SPTJF Shanghai Petrochemical Co Ltd (PK)

Exhibit

Number

Objection made to the resolutions proposed at the 2022 annual general meeting (the “AGM”), the first A shareholders class meeting for 2023 (the “A Shareholders Class Meeting”) and the first H shareholders class meeting for 2023 (the “H Shareholders Class Meeting”, together with the AGM and A Shareholders Class Meeting as the “Meeting(s)”): Nil

THE CONVENING AND ATTENDANCE OF THE MEETING(S)

Date of the Meeting(s): 28 June 2023

Venue of the Meeting(s): North Building, Jinshan Hotel, No.1, Jinyi East Road, Jinshan District, Shanghai, the People’s Republic of China

Information of ordinary shareholders and preferred shareholders with restored voting rights who attended the Meeting(s) and their shareholdings:

Overseas listed foreign shares shareholders (H shares)

Total number of shares held by overseas listed foreign shares shareholders (H shares)

Percentage of shares held by overseas listed foreign shares shareholders to the total number of shares (%)

1. Total number of A shares shareholders and proxies attending the A Shareholders Class Meeting

2. Total number of shares with voting rights held by A shares shareholders attending the A Shareholders Class Meeting (shares)

3. Percentage of shares held by such A shares shareholders in the total number of shares entitling the holders to attend and vote at the A Shareholders Class Meeting (%)

1. Total number of H shares shareholders and proxies attending the H Shareholders Class Meeting

2. Total number of shares with voting rights held by H shares shareholders attending the H Shareholders Class Meeting (shares)

3. Percentage of shares held by such H shares shareholders in the total number of shares entitling the holders to attend and vote at the H Shareholders Class Meeting (%)

The Meeting(s) were convened by the Board of the Company, and Mr. Wan Tao, chairman of the Company, presided over the Meeting(s). The convening and holding of and voting at the Meeting(s) complied with the relevant regulations of Company Law of the People’s Republic of China and the Articles of Association of the Company.

Attendance of the directors, supervisors and the secretary to the Board of the Company

The Company has 11 directors, 8 of whom attended the Meeting(s). Mr. Guan Zemin, Vice Chairman and executive director, Mr. Peng Kun, non-executive director, and Mr. Gao Song, independent director were absent from the Meeting(s) due to business engagements;

The Company has 6 supervisors, 6 of whom attended the Meeting(s);

Mr. Qin Zhaohui, proposed non-independent director, Ms. Zhou Ying and Mr. Huang Jiangdong, proposed independent director(s), attended the Meeting(s);

Mr. Liu Gang, the secretary to the Board, attended the Meeting(s).

VOTING RESULTS OF RESOLUTIONS

The AGM

Resolution: THAT the 2022 Work Report of the Board of the Company be considered and approved

Type of shareholders

A shares

H shares

Total number of ordinary shares:

Resolution: THAT the 2022 Work Report of the Supervisory Committee of the Company be considered and approved

Type of shareholders

A shares

H shares

Total number of ordinary shares:

Resolution: THAT the 2022 Audited Financial Statements of the Company be considered and approved

Type of shareholders

A shares

H shares

Total number of ordinary shares:

Resolution: THAT the 2022 Profit Distribution Plan of the Company be considered and approved

Type of shareholders

A shares

H shares

Total number of ordinary shares:

Resolution: THAT the 2023 Financial Budget Report of the Company be considered and approved

Type of shareholders

A shares

H shares

Total number of ordinary shares:

Resolution: THAT the re-appointment of KPMG Huazhen LLP and KPMG as the domestic and international auditors, respectively, of the Company for the year 2023 and the authorization of the Board to fix their remuneration be considered and approved

Type of shareholders

A shares

H shares

Total number of ordinary shares:

Resolution: THAT the authorization to the Board to decide on the registration and issuance of ultra short-term financing bonds be considered and approved

Type of shareholders

A shares

H shares

Total number of ordinary shares:

Resolution: THAT the reduction of registered capital and amendments to the Articles of Association and authorization to the secretary to the Board to represent the Company in handling the relevant formalities for application, approval, disclosure, registration and filing requirements for the reduction of registered capital and amendments to the Articles of Association (including textual amendments in accordance with the requirements of the relevant regulatory authorities) be considered and approved

Type of shareholders

A shares

H shares

Total number of ordinary shares:

Resolution: THAT the proposal to the shareholders at the general meeting to authorize the Board to repurchase the domestic shares and/or overseas-listed foreign shares of the Company be considered and approved

Type of shareholders

A shares

H shares

Total number of ordinary shares:

Resolution: THAT the election of the following candidates as non-independent directors of the Eleventh Session of the Board of the Company be considered and approved

Resolution no.

10.01

10.02

10.03

10.04

10.05

10.06

Resolution: THAT the election of the following candidates as independent directors of the Eleventh Session of the Board of the Company be considered and approved

Resolution no.

11.01

11.02

11.03

11.04

11.05

Resolution: THAT the election of the following candidates as non-employee representative supervisors of the Eleventh Session of the Supervisory Committee of the Company be considered and approved

Resolution no.

12.01

12.02

12.03

The A Shareholders Class Meeting

Resolution: THAT the proposal to the shareholders at the general meeting to authorize the Board to repurchase the domestic shares and/or overseas listed foreign shares of the Company be considered and approved

Type of shareholders

A shares

The H Shareholders Class Meeting

Resolution: THAT the proposal to the shareholders at the general meeting to authorize the Board to repurchase the domestic shares and/or overseas listed foreign shares of the Company be considered and approved

Type of shareholders

H shares

Voting on material issues by A shares shareholders holding individually or jointly less than 5% of the Company’s total number of issued shares

Resolution

Resolution

Name of proposed

director

Name of proposed

director

Explanation in relation to the poll results of the resolutions

APPOINTMENT OF DIRECTORS AND SUPERVISORS

LAWYER’S CERTIFICATION

Legal advisor: Beijing Haiwen & Partners

Lawyer’s certification:

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 15 June 1995 and approved by the State Commission for Restructuring the Economic Systems and Securities Commission of the State Council on 17 July 1995

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 15 June 1999 and approved by the State Economic & Trade Commission on 28 June 1999

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 15 June 2000 and approved by the State Economic & Trade Commission on 20 June 2000

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 18 June 2003 and approved by the State-owned Assets Supervision and Administration Commission of the State Council on 13 August 2003

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 18 June 2004 and approved by the State-owned Assets Supervision and Administration Commission of the State Council on 30 July 2004

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 28 June 2005 and approved by the State-owned Assets Supervision and Administration Commission of the State Council on 5 August 2005

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 15 June 2006 and approved by the State-owned Assets Supervision and Administration Commission of the State Council on 8 August 2006

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 19 June 2007

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 12 June 2008

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 18 June 2009

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 23 June 2010 and approved by the State-owned Assets Supervision and Administration Commission of the State Council on 31 August 2010

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 27 June 2012

As adopted and amended by special resolution of shareholders at the Second Extraordinary General Meeting of the Company held on 11 December 2013 and approved by the State- owned Assets Supervision and Administration Commission of the State Council on 26 January 2014

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 15 June 2016

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 15 June 2017

As adopted and amended by special resolution of shareholders at the First Extraordinary General Meeting of the Company held on 2 August 2017

As adopted and amended by special resolution of shareholders at the First Extraordinary General Meeting of the Company held on 8 November 2018

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 16 June 2021

As adopted and amended by special resolution of shareholders at the annual general meeting of the Company held on 28 June 2023

CHAPTER 1

CHAPTER 2

CHAPTER 3

CHAPTER 4

CHAPTER 5

CHAPTER 6

CHAPTER 7

CHAPTER 8

CHAPTER 9

CHAPTER 10

CHAPTER 11

CHAPTER 12

CHAPTER 13

CHAPTER 14

CHAPTER 15

CHAPTER 16

CHAPTER 17

CHAPTER 18

CHAPTER 19

CHAPTER 20

CHAPTER 21

CHAPTER 22

CHAPTER 23

CHAPTER 24

CHAPTER 25

Shares issued by the Company investors inside the PRC and subscribed for in Renminbi are referred to as domestic shares. Shares issued by the Company and subscribed for in foreign currency are referred to as foreign shares. Foreign shares listed overseas are referred to as overseas listed foreign shares. The holders of domestic shares and the holders of overseas listed foreign shares are both ordinary shareholders, and have the same rights and obligations.

The aforementioned foreign currency refers to the official currency of other countries or regions, other than Renminbi, as recognised by the responsible foreign exchange authority of the PRC which can be used for subscribing for shares.

The plan as to the issue of domestic shares and overseas listed foreign shares as approved by the securities regulatory authority of the State Council shall be implemented and arranged by the directors of the Company.

The plan as to the issue of domestic shares and overseas listed foreign shares as mentioned above may be implemented within fifteen (15) months from the date of approval by the State Council securities regulatory authority.

(1)   public share offering;

(2)   non-public share offering;

(3)   distribution of new shares to existing shareholders;

(4)   transfer of the capital reserve fund to increase capital;

(5)   any other means as permitted by law or administrative regulations and approved by the State Council securities regulatory authority.

(1)   reduction of capital;

(2)   merger with other companies which hold shares of the Company;

(3)   granting shares for shares holding scheme or as incentive compensation to the staff of the Company;

(4)   acquiring the shares of shareholders who vote against any resolution adopted at the general meeting of shareholders on the merger or division of the Company;

(5)   using shares for corporate bonds issued by listed companies which are convertible into shares;

(6)   necessary for a listed company to protect the Company’s value and shareholders’ equity;

(7)   other circumstances as permitted by law or administrative regulations.

(1)   making a general offer to all the shareholders in proportion to their shareholding;

(2)   purchasing its shares in public on a stock exchange;

(3)   making an off-market contract;

(4)   other methods as stipulated by laws or administrative regulations and approved by the State Council securities regulatory authorities.

(1)   where the Company repurchases its shares at face value, payment shall be made out of distributable profits of the Company or out of proceeds of a fresh issue of shares made for that purpose;

(2)   where the Company repurchases its shares at a premium, payment up to the face value may be made out of distributable profits of the Company or out of proceeds of a fresh issue of shares made for that purpose. Payment of the portion in excess of the face value shall be effected as follows:

(i) if the shares being repurchased were issued at face value, payment shall be made out of distributable profits of the Company;

(ii)  if the shares being repurchased were issued at a premium, payment shall be made out of distributable profits of the Company or out of proceeds of a fresh issue of shares made for that purpose, provided that the amount paid out of proceeds of the fresh issue shall not exceed the aggregate of premiums received by the Company on the issue of the shares repurchased nor the current amount of the Company’s capital reserve fund (including the premiums on the fresh issue);

(3)   payment by the Company in consideration for the following shall be made out of distributable profits

(i) the acquisition of rights to repurchase shares of the Company;

(ii)  the variation of any contract to repurchase shares of the Company;

(iii)  the release of the Company’s obligations under any contract to repurchase shares of the Company;

(4)   to the extent that shares are repurchased out of distributable profits of the Company, the amount of the Company’s registered share capital reduced shall be transferred to the Company’s capital reserve fund.

The Company or any of its subsidiaries shall not at any time give any form of Financial Assistance to a person who is acquiring or is proposing to acquire shares in the Company. The person referred to in this paragraph includes any person who directly or indirectly incurs a liability for the purpose of acquiring the Company’s shares.

Neither the Company nor any of its subsidiaries shall give any form of Financial Assistance to the person for the purpose of lessening or discharging the liability.

This Article shall not apply to the circumstance under Article 37.

(1)   financial assistance given by way of gift;

(2)   financial assistance given by way of guarantee (including the provision of an undertaking or assets to secure performance of the obligations by the obligor) or indemnity, other than an indemnity in respect of the Company’s own neglect or default, or by way of release or waiver;

(3)   financial assistance given by way of a loan or any other agreement under which the obligations of the Company are to be fulfilled before the obligations of another party to the agreement, or by way of the novation of, or the assignment of rights arising under, a loan or such other agreement; or

(4)   any other financial assistance given by the Company when the Company is insolvent or has not net assets or when its net assets would thereby reduce to a material extent.

This following transactions are not considered prohibited under Article 35:

(1)   the provision of Financial Assistance where the Financial Assistance is given in good faith in the interests of the company and the Company’s principal purpose in giving that assistance is not to give it for the purpose of any such acquisition, or the giving of the assistance is but an incidental part of some larger purpose of the Company;

(2)   a distribution of the Company’s assets by way of dividend lawfully declared;

(3)   the allotment of bonus shares;

(4)   a reduction of share capital, a repurchase of shares of the Company, a reorganisation of the share capital or other restructuring of the Company effected in compliance with these Articles;

(5)   the lending of money by the Company in the ordinary course of its business, where the lending of money is part of the scope of business of the Company (only if the Company has net assets which are not thereby reduced or, to the extent that those assets are thereby reduced, if the assistance is provided out of distributable profits);

(6)   the provision of money by the Company for contributions to employees’ share schemes (only if the Company has net assets which are not thereby reduced or, to the extent that those assets are thereby reduced, if the assistance is provided out of distributable profits).

The share certificates of the Company shall be in registered form.

The share certificates of the Company shall contain the following particulars:

(1)   the Company name;

(2)   the date on which the Company was registered as established;

(3)   the type of shares, the value of the shares and the number of shares represented by the certificate;

(4)   the serial number of the share certificate;

(5)   other information as required by the Company Law, the Special Regulations and the stock exchange where the relevant shares are listed.

The stocks or other securities with equity rights nature held by directors, supervisors, senior managers, and shareholders who are natural persons mentioned in the preceding paragraph shall include shares or other securities with equity rights held by their spouses, parents, children or by others’ accounts.

If the board of directors of the Company fails to comply with the requirements in accordance with the preceding paragraph, a shareholder shall have the right to request the board of directors to effect the same within thirty days. If the board of directors fails to do so within the said time limit, a shareholder shall have the right to initiate proceedings in the People’s Court directly in his own name for the interests of the Company.

(1)   names, addresses, occupations or descriptions;

(2)   the number of each class of shares held;

(3)   the amount paid or agreed to be paid on the shares of shares held;

(4)   the serial number of the shares held;

(5)   the date at which each holder was entered in the register as a shareholder;

(6)   the date at which each holder ceases to be a shareholder.

(1)   the register of shareholders maintained at the legal address of the Company other than that specified in paragraphs (2) and (3) of this Article;

(2)   the Company’s register of holders of overseas listed foreign shares maintained at the place where the stock exchange having the shares listed is located;

(3)   the register of shareholders deposited at other places decided by the board of directors as necessary for the listing of the Company’s shares.

(1)   A fee in the sum of two Hong Kong dollars and fifty cents (2.5) or such higher sum then agreed by the Hong Kong Stock Exchange is paid to the Company in respect of the registration of any transfer in the title of the shares to which it relates or for the alteration in the title of such shares or other documents;

(2)   the instrument of transfer is only in respect of foreign shares listed in Hong Kong;

(3)   the stamp duty payable in respect of such instrument of transfer has been paid;

(4)   share certificates or other evidence as the board of directors may reasonably require to prove the right of the transferor to make the transfer shall be provided;

(5)   if the shares are proposed to be transferred with joint holders, the number of joint holders shall not be more than four (4); and

(6)   the relevant shares are free from any lien by any company.

(1)   the applicant shall submit an application to the Company in prescribed form accompanied by a notarial act or a statutory declaration made by the applicant stating the grounds upon which the application is made, the circumstances of the loss, and such other particulars as the case may require in order to verify the grounds upon which the application is made and that no other person is entitled to have his name entered in the register of shareholders in respect of the relevant shares;

(2)   prior to the Company deciding to issue new share certificates, the Company not having received any statutory declaration from any person other than the applicant requesting for his name to be entered into the shareholders’ register;

(3)   the Company shall, if it intends to issue a new share certificate, publish a notice of its intention once every thirty (30) days in a period of ninety (90) consecutive days in such newspaper as may be prescribed by the board for this purpose from time to time;

(4)   the Company shall, prior to publication of the notice for issue of new share certificates, deliver to the stock exchange on which the relevant shares are listed a copy of the notice to be published and received confirmation from such stock exchange that the notice has been exhibited on its premises. The period of exhibition of the notice at the relevant stock exchange shall be ninety (90) days.

In the case of an application made without the consent of the registered holder of the relevant shares, a copy of the notice to be published shall be delivered to such registered holder;

(5)   if, by the expiration of the 90-day period referred to in sub-paragraphs (3) and (4), the Company shall not have received notice of any other claim in respect of the relevant shares, the Company may issue a new certificate for the relevant shares to the applicant or as he may direct;

(6)   where the Company issues a new certificate under this Article, it shall forthwith cancel the original certificate and enter the cancellation and issue in the register of shareholders accordingly;

(7)   all expenses relating to an application for the cancellation of an original certificate and the issuance of a new certificate by the Company shall be borne by the applicant and the Company may refuse to take any action until reasonable security is provided.

CHAPTER 7 RIGHTS AND OBLIGATIONS OF SHAREHOLDERS

Holdersof ordinary shares shall have the following rights:

(1)   to receive dividends or other forms of distribution proportional to their shareholding;

(2)   to request, call on, preside and attend general meetings of shareholders in person or by proxy in accordance with the law and to exercise their corresponding voting rights;

(3)   to supervise the business operations and activities of the Company and to make suggestions or raise questions;

(4)   to transfer, gift or pledge shares in accordance with law, administrative regulations and these Articles;

(5)   upon providing with evidence of the class and number of shares of the Company held, and following confirmation of the shareholder’s identity by the Company, to receive information in accordance with laws, administrative regulations and these Articles, including:

1.  to obtain a copy of the Articles of Association after payment of charges at cost;

2.  to inspect and copy for reasonable charges:

(i) all parts of the shareholders’ register;

(ii)  particulars of the directors, supervisors and senior officers of the Company including:

(a)   present and past names and aliases;

(b)   nationality;

(c)   primary and all other business occupations;

(d)   identity document and its number;

(iii)  the share capital of the Company;

(iv) stubs of company bonds;

(v)   reports showing the number and par value of shares repurchased by the Company since the end of the last financial year, the aggregate amount paid by the Company for the shares and the maximum and minimum price paid in respect of each class of shares repurchased;

(vi) minutes of shareholders’ meetings, resolutions of the board of directors and resolutions of the supervisory committee and financial and accounting reports;

(6)   to receive the distribution of residual assets of the Company in proportion to their shareholding upon winding up or liquidation of the Company;

(7)   to request the Company to acquire their shares if the shareholders disapprove any resolution passed at the shareholders’ general meeting on the merger or demerger of the Company;

(8)   where resolutions of the shareholders’ general meeting or the board of directors violate the provisions of laws or administrative regulations, and infringe the lawful rights and interests of shareholders, to have the right to bring an action to request the ceasing of the abovementioned violation or infringement and the right to request the Company to take action seeking compensation;

(9)   to have other rights granted by law, administrative regulations and the Articles of Association.

Holders of the ordinary shares shall assume the following obligations:

(1)   to comply with the Company Articles;

(2)   to pay subscription monies in respect of the shares they have subscribed for and in accordance with the agreed manner of payment;

(3)   not to return shares other than in such circumstances stipulated by law and administrative regulation;

(4)   not to abuse their shareholders’ rights to harm the interest of the Company or other shareholders, and not to abuse the independent legal person status of the Company and the limited liability of shareholders to harm the interest of any creditor of the Company. If a shareholder of the Company abuses its shareholder’s rights and thereby causes loss on the Company or other shareholders, such shareholder shall be liable for damages in accordance with the law. If a shareholder of the Company abuses the Company’s independent legal person status and the limited liability of shareholders for the purposes of avoiding debts, resulting in materially impairing the interests of the creditors of the Company, such shareholder shall be jointly and severally liable for the debts owed by the Company.

(5)   to assume other obligations as imposed by law, administrative regulations and the Company Articles.

(1)   to relieve a director or a supervisor of his duty to act honestly in the best interests of the Company;

(2)   to approve the expropriation by a director or supervisor (for his own benefit or for the benefit of another person) in any guise of the Company’s assets, including without limitation any opportunities which are favourable to the Company;

(3)   to approve the expropriation by a director or supervisor (for his own benefit or for the benefit of another person) of the individual rights of other shareholders, including without limitation rights to distribution and voting rights save and except pursuant to restructuring submitted to shareholders for approval in accordance with these Articles.

(1)   he alone or acting in concert with others has the power to elect half or more than half of the members of the board;

(2)   he alone or acting in concert with others has the power to exercise or to control the exercise of thirty per cent. (30%) or more of the voting rights in the Company;

(3)   he alone or acting in concert with others holds thirty per cent. (30%) or more of the issued and outstanding shares of the Company;

(4)   he alone or acting in concert with others in any other manner de facto controls the Company.

(1)   functions and powers of the shareholders’ general meeting;

(2)   delegation of powers to the board of directors by the shareholders’ general meeting;

(3)   the procedures to convene a shareholders’ general meeting, including the proposal and collection of motions, notice and change of the notice of the meeting, registration of the meeting, convening the meeting, voting and resolutions, adjournment of the meeting, post-meeting matters and public announcement etc.;

(4)   any other issues which the shareholders’ general meeting considers necessary.

Article60

The  shareholders’ meetings exercise the following powers:

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

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

(3)   to elect and replace the supervisors who are not employee representatives and decide on matters relating to the remuneration of supervisors;

(4)   to examine and approve reports of the board of directors;

(5)   to examine and approve reports of the supervisory committee;

(6)   to examine and approve the Company’s proposed annual financial budgets and final accounts;

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

(8)   to decide on increases in or reductions of the Company’s registered capital;

(9)   to decide on issues such as merger, division, dissolution, liquidation or changing of the form of the Company and other matters;

(10)   to decide on the issue of bonds by the Company;

(11)   to decide on the appointment, dismissal or termination of appointment of auditors;

(12)   to amend the Articles of Association;

(13)   to review any requisition by the board of directors, supervisory committee or shareholders holding shares with 3% or more of the total voting rights of the Company;

(14)   to examine and approve matters relating to guarantees stipulated in Article 61 of the Articles of Association;

(15)   to consider the Company’s significant acquisition or disposal of material assets conducted within the period of one year with a value exceeding 30% of the latest audited total assets of the Company;

(16)   to examine and approve changes in the use of proceeds;

(17)   to examine and approve share incentive schemes;

(18)   to resolve for the Company to re purchase its own shares as per item (1) or (2) of Article 30 of these Articles of Association;

(19)   to authorize and entrust the board of directors to handle any matters authorized and entrusted thereto;

(20)   to resolve other matters of the Company as required to be resolved in shareholders’ general meetings in accordance with laws, administrative regulations, rules and regulations of authorized departments, these Articles and the Rules of Procedures for Shareholders’ General Meetings.

(1)   any subsequent guarantee to be provided by the Company in favour of a third party when the aggregate amount of guarantees of the Company and its holding subsidiaries given in favour of third parties has already exceeded 50% of the Company’s most recently audited net asset value;

(2)   any subsequent guarantee to be provided by the Company in favour of a third party, when the aggregate amount of guarantees of the Company given in favour of third parties has reached or has already exceeded 30% of the Company’s most recently audited total asset value;

(3)   any guarantee to be provided by the Company in favour of an entity which is subject to a gearing ratio of over 70%;

(4)   any single guarantee to be provided by the Company exceeding 10% of the Company’s most recently audited net asset value;

(5)   any guarantee to be provided in favour of any shareholder, de facto controllers and their connected parties.

General meetings of shareholders shall be divided into annual general meetings and extraordinary general meetings, and shall be convened by board of directors. An annual general meeting must be convened once each year, and held within six months after the end of each financial year.

The board of directors shall convene an extraordinary general meeting within two months of any of the following circumstances:

(1)   the number of the directors is less than the number required by the Company Law or less than two-thirds required by these Articles;

(2)   the unrecovered losses of the Company’s capital reach one-third of the Company’s paid-up share capital;

(3)   upon written requisition by the shareholders individually or jointly holding ten per cent. (10%) or more of the issued and outstanding voting shares of the Company;

(4)   when deemed necessary by the board of directors or proposed by the supervisors;

(5)   in other circumstance as required by the laws, administrative regulations, departmental rules or these Articles.

In paragraph (3) above, shareholdings will be calculated as of the day upon which the written requisition is made.

Shareholders who individually or jointly hold three per cent. (3%) or more of the shares of the Company may propose and submit in writing an extraordinary motion to the convener ten (10) days prior to the convening of the shareholders’ general meeting. The convener shall issue a supplementary notice of the shareholders’ general meeting within two (2) days upon receipt of such motion and shall make an announcement on the content of the extraordinary motion.

Except for those provided for in the preceding paragraph, the convener shall neither amend the motion specified in the notice of the shareholders’ general meeting nor add any new motion after the issuance of the notice of the shareholders’ general meeting.

Motions for shareholders’ meetings shall comply with the following conditions:

(1)   the contents do not conflict with laws, regulations and the Articles, and is within the business scope of the Company and the powers of the shareholders’ meeting;

(2)   there is a clear subject and specific resolution;

(3)   it is submitted or delivered in writing to the board of directors.

Article 66

Article 67

Article 68

(1)   be in writing;

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

(3)   state the general nature of business to be transacted at the meeting;

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

(5)   if matters relating to election of directors and supervisors are proposed to be discussed at a general meeting of shareholders, detailed information concerning the candidates shall be fully disclosed in the notice of the general meeting, which shall at least include the following:

(i) personal information relating to the candidates’ including educational background, work experience and all other positions undertaken on a part-time basis;

(ii)  whether the candidates are connected with the Company, its controlling shareholders or de facto controllers;

(iii)  disclosing the candidates’ shareholdings in the Company;

(iv) whether the candidates have been subject to any punishment by the China Securities Regulatory Commission or other relevant department or to any sanction by any stock exchange.

(6)   contain a disclosure of the nature and extent, if any, of material interests of any director, supervisor and the senior officer of the Company in the business to be transacted and the effect of the business to be transacted on them in their capacity as shareholders so far as it is different from the effect on the interest of shareholders of the same class;

(7)   contain the text of any special resolution proposed to be resolved at the meeting;

(8)   contain conspicuously a statement that a shareholder entitled to attend and vote is entitled to appoint one or more proxies to attend and vote for and on behalf of him and that a proxy need not also be a shareholder;

(9)   state the record date for shareholders entitled to attend the meeting;

(10)  state the time and place for delivery of proxy forms for use at the meeting;

(11)  state the name and telephone number of the contact person for the meeting.

Notice of the meeting shall be served by delivery or sent by prepaid airmail to the shareholders (whether or not entitled to vote thereat) at the addresses as registered on the shareholder register (whether that address is in the PRC or overseas). In the case of domestic shareholders, the notice may also be given by announcement.

The notice specified in the preceding paragraph should be published on one or more newspapers as appointed by the Securities Regulatory Authorities of the State Council. Once published, all domestic shareholders shall be deemed to have received notice of the shareholders general meeting.

All shareholders who are listed on the Company’s register as of the record date or their proxies shall be entitled to attend the shareholders’ general meeting and exercise their voting rights in accordance with the relevant laws and regulations and these Articles.

Any shareholder entitled to attend and vote at a meeting of the Company may attend the meeting in person or appoint one or more than one person (whether a shareholder or not) as his proxy/proxies to attend and vote for and on behalf of him, and the proxy so appointed:

(1)   shall have the same right as the shareholder to speak at the meeting;

(2)   may demand or join in demanding a poll;

(3)   may vote by hand or on a poll, but a proxy of a shareholder who has appointed more than one proxy may only vote on a poll.

(1)   the name of the proxy;

(2)   the number of shares represented by the proxy;

(3)   whether or not the proxy shall exercise voting rights;

(4)   indicate in relation to each motion on the agenda of the shareholders’ meeting directions to vote for or against;

(5)   date, and period of validity;

(6)   the signature (or seal) of the appointer or by the person duly authorized in writing to appoint such proxy; where the appointer is a legal person shareholder, the seal of the legal person entity or the signature of the director or the person duly authorized shall be affixed.

(1)   the chairman of the meeting;

(2)   at least two shareholders or proxies having the right to vote;

(3)   one or more shareholders (including proxies) holding shares alone or jointly representing ten per cent. (10%) or more of the voting rights present at such meeting.

Unless a poll is demanded, a declaration by the chairman that a proposal has been adopted by a show of hands and recorded in the minutes of the meeting shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.

The demand for a poll may be withdrawn by the person who demands it.

(1)   the working reports by the board of directors and the supervisory committee;

(2)   the profit distribution proposal and proposal to recover losses formulated by the board of directors;

(3)   the appointment or removal of the members of the board of directors and members of the supervisory committee who are not employee representatives and their remuneration and method of payment;

(4)   the Company’s annual budget and final report, balance sheet, profit and loss accounts and other financial statements;

(5)   the Company’s annual report;

(6)   other matters except those required to be adopted by special resolution in accordance with the provisions of law or administrative regulations or the Company Articles.

(1)   increase or reduction of the Company’s share capital and the issue of any type of shares, warrants and other similar securities;

(2)   issue of corporate bonds;

(3)   division, merger, dissolution, liquidation or the change of the form of the Company;

(4)   amendments to the Articles of Association;

(5)   the Company’s significant acquisition or disposal of material assets or provision of guarantees conducted within the period of one year with a value exceeding 30% of the latest audited total assets of the Company;

(6)   share incentive schemes;

(7)   other matters which are required under the laws, administrative regulations or these Articles, and which are resolved by shareholders by ordinary resolution that are considered by the shareholders to be material to the Company and are required to be passed by special resolution.

(1)   the date and venue for convening the meeting, meeting agenda and the name of the convenor;

(2)   the name of the chairman of the meeting as well as those of the directors, supervisors, and senior officers who attend the meeting as attendees and non-voting attendees;

(3)   the number of shareholders and proxies attending the meeting, the total number of voting shares represented by the shareholders who are entitled to vote; the proportion of the number of voting shares represented by the shareholders who are entitled to vote out of the total number of shares of the Company;

(4)   a description of the considerations taken for each motion, the main points put forward by each speaker relating thereto and the voting results thereof;

(5)   details of queries and recommendations of the shareholders and the corresponding response or explanation in relation thereto;

(6)   the names of the legal advisers and persons responsible for counting the votes and for supervising the counting process; and

(7)   other contents which should be recorded in the minutes as provided for in the Articles of Association.

(1)   whether the procedures for convening and holding a general meeting comply with the requirements of the laws, administrative regulations and these Articles of Association;

(2)   whether attendees or the convenor of a general meeting meet the requisite legal requirements;

(3)   whether the voting procedures for and the voting results of the general meeting are lawful and valid; and

(4)   issuance of legal opinions on other relevant issues at the request of the Company.

(1)   to increase or decrease the number of shares of such class, or increase or decrease the number of shares of a class having voting or distribution rights or other privileges equal or superior to the shares of such class;

(2)   to effect a conversion of all or a part of the shares of such class into another class or to effect a conversion or create a right of conversion of all or part of the shares of another class into the shares of such class;

(3)   to remove or reduce rights to dividends, rights to accrued dividends or rights to cumulative dividends of such class;

(4)   to reduce or remove the preferential rights to dividends of such class or the preferential rights to asset distributions of such class upon liquidation of the Company;

(5)   to add, remove to reduce the rights to conversion, option, voting, transfer, preferential placement or acquisition of the Company’s securities of such class;

(6)   to remove or reduce the rights to receive payment in particular currencies of such class;

(7)   to create a new class of shares having voting or distribution rights or other privileges equal or superior to the shares of such class;

(8)   to restrict the transfer of ownership of the shares of such class or add to such restrictions;

(9)   to allot and issue rights to subscribe for, or to convert into, shares in the Company of such class or another class;

(10)  to increase the rights or privileges of another class;

(11)  to restructure the Company where the proposed restructuring will result in different classes of shareholders bearing a disproportionate burden of such proposed restructuring;

(12)  to vary or abrogate this Article.

(1)   in the case of repurchase of shares by making a general offer to the shareholders in proportion to their shareholding or repurchasing their shares in public on a stock exchange under Article 31, an “Interested Shareholder” means the Controlling Shareholder as defined in Article 58;

(2)   in the case of a repurchase of shares by an off-market contract under Article 31, an “Interested Shareholder” means a holder of the shares to which the proposed contract relates;

(3)   in the case of a restructuring of the Company, an “Interested Shareholder” means a shareholder within a class who bears less than a proportionate burden imposed on that class under the proposed restructuring or who has an interest in the proposed restructuring different from the interest of shareholders of that class.

(1)   where the Company issues, upon approval by a special resolution of the shareholders in a general meeting, either separately or concurrently once every twelve months, not more than twenty per cent. (20%) of each of the existing issued domestic shares and overseas listed foreign shares of the Company; or

(2)   where the Company’s plan to issue domestic shares and overseas listed foreign shares on establishment is implemented within fifteen (15) months from the date of approval by the State Council Securities Commission.

(1)   Major responsibilities of the audit committee are:

(i) to propose the appointment or replacement of an external audit firm and to oversee the work of the external audit firm;

(ii)  to oversee the Company’s internal audit policy and the implementation thereof;

(iii)   to ensure that the internal audit function is adequately resourced and has the appropriate standing within the Company, and to review and monitor its effectiveness;

(iv) to be in charge of the communications between the Company’s internal and external auditors;

(v)   to review the Company’s financial reports and the disclosure thereof;

(vi) to review the Company’s risk management and internal control systems, and submit to the board an annual self-assessment report on the Company’s risk management and internal control;

(vii)  to discuss the risk management and internal control systems with management to ensure that management has performed its duty to have effective systems. This discussion should include the adequacy of resources, staff qualifications and experience, training programmes and budget of the accounting, financial reporting and internal audit functions;

(viii)  to report and to submit in order of importance to the board of any suspected fraud and non-compliance, risk management and internal control failures, or suspected violations of laws and regulations that comes to its attention , and to review the results of internal investigations on suspected fraud and non- compliance, risk management and internal control failures and on activities in violation of laws or regulations on financial reports;

(ix) to review the major connected transactions;

(x)   to review the arrangements made by the Company for the concerns raised by employees in confidence about improprieties in financial reporting, risk management, internal control or other matters, and to ensure that the Company will conduct a fair and independent investigation of these matters and take appropriate follow-up action;

(xi) to formulate compliance reporting policies and systems to ensure that the Company’s employees and other parties in contact with the Company (such as customers and suppliers) can raise their concerns on any possible improper matter regarding the Company to the audit committee;

(xii)  to consider major investigation findings on risk management and internal control matters as delegated by the Board or on its own initiative and management’s response to these findings; and

(xiii)  to perform other duties and powers as assigned by the board.

(2)   Major responsibilities of the remuneration and appraisal committee are:

(i)  to formulate a remuneration policy and an implementation scheme according to the main terms of reference, duties and significance of the management positions of the directors and officers, as well as on the basis of the pay levels for the relevant positions at other relevant companies;

(ii)  to carry out the remuneration policy and the implementation scheme, which primarily comprise performance appraisal standards and procedures, a main evaluation mechanism, award and penalty regimes and standards, etc.;

(iii)   to review and approve the remuneration proposals for the management with reference to the Company’s business goals and objectives set by the board;

(iv) to review the performance of duties by the directors and officers of the Company and to conduct annual performance appraisals thereof;

(v)   to review and approve compensation payable to executive directors and officers of the Company for any loss or termination of office, or compensation arrangements in connection with the dismissal or removal of directors of the Company for misconduct to ensure that such compensation or compensation arrangements are consistent with contractual terms or are otherwise fair and not excessive;

(vi) to ensure that no director or any of his directly interested parties thereof is involved in deciding his own remuneration; and

(vii)  to perform other duties and powers as assigned by the board.

(3)   Major responsibilities of the nomination committee are:

(i)  to examine the criteria, procedures and methods for the selection of directors and officers and to submit the same to the board for consideration;

(ii)  to review the structure, size and composition of the board (including the skills, knowledge and experience) at least annually and to make recommendations on any proposed changes to the board to complement the Company’s corporate strategies;

(iii)   to identify candidates with appropriate qualifications to act as directors and to select and nominate such candidates;

(iv) to conduct an investigation into the candidates for directorships and the position of general manager and to recommend to the board;

(v)   to make recommendations to the board on the appointment or re-appointment of directors and succession planning for directors (especially the chairman and the general manager);

(vi) to assess the independence of independent non-executive directors;

(vii)  to conduct fact-finding investigations into the candidates for other management positions as proposed by the general manager and to offer opinions on such investigations to the board;

(viii)  to search for candidates available for employment in the domestic and overseas human resources markets and within the Company and to make recommendations to the board;

(ix) to perform other duties as assigned by the board; and

(x)   to perform other duties as assigned by the securities regulatory authorities in places where the Company is listed.

(4)   Major responsibilities of the strategic committee are:

(i)  to study the development strategies of the Company and advise the Board on the same;

(ii)  to study any single project with an investment representing more than 5% of the latest audited net assets of the Company and advise the Board on the same;

(iii)   to study material investment proposals and material investment projects that are subject to the decision of the Board, and other material matters that will affect the development of the Company, at the request of the Chairman, more than half of the Independent Directors or more than one-third of the Directors and advise the Board on the same;

(iv) to perform other duties as assigned by the Board;

(v)   to fulfil other responsibilities as imposed by the securities regulatory authorities in domestic and foreign places where the Company is listed;

(vi) to inspect and study the implementation of the above matters and propose any suggestions for improvement and adjustment to the Board on a timely basis.

(1)   Before nominating a candidate for election as an independent director, the nominator should first obtain the consent of the nominee, and fully understand the nominee’s qualifications, education, profession, detailed working experience and other positions held, and said nominator is responsible for providing such written materials to the Company. The candidate shall provide a written undertaking to the Company, agreeing to accept the nomination, confirming the truthfulness and completeness of the publicly disclosed materials relating to the candidate and guaranteeing that following election they will practically carry out the responsibilities of a director.

(2)   The nominator of the independent director must make a statement regarding the qualifications and independence of the nominee, and the nominee must make a public declaration that there does not exist any relationship between himself and the Company which may influence his independent objective judgement.

(3)   If the nomination of a candidate for independent director occurs before the Company holds a meeting of the board of directors, then the written materials regarding the nominee set out in paragraphs (1) and (2) of this Article shall be made public together with the resolutions of the board of directors or the notice of the shareholders’ general meeting.

(4)   If shareholders alone or together holding three per cent. (3%) or more of the voting rights of the Company or the supervisory committee proposes a motion at the annual general meeting of shareholders for the election of a candidate for an independent director, then written notice of the intention of such person(s) nominating the candidate and the willingness of the nominee to accept the nomination, together with the written materials and undertakings relating to the nominee set out in paragraphs (1) and (2) of this Article, shall be delivered to the Company during a period of not less than ten (10) days commencing no earlier than the day after the despatch of the notice of such annual general meeting of shareholders and ending no later than ten (10) days before the date of such shareholders’ general meeting.

(5)   When a notice convening the shareholders’ general meeting for the election of independent directors is announced, the Company should submit relevant materials regarding all nominees simultaneously to the stock exchanges authorized by the securities regulatory and administrative organs under the State Council on which the Company’s shares are listed. If the board of directors have any objections to the nominees, it should also submit its written opinions at the same time. Where the relevant stock exchanges have any objections to a nominee, that person shall not be a candidate for election as independent director. When convening a general meeting of shareholders to elect independent directors, the board of directors of the Company should explain whether the relevant stock exchanges have any objections to any of the candidates for election as independent director.

(1)   Before nominating a candidate for election as a non-independent director, the nominator should first obtain the consent of the nominee, and fully understand the nominee’s qualifications, education, profession, detailed working experience and other positions held, and said nominator is responsible for providing such written materials to the Company. The candidate shall provide a written undertaking to the Company, agreeing to accept the nomination, confirming the truthfulness and completeness of the publicly disclosed materials relating to the candidate and guaranteeing that following election they will practically carry out the responsibilities of a director.

(2)   If the nomination of a candidate for non-independent director occurs before the Company holds a meeting of the board of directors, then the written materials regarding the nominee set out in paragraph (1) of this Article shall be made public together with the resolutions of the board of directors or the notice of the shareholders’ general meeting.

(3)   If shareholders alone or together holding three per cent. (3%) or more of the voting rights of the Company or the supervisory committee propose a candidate for election as a non-independent director to the annual general meeting of shareholders, then written notice of the intention of such person(s) nominating the candidate and the willingness of the nominee to accept the nomination, together with the written materials and undertakings relating to the nominee set out in paragraph (1) of this Article, shall be delivered to the Company during a period of not less than ten (10) days commencing no earlier than the day after the despatch of the notice of such annual general meeting of shareholders and ending no later than ten (10) days before the date of such shareholders’ general meeting.

(1)   be qualified to act as a company director pursuant to PRC and overseas laws and regulations;

(2)   possess the independence required pursuant to these Articles;

(3)   possess a basic knowledge of the operations of a listed company, and be familiar with the relevant laws, administrative regulations, rules and codes;

(4)   have at least five (5) years working experience in law, economics or other area required for the fulfilment of responsibilities as an independent director.

(1)   when two or more directors are required to be elected, the cumulative voting method must be adopted;

(2)   when the cumulative voting method is adopted, each share held by a shareholder has equal voting rights in relation to the number of candidates for election as directors;

(3)   the notice of meeting must inform shareholders that the cumulative voting system will be adopted for the resolutions for the election of directors. The persons convening the meeting must prepare ballots suitable for the implementation of the cumulative voting method, and a written explanation of the cumulative voting method, instructions for filling in ballots and the method of counting votes must be provided;

(4)   when the shareholders’ general meeting is voting on the resolutions for the election of directors, shareholders may divide their voting rights, and vote a proportional number of the shares held for each of the candidates for election as director. Alternatively, shareholders may concentrate their voting rights, and vote all of the voting rights represented by the shares held in favour on one particular candidate for election as director, or vote part of the voting rights represented by the shares held in favour of a certain number of the candidates for election as director;

(5)   after a shareholder has concentrated the voting rights represented by all of the shares held by him on one or a certain number of candidates for director, he may not exercise his voting rights again in respect of other candidates for director;

(6)   if the total number of votes exercised by a shareholder concentrating his voting rights on one or a certain number of candidates for director exceeds the total number of voting rights represented by the shares held by that shareholder, that shareholder’s vote is invalid, and will be deemed to be an abstention. If the total number of votes exercised by a shareholder concentrating his voting rights on one or a certain number of candidates for director is less than the total number of voting rights represented by the shares held by that shareholder, that shareholder’s vote is valid, and those voting rights not exercised will be deemed to be abstentions;

(7)   where the total number of votes in favour won by a candidate for director exceeds one- half of the total of number of shares with voting rights represented by shareholders attending the general meeting (based on the non-cumulative number of shares) and the total number of votes in favour exceeds the total number of opposing votes, that candidate will be elected as a director. If the number of directors so elected exceeds the number of positions available for director, then those receiving the most number of votes in favour shall be elected as directors (provided that where those receiving relatively less votes in favour have an equal number of votes in favour, which would cause the number of persons elected to exceed the positions available, then such candidates will be deemed to have not been elected). If an insufficient number of directors are elected at the shareholders’ general meeting to fill the positions available, then a further vote will be conducted for the remaining positions, until such point as all positions for director have been elected;

(8)   where the general meeting holds a new round of election for directors in accordance with the requirements set out in paragraph (7) above, the cumulative votes of the shareholders shall be re-calculated based on the number of directors elected in each round of election.

(9)   Independent directors and other members of the board of directors are elected separately.

(1)   to be responsible for convening shareholders’ general meetings and reporting on its work to the shareholders’ general meeting;

(2)   to implement the resolutions of the shareholders’ general meetings;

(3)   to decide on the Company’s business plans and investment proposals;

(4)   to formulate the Company’s proposed annual financial budgets and final accounts;

(5)   to formulate the Company’s profit distribution plans and plans for recovery of losses;

(6)   to formulate the Company’s financial strategy, the Company’s plan to increase or decrease its registered capital, the Company’s acquisition of its own shares and the issuance of any type of securities (including but not limited to corporate bonds) and plans for listing or repurchasing Company stocks as per item (1) or (2) of Article 30 of these Articles of Association;

(7)   to draft plans for major acquisitions or disposals, and for the merger, division, dissolution or changing of the form of the Company;

(8)   to formulate the proposal for amendments to the Articles of Association;