before the meeting, inquire onthe information required, as part of their decisionmaking process, from the relevant persons orinstitutions such as the Office of the Board, theconvener of the meeting, General Manager andother members of senior management, specialcommittees, the accounting firm and the law firm,or may, while the meeting is underway, suggest tothe chairperson that the aforesaid persons orinstitutions to appear at the meeting and makerelevant explanations.

Rule 65 After adequate discussion of eachproposal, the chairperson shall submit the proposalto a vote by the attending Directors one by one.

Rule 65 After adequate discussion of eachproposal, the chairperson shall submit the proposalto a vote by the attending Directors one by one.

Rule 66 Voting of resolutions of the Board shallproceed by the following methods: voting by ashow of hands or voting by poll in writing(including voting by fax). Every Director shallhave one vote. Resolutions made by the Boardshall be passed by more than half of all Directors.If the pros and cons are the same, the chairmanshall be entitled to an additional vote.

Rule 66 Voting of resolutions of the Board shallproceed by the following methods: voting by ashow of hands or voting by poll in writing(including voting by fax). Every Director shallhave one vote. Resolutions made by the Boardshall be passed by more than half of all Directors.If the pros and cons are the same, the chairmanshall be entitled to an additional vote.

Rule 67 A Director may vote for, against orabstain from voting on a proposal. Each Directorshall choose from one of the above options. In theevent that a Director does not choose any optionor chooses two or more options at the same time,the chairperson shall require the Director toreconsider his/her option, otherwise he/she shall bedeemed as having abstained from voting; anyDirector who has left during the meeting withoutreturning and has not casted his/her votes shall bedeemed as having abstained from voting.

Rule 67 A Director may vote for, against orabstain from voting on a proposal. Each Directorshall choose from one of the above options. In theevent that a Director does not choose any optionor chooses two or more options at the same time,the chairperson shall require the Director toreconsider his/her option, otherwise he/she shall bedeemed as having abstained from voting; anyDirector who has left during the meeting withoutreturning and has not casted his/her votes shall bedeemed as having abstained from voting.

Rule 68 A Director shall not be allowed to leavethe Board meeting halfway unless being approvedby the chairperson and being remarked in theminutes, otherwise such Director shall be deemedas being absent without any reason.

Rule 68 A Director shall not be allowed to leavethe Board meeting halfway unless being approvedby the chairperson and being remarked in theminutes, otherwise such Director shall be deemedas being absent without any reason.



– XIII-33 –




Rule 69 After the attending Directors have voted,the Office of the Board shall collect ballots castedby the Directors, which shall be counted by theSecretary of the Board under supervision of asupervisor or an independent Director.

Rule 69 After the attending Directors have voted,the Office of the Board shall collect ballots castedby the Directors, which shall be counted by theSecretary of the Board under supervision of asupervisor or an independent Director.

Rule 70 Where the meeting is held onsite, thechairperson shall announce the statistics onsite; inother circumstances, the chairperson shall requirethe Secretary of the Board to announce the votingresult in the same working day immediatelyfollowing the prescribed voting deadline.

Rule 70 Where the meeting is held onsite, thechairperson shall announce the statistics onsite; inother circumstances, the chairperson shall requirethe Secretary of the Board to announce the votingresult in the same working day immediatelyfollowing the prescribed voting deadline.

Rule 71 The ballots casted by Directors after thechairperson announced the voting result or afterthe prescribed voting deadline shall not becounted.

Rule 71 The ballots casted by Directors after thechairperson announced the voting result or afterthe prescribed voting deadline shall not becounted.

Rule 72 Saved as specified in Rule 73 of theseRules of Procedures, adoption of or resolution onany proposal shall be subject to approval of morethan half of all the Directors of the Company.Where the relevant laws, administrative regulationsand the Articles of Association have anyprovisions that required approvals by more thanhalf of all the Directors, such provisions shallapply.

If different resolutions are in conflict with eachother in their contents and meanings, theresolutions formed later in time shall prevail.

Rule 72 Saved as specified in Rule 83 of theseRules of Procedures, adoption of or resolution onany proposal shall be subject to approval of morethan half of all the Directors of the Company.Where the relevant laws, administrative regulationsand the Articles of Association have anyprovisions that required approvals by more thanhalf of all the Directors, such provisions shallapply.

If different resolutions are in conflict with eachother in their contents and meanings, theresolutions formed later in time shall prevail.

Rule 73 Where a Director is related with theenterprises involved in the resolution or with theresolution at the meeting of the Board and shalltherefore abstain from voting, such Director shallnot exercise his/her voting rights on suchresolution nor can he/she exercise any votingrights on behalf of other Directors. The meetingmay be held if it is quorated by more than onehalf of the non-related Directors. The resolutionsof the board meeting shall be passed by more thanone half of non-related Directors. If the number ofnon-related Directors attending the board meetingis less than three, such matter shall be put forwardto the Shareholders’ General Meeting fordiscussion.

Rule 73 Where a Director is related with theenterprises involved in the resolution or with theresolution at the meeting of the Board and shalltherefore abstain from voting, such Director shallnot exercise his/her voting rights on suchresolution nor can he/she exercise any votingrights on behalf of other Directors. The meetingmay be held if it is quorated by more than onehalf of the non-related Directors. The resolutionsof the board meeting shall be passed by more thanone half of non-related Directors. If the number ofnon-related Directors attending the board meetingis less than three, such matter shall be put forwardto the Shareholders’ General Meeting fordiscussion.



– XIII-34 –




Rule 74 The Directors shall act within the scopeof authorisation given at the Shareholders’ generalmeetings and the Articles of Association, and shallnot make any resolutions beyond authority.

Rule 74 The Directors shall act within the scopeof authorisation given at the Shareholders’ generalmeetings and the Articles of Association, and shallnot make any resolutions beyond authority.

Rule 75 The chairperson of the Board meetingmay, if he/she deems necessary, adjourn or resumethe meeting.

A Director shall not be allowed to leave the Boardmeeting halfway unless being approved by thechairperson and being remarked in the minutes,otherwise such Director shall be deemed as beingabsent without any reason.

Rule 75 The chairperson of the Board meetingmay, if he/she deems necessary, adjourn or resumethe meeting.

A Director shall not be allowed to leave the Boardmeeting halfway unless being approved by thechairperson and being remarked in the minutes,otherwise such Director shall be deemed as beingabsent without any reason.

Rule 76 The minutes shall include the followinginformation:

(1) the session of the meeting, time, venue andform of the meeting;

(2) the particulars of issuing the notice of themeeting;

(3) the names of the convener and the chairman ofthe meeting;

(4) the Director attending in person or by proxy;

(5) the proposals reviewed in the meeting, themain points of speeches and major opinions, thevoting intention of each Director on relevantmatters;

(6) the voting form and result of each proposal(specifying numbers of affirmative, opposing andabstention votes);

(7) such other matters to be recorded as theDirector attending the meeting considerappropriate.

Rule 76 The Board shall record the decisions onmatters discussed at the meeting in minutes.The minutes of the Board shall be true,accurate and complete. The Directors, boardsecretary and recorder attending the meetingshall sign on the minutes of the meeting. Theminutes shall include the following information:

(1) the session of the meeting, time, venue andform of the meeting;

(2) the particulars of issuing the notice of themeeting;

(3) the names of the convener and the chairman ofthe meeting;

(4) the Director attending in person or by proxy;

(5) the proposals reviewed in the meeting, themain points of speeches and major opinions, thevoting intention of each Director on relevantmatters;

(6) the voting form and result of each proposal(specifying numbers of affirmative, opposing andabstention votes);

(7) such other matters to be recorded as theDirector attending the meeting considerappropriate.



– XIII-35 –




Rule 77 The Directors shall be responsible for theresolutions passed at Board meetings. AnyDirector who votes for a resolution which runscounter to the relevant laws, regulations orArticles of Association, thereby causing seriouslosses to the Company, shall be liable forcompensation. A Director who has been proved ashaving expressed dissenting opinions on theresolution and such opinions are recorded in theminutes of the meeting may be exempt fromliability. Where a Director abstains from voting, oris absent and does not appoint others to attend, theDirector may not be relieved from such liability;where a Director has expressed his opposition tosuch resolution but does not cast a negative vote,the Director also may not be relieved from suchliability. The attending Directors shall sign theminutes, resolutions and summary of the meetingin person or on behalf of the Directors appointingthem to attend the meeting. Where the Directorsdisagree over the minutes, resolutions andsummary of the meeting, they may attach writtenremarks when signing the same. Where necessary,a report shall be submitted to regulatorydepartments in a timely manner, publicannouncements may also be made. Where anyDirector neither signs as per the precedingparagraph nor provides his different opinions inwriting, reports to the regulatory authority orannounces public statement, the said Director shallbe deemed as agreeing with the minutes andresolutions.

Rule 77 The Directors shall be responsible for theresolutions passed at Board meetings. AnyDirector who votes for a resolution which runscounter to the relevant laws, regulations orArticles of Association, thereby causing seriouslosses to the Company, shall be liable forcompensation. A Director who has been proved ashaving expressed dissenting opinions on theresolution and such opinions are recorded in theminutes of the meeting may be exempt fromliability. Where a Director abstains from voting, oris absent and does not appoint others to attend, theDirector may not be relieved from such liability;where a Director has expressed his opposition tosuch resolution but does not cast a negative vote,the Director also may not be relieved from suchliability. The attending Directors shall sign theminutes, resolutions and summary of the meetingin person or on behalf of the Directors appointingthem to attend the meeting. Where the Directorsdisagree over the minutes, resolutions andsummary of the meeting, they may attach writtenremarks when signing the same. Where necessary,a report shall be submitted to regulatorydepartments in a timely manner, publicannouncements may also be made. Where anyDirector neither signs as per the precedingparagraph nor provides his different opinions inwriting, reports to the regulatory authority orannounces public statement, the said Director shallbe deemed as agreeing with the minutes andresolutions.

Rule 78 The office of the Board shall keep theminutes of meetings of the Board and its specialcommittees, which shall be available for inspectionduring reasonable hours by any Directors givingreasonable notice.

Rule 78 The office of the Board shall keep theminutes of meetings of the Board and its specialcommittees, which shall be available for inspectionduring reasonable hours by any Directors givingreasonable notice.

Rule 79 The Board shall keep the minutes of allprevious Shareholders’ General Meeting and BoardMeetings, minutes of the Board of Supervisors,summary, resolutions, financial audited reports,register of shareholders etc in the Companyavailable for inspection. The retention period is noless than 10 years.

Rule 79 The Board shall keep the minutes of allprevious Shareholders’ General Meeting and BoardMeetings, minutes of the Board of Supervisors,summary, resolutions, financial audited reports,register of shareholders etc in the Companyavailable for inspection. The retention period is noless than 10 years.



– XIII-36 –




Chapter IX Supplementary Provisions Chapter IX Supplementary Provisions

Rule 80 Unless otherwise specified, the termsused in the Rules shall have the same meanings asthat in the Articles of Association.

Rule 80 Unless otherwise specified, the termsused in the Rules shall have the same meanings asthat in the Articles of Association.

Rule 81 Any matters not covered herein or anyconflicts with the new or amended laws,regulations or provisions of the articles ofassociation upon coming into effect of the Rules,such laws, regulations and the Articles ofAssociation shall prevail. In the event that theRules contravenes with other laws, regulations,Hong Kong Listing Rules and the Articles ofAssociation, the laws, regulations, Hong KongListing Rules and the Articles of Association shallprevail. Relevant amendments shall also be madeto the Rules promptly.

Rule 81 Any matters not covered herein or anyconflicts with the new or amended laws,regulations or provisions of the articles ofassociation upon coming into effect of the Rules,such laws, regulations and the Articles ofAssociation shall prevail. In the event that theRules contradicts with other laws, regulations, thelisting rules of the places where shares of theCompany are listed and the Articles ofAssociation, the laws, regulations, the listingrules of the places where shares of theCompany are listed and the Articles ofAssociation shall prevail. Relevant amendmentsshall also be made to the Rules promptly.

Rule 82 The words herein of “more” and “within”include the figure itself; while the words of“exceeding” exclude the figure itself. The term“related” used herein shall have the same meaningwhen used in the Hong Kong Listing Rules.

Rule 82 The words herein of “more” and “within”include the figure itself; while the words of“exceeding” exclude the figure itself. The term“related” used herein shall have the same meaningwhen used in Hong Kong Listing Rules.





Rule 85 The Rules, as an annex to the Articles ofAssociation, shall take effect from the date ofinitial public offering and listing of the Companyin Hong Kong, after being considered andapproved by the Shareholders’ General Meeting.

Rule 85 The Rules, as an annex to the Articles ofAssociation, shall take effect from the date ofinitial public offering of the Companydomestically and its listing on a domestic stockexchange, after being considered and approved bythe Shareholders’ General Meeting. The existingrules shall become void and null after cominginto effect of the Rules.



– XIII-37 –

The notice below is reproduced from the notice of annual general meeting by theCompany dated 26 March 2021 which has already been despatched to the Shareholders.Shareholders are reminded that, subsequent to the aforesaid notice, the AGM originallyscheduled on Wednesday, 12 May 2021 has been postponed to Friday, 14 May 2021. Forfurther details, please refer to the circular dated 23 April 2021.



(Stock Code: 3678)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that an annual general meeting (the “AGM”) of theCompany will be held at 2:00 p.m. on Wednesday, 12 May 2021 at Conference Room, 9/F,Holly Tower, No. 50 Zhonghua Road, Nanjing, the PRC for the purpose of considering and,if thought fit, passing the following resolutions:

AS SPECIAL RESOLUTIONS

1. to consider and approve the proposal of the Company’s application of initialpublic offering and listing of Renminbi Ordinary Shares (the “A Shares”) (the “AShare Offering”):

1.1 classes of shares;

1.2 nominal value per share;

1.3 proposed stock exchange for the listing of the A Shares;

1.4 proposed offering size;

1.5 target subscriber;

1.6 method of offering;

1.7 pricing methodology;

1.8 form of underwriting;

1.9 conversion into a joint stock limited liability company with domestic andoverseas offering and listing of the shares;


– AGM-1 –

1.10 conversion of unlisted issued shares of the Company to A Shares; and

1.11 valid period of the resolutions for the proposal of the A Share Offering;

2. to consider and approve the authorisation to the board (the “Board”) of directors(the “Directors”) of the Company to deal with related matters in connection withthe Company’s application for the A Share Offering and the listing of the AShares at its full discretion;

3. to consider and approve the feasibility analysis report on the investment projectsusing the proceeds from the A Share Offering;

4. to consider and approve the impacts and remedial measures on dilution ofimmediate return from the A Share Offering;

5. to consider and approve the price stabilising plan for the A Shares within threeyears after the A Share Offering;

6. to consider and approve the dividend return plan for the shareholders of theCompany within three years after the A Share Offering;

7. to consider and approve the public undertakings in documents in connection withthe A Share Offering;

8. to consider and approve the attribution of accumulated undistributed profits oraccumulated uncovered losses prior to the A Share Offering and the listing of theA Shares;

9. to consider and approve the proposed formulation of the articles of association ofthe Company with effect upon the A Share Offering and the listing of the AShares;

10. to consider and approve the proposed formulation of the rules of procedures ofthe general meetings of the Company with effect upon the A Share Offering andthe listing of the A Shares;

11. to consider and approve the proposed formulation of the rules of procedures ofthe Board with effect upon the A Share Offering and the listing of the A Shares;

12. to consider and approve the proposed formulation of the rules of procedures ofthe board of supervisors of the Company with effect upon the A Share Offeringand the listing of the A Shares;

13. to consider and approve the proposed amendments to the existing articles ofassociation of the Company;

14. to consider and approve the proposed amendments to the existing rules ofprocedures of the general meeting of the Company;


– AGM-2 –

15. to consider and approve the proposed amendments to the existing rules ofprocedures of the Board;

AS ORDINARY RESOLUTIONS

16. to consider and approve the report of the use of raised funds from the previousoffering;

17. to consider and approve the proposed formulation of the related party transactionsmanagement system with effect upon the A Share Offering and the listing of the AShares;

18. to consider and approve the proposed formulation of the system concerning theindependent Directors with effect upon the A Share Offering and the listing of theA Shares;

19. to consider and approve the proposed formulation of the administration system ofraised funds with effect upon the A Share Offering and the listing of the A Shares;

20. to consider and approve the 2020 annual report, including (i) the H Shares annualreport of the Company for the year ended 31 December 2020 and (ii) the annualreport of the Company for the year ended 31 December 2020 prepared inaccordance with the relevant regulations and requirements of the China SecuritiesRegulatory Commission;

21. to consider and approve the report of the Board for the year ended 31 December2020;

22. to consider and approve the report of the supervisory committee of the Companyfor the year ended 31 December 2020;

23. to consider and approve the final financial report of the Company for the yearended 31 December 2020;

24. to consider and approve the profit distribution plan of the Company anddeclaration of final dividend for the year ended 31 December 2020;

25. to consider and approve the appointment of ShineWing Certified PublicAccountants as the auditor of the Company to hold office until the conclusion ofthe next annual general meeting of the Company, and to authorise the generalmanager’s office of the Company to fix their remuneration at its meetings; and

26. to authorise the Board to fix the remuneration package of the Directors andsupervisors of the Company for the year ended 31 December 2020.


Nanjing, China, 26 March 2021


– AGM-3 –

Notes:

1. All resolutions at the meeting will be taken by poll pursuant to the Rules Governing the Listing ofSecurities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”). The results of the poll willbe published on the websites of The Stock Exchange of Hong Kong Limited and the Company inaccordance with the Listing Rules.

2. The register of members of the Company will be closed from Sunday, 11 April 2021 to Wednesday, 12 May2021 (both days inclusive), during which period no transfer of Shares of the Company can be registered.Holders of H Shares and Domestic Shares whose names appear on the registers of members of theCompany after the close of business on Friday, 9 April 2021 shall be entitled to attend and vote at theAGM. In order to qualify to attend and vote at the AGM, all transfer documents accompanied by therelevant share certificates must be lodged with the H share registrar of the Company, Computershare HongKong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East,Wan Chai, Hong Kong (for holders of H Shares of the Company) or the headquarters in the PRC of theCompany (for holders of Domestic Shares of the Company), no later than 4:30 p.m. on Friday, 9 April2021.

3. Shareholders who intend to attend the AGM should complete the reply slip and return it by hand or by postto the H share registrar of the Company, Computershare Hong Kong Investor Services Limited at 17MFloor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for holders of H Shares of theCompany) or to the headquarters in the PRC of the Company (for holders of Domestic Shares of theCompany) on or before Thursday, 22 April 2021.

4. Shareholders who are entitled to attend and vote at the AGM may appoint one or more proxies to attendand vote on their behalves. A proxy need not be a shareholder.

5. In order to be valid, the form of proxy for the AGM must be deposited by hand or post, for holders of HShares of the Company, to the H share registrar of the Company, Computershare Hong Kong InvestorServices Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, and, forholders of Domestic Shares of the Company, to the headquarters in the PRC of the Company not less than24 hours before the time for holding the AGM (i.e. before 2:00 p.m. on Tuesday, 11 May 2021) (or anyadjournment thereof) for taking the poll. If the form of proxy is signed by a person under a power ofattorney or other authority, a notarial copy of that power of attorney or authority shall be deposited at thesame time as mentioned in the form of proxy. Completion and return of the form of proxy will not precludeshareholders from attending and voting in person at the AGM or any adjourned meetings should they sowish.

If the proxy is a legal person, its legal representative or any representative authorised by a resolution of itsboard of directors or by other governing body shall attend the above meeting of the Company on its behalf.If the shareholder is a recognised clearing house (or its proxy) defined by the Hong Kong relevantordinance from time to time, the shareholder may authorise one or more persons it considers appropriate asits representative(s) at the above meeting; however, if more than one person are authorised, the power ofattorney shall contain the number and class of shares for which such persons are authorised, and shall besigned by an authorised personnel of the recognised clearing house. The person(s) so authorised canrepresent the recognised clearing house (or its proxy) to attend the meeting and exercise its right, as if thepersons are the Company’s individual shareholders, and shall not be required to produce evidence ofshareholding, the notarised power of attorney and/or further evidence to prove that he/she/they have beenduly authorised.

A vote provided in according to the instruments in such form of proxy shall be valid, notwithstanding theprevious death or loss of capacity of the appointer or the revocation of the proxy or of the authority underwhich the proxy was executed, or the transfer of the shares with respect to which the proxy is given,provided that no notice in writing of such matters shall have been received by the Company prior to theabove meeting.

6. In case of joint shareholder for any share, only the person whose name is at the first place on the registerof shareholders has the rights to receive the certificate of relevant shares and notice from the Company andto attend or exercise all of the votes relating to the shares.


– AGM-4 –

7. Shareholders or their proxies shall provide their identity documents when attending the AGM.

8. The address of the headquarters of the Company in the PRC is No. 50 Zhonghua Road, Nanjing, the PRC.

9. In this notice of AGM, unless the context otherwise requires, terms used herein shall have the samemeanings as defined in the circular to be published by the Company.

As at the date of this notice, the Board consists of Mr. Zhou Yong and Ms. ZhouJianqiu as executive Directors; Mr. Xue Binghai, Mr. Jiang Lin and Mr. Shan Bing asnon-executive Directors; and Mr. Wang Yuetan, Mr. Lam Kai Yeung and Mr. Huang Dechunas independent non-executive Directors.


– AGM-5 –

The notice below is reproduced from the notice of the 2021 first domestic shareholders’class meeting by the Company dated 26 March 2021 which has already been despatched tothe Shareholders. Shareholders are reminded that, subsequent to the aforesaid notice, theDomestic Shareholders’ Class Meeting originally scheduled on Wednesday, 12 May 2021 hasbeen postponed to Friday, 14 May 2021. For further details, please refer to the circulardated 23 April 2021.



(Stock Code: 3678)

NOTICE OF THE 2021 FIRST DOMESTICSHAREHOLDERS’ CLASS MEETING

NOTICE IS HEREBY GIVEN that the class meeting (the “Domestic Shareholders’Class Meeting”) of the holders of domestic shares of the Company will be held at the laterof 2:30 p.m. on Wednesday, 12 May 2021 at Conference Room, 9/F, Holly Tower, No. 50Zhonghua Road, Nanjing, the People’s Republic of China, or immediately after theconclusion of the annual general meeting (the “AGM”) of the Company held at the samedate or any adjournment thereof for the purpose of considering and, if thought fit, passingthe following resolutions:










NOTICE OF THE 2021 FIRST DOMESTIC SHAREHOLDERS’ CLASS MEETING

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1.9 conversion into a joint stock limited liability company with domestic andoverseas offering and listing of shares;



2. to consider and approve the authorisation to the board of directors (the“Directors”) of the Company to deal with related matters in connection with theCompany’s application for the A Share Offering and the listing of the A Shares atits full discretion;




6. to consider and approve the dividend return plan for shareholders of the Companywithin three years after the A Share Offering;

7. to consider and approve the public undertakings in documents in connection withthe A Share Offering; and

8. to consider and approve the attribution of accumulated undistributed profits oraccumulated uncovered losses prior to the A Share Offering and the listing of theA Shares.


Nanjing, the PRC, 26 March 2021

Notes:

1. All resolutions at the meeting will be taken by poll.

2. The register of members of the Company will be closed from Sunday, 11 April 2021 to Wednesday, 12 May2021 (both days inclusive), during which period no transfer of shares of the Company can be registered. Inorder to qualify to attend and vote at the Domestic Shareholders’ Class Meeting, all transfer documentsaccompanied by the relevant share certificates must be lodged with the headquarters in the PRC of theCompany at No. 50 Zhonghua Road, Nanjing, the PRC, no later than 4:30 p.m. on Friday, 9 April 2021.


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3. Domestic shareholders who intend to attend the Domestic Shareholders’ Class Meeting should complete thereply slip and return it by hand or by post to the headquarters in the PRC of the Company on or beforeThursday, 22 April 2021.

4. Domestic shareholders who are entitled to attend and vote at the Domestic Shareholders’ Class Meetingmay appoint one or more proxies to attend and vote on their behalves. A proxy need not be a domesticshareholder of the Company.

5. The instrument appointing a proxy must be in writing under the hand of a domestic shareholder or hisattorney duly authorised in writing. If the domestic shareholder is a legal person, that instrument must beexecuted either under its seal or under the hand of its director or other attorney duly authorised to sign thesame on its behalf.

6. In order to be valid, the proxy form for the Domestic Shareholders’ Class Meeting must be deposited byhand or post to the headquarters in the PRC of the Company not less than 24 hours (i.e. not later than 2:30p.m. on Tuesday, 11 May 2021) before the time for holding the Domestic Shareholders’ Class Meeting (orany adjournment thereof) for taking the poll. If the proxy form is signed by a person under a power ofattorney or other authority, a notarial copy of that power of attorney or authority shall be deposited at thesame time as mentioned in the proxy form. Completion and return of the proxy form will not precludeshareholders from attending and voting in person at the Domestic Shareholders’ Class Meeting or anyadjourned meetings should they so wish.

If the proxy is a legal person, its legal representative or any representative authorised by a resolution of itsboard of directors or by other governing body shall attend the above meeting of the Company on its behalf.If the domestic shareholder is a recognised clearing house (or its proxy) defined by the Hong Kong relevantOrdinance from time to time, the domestic shareholder may authorise one or more persons it considersappropriate as its representative(s) at the above meeting; however, if more than one person are authorised,the power of attorney shall contain the number and class of shares for which such persons are authorised,and shall be signed by an authorised personnel of the recognised clearing house. The person(s) soauthorised can represent the recognised clearing house (or its proxy) to attend the meeting and exercise itsright, as if the persons are the Company’s individual shareholders, and shall not be required to produceevidence of shareholding, the notarised power of attorney and/or further evidence to prove that he/she/theyhave been duly authorised.

A vote provided in according to the instruments in such proxy forms shall be valid, notwithstanding theprevious death or loss of capacity of the appointer or the revocation of the proxy or of the authority underwhich the proxy was executed, or the transfer of the shares with respect to which the proxy is given,provided that no notice in writing of such matters shall have been received by the Company prior to theabove meeting.

7. In case of joint shareholder for any domestic share, only the person whose name is at the first place on theregister of shareholders has the rights to receive the certificate of relevant shares and notice from theCompany and to attend or exercise all of the votes relating to the shares.

8. Domestic shareholders or their proxies shall provide their identity documents when attending the DomesticShareholders’ Class Meeting. If corporate domestic shareholders appoint authorised representative to attendthe Domestic Shareholders’ Class Meeting, the authorised representative shall produce his/her identitydocuments and a notarial copy of the relevant authorisation instrument signed by the Board or otherauthorised parties of the corporate Shareholders or other notarial documents allowed by the Company.Proxies shall produce their identity documents and the proxy form signed by the Shareholders or theirattorney when attending the Domestic Shareholders’ Class Meeting.

9. Domestic shareholders attending the Domestic Shareholders’ Class Meeting shall bear their own travelingand accommodation expenses.

As at the date of this notice, the Board consists of Mr. Zhou Yong and Ms. ZhouJianqiu as executive Directors; Mr. Xue Binghai, Mr. Shan Bing and Mr. Jiang Lin asnon-executive Directors; and Mr. Lam Kai Yeung, Mr. Wang Yuetang and Mr. Huang Dechunas independent non-executive Directors.


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The notice below is reproduced from the notice of the 2021 first H shareholders’ classmeeting by the Company dated 26 March 2021 which has already been despatched to theShareholders. Shareholders are reminded that, subsequent to the aforesaid notice, the HShareholders’ Class Meeting originally scheduled on Wednesday, 12 May 2021 has beenpostponed to Friday, 14 May 2021. For further details, please refer to the circular dated 23April 2021.



(Stock Code: 3678)

NOTICE OF THE 2021 FIRST H SHAREHOLDERS’ CLASS MEETING

NOTICE IS HEREBY GIVEN that the class meeting (the “H Shareholders’ ClassMeeting”) of the holders of H shares of the Company will be held at the later of 3:00 p.m.on Wednesday, 12 May 2021 at Conference Room, 9/F, Holly Tower, No. 50 ZhonghuaRoad, Nanjing, the People’s Republic of China, or immediately after the conclusion of theclass meeting of the holders of domestic shares of the Company held at the same date orany adjournment thereof for the purpose of considering and, if thought fit, passing thefollowing resolutions:












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1.9 conversion into a joint stock limited liability company with domestic andoverseas offering and listing of shares;



2. to consider and approve the authorisation to the board of directors (the“Directors”) of the Company to deal with related matters in connection with theCompany’s application for the A Share Offering and the listing of the A Shares atits full discretion;




6. to consider and approve the dividend return plan for shareholders of the Companywithin three years after the A Share Offering;

7. to consider and approve the public undertakings in documents in connection withthe A Share Offering; and

8. to consider and approve the attribution of accumulated undistributed profits oraccumulated uncovered losses prior to the A Share Offering and the listing of theA Shares.


Nanjing, the PRC, 26 March 2021

Notes:

1. All resolutions at the meeting will be taken by poll.

2. The register of members of the Company will be closed from Sunday, 11 April 2021 to Wednesday, 12 May2021 (both days inclusive), during which period no transfer of shares of the Company can be registered. Inorder to qualify to attend and vote at the H Shareholders’ Class Meeting, all transfer documentsaccompanied by the relevant share certificates must be lodged with the H share registrar of the Company,Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre,183 Queen’s Road East, Wan Chai, Hong Kong, no later than 4:30 p.m. on Friday, 9 April 2021.

3. H shareholders who intend to attend the H Shareholders’ Class Meeting should complete the reply slip andreturn it by hand, by post, by email or by fax to the H share registrar of the Company on or beforeThursday, 22 April 2021.


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4. H shareholders who are entitled to attend and vote at the H Shareholders’ Class Meeting may appoint oneor more proxies to attend and vote on their behalves. A proxy need not be a H shareholder of the Company.

5. The instrument appointing a proxy must be in writing under the hand of a H shareholder or his attorneyduly authorised in writing. If the H shareholder is a legal person, that instrument must be executed eitherunder its seal or under the hand of its director or other attorney duly authorised to sign the same on itsbehalf.

6. In order to be valid, the proxy form for the H Shareholders’ Class Meeting must be deposited by hand orpost, for holders of H shares of the Company, to the H share registrar of the Company, ComputershareHong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai,Hong Kong not less than 24 hours (i.e. not later than 3:00 p.m. on Tuesday, 11 May 2021) before the timefor holding the H Shareholders’ Class Meeting (or any adjournment thereof) for taking the poll. If the proxyform is signed by a person under a power of attorney or other authority, a notarial copy of that power ofattorney or authority shall be deposited at the same time as mentioned in the proxy form. Completion andreturn of the proxy form will not preclude shareholders from attending and voting in person at the HShareholders’ Class Meeting or any adjourned meetings should they so wish.

If the proxy is a legal person, its legal representative or any representative authorised by a resolution of itsboard of directors or by other governing body shall attend the above meeting of the Company on its behalf.If the H shareholder is a recognised clearing house (or its proxy) defined by the Hong Kong relevantOrdinance from time to time, the H shareholder may authorise one or more persons it considers appropriateas its representative(s) at the above meeting; however, if more than one person are authorised, the power ofattorney shall contain the number and class of shares for which such persons are authorised, and shall besigned by an authorised personnel of the recognised clearing house. The person(s) so authorised canrepresent the recognised clearing house (or its proxy) to attend the meeting and exercise its right, as if thepersons are the Company’s individual shareholders, and shall not be required to produce evidence ofshareholding, the notarised power of attorney and/or further evidence to prove that he/she/they have beenduly authorised.

A vote provided in according to the instruments in such proxy forms shall be valid, notwithstanding theprevious death or loss of capacity of the appointer or the revocation of the proxy or of the authority underwhich the proxy was executed, or the transfer of the shares with respect to which the proxy is given,provided that no notice in writing of such matters shall have been received by the Company prior to theabove meeting.

7. In case of joint shareholder for any H share, only the person whose name is at the first place on the registerof shareholders has the rights to receive the certificate of relevant shares and notice from the Company andto attend or exercise all of the votes relating to the shares.

8. H shareholders or their proxies shall provide their identity documents when attending the H Shareholders’Class Meeting. If corporate H shareholders appoint authorised representative to attend the H Shareholders’Class Meeting, the authorised representative shall produce his/her identity documents and a notarial copy ofthe relevant authorisation instrument signed by the Board or other authorised parties of the corporateShareholders or other notarial documents allowed by the Company. Proxies shall produce their identitydocuments and the proxy form signed by the Shareholders or their attorney when attending the HShareholders’ Class Meeting.

9. H shareholders attending the H Shareholders’ Class Meeting shall bear their own traveling andaccommodation expenses.

As at the date of this notice, the Board consists of Mr. Zhou Yong and Ms. ZhouJianqiu as executive Directors; Mr. Xue Binghai, Mr. Shan Bing and Mr. Jiang Lin asnon-executive Directors; and Mr. Lam Kai Yeung, Mr. Wang Yuetang and Mr. Huang Dechunas independent non-executive Directors.


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Documents

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