SDIC Power Holdings Co., Ltd.

Articles of Association

 

Chapter I General Provisions

1.1 To protect the lawful rights and interests of the Company, its shareholders, employees, and creditors and regulate the organization and actions of the Company, these Articles of Association ("these Articles") are formulated according to the Company Law of the People's Republic of China (hereinafter referred to as the Company Law), the Securities Law of the People's Republic of China (hereinafter referred to as the Securities Law), the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (hereinafter referred to as the Trial Administrative Measures), the Guidelines No. 1 of Shanghai Stock Exchange for Self-regulation of Listed Companies - Standardized Operation (hereinafter referred to as Standardized Operation), the Constitution of the Communist Party of China (hereinafter referred to as the Constitution of the CPC), and other related regulations.

1.2 The Company is a company limited by shares established in accordance with the Company Law and other regulations in China (hereinafter referred to as "the Company"). The Company was approved by the [1989] No. 2 Document of the Hubei Provincial Commission for Structural Reforms and established in the form of a public offering. It was registered in the Hubei Provincial Administration for Industry and Commerce and obtained a business license. In 2002, due to changes in the Company's main business, the Company was registered with the Gansu Provincial Administration for Industry and Commerce instead and obtained a business license. In 2014, due to the needs of company development, the Company was registered with the State Administration for Industry and Commerce instead. Unified social credit code: 911100002717519818.

1.3 In March 1989, the Company issued 606,205 shares of RMB ordinary shares (hereinafter referred to as A shares) to the public for the first time with the approval of the Hubei Branch of the People's Bank of China. With the approval of the China Securities Regulatory Commission (hereinafter referred to as CSRC), the Company was listed on the Shanghai Stock Exchange on January 18, 1996.

On October 25, 2019, with the approval of the CSRC, the Company issued 17,985,000 global depositary receipts (hereinafter referred to as GDRs), representing 179,850,000 RMB ordinary shares based on the Company's determined conversion ratio. These GDRs were listed on the London Stock Exchange on October 22, 2020.

1.4 Registered name of the Company: 国投电力控股股份有限公司

English name of the Company: SDIC Power Holdings Co., Ltd.

1.5 Domicile: Room 1108, F/11, Building No. 147, Xizhimen South Street, Xicheng District, Beijing, Postal Code: 100034, Tel.: 010-88006378, Fax: 010-88006368.

1.6 The registered capital of the Company is RMB 8,004,494,262.

1.7 The Company is a joint stock company with perpetual existence.

1.8 The director who represents the Company in handling the Company's affairs is the legal representative of the Company. The chairman of the Company represents the Company in conducting corporate affairs. If the chairman resigns, it shall be deemed that he/she also resigns as the legal representative simultaneously. If the legal representative resigns, the Company shall appoint a new legal representative within thirty (30) days from the date of the legal representative's resignation.

1.9 The legal consequences of civil activities performed by the legal representative in the name of the Company shall be borne by the Company.

1.10 Restrictions on the functions and powers of the legal representative by these Articles or the shareholders' meeting shall not be invoked against a bona fide counterparty.

1.11 If the legal representative causes damage to others as a result of performing his/her duties, the Company shall be held civilly liable. After the Company has assumed civil liability, it may, in accordance with the provisions of the law or these Articles, recover the compensation from the legal representative who is at fault.

1.12 Each shareholder shall be liable for the Company to the extent of the shares it has subscribed for, and the Company shall be liable for its debts with all its assets.

1.13 These Articles shall come into effect upon being deliberated and adopted by the Company's shareholders' meeting and on the date when the Global Depositary Receipts (GDRs) issued by the Company are listed on the London Stock Exchange. From the date when these Articles come into effect, the original Articles of Association of the Company will automatically become invalid.

Since the date of coming into effect, these Articles shall have become a legally binding document to standardize the organization and behaviors of the Company, as well as the rights and obligations between the Company and its shareholders and between shareholders themselves.

These Articles shall have legal binding force on the Company, shareholders, directors, and senior executives. The aforesaid persons may all put forward claims regarding rights related to the Company's affairs in accordance with these Articles.

According to these Articles, shareholders may sue other shareholders, shareholders may sue the Company's directors and senior executives, shareholders may sue the Company, and the Company may sue shareholders, directors and senior executives.

Sue referred to in the preceding clauses includes bringing a lawsuit to a court or filing an application for arbitration to an arbitration agency.

1.14 The term "senior executives" as mentioned in these Articles refers to the Company's general manager, deputy general manager, secretary of the Board of Directors, chief accountant (Head of Finance), and general counsel.

1.15 The Company may invest in other limited liability companies and joint stock limited companies, and shall bear liability for the invested companies to the extent of its capital contributions. If the law stipulates that the Company may not be a contributor jointly and severally liable for the debts of the invested enterprise, it shall comply with the provisions thereof.

Chapter II Purpose and Scope of Business

2.1 The Company's business purpose is: To operate in accordance with international practices and the norms of a joint-stock company, attract domestic and foreign capital, and dedicate itself to the development and operation of large and medium-sized power projects; to adapt to the needs of technological development, actively explore new energy, high-tech, and environmental protection projects; to learn from advanced management experience both domestically and internationally, continuously improve the Company's management level, and enable the Company's business and scale to develop rapidly, healthily, and stably; to build the Company into an international, comprehensive energy listed company with outstanding core competitiveness, advanced management, and the ability to create substantial returns for shareholders, focusing on power generation and venturing into power distribution and sales.

2.2 Upon legal registration, the Company's scope of business includes: investment, construction, operation and management of energy projects focusing on electricity production; development and operation of new energy projects, as well as high-tech and environmental protection industry; development and operation of power products, as well as information and consultation services.

Chapter III Shares

Section I Share Issuance

3.1.1 The Company shall always have ordinary shares at any time. According to its needs and upon approval by the company examination and approval department authorized by the State Council, the Company may set up other categories of shares.

The shares of the Company shall be represented by stock certificates.

3.1.2 The issuance of shares by the Company shall follow the principles of openness, fairness and justness, and the shares of the same category shall have the same rights. For shares of the same category issued in the same offering, the offering conditions and price per share shall be the same. The subscribers shall pay the same price per share for the shares they subscribe for.

3.1.3 All par value shares issued by the Company are stocks with a par value, which is denominated in RMB.

3.1.4 With the approval of the competent securities authority under the State Council, the Company may issue shares or GDRs to domestic and foreign investors.

The term "Foreign Investors" in the preceding paragraph refers to foreign investors and those from Hong Kong, Macau, and Taiwan regions who subscribe to the Company's shares or GDRs. The term "Domestic Investors" refers to investors within the territory of the People's Republic of China (excluding the aforementioned regions) who subscribe to the Company's shares, or subscribe to GDRs in compliance with national outbound investment regulations.

3.1.5 The shares issued by the Company domestically and the newly issued domestic stocks corresponding to the GDRs issued overseas are centrally deposited at the Shanghai Branch of China Securities Depository and Clearing Corporation Limited.

3.1.6 The Company was exclusively initiated and established by SINOPEC Jingmen Company in February 1989.

3.1.7 Upon its establishment, the Company issued 606,205 shares to the public for the first time with the approval of the Hubei Branch of the People's Bank of China. After the completion of the aforesaid issuance, the total number of shares of the company is 606,205 shares. The amount per share of the par value shares is RMB 1, and all are RMB ordinary shares.

Approved by CSRC in 2019, the Company issued 17,985,000 GDRs to foreign investors for the first time in 2020, representing 179,850,000 RMB ordinary shares after conversion based on the ratio determined by the Company. After the aforesaid issue, the Company has a total of 6,965,873,347 shares, which are all RMB ordinary shares.

The current share capital structure of the Company is 8,004,494,262 RMB ordinary shares.

Section II Increase, Reduction and Repurchase of Shares

3.2.1 In light of the needs of its operation and development, and in accordance with the provisions of laws, regulations and these Articles, the Company may increase its capital by adopting the following methods upon separate resolutions made by the shareholders' meeting:

(I)          Issuance of shares to nonspecific objects;

(II)         Issuance of shares to specific objects;

(III)        Placement of shares to existing shareholders;

(IV)        Bonus issue of new shares to existing shareholders;

(V)         Converting the capital reserve into share capital;

(VI)        If the Company issues convertible corporate bonds, during the conversion period, it may apply for the conversion of shares in accordance with the then-effective conversion price within the trading hours of the conversion period. During the existence period of the convertible bonds, the Company shall annually register with the industrial and commercial department to change the amount of share capital increased due to the conversion of convertible bonds;

(VII)      Other methods as stipulated by laws, administrative regulations and specified CSRC.

When the Company increases its capital by issuing new shares, upon approval in accordance with the provisions of these Articles, the relevant procedures shall be handled in accordance with the provisions of relevant national laws and administrative regulations.

3.2.2 The Company may reduce its registered capital. The decrease of the registered capital of the Company shall be handled in accordance with the procedures stipulated in the Company Law, other relevant regulations and these Articles of Association.

3.2.3 The Company shall not purchase its own shares except under any of the following circumstances:

(I)          Decreasing the registered capital of the Company;

(II)         Merging with other companies holding shares of the Company;

(III)        Using shares for employee stock ownership plan or stock ownership incentive;

(IV)        Any shareholder requires the Company to purchase his/her shares due to objection against the resolution on merger or division of the Company made at the shareholders' meeting;

(V)         The shares are used to convert corporate bonds that can be converted into shares issued by the Company;

(VI)        Such purchase is necessary for the Company to maintain corporate value and shareholders' equity;

(VII)      Other circumstances allowed by laws and administrative regulations.

3.2.4 The Company can choose one of the following modes to purchase the shares of the Company:

(I)          The Company repurchases its shares at a stock exchange through public centralized trading;

(II)         Offer method;

(III)        The Company repurchases its shares by agreement outside the stock exchange;

(IV)        Other methods recognized by laws, administrative regulations, and CSRC.

Where the Company intends to purchase the shares therein for any reason as mentioned in Items (III), (V) and (VI) of Article 3.2.3 of these Articles, the same shall be conducted in a public centralized trading.

3.2.5 When the Company repurchases its shares by agreement outside the stock exchange, it shall be approved by the shareholders' meeting in accordance with the provisions of these Articles. With the prior approval of the shareholders' meeting in the same manner, the Company may terminate or change the contract concluded in the aforesaid manner, or waive any rights herein.

Contracts as mentioned in the preceding paragraph for repurchasing shares, shall include but not limited to, an agreement agreeing to undertake the share repurchase obligation and acquire the right to repurchase the share.

The Company shall not transfer the contract for repurchasing its shares or any rights stipulated in the contract.

3.2.6 The Company's acquisition of its own shares for reasons as mentioned in Items (I) and (II) of Article 3.2.3 of these Articles shall be decided by resolution made at the shareholders' meeting. The Company's acquisition of its own shares for reasons as mentioned in Items (III), (V) and (VI) of Article 3.2.3 of these Articles shall be subject to the resolution of the Board of Directors attended by more than two-thirds of the directors in accordance with these Articles or the authorization of the shareholders' meeting.

Where the Company repurchases its own shares and the situation falls under Item (I) of Article 3.2.3 of these Articles, such shares shall be cancelled within ten (10) days as of the date of purchase. Where the situation falls under Item(II) or Item (IV) of Article 3.2.3 of these Articles, such shares shall be transferred or cancelled within six months. Where the situation falls under Item (III), Item (V) or Item (VI) of Article 3.2.3 of these Articles, the total number of shares of the Company held by the Company itself shall not exceed ten percent of the total number of the Company's issued shares, and such shares shall be transferred or cancelled within three years.

The shares purchased and written off by the Company shall be applied for registered capital change registration with the original company registration authority according to law. The total par value of the cancelled shares shall be deducted from the registered capital of the Company.

Section III Transfer of Shares

3.3.1 The shares of the Company shall be transferable in accordance with the law without any lien.

3.3.2 The Company does not accept its own shares as the subject of a pledge.

3.3.3 The shares issued by the Company before the public offering of shares must not be transferred within a year from the date of listing and trading of the shares thereof on the stock exchange. The directors and senior executives of the Company shall report to the Company the shares held thereby and the changes thereof. During the term of office determined at the time of taking office, the shares of the Company transferred thereby each year must not exceed 25% of the total shares of the Company of the same category held by aforesaid persons. The shares of the Company held by the aforesaid persons must not be transferred within one year as of the date when the shares of the Company are listed and traded in the stock exchange. Any of the aforesaid persons shall not transfer the shares in the Company he/she holds within half a year after he/she is removed from his/her post. If there are other regulations stipulated by laws, administrative regulations, or the CSRC regarding the transfer of shares held by shareholders in the Company, those regulations shall prevail.

3.3.4 Where the directors, senior executives of the Company or shareholders who hold more than 5% of the Company's shares sell the Company's stocks or other securities with equity nature within six months after purchase, or repurchase them within six months after sale, the proceeds therefrom shall belong to the Company, and the Board of Directors of the Company shall recover such proceeds. However, exceptions shall be applied to the circumstance where the securities company holds more than 5% of the shares due to the exclusive sale of the remaining stocks purchased after the sale, and other circumstances stipulated by CSRC.

Shares or other securities of equity nature held by a director, senior executive, or a natural person shareholder referred to in the preceding paragraph shall include shares or other securities of equity nature held by his/her spouse, parents, or children and by making use of others' accounts.

Where the Board of Directors of the Company fails to act in accordance with the provisions of the first paragraph of this article, shareholders shall have the right to request the Board of Directors to act within thirty (30) days. If the Board of Directors of the Company fails to perform its duties within the aforesaid period, the shareholders shall have the right to file a lawsuit with a People's Court directly in their name for the interests of the Company.

Where the Board of Directors of the Company fails to act in accordance with the provisions of the first paragraph of this article, the responsible directors shall bear joint and several liabilities according to law.

Section IV Financial Support for Purchase of the Company's Shares

3.4.1 The Company or its subsidiaries (including the Company's affiliated enterprises) shall not at any time and in any way provide any financial support for others to purchase or intend to purchase the shares of the Company or its parent company. The aforementioned persons who have purchased the Company's shares include those who undertake direct or indirect obligations for the purchase of the Company's shares.

The Company or its subsidiaries shall not at any time provide the financial support for the aforesaid obligor at any time and in any way to reduce or relieve his obligations.

The provision of this article shall not apply to the circumstances described in Article 3.4.3 of these Articles.

3.4.2 The financial support referred to in these Articles shall include (but not limited to) the following:

(I)          Donation;

(II)         Guarantee (including the liability of the guarantor or the provision of property to ensure the obligation of the obligor), compensation (but not including compensation arising from the fault of the Company), cancellation or waiver of rights;

(III)       Credit arrangement or conclusion of a contract in which the Company performs its liabilities before other parties, as well as change of credit and contract parties, and transfer of rights in the contract, etc.;

(IV)       Financial support provided in any form under such circumstances that the Company is unable to repay debts, has no net assets or will cause a substantial reduction in its net assets.

The liability described in this chapter shall include that made by the obligor through the conclusion of a contract or arrangement (regardless of whether the contract or arrangement is enforceable, or is borne by the individual or jointly with any other person), or changes the financial conditions in any form.

3.4.3 The following acts shall not be deemed as prohibited by Article 3.4.1 of this chapter:

(I)          The financial support provided by the Company is honestly for the benefit of the Company, and its main purpose is not to purchase the Company's shares, or it is part of a general plan of the Company;

(II)         The Company distributes its property as dividends in accordance with the law;

(III)       The dividends are distributed in the form of shares;

(IV)       Reduction of registered capital, purchase of shares, adjustment of equity structure, etc. are conducted in accordance with these Articles;

(V)        The Company provides loans for its normal business activities within the business scope (but the loans shall not result in decreasing its net assets, or even so, the financial support shall be paid out of the distributable profits of the Company);

(VI)       The Company provides funds for the employee stock ownership plan;

(VII)      For the benefit of the Company, upon a resolution of the shareholders' meeting or a resolution made by the Board of Directors in accordance with these Articles or the authorization of the shareholders' meeting, the Company may provide financial support for others to acquire the shares of the Company or its parent company, and the cumulative total amount of such financial support shall not exceed ten percent of the total amount of the issued share capital. The resolution made by the Board of Directors shall be approved by more than two-thirds of all directors.

If the Company or its subsidiaries (including the affiliated enterprises of the Company) conduct the acts mentioned in this article, they shall comply with the provisions of laws, administrative regulations, the CSRC and stock exchanges.

Section V Register of Stocks and Shareholders

3.5.1 The Company's shares shall be registered.

If the Company's stocks are in paper form, the following main items shall be stated thereon:

(I)          Name of the Company;

(II)         The date of the Company's establishment or the time of stock issuance;

(III)       Types of stocks, face amount and number of shares represented;

(IV)       Number of shares;

(V)        Other items required by Company Law and other laws and regulations, as well as the stock exchange where the Company's shares are listed.

3.5.2 Stocks shall be signed by the legal representative. Where the stock exchange where the Company's shares are listed requires other senior executives of the Company to sign the shares, they shall also be signed by other relevant senior executives. Shares become effective when they are affixed with the Company's seal or affixed with the seal in printed form. The signature of the legal representative or other relevant senior executives of the Company to the stocks may be printed.

Under paperless issuance and trading, the Company's shares applicable to the securities regulatory body and the stock exchange where the Company's shares are listed shall be otherwise specified.

3.5.3 The Company shall prepare the register of shareholders and keep it in the Company, recording the following items:

(I)          Name, address (domicile), occupation or nature of each shareholder;

(II)         Type and number of shares subscribed by each shareholder;

(III)       Amount paid or payable for the shares held by each shareholder;

(IV)       Date when each shareholder obtains the shares;

(V)        Date on which each shareholder ceases to be a shareholder;

(VI)       Share number, if the shares are issued in paper form.

The Company shall establish a register of shareholders based on the certificates provided by the securities registration and settlement organization. The register of shareholders is sufficient evidence to prove that shareholders hold shares of the Company; however, this shall not apply if there is contrary evidence.

3.5.4 The Company may keep the register of GDR equity holders overseas and entrust overseas agencies to manage it as per the understanding and agreement reached between the Securities Authority under the State Council and the overseas securities regulatory authority.

3.5.5 The Company shall keep a complete register of shareholders.

The register of shareholders shall include the following:

(I)          Register of shareholders, kept at the domicile of the Company, other than those stated in Item (II) and Item (III) of the Article;

(II)         Register of shareholders of overseas-listed foreign shares of the Company kept at the locality of the overseas-listed stock exchange (if any);

(III)       Register of shareholders kept in other places by the Board of Directors for the listing demand of the Company's shares.

3.5.6 The parts of the register of shareholders shall not overlap. Where the shares registered in a specific part of the register of shareholders are transferred, such shares shall not be registered in other parts of the register during the period of their registration.

The parts of the register of shareholders shall be altered or corrected as per the laws of the place where the register of shareholders is kept.

3.5.7 Within thirty (30) days before the shareholders' meeting, or within five (5) days prior to the benchmark date decided by the Company for the distribution of dividends, no modification registration may be made to the register of shareholders due to the transfer of the shares. Where otherwise provided by laws, administrative regulations or the securities regulatory body where the Company's shares are listed has other provisions, such provisions shall prevail.

3.5.8 Where anyone who disagrees with the register of shareholders requests their name to be registered on or deleted from the register, they may apply to a court with jurisdiction the right for the correction of the register.

3.5.9 Any shareholder registered on the register of shareholders or any person who requests his name to be registered on the register of shareholders may apply to the Company for reissuing new shares in case the shares are lost.

If a shareholder of A shares loses stocks and applies for reissuance, it shall be handled in accordance with the relevant provisions of the Company Law. Where the shareholders holding overseas-listed foreign shares (if any) lose their stocks, they shall apply for reissuing stock as per the laws of the place where the original register of shareholders holding overseas-listed foreign shares is kept, as well as the rules of the stock exchange or other relevant regulations.

3.5.10 After the Company reissues new stocks in accordance with the provisions of these Articles, the names of the well-meaning purchasers of the aforementioned new stocks or shareholders (if they are well-meaning purchasers) who are subsequently registered as the owner of the shares shall not be deleted from the register of shareholders.

3.5.11 Unless the party can prove that the Company has committed fraud, the Company shall have no liability to compensate anyone subject to damage due to the cancellation of the original stocks or the reissue of new stocks.

Chapter IV Shareholders and Shareholders' Meeting

Section I General Provisions on Shareholders

4.1.1 The shareholders of the Company are persons who hold its shares according to the law, with the names registered on the register of shareholders.

The shareholders shall enjoy rights and assume obligations as per the category and number of shares held by them. Shareholders holding the same category of shares shall enjoy the same rights and assume the same obligations.

4.1.2 When the Company holds a general meeting of shareholders, distributes dividends, liquidates and takes actions which require confirming the shareholders' identity, the Board of Directors or the convener of shareholders' meeting shall determine the record date, and the shareholders registered upon the closing of the market on the record date shall be entitled to relevant rights and interests.

4.1.3 The shareholders of the Company shall enjoy the following rights:

(I)          Receive dividends and benefit distribution in other forms to the extent of the shares held thereby;

(II)         Request, hold, convene, preside over, participate in, or send a proxy to attend the shareholders' meeting according to the laws, and exercise corresponding voting rights;

(III)       Supervise the Company's business operations, propose suggestions, or raise questions;

(IV)       Transfer, donate, or pledge the shares held by them in accordance with laws, administrative regulations, and the provisions of these Articles;

(V)        Consult and copy the Articles of Association, the register of shareholders, the minutes of shareholders' meetings, the resolutions of the board meeting and the financial and accounting reports. Shareholders who meet the requirements of Paragraph 2 of Article 4.1.5 of these Articles may consult the Company's accounting books and accounting vouchers.

(VI)       Participate in the distribution of the remaining property of the Company based on their shareholding ratios in the event of termination or liquidation of the Company;

(VII)      Require the Company to purchase the shares held thereby if raising any objection to any resolution of the shareholders' meeting on merger or division of the Company;

(VIII)     Other rights stipulated by laws, administrative regulations, departmental rules, or these Articles.

4.1.4 Where shareholders request to consult and copy relevant materials of the Company, they shall comply with the provisions of laws and administrative regulations such as the Company Law and the Securities Law.

4.1.5 When exercising the rights under Item (V) of Article 4.1.3 to request access to and copy relevant materials of the Company, a shareholder shall provide the Company with written documents certifying their identity, the type of shares they hold in the Company, and the quantity of such shares. After verifying the shareholder's identity, the Company shall provide the requested materials in accordance with the shareholder's request.

Shareholders who have individually or jointly held not less than three percent of the Company's shares for a continuous period of not less than one hundred and eighty (180) days and request to consult the Company's accounting books and accounting vouchers shall, in addition to submitting the materials as required in the preceding paragraph, submit a written request to the Company stating their purpose. If the Company has reasonable grounds to believe that a shareholder's request to consult the accounting books or accounting vouchers is for an improper purpose and may prejudice the legitimate interests of the Company, the Company may refuse to provide access and shall, within fifteen (15) days from the date the shareholder submits the written request, reply in writing to the shareholder stating the reasons therefor. If the Company refuses to provide access, the shareholder may file a lawsuit with the people's court.

Shareholders may entrust intermediary institutions such as accounting firms and law firms to consult the materials specified in the preceding paragraph.

When shareholders and the intermediary institutions such as accounting firms and law firms entrusted by them consult and copy relevant materials, they shall comply with the provisions of laws and administrative regulations regarding the protection of state secrets, trade secrets, personal privacy and personal information.

The provisions of this article shall apply to shareholders' requests to consult or copy relevant materials of the Company's wholly-owned subsidiaries.

4.1.6 If a resolution made by the shareholders' meeting or the Board of Directors of the Company contravenes any laws or administrative regulations, the shareholders may request the people's court to declare such resolution to be invalid. If the procedures for convening, or the methods of voting at, the shareholders' meeting or meetings of the Board of Directors violate the laws, administrative regulations or these Articles, or the content of a resolution violate these Articles, shareholders shall be entitled to initiate proceeding to the People's Court to rescind such resolutions within sixty (60) days from the date on which such resolution is adopted, except for the conditions where the convening procedures or voting methods of the shareholders' meeting or the board meeting have only minor flaws and do not pose a substantial impact on the resolution.

If the Board of Directors, shareholders and other relevant parties have disputes over the validity of the resolutions of the shareholders' meeting, they shall promptly file a lawsuit with the people's court. Before the people's court makes a judgment or ruling such as revoking the resolution, the relevant parties shall implement the resolution of the shareholders' meeting. The Company, directors and senior executives shall earnestly perform their duties to ensure the normal operation of the Company.

Where the people's court makes a judgment or ruling on relevant matters, the Company shall fulfill its information disclosure obligations in accordance with the provisions of laws, administrative regulations, CSRC and the stock exchange, fully explain the impacts, and actively cooperate with the implementation after the judgment or ruling comes into effect. In case of matters involving the correction of previous items, they will be dealt with in a timely manner and the corresponding information disclosure obligations will be fulfilled.

4.1.7 The resolutions of the shareholders' meeting or the Board of Directors of the Company shall not come into effect under any of the following circumstances:

(I)            Resolutions are made without convening a shareholders' meeting or a board meeting;

(II)           The shareholders' meeting or the board meeting fails to vote on the matters to be resolved;

(III)         The number of attendees or the number of voting rights held fails to reach the number or the number of voting rights stipulated in the Company Law or these Articles of the Company;

(IV)         The number of people agreeing to the matters of the resolution or the number of voting rights held fails to reach the number or the number of voting rights stipulated in the Company Law or these Articles of the Company.

4.1.8 Where the Company incurs losses as a result of violation of the laws, administrative regulations or provisions of these Articles by directors and senior executives other than members of the Audit Committee during performing their duties with the Company, the shareholders individually or jointly holding 1% or more of the Company's shares for more than one hundred and eighty (180) consecutive days shall be entitled to request in writing the Audit Committee to bring a lawsuit in the people's court. Where the Company incurs losses as a result of the Audit Committee members' violation of the laws, administrative regulations or provisions hereof during performing its duties with the Company, the above-mentioned shareholders shall be entitled to request in writing to the Board of Directors to bring a lawsuit in the people's court.

In the event that the Audit Committee or the Board of Directors refuses to initiate proceedings after receiving the written request of shareholders stated in the foregoing paragraph, or fails to initiate such proceedings within thirty (30) days from the date on which such request is received, or in case of emergency where failure to initiate such proceedings immediately will result in irreparable damage to the Company's interests, shareholders described in the preceding paragraph shall have the right to initiate proceedings in the people's court directly in their own names in the interest of the Company.

If others infringe the legitimate rights of the Company and cause any damage to the Company, any shareholder described in the first paragraph of this article can bring an accusation to the people's court in accordance with the provisions of the preceding two paragraphs.

Where the directors, supervisors or senior executives of a wholly-owned subsidiary of the Company, in performing their duties, violate the provisions of laws, administrative regulations or these Articles and cause losses to the Company, or where losses are caused due to the infringement upon the legitimate rights and interests of the wholly-owned subsidiary by others, shareholders who have individually or jointly held not less than 1% of the Company's shares for a continuous period of not less than one hundred and eighty (180) days may, in accordance with the provisions of the first three paragraphs of Article 189 of the Company Law, request in writing the Supervisory Committee or the Board of Directors of the wholly-owned subsidiary to file a lawsuit with the people's court or directly file a lawsuit with the people's court in their own names.

If the wholly-owned subsidiary of the Company does not have a Supervisory Committee or supervisors but has an Audit Committee, the provisions of Paragraph 1 and Paragraph 2 of this article shall apply.

4.1.9 If directors or senior executives contravene laws, administrative regulations, or these Articles, thereby damaging shareholders' interests, shareholders can start litigation in the people's court.

4.1.10 The shareholders of the Company shall undertake the following obligations:

(I)          Abide by laws, administrative regulations, and these Articles;

(II)         Make payment for the shares subscribed according to the specified contribution method;

(III)       Except in the circumstances stipulated by laws and regulations, its share capital shall not be withdrawn;

(IV)       Not to misuse the shareholder's rights to prejudice the interests of the Company or other shareholders, or abuse the independent status as a corporate juridical person or the limited liabilities of a shareholder to prejudice the interests of creditors of the Company;

If abusing the shareholder's rights and causing losses to the Company or other shareholders, the shareholder of the Company shall be liable for compensation according to law;

Where abusing the independent status as a corporate juridical person and the limited liabilities of a shareholder to evade debts and thus seriously prejudicing the interests of the creditors of the Company, the shareholder of the Company shall assume joint liabilities for the debts of the Company;

(V)        Fulfill other obligations as stipulated by laws, administrative regulations and these Articles.

Except the conditions agreed upon by the subscriber of the shares during subscribing, the shareholders may not be liable for any additional share capital.

4.1.11 If a shareholder holding 5% or more voting shares of the Company provides security with those shares, he shall report to the Company in writing on the day of such occurrence.

4.1.12 In addition to the obligations required by laws, administrative regulations, or the Listing Rules of the stock exchange where the Company's shares or GDR are listed, the controlling shareholders shall not make any decisions that will impair the interests of all or some of the shareholders concerning the following aspects when they exercise their powers as shareholders by exercising their voting rights:

(I)          Exempt the responsibility of the directors to act in good faith for the maximum benefit of the Company;

(II)         Approve the directors to deprive the property of the Company (including but not limited to the opportunities favorable to the Company) in any form for their own benefits or for the benefits of others;

(III)       Approve the directors to deprive the individual rights and interests of other shareholders (including but not limited to any distribution rights, voting rights, but excluding the restructuring of the Company which is submitted to the shareholders' meeting for approval in accordance with these Articles) for their own benefits or for the benefit of others.

Section II Controlling Shareholder and Actual Controller

4.2.1 The controlling shareholder and actual controller of the Company shall exercise their rights and fulfill their obligations in accordance with the provisions of laws, administrative regulations, CSRC and the stock exchange, and safeguard the interests of the listed company.

4.2.2 The controlling shareholder and actual controller of the Company shall abide by the following provisions:

(I)          Exercise shareholders' rights in accordance with the law, and refrain from abusing control rights or using affiliated relationships to damage the legitimate rights and interests of the Company or other shareholders;

(II)  Strictly fulfill the public statements and various commitments made, and shall not change or waive them without authorization;

(III) Strictly perform the information disclosure obligations in accordance with the relevant regulations, actively cooperate with the Company in information disclosure, and promptly inform the Company of major events that have occurred or are planned to occur;

(IV)       Shall not occupy the Company's funds in any way;

(V)  Shall not force, instigate or demand the Company and relevant personnel to provide guarantees in violation of laws and regulations;

(VI)       Shall not seek benefits by taking advantage of the Company's unpublished material information, nor disclose the Company's unpublished material information in any way, nor engage in illegal and irregular acts such as insider trading, short-swing trading and market manipulation;

(VII)      Shall not damage the legitimate rights and interests of the Company and other shareholders in any way, such as through unfair related-party transactions, profit distribution, asset restructuring or outbound investment;

(VIII)     Ensure the integrity of the Company's assets, the independence of its personnel, finance, institutions and business, and shall not affect the Company's independence in any way;

(IX)       Other provisions of laws, administrative regulations, the provisions of CSRC, the business rules of the securities exchange and these Articles.

Where the controlling shareholder or the actual controller of the Company does not serve as a director of the Company but actually executes the Company's affairs, the provisions on the duty of loyalty and the duty of diligence of directors in these Articles shall apply.

If the controlling shareholder or the actual controller of the Company instructs directors or senior executives to engage in acts that damage the interests of the Company or shareholders, they shall bear joint and several liability with such directors and senior executives.

4.2.3 Where the controlling shareholder or the actual controller pledges the Company's stocks held or actually controlled by them, they shall maintain the stability of the Company's control rights and production and operation.

4.2.4 Where the controlling shareholder or the actual controller transfers the shares of the Company held by them, they shall comply with the restrictive provisions on share transfer in the provisions of laws, administrative regulations, CSRC and the securities exchange as well as their commitments made regarding the restriction on share transfer.

Section III General Provisions on Shareholders' Meeting

4.3.1 The shareholders' meeting shall consist of all shareholders. The shareholders' meeting is the Company's organ of authority, and shall exercise its powers in accordance with law:

(I)          Elect and change directors and decide the remuneration of directors;

(II)         Deliberate on and approve the reports of the Board of Directors;

(III)       Deliberate on and approve the profit distribution plan, profit distribution policy adjustment plan, loss recovery plans for the Company;

(IV)       Make resolutions on the increase or reduction in the registered capital of the Company;

(V)        Make resolutions on the issuance of the corporate bonds;

(VI)       Make resolutions on the Company's acquisition of its own shares or on merger, division, dissolution, liquidation or alteration of the Company's form;

(VII)      Deliberate on and approve the amendment plan for these Articles;

(VIII)     Make resolutions on the appointment, dismissal or non-reappointment of the accounting firm that undertakes the audit business of the Company;

(IX)       Deliberate on and approve the matter that the Company purchases or sells any major asset which exceeds 30% of the Company's total assets as audited in latest term;

(X)        Deliberate on and approve the proposed related-party transaction (except that the Company provides guarantees, receives cash assets and debts which purely reduce the Company's obligations) amounting to more than RMB 30 million between the Company and related party and such significant related-party transaction accounts for more than five percent of absolute value of the Company's net assets attributable to parent company as audited in latest term;

The amount of related-party transactions between the Company and the same related party, or transaction related to the type of transaction object between the Company and different related party, will be calculated according to the principles of accumulative calculation for twelve (12) consecutive months;

(XI)       Deliberate on and approve the guarantee matters and other transaction matters stipulated in Article 4.3.2;

(XII)      Deliberate on and approve matters concerning changing the purpose of raised funds;

(XIII)     Deliberate on the stock ownership incentive plan and employee stock ownership plan;

(XIV)    Deliberate on the repurchase of shares by the Company;

(XV)      Deliberate proposals from shareholders who, individually or in the aggregate, hold more than one percent of the shares representing the voting rights of the Company;

(XVI)    Deliberate on other matters, which shall be decided by the shareholders' meeting according to the laws, administrative regulations, department regulations, or these Articles.

The shareholders' meeting may authorize the Board of Directors to make resolutions on the issuance of corporate bonds.

4.3.2 Any transaction behaviors (except that the Company provides financial support, guarantees and receives cash assets and debts which purely reduce the Company's obligations) in respect of the Company or its controlled subsidiaries shall be submitted to the shareholders' meeting for deliberation and approval if:

(I)          The total amount of the assets involved in such transaction (calculated based on the higher of the book value and estimated value if both exist) accounts for more than fifty percent of the Company's total assets as audited in the latest term;

(II)         The net assets involved in the transaction object (such as equity) (calculated based on the higher of the book value and estimated value if both exist) account for more than fifty percent of the Company's net assets as audited in the latest term, with an absolute amount of more than RMB 50 million;

(III)       The transaction has a turnover (including assumed debts and expenses) of more than fifty percent of the net assets of the Company as audited in the latest fiscal year, with an absolute amount of more than RMB 50 million;

(IV)       Profits from the transaction account for more than fifty percent of the net profit of the Company as audited in the latest fiscal year, with an absolute amount of above RMB 5 million;

(V)        Relevant operating revenue of the transaction object (such as equity) in the latest fiscal year accounts for more than fifty percent of the total operating revenue of the Company as audited in the latest fiscal year, with an absolute amount of above RMB 50 million;

(VI)       Relevant net profit of the transaction object (such as equity) in the latest fiscal year accounts for more than fifty percent of the total net profit of the Company as audited in the latest fiscal year, with an absolute amount of above RMB 5 million.

If these Articles or laws and regulations provide otherwise for the consideration and voting of transaction behaviors, the relevant provisions shall be followed.

If the data involved in the above indicators is negative, the absolute value shall be taken for the calculation. The term "transaction" as defined in these Articles includes the following: purchase or sale of assets; overseas investment (including entrusted wealth management, investment in subsidiaries, etc.); provision of financial support (including interest-bearing or interest-free loans, entrusted loans, etc.); provision of guarantees (including guarantees for controlled subsidiaries, etc.); lease-in or lease-out of assets; entrustment or trusteeship of assets and business; donation or receipt of donated assets; debt and debt restructuring; signing of license agreements; transfer or acquisition of research and development projects; waiver of rights (including waiver of preemptive right to purchase, preemptive right to subscribe for capital contributions, etc.); other transactions recognized by the Shanghai Stock Exchange (none of the above transactions include the purchase of raw materials, fuels and power; provision or receipt of labor services, etc.; as well as the sale of products and commodities, etc.; project contracting and other transactions related to daily operations, but such asset purchase or sale activities involved in asset swaps are still included).

The following guarantee matters of the Company shall be submitted to the shareholders' meeting for deliberation after being deliberated on and approved by the Board of Directors:

(I)          Any guarantee provided after the total guarantee to third parties provided by the Company and its controlled subsidiaries has exceeded fifty percent of the Company's net assets as audited in the latest term;

(II)         Any guarantee provided after the total external guarantee provided by the Company and its controlled subsidiaries has exceeded thirty percent of the Company's total assets as audited in the latest term;

(III)       Any guarantee provided to others after the amount of the guarantee, calculated on a cumulative basis within twelve consecutive months according to the principle of cumulative calculation of the guaranteed amount, exceeds 30% of the Company's total assets as audited in the latest term;

(IV)       Any guarantee provided to a party who has an asset-liability ratio in excess of seventy percent;

(V)        Any single guarantee with the amount in excess of ten percent of the Company's net assets as audited in the latest term;

(VI)       Any guarantee provided to shareholders, actual controllers and their related parties.

The guarantee mentioned in the preceding Item (III) subject to deliberation of the shareholders' meeting shall be approved by at least two-thirds of the votes held by the shareholders present at the meeting.

Where there is any violation of the authority of the Board of Directors and the shareholders' meeting to approve external guarantees in these Articles and any violation of the approval authority and deliberation procedures to provide external guarantees, the relevant personnel shall be held responsible in accordance with the relevant laws and regulations and the provisions of these Articles.

If the Company's financial support matters fall under any of the following circumstances, they shall also be submitted to the shareholders' meeting for deliberation after being deliberated on and approved by the Board of Directors:

(I)            The amount of single financial support exceeds 10% of the net assets of the Company as audited in the latest term;

(II)           The latest financial statement data of the funded object shows that the asset-liability ratio exceeds 70%;

(III)         The accumulated amount of financial support in the last 12 months exceeds 10% of the net assets of the Company as audited in the latest term;

(IV)         Other circumstances as stipulated by CSRC, the stock exchange or these Articles.

If the recipient of the financial support is a controlled subsidiary within the scope of the Company's consolidated financial statements and the other shareholders of such controlled subsidiary do not include the controlling shareholder, the actual controller and their related parties of the listed company, it may be exempted from the application of the provisions of the preceding paragraph.

4.3.3 The shareholders' meetings are divided into annual shareholders' meeting and extraordinary shareholders' meeting. The annual shareholders' meeting shall be held annually within six (6) months after the end of the preceding fiscal year.

4.3.4 In case of any one of the following circumstances, the Company shall hold an extraordinary shareholders' meeting within two (2) months from the date of occurrence of the relevant fact:

(I)          The number of directors is less than six;

(II)         The uncovered losses of the Company occupy 1/3 of the total share capital;

(III)       Shareholder(s) who individually or jointly hold more than ten percent of the Company's shares (including preferred shares with the restoration of voting rights, etc.) make(s) a request to hold such a meeting;

(IV)       The Board of Directors deems it necessary to convene such a meeting;

(V)        The Audit Committee proposes to convene such a meeting;

(VI)       Other circumstances stipulated by laws, administrative regulations, departmental rules or these Articles of Association.

4.3.5 The place where the shareholders' meeting of the Company is held is the location of the Company's office address.

A meeting place shall be arranged for the shareholders' meeting, which shall be convened in the form of an on-site meeting, and may also be convened simultaneously by means of electronic communication. The Company will also provide online voting to facilitate the participation of the shareholders. Shareholders who participate in the shareholders' meeting through the above means shall be deemed to be present.

4.3.6 The Company shall employ a lawyer to provide legal advice on the following issues and make relevant announcements when convening the shareholders' meeting:

(I)          Whether the convening of the meeting and its procedures are in compliance with provisions of laws, administrative regulations and these Articles;

(II)         Whether the qualifications of the attendees and the person(s) convening the meeting are legal and valid;

(III)       Whether the voting procedures and voting results of the meeting are legal and valid;

(IV)       Legal opinions on other related matters at the request of the Company.

Section IV Convening of Shareholders' Meeting

4.4.1 The Board of Directors shall convene the shareholders' meeting on time within the prescribed time limit. With the consent of more than half of all independent directors, independent directors have the right to propose to the Board of Directors to convene an extraordinary shareholders' meeting. Where independent directors exercise such right of proposal, the Company shall disclose promptly. Where the above-mentioned right cannot be normally exercised, the Company shall disclose the specific circumstances and reasons. The Board of Directors shall, subject to provisions of laws, administrative regulations, and these Articles, give a written response to agree or disagree to hold an extraordinary shareholders' meeting within ten (10) days after its receipt of the proposal for the extraordinary shareholders' meeting by independent directors.

Where the Board of Directors agrees to convene an extraordinary shareholders' meeting, the notice of convening the extraordinary shareholders' meeting will be issued within five (5) days after the resolution of the Board of Directors is made. Where the Board of Directors does not agree to convene an extraordinary shareholders' meeting, it shall explain the reasons and make an announcement.

4.4.2 When the Audit Committee proposes to the Board of Directors to convene an extraordinary shareholders' meeting, it shall put forward the proposal to the Board of Directors in written form. The Board of Directors shall, subject to provisions of laws, administrative regulations and these Articles, give a written response on agreeing or disagreeing to hold the extraordinary shareholders' meeting within ten (10) days after its receipt of the proposal.

If the Board of Directors agrees to convene an extraordinary shareholders' meeting, it shall issue a notice of convening the shareholders' meeting within five (5) days after making the Board of Directors' resolution. For any changes to the original proposal in the notice, the consent of the Audit Committee shall be obtained.

If the Board of Directors does not agree to convene an extraordinary shareholders' meeting or fails to give feedback within ten (10) days after receiving the proposal, it shall be deemed that the Board of Directors is unable to perform or fails to perform its duty of convening the shareholders' meeting. In such a case, the Audit Committee convenes and presides over the meeting on its own.

4.4.3 Shareholders who individually or jointly hold more than 10% of the Company's shares (including preferred shares with the restoration of voting rights, etc.) and request the Board of Directors to convene an extraordinary shareholders' meeting shall put forward the request to the Board of Directors in written form and clarify the topics of the meeting. The Board of Directors shall, in accordance with the provisions of laws, administrative regulations, and these Articles, give written feedback on whether or not to agree to convene an extraordinary shareholders' meeting within ten (10) days after receiving the written request.

If the Board of Directors agrees to convene an extraordinary shareholders' meeting, it shall issue a notice of convening the shareholders' meeting within five (5) days after making the Board of Directors' resolution. For any changes to the original request in the notice, the consent of the relevant shareholders shall be obtained.

If the Board of Directors does not agree to convene an extraordinary shareholders' meeting or fails to give feedback within ten (10) days after receiving the request, shareholders who individually or jointly hold more than 10% of the Company's shares (including preferred shares with the restoration of voting rights, etc.) shall have the right to propose to the Audit Committee to convene an extraordinary shareholders' meeting and shall put forward the request to the Audit Committee in written form.

If the Audit Committee agrees to convene an extraordinary shareholders' meeting, it shall issue a notice of convening the shareholders' meeting within five (5) days after receiving the request. For any changes to the original request in the notice, the consent of the relevant shareholders shall be obtained.

If the Audit Committee fails to issue the notice of the shareholders' meeting within the prescribed time limit, it shall be deemed that the Audit Committee does not convene and preside over the shareholders' meeting. Shareholders who individually or jointly hold more than 10% of the Company's shares (including preferred shares with the restoration of voting rights, etc.) for more than ninety (90) consecutive days may convene and preside over the meeting on their own.

4.4.4 If the Audit Committee or shareholders decide to convene the shareholders' meeting on their own, they must notify the Board of Directors in writing and file with the Shanghai Stock Exchange at the same time.

Before the announcement of the resolution of the shareholders' meeting, the shareholding proportion of the convening shareholders (including preferred shares with the restoration of voting rights, etc.) shall not be lower than 10%. The convening shareholders shall disclose the announcement no later than when sending out the notice of the shareholders' meeting and undertake that during the period from the date of proposing to convene the shareholders' meeting to the date of convening the meeting, their shareholding proportion will not be lower than 10% of the Company's total share capital.

The Audit Committee or the convening shareholders shall submit relevant supporting materials to the Shanghai Stock Exchange when sending out the notice of the shareholders' meeting and releasing the announcement of the resolution of the shareholders' meeting.

4.4.5 For the shareholders' meeting convened by the Audit Committee or shareholders on their own, the Board of Directors and the secretary of the Board of Directors will provide cooperation. The Board of Directors shall provide the register of shareholders on the equity registration date.

4.4.6 All costs and expenses as necessary for the shareholders' meeting convened by the Audit Committee or shareholders shall be borne by the Company. If the Board of Directors does not provide the register of shareholders, the convener may use relevant notice on convening the shareholders' meeting to apply for that register to the securities registration and settlement organization. The register of shareholders obtained by the convener shall not be used for purposes other than convening the shareholders' meeting.

Section V Proposal and Notice of Shareholders' Meeting

4.5.1 The content of the proposal shall fall within the powers of the shareholders' meeting, include clear topics and concrete items for resolution, and comply with the relevant provisions of laws, administrative regulations and these Articles.

4.5.2 When the Company convenes a shareholders' meeting, the Board of Directors, the Audit Committee and shareholders who individually or jointly hold more than 1% of the Company's shares (including preferred shares with the restoration of voting rights, etc.) shall have the right to put forward proposals to the Company.

Where a qualified shareholder submits a provisional proposal prior to the shareholders' meeting, the percentage of shares held between the issuance of the notice of the proposal and the announcement of the resolution of the meeting shall not be less than one percent.

Where a shareholder proposes a provisional proposal, it shall provide the convener with the certification documents for holding more than one percent of the shares of the listed company. Where a shareholder jointly proposes a proposal by way of entrustment, the entrusting shareholder shall issue a written authorization document to the entrusted shareholder.

Shareholders individually or jointly holding not less than 1% of the Company's shares (including preferred shares with the restoration of voting rights, etc.) may submit a provisional proposal to the convener in writing ten (10) days prior to the date of the shareholders' meeting. The convener shall issue a supplementary notice of the shareholders' meeting within two (2) days after receiving the proposal, announce the content of the temporary proposal and submit the temporary proposal to the shareholders' meeting for deliberation, except for temporary proposals violating laws, administrative regulations or the provisions of these Articles, or are not within the authority scope of the shareholders' meeting.

Except for the circumstances in the preceding provisions, the convener shall not modify those proposals as listed in the notice of the shareholders' meeting or add any new proposal after giving the notice.

The shareholders' meeting shall not vote on or make a resolution on proposals that are not listed in the notice of the shareholders' meeting or do not comply with the provisions of these Articles.

4.5.3 When convening an annual shareholders' meeting, the convener shall notify all shareholders by means of an announcement twenty (20) days before the meeting is held. When convening an extraordinary shareholders' meeting, the convener shall notify all shareholders by means of an announcement fifteen (15) days before the meeting is held.

4.5.4 The shareholders' meeting shall not make decisions on matters that are not stated in the notice.

4.5.5 The notice of the shareholders' meeting shall include the following:

(I)            Date, place, and duration of the meeting;

(II)           Matters and proposals to be discussed at the meeting;

(III)         A statement in clear words that: all shareholders have the right to attend the shareholders' meeting, or may attend and vote in the meeting by proxy in written form, who may not necessarily be the shareholder of the Company;

(IV)         The date of equity registration for shareholders entitled to attend the shareholders' meeting;

(V)          Name and telephone number of the standing contact person for the meeting;

(VI)         Voting time and voting procedures by online or other means.

The notice and supplementary notice of the shareholders' meeting shall fully and completely disclose the specific content of all the proposals, as well as all the materials or explanations required for shareholders to make a reasonable judgment on the matters to be discussed.

The starting time of online vote or other ways of voting of the shareholders' meeting shall not be earlier than 3:00 p.m. of the date before the on-site convening of the shareholders' meeting and later than 9:30 a.m. of the date of on-site convening of the meeting, while the ending time shall not be before 3:00 p.m. of the date when the on-site shareholders' meeting ends.

The interval between the date of equity registration and the date of the meeting shall not be more than seven (7) working days. The equity registration date shall not be changed upon determination.

4.5.6 If the election of directors is to be discussed at the shareholders' meeting, the notice of the shareholders' meeting will fully disclose the detailed information of the director candidates, including at least the following:

(I)          Education background, work experience, part-time jobs, and other personal information;

(II)         Whether there is any affiliation to the directors, senior executives, controlling shareholders, actual controller, and shareholders holding more than 5% shares of the Company;

(III)       Whether any circumstances prohibit such candidates from serving as directors or senior executives according to the Company Law, other laws and regulations, and other relevant provisions;

(IV)       The number of shares held in the Company;

(V)        Whether such candidates are prohibited by CSRC from serving as directors and senior executives in listed companies, and the prohibition term has not yet expired;

(VI)       Whether such candidates are publicly recognized by any stock exchange as unfit to be directors or senior executives of listed companies, and the term has not yet expired;

(VII)      Other important matters required to be disclosed by the Shanghai Stock Exchange.

In addition to the election of directors by accumulative voting, each director candidate shall be put forward by a single proposal.

4.5.7 Except as otherwise provided by laws, administrative regulations, listing rules of the stock exchange where the Company's shares or GDR are listed, or these Articles, the notice of shareholders' meeting shall be sent by specially designated persons or by mail postpaid to shareholders (whether or not having voting right at the shareholders' meeting). The receiver address shall be that on the register of shareholders. For shareholders of A shares, the notice of shareholders' meeting could also be in the form of announcement.

The announcement referred to in the preceding paragraph shall be published in one or more newspapers designated by the security's regulatory institution under the State Council within the period of meeting notice requirements in Article 4.4.3 of these Articles, and once announced, it shall be deemed that all shareholders of A shares have received the notice of the shareholders' meeting.

4.5.8 The shareholders' meeting shall not be postponed or canceled and those proposals as listed in the notice of the shareholders' meeting shall not be canceled without justified reasons after the giving of the notice. In case of postponement or cancellation, the convener shall proclaim it and explain the reasons at least two (2) working days before the originally determined date of the meeting. If the shareholders' meeting is postponed, the date of the postponed meeting shall also be disclosed.

Section VI Convening of Shareholders' Meeting

4.6.1 The Board of Directors of the Company and other conveners shall take necessary actions to guarantee the normal order of the shareholders' meeting. Appropriate actions shall be taken to stop any act of interfering with the shareholders' meeting, causing troubles and infringing shareholders' lawful rights and interests, and such an act will be timely reported to relevant department for investigation and treatment.

4.6.2 All shareholders registered on the date of equity registration or their proxies shall be entitled to attend the shareholders' meeting and exercise their voting rights in accordance with relevant laws, regulations, and these Articles.

Any shareholder who has the right to attend and vote at the shareholders' meeting may attend the shareholders' meeting in person or may appoint one person (who may not be a shareholder of the Company) as his/her proxy and attend and vote at the meeting on his/her behalf. The shareholder's proxy, under the authorization of such shareholder, may exercise the following rights:

(I)          Exercising the shareholder's right to speak at the shareholders' meeting;

(II)         Requesting on its initiative or jointly with others to vote by poll.

4.6.3 Individual shareholders present at the meeting in person shall present personal ID cards or other valid documents or certificates that can identify them; proxies present at the meeting on behalf of others shall present valid ID cards and the power of attorney from shareholders they present.

For the institutional shareholder, the legal representative or the proxy appointed by the legal representative shall attend the meeting on behalf. The legal representatives who attend the meeting in person shall present their ID cards or other valid credentials that can certify their identities as legal representatives. For those who entrust their proxies to attend the meeting, the proxies shall present their ID cards and the written powers of attorney provided by the legal representatives of the institutional shareholders.

4.6.4 Shareholders shall entrust proxies in writing, and the entrustment shall be signed by the principal or the proxy entrusted in writing by the principal. If the principal is a legal person, it shall affix its corporate seal or be signed by its directors or formally appointed proxies.

The power of attorney issued by a shareholder for entrusting others to attend the shareholders' meeting shall specify the following:

(I)          The name of the principal, the type and quantity of the Company's shares held;

(II)         The name of the proxy;

(III)       The specific instructions of the shareholder, including instructions on voting for, against or abstaining from each item to be considered on the agenda of the shareholders' meeting, etc.;

(IV)       Date of issuance and validity period of the power of attorney;

(V)        The signature (or seal) of the principal. In case the principal is an institutional shareholder, the official seal of the legal person shall be affixed.

4.6.5 The format of any power of attorney issued by the Board of Directors of the Company to shareholders for appointing shareholder proxies shall allow shareholders to freely choose to instruct shareholder proxies to vote for or against, and give separate instructions on the matters to be voted on for each topic of the meeting.

4.6.6 The power of attorney for voting shall be kept at the Company's domicile or other place specified in the notice of convening the meeting at least twenty-four hours before the relevant meeting for voting entrusted by the power of attorney or twenty-four hours before the designated voting time. If the proxy form is signed by someone authorized by the principal, the power of attorney or other authorization documents shall be notarized. The notarized power of attorney or other authorization documents together with the power of attorney appointing a voting proxy shall be deposited at the domicile of the Company or any other place as designated in the notice of convening the meeting.

4.6.7 Prior to voting, in case of death or incapacity of the Principal, or if the appointment is canceled, the authorization for signing the appointment is withdrawn, or the relevant shares are transferred, the voting by the shareholder's proxy under the proxy form shall remain in force, provided that the Company does not receive any written notice of such matters prior to the meeting.

4.6.8 The register of participants at the meeting shall be prepared by the Company. Such register shall state the name (or entity name) of the attendee, ID card number, the number of shares held by the attendee or presenting voting right, the name (or entity name) of the principal and other relevant matters.

4.6.9 The convener and the lawyer hired by the Company shall jointly verify the legality of shareholders' qualifications based on the list of shareholders provided by the securities registration and settlement organization, and register the names (or titles) of shareholders and the number of shares with voting rights they hold. The meeting registration shall be completed before the moderator announces the number of the present shareholders and proxies, and total number of voting shares.

4.6.10 If the shareholders' meeting requires directors or senior executives to attend the meeting as nonvoting delegates, they shall do so and accept inquiries from shareholders.

4.6.11 The shareholders' meeting is convened by the Board of Directors. The shareholders' meeting shall be presided over by the chairman as the moderator. If the chairman is unable to perform relevant duties or fails to perform relevant duties, the vice chairman shall preside over the meeting. If the vice chairman is unable to perform relevant duties or fails to perform relevant duties, a director jointly recommended by more than half of the directors shall preside over the meeting as the moderator.

If the shareholders' meeting is convened by the Audit Committee on its own, it shall be presided over by the convener of the Audit Committee. If the convener of the Audit Committee is unable to perform relevant duties or fails to perform relevant duties, a member of the Audit Committee jointly recommended by more than half of the members of the Audit Committee shall preside over it.

For the shareholders' meeting convened by shareholders on their own, it shall be presided over by the convener or the representative recommended by the convener.

When the shareholders' meeting is held, if the moderator violates these Articles or the rules of procedure for the shareholders' meeting of the Company, causing the shareholders' meeting unable to continue, with the consent of shareholders with more than half of the voting rights present at the shareholders' meeting, the shareholders' meeting may recommend one person to serve as the moderator and continue the meeting.

4.6.12 The Company shall formulate the Rules of Procedure of the Shareholders' Meeting and specify the detailed holding, convening and voting procedures hereof, including notification, registration, deliberation of proposals, voting, count of votes, the announcement of voting results, formulation of resolutions, meeting minutes and signature and pronouncements as well as the principle of authorization from the shareholders' meeting to the Board of Directors, and the authorization content shall be definite and specific. The Rules of Procedure of the Shareholders' Meeting, as an annex to these Articles, shall be prepared by the Board of Directors and approved by the shareholders' meeting.

4.6.13 The Board of Directors shall report to the shareholders' meeting on their work in the past year at the annual shareholders' meeting. Each independent director shall also submit to the annual shareholders' meeting an annual report on his/her performance of duties.

4.6.14 The directors and senior executive shall provide explanations and clarifications for the inquiries and suggestions made by the shareholders at the shareholders' meeting.

4.6.15 The moderator of the meeting shall, prior to the voting, announce the number of shareholders and proxies attending the meeting, as well as the total voting shares held by such present shareholders and proxies, which are subject to the record in the meeting register.

4.6.16 There shall be minutes of the shareholders' meeting, which shall be taken by the secretary of the Board of Directors. The minutes shall record:

(I)          Time, place, agenda, and name of the convener of the meeting;

(II)         The names of the moderator and the directors and senior executives who attend the meeting as nonvoting delegates;

(III)       Number of shareholders and proxies attending the meeting, total number of voting shares held by them, and their proportion in the total number of shares of the Company;

(IV)       Consideration process, main points of address, and voting results of each proposal;

(V)        Inquiries or suggestions raised by shareholders and the corresponding replies or explanations;

(VI)       Names of the lawyer, vote counter, and scrutineer;

(VII)      Other contents specified in these Articles that shall be recorded in the minutes.

4.6.17 The convener shall ensure that the minutes are true, accurate and complete. The directors, the secretary of the Board of Directors, the convener or his or her representatives, and the moderator who attend or participate in the meeting as nonvoting delegates shall sign the minutes of the meeting. The minutes shall be kept together with the register of present shareholders and the power of attorney for present proxies as well as valid documents describing the results of online and other voting process, for a period of ten years at least.

4.6.18 Shareholders may inspect copies of meeting minutes during the Company's office hours free of charge. If any shareholder requests a copy of the relevant minutes from the Company, the Company shall send the copy to the shareholder within seven days after having received a reasonable fee.

4.6.19 The convener should ensure that the shareholders' meeting can be convened continuously until a final resolution is passed. In case the shareholders' meeting is suspended, or no resolution can be made due to force majeure and other special reasons, necessary actions shall be taken to resume the meeting as soon as possible or the shareholders' meeting may be directly terminated, and a prompt notice shall be given. In addition, the convener shall report it to the CSRC's local office where the Company is located and the Shanghai Stock Exchange.

Section VII Voting and Resolutions of Shareholders' Meeting

4.7.1 Resolutions of the shareholders' meeting include ordinary and special resolutions.

Any ordinary resolution of the shareholders' meeting shall be passed with more than half of the voting rights held by the shareholders who attend the meeting.

Any special resolution of the shareholders' meeting shall be passed with more than two-thirds of the voting rights held by the shareholders who attend the meeting.

The shareholders referred to in this article include shareholders who entrust proxies to attend the shareholders' meeting.

4.7.2 The following matters shall be approved by an ordinary resolution of the shareholders' meeting:

(I)            Work Report of the Board of Directors;

(II)           Profit distribution plans and loss compensation plans prepared by the Board of Directors;

(III)         Appointment and dismissal of members of the Board of Directors as well as their remunerations and payment method;

(IV)         The Company's balance sheet, income statement, and other financial statements;

(V)          Matters other than those specified to be adopted by a special resolution by provisions of laws, administrative regulations or these Articles.

4.7.3 The following matters shall be adopted by the shareholders' meeting through special resolutions:

(I)            The Company's increase or decrease of its registered capital and issuance of any kind of stocks, warrants and other similar securities;

(II)           Issuance of corporate bonds;

(III)         Division, separation, merger, dissolution and liquidation of the Company;

(IV)         Any amendment to these Articles;

(V)          The amount of the Company's purchase or sale of major assets or the provision of guarantees to others within one year exceeds 30% of total assets of the Company as audited in the latest term;

(VI)         Profit distribution policy adjustment plan;

(VII)        Stock ownership incentive plan;

(VIII)       Company's share repurchase;

(IX)         Other matters that are specified by laws, administrative regulations or these Articles and that are recognized by an ordinary resolution of the shareholders' meeting as exerting a significant impact on the Company and to be approved by a special resolution.

4.7.4 Shareholders will exercise the voting right according to the number of voting shares held by them, with one vote for each share.

When the shareholders' meeting deliberates on major matters concerning the interests of minority investors, the votes of small and medium investors shall be counted separately. Separate counting results shall be disclosed publicly and timely.

There shall be no voting right for the shares of the Company held by the Company itself and such shares shall not be included in the total number of shares with voting rights held by shareholders present at the shareholders' meeting.

Where a shareholder purchases the voting shares of the Company in violation of the provisions of Paragraphs 1 and 2 of Article 63 of the Securities Law, the share exceeding the prescribed proportion shall not exercise the voting rights within 36 months after purchase, and shall not be included in the total number of voting shares attending the shareholders' meeting.

The Board of Directors, independent directors, shareholders holding 1% or more of the shares with voting rights, or the investor protection institutions established according to laws, administrative regulations, or the provisions of CSRC may solicit the voting rights of shareholders. To solicit such voting rights is subject to fully disclosing the specific voting intention and other relevant information to the shareholders with voting rights being solicited. A paid solicitation or disguised paid solicitation of shareholders' voting rights is not allowed. Except for the statutory conditions, the Company may not impose the minimum shareholding ratio limit on the voting right solicitation.

4.7.5 When the shareholders' meeting discusses associated related-party transactions, the associated shareholders shall not participate in the voting. Their voting shares held will not be calculated within the total number of valid votes. The public announcement of shareholders' meeting decisions shall fully disclose the voting circumstances of the non-associated shareholders.

4.7.6 Except under special circumstances such as company crisis, without the approval by a special resolution of the shareholders' meeting, the Company will not enter into a contract with any person other than a director or senior executives to entrust the management of all or important business of the Company to that person.

4.7.7 The list of director candidates shall be submitted to the shareholders' meeting for voting in the form of a proposal.

When the shareholders' meeting conducts voting to elect the directors, cumulative voting shall apply according to these Articles or a resolution of the shareholders' meeting. The aforementioned directors include independent directors and non-independent directors. The directors served by employee representatives shall be democratically elected or replaced by the employees of the Company, and the relevant provisions of this article on the election at the shareholders' meeting and cumulative voting system shall not apply.

The above-mentioned cumulative voting system means that each share has voting rights of the same number of directors to be elected and voting rights held by a shareholder can be used in a centralized way in case of election of directors at the shareholders' meeting. Director candidates with the most votes shall be elected and the number of votes cast for the elected directors shall exceed 50% of the total shares held by shareholders attending the shareholders' meeting.

To ensure that the election of independent directors meets the regulations, the Company conducts separate elections for independent directors and non-independent directors, both using the cumulative voting system. The specific operation is as follows: In the election of independent directors, each shareholder present at the meeting is entitled to such number of votes as equal to the product of the total number of shares held by it and the number of independent directors to be elected at the shareholders' meeting, and such votes can only be used for the independent director candidates in the shareholders' meeting. In the election of non-independent directors, each shareholder present at the meeting is entitled to such number of votes as equal to the product of the total number of shares held by it and the number of non-independent directors to be elected at the shareholders' meeting, and such votes can only be used for candidates of non-independent directors in the shareholders' meeting.

If the number of directors elected at the shareholders' meeting falls short of the required number, or if there are multiple candidates with the same number of votes but only one can be elected as a director, a second round of voting shall be conducted for the remaining positions until all the required directors are elected. During the second round of voting, the total number of voting rights of each shareholder participating in the vote is equal to the product of the number of shares held by it and the number of directors still needed to be elected. Any matters not covered by the cumulative voting method shall be resolved through consultation between the moderator of the meeting and the shareholders attending the meeting. If consensus cannot be reached through consultation, it shall be handled following the opinion passed by the shareholders present at the meeting with more than half of the voting rights.

The Board of Directors shall announce to shareholders the resumes and basic information of the candidate directors.

4.7.8 Besides the cumulative voting system, the shareholders' meeting will conduct voting on each of the proposals. If different proposals are submitted on the same issue, the voting shall be conducted in the chronological order in which these proposals have been submitted. In case of interruption of the shareholders' meeting or failure to reach a resolution due to unusual reasons such as force majeure, the shareholders' meeting shall not leave the proposals suspended or leave them without voting.

4.7.9 When the shareholders' meeting discusses the proposals, it shall not modify any proposals, otherwise the related changed proposal shall be deemed as a new proposal and shall not be voted at this shareholders' meeting.

4.7.10 The same vote shall be only one of the following voting modes, face-to-face voting, online voting or other means. A repetitively used vote can be only valid as its first voting.

4.7.11 Two shareholder representatives shall be elected to participate in the vote counting and supervising before voting on a proposal at the shareholders' meeting. If the deliberation matters are related to certain shareholders, the relevant shareholders and proxies must not participate in vote counting and supervision.

When the shareholders' meeting is voting on a proposal, the lawyers and shareholder representatives shall work together to count and scrutinize the votes and announce the result of the voting on the spot. The voting results of the proposals shall be recorded in the meeting minutes.

The shareholders or their proxies of listed companies voting online or another way have the right to examine the results of their votes through the corresponding voting systems.

4.7.12 The end time of the shareholders' meeting held on-site shall not be earlier than that of the online or other methods. The moderator shall announce the voting situation and result of each proposal, and declare whether the proposal is adopted according to the voting result.

Prior to the formal announcement of the voting results, the listed companies, vote counters, scrutineers, shareholders, network service suppliers, etc. involved in the shareholders' meeting, online voting or voting in other manners, are all responsible for confidentiality of the voting results.

4.7.13 Shareholders attending the shareholders' meeting shall present one of the following views on the proposal submitted for voting: consent, objection or abstention. Except for securities registration and settlement institutions, as nominee holders of stocks of interconnectivity mechanism between the Mainland and Hong Kong SAR on the stock market, where declarations are made based upon the intention of actual holders.

In case the vote is uncompleted, mistakenly completed or illegible or the vote is not submitted, it shall be deemed that the voter gives up the voting right and the voting results of the holding shares shall be counted as "waiver".

4.7.14 In case of the meeting moderator having any suspicion for the voting results and resolutions, he/she may require the votes to be counted; if the moderator fails to count the votes, and if the shareholders or their proxies present have any questions for the result published by the moderator, they have the right to require counting votes immediately upon announcement of voting results, and moderator shall promptly organize the count of votes.

Where votes are counted at the shareholders' meeting, the counting results shall be recorded in the minutes of the meeting.

4.7.15 The resolutions of the shareholders' meeting shall be announced timely. The announcement shall state the number of present shareholders and proxies, the total number of voting shares, and its ratio to total voting shares of the Company, the method of voting, the voting result of each proposal, and the details of each resolution.

4.7.16 If a proposal is not approved at the meeting, or if a resolution of the previous shareholders' meeting is changed in this shareholders' meeting, a special prompt shall be made in the announcement of the resolutions of the shareholders' meeting.

4.7.17 If the shareholders' meeting approves the proposals regarding the election of directors, the newly elected directors will assume office upon the conclusion of the shareholders' meeting.

4.7.18 If the shareholders' meeting approves proposals on cash dividends, bonus shares, or conversion of capital reserve into share capital, the Company shall implement the specific plans within two months after the conclusion of the shareholders' meeting.

Chapter V Directors and Board of Directors

Section I Directors

5.1.1 Directors shall be elected or replaced by the shareholders' meeting and the term of office of directors is three years. A director may, after the expiration of his/her term of office, hold a consecutive term upon re-election. Before a director's term of office expires, the shareholders' meeting can terminate his or her duties. After a democratic election or replacement by the Company's employees, the employee representatives who serve as directors directly join the Board of Directors, and there is no need to submit such to the shareholders' meeting for deliberation.

The term of office of a director shall commence on the date of accession and end at the expiry of his/her term of office of this Board of Directors. If a director's term of office expires but no new director is yet appointed, before the newly elected director takes up an appointment, the original director shall still carry out his/her duties according to the laws, administrative regulations, departmental rules, and these Articles.

Directors may concurrently hold the positions of senior executives. However, the total number of directors who concurrently hold the positions of senior executives and directors who are employee representatives shall not exceed one-half of the total number of the Company's directors.

A director needs not hold any shares in the Company.

5.1.2 Director candidates other than independent directors and employee directors shall be nominated by the Board of Directors and shareholders who individually or jointly hold more than one percent of the issued shares of the Company and elected by the shareholders' meeting of the Company. The Board of Directors and the shareholders individually or jointly holding more than one percent of the issued shares of the Company can nominate the candidates of independent directors who shall go through the election of the shareholders' meeting. Legally established investor protection institutions may publicly request shareholders to entrust them to exercise the right to nominate independent directors on their behalf.

5.1.3 Directors shall abide by the provisions of laws, administrative regulations and these Articles. They shall take measures to avoid conflicts between their own interests and the interests of the Company and shall not seek improper benefits by taking advantage of their positions. Directors shall have the following duties of loyalty to the Company:

(I)            Shall not embezzle the Company's property or misappropriate the Company's funds;

(II)           Shall not open accounts in their own names or in the names of other individuals to deposit the Company's funds;

(III)         Shall not take bribes or accept other illegal incomes by taking advantage of their powers;

(IV)         Shareholders may not enter into a contract or conduct a transaction with the Company directly or indirectly without reporting to the Board of Directors or the shareholders' meeting and obtaining a resolution of the Board of Directors or the shareholders' meeting in accordance with the provisions of these Articles;

(V)          Shareholders shall not take advantage of their positions to seek business opportunities belonging to the Company for themselves or others, except where they report to the Board of Directors or the shareholders' meeting and the matter is adopted through a resolution of the shareholders' meeting, or where the Company is unable to take advantage of such business opportunities in accordance with the provisions of laws, administrative regulations or these Articles;

(VI)         Without reporting to the Board of Directors or the shareholders' meeting and having it adopted through a resolution of the shareholders' meeting, shareholders shall not engage in the business of the same kind as that of the Company on their own or for others.

(VII)        Shall not accept commissions of transactions between others and the Company for their own use;

(VIII)       Shall keep business secrets, shall not disclose significant information that has not yet been disclosed by the Company, shall not obtain improper benefits by taking advantage of insider information, and shall fulfill the non-competition obligations agreed with the Company after leaving their positions;

(IX)         Shall not make use of their relationships to compromise the interests of the Company;

(X)          Shall protect the safety and integrity of the Company's assets and shall not take advantage of their positions to harm the Company's interests for the benefit of the Company's actual controllers, shareholders, employees, themselves or other third parties;

(XI)         Other duties of loyalty specified by laws, administrative regulations, departmental rules, and these Articles.

Any income of a director in violation of the Article shall belong to the Company; the director shall be liable for compensating any losses caused to the Company.

The relatives of directors and senior executives, enterprises directly or indirectly controlled by directors, senior executives or their relatives, as well as related parties having other affiliated relationships with directors and senior executives, who enter into contracts with or conduct transactions with the Company, shall be subject to the provisions of Item (IV) of the first paragraph of this article.

5.1.4 Directors shall abide by the provisions of laws, administrative regulations and these Articles, and have the duty of diligence towards the Company. When performing their duties, they shall exercise the reasonable care that managers usually should have for the best interests of the Company. Directors have the following duty of diligence to the Company:

(I)            Exercise the rights granted by the Company in a prudent, conscientious, and diligent manner to ensure that the Company's business practices conform to the requirements of national laws, administrative regulations, and national economic policies and that the Company carries out business activities within the scope of business as specified in its business license;

(II)           Treat all shareholders fairly;

(III)         Stay informed about the Company's business operations and management;

(IV)         Shall sign a written confirmation of the Company's periodic reports to ensure that the information disclosed by the Company is true, accurate and complete;

(V)          Shall ensure that they have sufficient time and energy to participate in the Company's affairs. In principle, they shall attend the Board of Directors meetings in person. If they are unable to attend the Board of Directors meetings in person due to certain reasons, they shall carefully choose an entrustee. The authorized matters and decision-making intentions shall be specific and clear, and they shall not entrust others with full authority;

(VI)         Shall prudently judge the risks and benefits that may arise from the matters to be deliberated by the Company's Board of Directors and express clear opinions on the matters under discussion. If they vote against or abstain from voting in the Company's Board of Directors, they shall clearly disclose the reasons, bases, improvement suggestions or measures for their voting intentions;

(VII)        Shall carefully read all the business and financial reports of the Company as well as media reports, promptly understand and continuously pay attention to the business operation and management status of the Company, major events that have occurred or may occur in the Company and their impacts, and promptly report the problems existing in the Company's business activities to the Board of Directors. They shall not shirk their responsibilities on the grounds that they are not directly engaged in business management or are unaware of or unfamiliar with relevant matters;

(VIII)       Pay attention to whether the Company's funds are occupied by related parties or potential related parties or other issues that encroach on the Company's interests. In case of any abnormal situation is found, promptly report to the Board of Directors and take corresponding measures;

(IX)         Carefully read the Company's financial and accounting reports, and pay attention to whether there are significant compilation errors or omissions in the financial and accounting reports, whether the main accounting data and financial indicators have fluctuated significantly and whether the explanations for the fluctuations are reasonable. If there are doubts about the financial and accounting reports, one shall take the initiative to conduct investigations or request the Board of Directors to supplement the required materials or information;

(X)          Actively promote the standardized operation of the Company, urge the Company to fulfill its information disclosure obligations in accordance with laws and regulations, promptly correct and report the Company's violations, and support the Company in fulfilling its social responsibilities;

(XI)         Provide relevant information and data truthfully to the Audit Committee and not impede the exercising of functions and powers by the Audit Committee;

(XII)        Other duties of diligence specified by laws, administrative regulations, departmental regulations, and these Articles.

5.1.5 If a director fails to attend the board meeting in person for two consecutive times and also does not entrust other directors to attend on his or her behalf, it shall be deemed that the director is unable to perform his or her duties. In such a case, the Board of Directors shall recommend to the shareholders' meeting that the director be replaced.

5.1.6 A director may resign before the expiration of his/her term of office. A director shall submit a written resignation report to the Company in case of his/her resignation. The resignation shall take effect on the date the Company receives the resignation notice, and the Company shall disclose the relevant circumstances within two (2) trading days.

If the members of the Board of Directors fall below the minimum legal requirement due to a director's resignation, such director shall still perform the duties according to the laws, administrative regulations, departmental rules, and these Articles until the appointment of a new director. The remaining directors in the Board of Directors shall convene an extraordinary shareholders' meeting as soon as possible to elect a director to fill the vacancy arising from such resignation. Before the resolution on the election matters of the directors made at the shareholders' meeting, the functions and powers of the directors raising the resignation and the remaining directors in the Board of Directors shall be restricted reasonably.

5.1.7 The Company shall establish a director resignation management system, specifying safeguard measures to hold directors accountable for unfulfilled public commitments and other outstanding matters, including recourse and compensation mechanisms. Upon the effectiveness of a director's resignation or the expiration of his/her term of office, the director shall complete all handover procedures with the Board of Directors. The fiduciary duties owed to the Company and its shareholders shall not automatically terminate upon the end of his/her tenure. Furthermore, the obligation to maintain the confidentiality of the Company's trade secrets shall remain in effect even after their departure, until such secrets become publicly available information. The duration of other obligations shall be determined in accordance with the principle of fairness, depending on the length of time between the occurrence of the event and the departure from office, and the circumstances and conditions under which the relationship with the Company ends. Directors shall remain liable for acts performed in the course of their duties during their tenure, and such liability shall not be discharged or terminated upon their departure from office.

5.1.8 The shareholders' meeting may pass a resolution to dismiss a director, and the dismissal shall take effect on the date when the resolution is made. If a director is dismissed without just cause before the expiration of his term of office, the director may request compensation from the Company.

5.1.9 Without the provisions of these Articles or the legal authorization of the Board of Directors, no director may act in the name of an individual on behalf of the Company or the Board of Directors. When a director acts in his/her own name, the director shall declare his/her position and capacity in advance where a third party reasonably believes that the director acts on behalf of the Company or the Board of Directors.

5.1.10 Where a director causes damage to third parties in the performance of their duties, the Company shall be liable for compensation, provided that if the director acted with intent or gross negligence, such Director shall also be personally liable for damages.

Where a director violates laws, administrative regulations, departmental rules, or the provisions of these Articles in the performance of their duties, thereby causing losses to the Company, such director shall be liable for compensation.

5.1.11 Independent directors shall bear the duties of loyalty and diligence to the listed company and all shareholders. They shall carefully perform their duties according to laws, administrative regulations, the provisions of CSRC, business rules of stock exchanges, and these Articles, play a role in participating in decision-making, supervision, balancing, and providing professional advice in the Board of Directors, safeguard the overall interests of listed companies, and protect the legitimate rights and interests of minority shareholders.

Section II Board of Directors

5.2.1 The Company shall set up a Board of Directors. The Board of Directors is the main body of the Company's business decision-making, playing the role of setting strategy, making decisions and preventing risks, exercising the right to make decisions on major issues of the Company in accordance with the legal procedures and the Articles of Association, and strengthening the management and supervision of the Management.

5.2.2 Regarding the matters involved in the resolutions of the Board of Directors that are included in the list of major operation and management matters subject to the prior research and discussion by the Company's Party Committee, they must be subject to the prior research and discussion by the Company's Party Committee before being submitted to the Board of Directors or the shareholders' meeting for deliberation and decision.

5.2.3 The Board of Directors consists of 9 directors, including 3 independent directors. The Board of Directors shall comprise one chairman, one vice chairman, and one employee director. The chairman and the vice chairman shall be elected by a majority of the votes of all directors of the Board of Directors. Outside directors shall in principle constitute the majority of the Board. For purposes of this article, "Outside Directors" refers to a non-executive director who does not hold any other position within the Company.

The Employee Director shall be democratically elected by the employees of the Company by means of Employee Representatives' Meeting, Employees' Meeting or others.

5.2.4 The Board of Directors shall perform the following functions and powers:

(I)            Deliberate on and determine the implementation of decisions and arrangements of the CPC Central Committee and major initiatives of national development strategies;

(II)           Convene the shareholders' meeting and report on its work to the shareholders' meeting;

(III)         Implement the resolutions of the shareholders' meeting;

(IV)         Decide the Company's business plans and investment plans;

(VI)         Formulate the profit distribution plan, profit distribution policy adjustment plan, loss recovery plans for the Company;

(VI)         Formulate the plans to increase or decrease registered capital, issue bonds or other securities, and list for the Company;

(VII)        Draw up schemes concerning major purchase, purchase of the Company's stocks, or merger, division, dissolution and alteration of the Company;

(VIII)       Deliberate and approve related-party transactions between the Company and related natural persons with a transaction amount of more than RMB 300,000 (except for the guarantee provided by the Company, if it meets the criteria for deliberation at the shareholders' meeting, it shall be submitted to the shareholders' meeting for deliberation and approval after deliberation by the Board of Directors), and deliberate and approve related-party transactions between the Company and related parties with a transaction amount of more than RMB 3 million and accounting for more than 0.5% of value of the Company's net assets as audited in the latest term (except for the guarantee provided by the Company, if it meets the criteria for deliberation at the shareholders' meeting, it shall be submitted to the shareholders' meeting for deliberation and approval after deliberation by the Board of Directors).

The amount of related-party transactions between the Company and the same related party, or transaction related to the type of transaction object between the Company and different related party, will be calculated according to the principles of accumulative calculation for twelve (12) consecutive months;

(IX)         Deliberate and approve the guarantees and other transactions that shall be reviewed by the Board of Directors as stipulated in 5.2.8 of these Articles;

(X)          Decide on the establishment of internal management organizations of the Company;

(XI)         Decide on the appointment or dismissal of the Company's general manager, secretary of the Board of Directors, and other senior executives according to relevant regulations and procedures, and determine their remuneration, rewards, and punishments; appoint or dismiss the deputy general managers, the chief accountant (chief financial officer), and the general counsel according to the nomination of general manager and determine their remuneration, rewards, and punishments.

(XII)        Formulate the basic management system of the Company;

(XIII)       Develop the methods of performance evaluation, sign annual and term performance responsibility letters with the management members, and scientifically and reasonably determine the performance evaluation results of management members;

(XIV)      Develop the salary management measures for senior executives, make the salary distribution plan for senior executives, and establish and improve the restraint mechanism matching with the incentives of the management members;

(XV)        Work out amendments to these Articles of Association;

(XVI)      Manage information disclosure matters of the Company;

(XVII)     Propose to the shareholders' meeting to hire or replace the accounting firm as the auditor of the Company and determine its remuneration;

(XVIII)    Make major accounting policies and accounting estimate change plans of the Company;

(XIX)      Formulate the stock ownership incentive plan of the Company;

(XX)        Receive the working reports of the general manager and investigate his or her work;

(XXI)      Decide on the establishment of special committees and the appointment and dismissal of their relevant candidates;

(XXII)     Formulate a work report of the Board of Directors;

(XXIII)    Decide on the Company's compliance management system, deliberate on and approve the basic system, system construction plan and annual report of compliance management, promote the improvement of the compliance management system and evaluate its effectiveness, study and decide on major matters of compliance management, and decide on the setting and responsibilities of the Compliance Management Department;

(XXIV)    Guide, inspect and evaluate the Company's internal audit, decide on the person in charge of the Company's internal audit institution, establish a mechanism under which the audit department is responsible to the Board of Directors, and deliberate on and approve the annual audit plan and important audit reports;

(XXV)     Other functions and powers granted by laws, administrative regulations, departmental rules, these Articles or the shareholders' meeting.

When the Board of Directors makes any resolutions mentioned in the previous paragraphs, Items (VI), (VII) and (XV), which shall be voted and approved by more than 2/3 of the directors, other items may generally be voted and approved by more than 1/2 of the directors attending the board meeting.

5.2.5 When the Board of Directors disposes of fixed assets, if the expected value of the fixed assets to be disposed of, together with the total value of the fixed assets that have been disposed of within the four months prior to the proposal for such disposal, exceeds 33% of the value of the fixed assets shown in the balance sheet most recently reviewed by the shareholders' meeting, the Board of Directors shall not dispose of or agree to dispose of such fixed assets without the approval of the shareholders' meeting.

The disposal of fixed assets referred to in this article shall include the transfer of rights and interests of some assets, excluding the provision of guarantee with the fixed assets.

The validity of transactions conducted by the Company in relation to the disposal of fixed assets shall not be affected by the violation of the first paragraph of this article.

5.2.6 The Board of Directors of the Company shall explain to the shareholders' meeting the non-standard audit opinions issued by the certified public accountants on the financial reports of the Company.

5.2.7 The Board of Directors shall formulate Rules of Procedures of the Board of Directors to ensure that the Board of Directors implements the resolutions of shareholders' meetings, improves work efficiency and ensures scientific decision-making. The Rules of Procedures of the Board of Directors stipulate the convening and voting procedures of the Board of Directors, which shall be formulated by the Board of Directors and approved by the shareholders' meeting as an annex to these Articles.

5.2.8 The Board of Directors shall determine the authorities over foreign investment, purchase and sale of assets, pledge of assets, external guarantees, entrusted financing, related-party transactions, and external donations, and establish strict examination and decision-making procedures. Key investment projects shall be reviewed by the relevant experts and professionals and submitted to the shareholders' meeting for approval.

(I)            The following transactions of the Company or its controlled subsidiaries (except for the provision of guarantee, receipt of cash assets and simple debt relief of the Company's obligations) shall be reviewed and approved by the Board of Directors:

1.    The total amount of the assets involved in such transaction (calculated based on the higher of the book value and estimated value if both exist) accounts for more than one percent and less than fifty percent of the Company's total assets as audited in the latest term;

2.    The net assets involved in the transaction object (such as equity) (calculated based on the higher of the book value and estimated value if both exist) account for more than one percent and less than fifty percent of the Company's net assets as audited in the latest term, or with an absolute amount of less than RMB 50 million although the aforementioned criteria are met;

3.    The transaction has a turnover (including assumed debts and expenses) of more than one percent and less than fifty percent of the Company's net assets as audited in the latest term, or with an absolute amount of less than RMB 50 million although the aforementioned criteria are met;

4.    Profits from the transaction account for more than one percent and less than fifty percent of the net profit of the Company as audited in the latest fiscal year, or with an absolute amount of less than RMB 5 million although the aforementioned criteria are met;

5.    Relevant operating revenue of the transaction object (such as stock equity) in the latest fiscal year accounts for more than one percent and less than fifty percent of the total operating revenue of the Company as audited in the latest fiscal year, or with an absolute amount of less than RMB 50 million although the aforementioned criteria are met;

6.    Relevant net profit of the transaction object (such as stock equity) in the latest fiscal year accounts for more than one percent and less than fifty percent of the net profits of the Company as audited in the latest fiscal year, or with an absolute amount of less than RMB 5 million although the aforementioned criteria are met.

If the data involved in the above indicators is negative, the absolute value shall be taken for the calculation.

The external guarantees of the Company shall be reviewed and approved by the Board of Directors, except for those required by laws and regulations, regulatory authorities and Article 4.2.2 of these Articles to be submitted to the shareholders' meeting for review.

(II)           The following transactions of the Company (except for the provision of guarantee, receipt of cash assets and simple debt relief of the Company's obligations) shall be reviewed and approved by the chairman as authorized by the Board of Directors:

1.    The total amount of the assets involved in such a transaction (calculated based on the higher of the book value and estimated value if both exist) accounts for more than one percent and less than ten percent of the total assets of the Company as audited in the latest term;

2.    The net assets involved in transaction object (such as equity) (calculated based on the higher of the book value and estimated value if both exist) account for more than one percent and less than ten percent of the net assets of the Company as audited in the latest term;

3.    The transaction has a turnover (including assumed debts and expenses) of more than one percent and less than ten percent of the net assets of the Company as audited in the latest term;

4.    Profits from the transaction account for more than one percent and less than ten percent of the net profits of the Company as audited in the latest fiscal year;

5.    Relevant operating revenue of the transaction object (such as stock equity) in the latest fiscal year accounts for more than one percent and less than ten percent of the operating revenue of the Company as audited in the latest fiscal year;

6.    Relevant net profit of the transaction object (such as stock equity) in the latest fiscal year accounts for more than one percent and less than ten percent of the net profits of the Company as audited in the latest fiscal year.

If the data involved in the above indicators is negative, the absolute value shall be taken for the calculation.

(III) The external donations of the Company shall be approved by the Board of Directors, and the general manager shall be authorized to make decisions on matters with a single amount of RMB 20 million or less.

5.2.9 The chairman shall perform the following functions and powers:

(I)            Preside over the shareholders' meeting and convene and preside over the meetings of the Board of Directors;

(II)           Supervise and inspect the implementation of resolutions of the Board of Directors;

(III)         Sign securities issued by the Company;

(IV)         Perform other functions and powers authorized by the Board of Directors.

5.2.10 The vice chairman shall assist the chairman in his work, and if the chairman is unable to perform his duties or fails to perform his duties, the vice chairman shall perform his duties; if the vice chairman is unable to perform his duties or fails to perform his duties, one director shall be elected by a majority of the directors to perform his duties.

5.2.11 The Board of Directors shall hold at least two meetings every year which shall be convened by the chairman, and shall give a written notice to all directors ten days before the meeting.

5.2.12 The shareholders representing more than 1/10 of the voting rights, or 1/3 of the Board of Directors, the Audit Committee or independent directors acting upon approval by a majority of all independent directors, may put forward a proposal to hold an extraordinary meeting of the Board of Directors. The chairman of the Board of Directors shall convene and preside over the Board meeting within ten days from receipt of the proposal.

5.2.13 The Board of Directors shall notify all directors by direct service, fax, e-mail or other written means five days prior to the convening of an interim board meeting.

5.2.14 The notice of the board meeting shall include the following contents:

(I)            Date and place of the meeting;

(II)           Duration of the meeting;

(III)         Cause and topics of the meeting;

(IV)         Date of giving notice.

5.2.15 A meeting of the Board of Directors may not be held unless more than half of the directors are present. The Board of Directors shall make resolutions. Except for the circumstances in which directors should avoid voting according to relevant laws, regulations, and the provisions of these Articles, more than half of the directors of the Company must vote for the proposal. The Board of Directors shall make resolutions on guarantee or financial support matters within its authority according to the provisions of these Articles. In addition to the agreement of more than half of all directors of the Company, the resolutions must also be approved by more than two-thirds of the directors present at the meeting, with prompt disclosure to be made thereafter. If it is stipulated in laws, administrative regulations, and these Articles that the Board of Directors shall obtain the consent of more directors when creating a resolution, such stipulation shall apply.

In voting on a resolution of the Board of Directors, each director shall have one vote.

5.2.16 If a director has an affiliated relationship with the enterprise or individual involved in the matters of the board meeting resolutions, the director shall promptly submit a written report to the Board of Directors. Directors with affiliated relationships shall not exercise the right to vote on such resolutions, nor shall they exercise the right to vote on behalf of other directors. The meeting of the Board of Directors may be held if more than half of the unassociated directors attend, and the resolution made by the board meeting shall be passed by more than half of the unassociated directors. If the number of non-affiliated directors attending the board meeting is less than three, the matter shall be submitted to the shareholders' meetings for deliberation.

5.2.17 The meeting holding and voting method for resolutions of the Board of Directors is on-site voting, including voting by poll and voting by a show of hands.

Provided that the directors are ensured to be able to fully express opinions, the interim meeting of the Board of Directors can be held and a resolution can be made by correspondence (including fax), and the resolution shall be signed by directors attending the meeting.

5.2.18 Each director shall attend the board meeting in person. A director unable to attend the meeting due to any reason may entrust in writing another director to attend the meeting. The power of attorney shall specify the name of the proxy, the entrusted matters, the scope and validity period of authorization, and shall be signed or sealed by the principal. The director representative attending the meeting shall exercise the director's duties within the authorized scope. If a director neither attends the board meeting nor entrusts a proxy to attend the meeting, he/she shall be deemed to waive the voting right in such meeting.

5.2.19 The Board of Directors shall keep records of decisions on matters discussed at the meeting, and attending directors shall sign the meeting minutes.

Such minutes of board meetings shall be kept as records of the Company for 10 years.

5.2.20 The minutes of board meetings shall include the following contents:

(I)            The date and place of the meeting and the name of the convener;

(II)           Names of the directors attending the meeting and the directors (proxies) entrusted to attend the meeting of the Board of Directors;

(III)         Agenda of the meeting;

(IV)         Main points of speeches delivered by directors;

(V)          Voting method and results of the resolution for each issue (the voting result shall state the number of affirmative votes, negative votes, or abstention votes).

5.2.21 Board of Directors shall make minutes of the decisions on matters discussed at the meeting, and the minutes shall be signed by the directors and minutes takers present at the meeting. The directors shall be accountable for the resolutions of the Board of Directors. If the resolutions of the Board of Directors violate laws, administrative regulations or the Articles of Association, resulting in serious losses to the Company, the directors who participated in the resolutions shall be liable for compensation to the Company. However, if it can be proved that they expressed objections during the voting and such objections were recorded in the minutes, those directors may be exempted from liability.

5.2.22 The Board of Directors shall formulate a management system for authorizing the management layer, clearly define requirements such as the authorization principles, management mechanisms, scope of matters, and authority conditions in accordance with the law, and establish and improve an authorization mechanism for tracking, supervision and dynamic adjustment as well as a working mechanism under which the general manager regularly reports to the Board of Directors.

Section III Independent Directors

5.3.1 Independent directors shall diligently perform their duties in accordance with laws, administrative regulations, the CSRC rules, stock exchange requirements, and these Articles of Association. They shall fulfill their roles in decision-making of the Board of Directors, oversight and checks-and-balances, and professional advisory functions, safeguarding the Company's overall interests and protecting the lawful rights and interests of minority shareholders.

5.3.2 Independent directors must maintain their independence. The following persons shall not serve as independent directors:

(I)            Persons holding positions in the Company or its affiliated enterprises, including their spouses, parents, children, and key social relationships;

(II)           Natural person shareholders directly or indirectly holding more than 1% of the issued shares of the Company or among the top 10 shareholders of the Company and their spouses, parents and children of such persons;

(III)         Persons employed by the companies that directly or indirectly hold more than five percent of the issued capital stock of the Company or the companies among the top fire shareholders of the Company or their spouses, parents and children of such persons;

(IV)         Persons who work in the affiliated enterprises of the Company's controlling shareholder and actual controller or their spouses, parents and children of such persons;

(V)          Persons who have major business dealings with the Company, its controlling shareholders, actual controllers or their respective affiliated enterprises, or persons who hold posts in companies with major business dealings with them, their controlling shareholders and actual controllers;

(VI)         Persons who provide financial, legal, consulting and sponsorship services for the Company, its controlling shareholders, actual controllers or their respective affiliated enterprises, including but not limited to all project team persons of intermediaries providing service, reviewers at all levels, persons signing the report, partners, directors, senior executives and principals;

(VII)        Persons who are covered under the circumstances listed in items (I) to (VI) within the last twelve months;

(VIII)       Other persons who do not have independence as stipulated by laws, administrative regulations, provisions of the CSRC, business rules of the Stock Exchange and these Articles.

The affiliated enterprises of the Company's controlling shareholder and actual controller mentioned in items (IV) to (VI) of the preceding paragraph do not include those controlled by the same state-owned asset management agency as the Company or that have not formed an association relationship with the Company according to relevant regulations.

Independent directors shall conduct self-examinations on their independence every year and submit the self-examination results to the Board of Directors. The Board of Directors shall evaluate the independence of incumbent independent directors every year and issue special opinions, which shall be disclosed together with the annual report.

5.3.3 Independent directors shall meet the following requirements:

(I)            Have the qualification to serve as a director of a listed company in accordance with laws, administrative regulations and other relevant provisions;

(II)           Have the independence specified in these Articles;

(III)         Have basic knowledge of the operation of listed companies, and be familiar with relevant laws, regulations and rules;

(IV)         Have no less than five (5) years of professional experience in law, accounting, economics, or other fields essential to the performance of independent director duties;

(V)          Demonstrate sound personal integrity with no record of material dishonesty or other serious misconduct;

(VI)         Other qualifications as required by laws, administrative regulations, CSRC provisions, stock exchange rules, and these Articles of Association.

5.3.4 As members of the Board of Directors, independent directors owe fiduciary duties of loyalty and diligence to the Company and all shareholders, and shall prudently perform the following responsibilities:

(I)            Participate in the decision-making of the Board of Directors and express clear opinions on the matters discussed;

(II)           Supervise potential material conflicts of interest between the Company and its controlling shareholders, actual controllers, directors, or senior executives, and safeguard the lawful rights and interests of minority shareholders;

(III)         Provide professional and objective suggestions on the Company's business development to promote the decision-making level of the Board of Directors;

(IV)         Perform other duties as stipulated by laws, administrative regulations, the regulations of the CSRC, and these Articles.

5.3.5 Independent directors shall exercise the following special functions and powers:

(I)            Independently employ an intermediary to audit, consult or check specific matters of the Company;

(II)           Propose to the Board of Directors the convening of an extraordinary shareholders' meeting;

(III)         Propose to convene a meeting of the Board of Directors;

(IV)         Solicit shareholders' rights from the shareholder in an open manner according to law;

(V)          Express independent opinions on matters that may damage the rights and interests of the Company or minority shareholders;

(VI)         Perform other functions and powers as stipulated by laws, administrative regulations, the regulations of the CSRC, and these Articles.

For independent directors to exercise the functions and powers specified in items (I) through (III) of the preceding paragraph, such exercise shall require approval by a majority of all independent directors.

Where an independent director exercises the functions and powers outlined in item (I), the Company shall disclose such exercise promptly. Where the aforementioned functions and powers cannot be duly exercised, the Company shall disclose the specific circumstances and reasons thereof.

5.3.6 The following matters shall be submitted to the Board of Directors for deliberation after being approved by more than half of all independent directors of the Company:

(I)            Related-party transactions that shall be disclosed;

(II)           Plans for change or exemption of commitments by the Company and related parties;

(III)         Decisions and measures taken by the Board of Directors of the listed company to be acquired with respect to the acquisition;

(IV)         Perform other matters as stipulated by laws, administrative regulations, the regulations of the CSRC, and these Articles.

5.3.7 The Company has established a special meeting mechanism attended by all independent directors. For matters such as related-party transactions that are to be reviewed by the Board of Directors, prior approval must be obtained from a special meeting of independent directors.

The Company shall hold special meetings of independent directors on a regular or irregular basis. Matters specified under 5.3.5(1)(i) through (iii) and Article 5.3.6 of these Articles of Association shall be subject to review and approval by the independent directors' Special Committee.

The Special Meetings of independent directors may study and discuss other matters of the Company as required.

The special meetings of independent directors shall be convened and presided over by an independent director jointly elected by more than half of the independent directors; if the convener fails to perform or is unable to perform his/her duties, two or more independent directors may themselves convene and elect a representative to preside over it.

Minutes of the meetings for the special meetings of independent directors of the Company shall be made in accordance with the regulations, and the opinions of the independent directors shall be set out in the minutes. Independent directors shall sign the minutes of the meeting for confirmation.

The Company shall provide convenience and support for the special meetings of independent directors.

Section IV Special Committees of the Board of Directors

5.4.1 The Company's Board of Directors shall establish an Audit Committee, which shall exercise the powers and functions statutorily vested in the Supervisory Committee under the Company Law.

5.4.2 The Audit Committee shall comprise three (3) members, all of whom shall be directors who do not hold senior executive positions in the Company. A majority of the Committee members shall be independent directors, with the convener role to be assumed by an independent director possessing professional accounting qualifications.

5.4.3 The Audit Committee shall be responsible for reviewing the Company's financial information and disclosures, overseeing and evaluating internal and external audits, and monitoring the internal control system. The following matters shall be submitted to the Board of Directors for deliberation only upon approval by a majority of all Audit Committee members:

(I)            Disclosure of financial accounting reports and financial information in periodic reports, as well as internal control evaluation reports;

(II)           Appointment or dismissal of the accounting firm engaged for the audit of the listed company;

(III)         Appointment or dismissal of the chief financial officer of the listed company;

(IV)         Changes in accounting policies or estimates, or material corrections of accounting errors, except those resulting from changes in accounting standards;

(V)          Other matters as stipulated by laws, administrative regulations, the regulations of the CSRC, and these Articles.

5.4.4 The Audit Committee shall meet at least once every quarter. Upon the proposal of two or more members, or when the convener deems it necessary, an extraordinary meeting may be convened. The Audit Committee meeting must have the presence of more than two-thirds of its members in order to be held.

Resolutions of the Audit Committee shall be passed by an affirmative vote of a majority of its members.

Each member of the Audit Committee shall have one (1) vote in the adoption of resolutions.

Resolutions of the Audit Committee shall be duly recorded in meeting minutes, which shall be signed by all attending Committee members.

The working rules of the Audit Committee shall be formulated by the Board of Directors.

5.4.5 The Board of Directors shall establish specialized committees, including the Strategy Committee, Nomination Committee, Compensation and Evaluation Committee, and Environment, Social and Governance (ESG) Committee, which shall perform their duties in accordance with these Articles of Association and the authorization of the Board. Proposals from such specialized committees shall be submitted to the Board for review and decision. The working procedures of the specialized committees shall be formulated by the Board of Directors.

5.4.6 The Strategy Committee is mainly for studying the long-term development strategies and major investment decisions of the Company, and offering pertinent suggestions.

5.4.7 Independent directors shall constitute a majority of the Nomination Committee, with an independent director serving as its convener. Main duties of the Nomination Committee:

(I)            Research and propose recommendations on the selection criteria and procedures for directors and senior executives;

(II)           Select and appoint qualified candidates for directors and senior executives;

(III)         Review and provide recommendations on candidates for directors and senior executives.

5.4.8 Independent directors shall constitute a majority of the Remuneration and Assessment Committee, with an independent director serving as its convener. Main duties of the Remuneration and Assessment Committee:

(I)            Study the standard of assessing directors and senior executives, conduct the assessment and offer suggestions;

(II)           Study and examine the remuneration policy and program for directors and senior executives.

5.4.9 The Committee on Environment, Society and Governance (hereinafter referred to as the "ESG Committee") shall consist of no fewer than five (5) members. The chairman of the Company shall serve as the chairperson of the Committee, responsible for convening and presiding over its meetings and activities.

The main duties of the ESG Committee:

(I)            Deliberate ESG-related disclosure documents, including but not limited to the Company's annual ESG special report;

(II)           Research and provide recommendations on the Company's ESG-related strategies and medium-to-long-term plans;

(III)         Review and approve material ESG topics;

(IV)         Oversee the identification, assessment, and management of ESG governance activities, including objectives, risks, and opportunities;

(V)          Study other material ESG matters affecting the Company and provide recommendations;

(VI)         Handle other matters authorized by the Board of Directors.

Chapter VI Senior Executives

6.1 The Company shall have one general manager, who shall be appointed or dismissed at the discretion of the Board of Directors.

The Company shall have several deputy general managers who are appointed or dismissed at the discretion of the Board of Directors.

The general manager, deputy general managers, chief accountant (chief financial officer), secretary of the Board of Directors and general counsel shall be the senior executives of the Company.

6.2 The provisions of these Articles concerning the circumstances under which individuals are prohibited from serving as directors, as well as the regulations concerning the resignation management system, shall also apply to senior executives.

6.3 A person holding other administrative position, other than a director or supervisor, in the organization of the controlling shareholder or the actual controller of the Company, cannot become a senior executive of the Company.

The senior executives of the Company are paid only at the Company and are not paid by the controlling shareholder on behalf of the Company.

6.4 The senior executives of the Company adopts the professional manager system, with a term of office of three years, and may be reappointed upon expiration of their term of office, and their term of office is generally consistent with the term of office of the Board of Directors of the Company. Senior executives sign appointment agreements and performance contracts, and shall be subject to rigid assessment and fulfillment requirements to strengthen the equivalence of responsibilities, rights, and obligations. The performance results of performance contracts serve as an important basis for the evaluation, compensation distribution, and job adjustment of senior executives.

6.5 The general manager shall report to the Board of Directors and shall exercise the following functions and powers:

(I)            Take charge of the Company's production, operation and management, organize the implementation of resolutions of the Board of Directors and report to the Board of Directors on his work;

(II)           Draft and organize the implementation of the Company's business policy, investment plan, business plan and investment scheme;

(III)         Review and approve the following transactions of the Company (except for the provision of guarantee, receipt of cash assets and simple debt relief of the Company's obligations):

1.    The total amount of the assets involved in such transaction (calculated based on the higher of the book value and estimated value if both exist) accounts for less than one percent of the total assets of the Company as audited in the latest term;

2.    The net assets involved in transaction object (such as equity) (calculated based on the higher of the book value and estimated value if both exist) account for less than one percent of the net assets of the Company as audited in the latest term;

3.    The transaction amount (including the debts and expenses assumed) accounts for less than one percent of the net assets of the Company as audited in the latest term;

4.    Profits from the transaction account for less than one percent of the net profit of the Company as audited in the latest fiscal year;

5.    Relevant operating revenue of the transaction object (such as equity) in the latest fiscal year accounts for less than one percent of the total operating revenue of the Company as audited in the latest fiscal year;

6.    Relevant net profit of the transaction object (such as equity) in the latest fiscal year accounts for less than one percent of the net profits of the Company as audited in the latest fiscal year.

If the data involved in the above indicators is negative, the absolute value shall be taken for the calculation.

For external investments within the authorities set out above, strict review and decision-making procedures should be established; major investment projects shall involve relevant experts and professionals for evaluation.

(IV)         Review and approve the related-party transactions in which the transaction amount between the Company or its controlled subsidiary and related natural persons is less than RMB 300,000 (excluding guarantees provided by the Company), and the transactions between the Company or its controlled subsidiary and related legal persons (excluding guarantees provided by the company) with a transaction amount of less than RMB 3 million, or related-party transactions where the transaction amount accounts for less than 0.5% of the absolute value of the Company's net assets as audited in the latest term;

The amount of related-party transactions between the Company and the same related party, or transaction related to the type of transaction object between the Company and different related party, will be calculated according to the principles of accumulative calculation for twelve (12) consecutive months;

(V)          Formulate the plan for the establishment of the Company's internal management organization;

(VI)         Formulate the basic management system of the Company;

(VII)        Formulate detailed rules of the Company;

(VIII)       Propose the appointment or dismissal of the Company's deputy general manager, chief accountant (chief financial officer), and general counsel to the Board of Directors;

(IX)         Decide to appoint or dismiss management personnel other than those to be appointed or dismissed by the Board of Directors;

(X)  Prepare the construction scheme of compliance management system and the basic system of compliance management, and organize their implementation after approval by the Board of Directors. Organize and develop specific compliance management systems, respond to major compliance risk events, approve annual compliance management plans, and guide and supervise compliance management of all departments and affiliated enterprises;

(XI)         Exercise other functions and powers provided in these Articles or granted by the Board of Directors.

The general manager attends the board meetings, and non-director general manager has no voting right in the board meetings.

6.6 The general manager shall prepare the working rules for the general manager, which shall be implemented after being approved by the Board of Directors.

6.7 The working rules for the general manager shall include:

(I)            Conditions, procedures and participants of the general manager meetings;

(II)           The specific duties and assignment of responsibility of general manager and other senior executives;

(III)         Company funds and asset utilization, signing authority for major contracts, and the system of reporting to the Board of Directors;

(IV)         Other matters that the Board of Directors deems necessary.

6.8 The general manager may resign before the expiration of his term of office. Specific procedures and measures associated to resignation of the general manager are stipulated by labor contract or service contract between the general manager and the Company.

6.9 The Company shall have a secretary of the Board of Directors. The secretary of the Board of Directors shall possess the necessary professional knowledge and experience. The secretary is responsible for the preparation of the Company's shareholders' meeting and board meeting, document storage, management of the Company's shareholder information, handling of information disclosure matters, etc., ensuring:

(I) The Company has complete organizational documents and records;

(II) The Company shall prepare and submit the reports and documents required by the competent authorities in accordance with the law.

(III) The Company's shareholder register shall be properly established to ensure that those who are entitled to obtain the Company's relevant records and documents can get them in a timely manner.

The secretary of the Board of Directors shall comply with the related provisions of the laws, administrative regulations, departmental rules, and these Articles.

6.10 The Company implements the general counsel system. The general counsel shall be appointed by the Board of Directors and shall conduct overall legal management of the enterprise. If the matters deliberated by the Board of Directors involve legal issues, the general counsel shall attend as a nonvoting delegate and give legal opinions.

6.11 The senior executives of the Company shall faithfully perform their duties and safeguard the best interests of the Company and all shareholders. If any senior executive of the Company fails to faithfully perform his duties or violates his fiduciary duty, thus causing damage to the interests of the Company and the public shareholders, he shall be liable for compensation according to law.

6.12 Where a senior executive causes damage to third parties in the performance of their duties, the Company shall be liable for compensation, provided that if the senior executive acted with intent or gross negligence, such director shall also be personally liable for damages. Where a senior executive violates laws, administrative regulations, departmental rules, or the provisions of these Articles in the performance of their duties, thereby causing losses to the Company, such senior executive shall be liable for compensation.

6.13 The Company promotes the public recruitment of employees, promotes the selection, competition for employment of middle-level managers, and the mechanism for those who are not competent to withdraw. It establishes a salary distribution system for key core talents with market competitiveness, flexibly carries out medium- and long-term incentives in various ways, and continuously promotes and deepens the reform of the three systems.

Chapter VII Party Committee

Section I Party Organization

7.1.1 According to the provisions of the Party Constitution and with the approval of the superior Party organization, the Committee of CPC SDIC Power Holdings Co., Ltd. (hereinafter referred to as the Company's Party Committee) is established. At the same time, in accordance with relevant regulations, the Discipline Inspection Committee of CPC SDIC Power Holdings Co., Ltd. (referred to as the Company's Discipline Inspection Committee) is established.

The Company shall establish a working organization of the Party, assign a sufficient workforce for Party affairs, and finance the expenditures for the Party organization.

7.1.2 The Company's Party Committee shall be elected by the meeting of all the Party members or the Party congress, with each term of office lasting 5 years generally. A new election shall be held at the end of each term, in accordance with the regulations. The elected members of the Party Committee shall be reported to the superior Party organization for the record; the secretary and deputy secretaries shall be reported to the superior Party organization for approval. When the superior Party organization deems it necessary, it may transfer or appoint the responsible person of the lower-level Party organization.

The term of office of the Party's Discipline Inspection Committee is the same as that of the Party Committee, and the secretary and deputy secretaries elected by the Discipline Inspection Committee shall be submitted to the Party organization at the higher level for approval after being approved by the Party Committee at the same level.

7.1.3 The Company's Party Committee has one secretary and several other members.

7.1.4 When the chairman is a Party member, in principle, the chairman and the secretary of the Party Committee shall be held by one person, and the general manager who is a Party member shall serve as the deputy secretary; a full-time deputy secretary dedicated to Party building work shall be appointed.

7.1.5 The "dual entry and cross appointments" leadership system shall be upheld and improved. Qualified Party Committee members may enter the Board of Directors or the Management through legal procedures. Similarly, Party members who are qualified in the Board of Directors or the Management may, according to relevant regulations and procedures, join the Party Committee.

Section II Responsibilities of the Company's Party Committee

7.2.1 While performing its duties in accordance with the Constitution of the Communist Party of China and other internal Party regulations, the Company's Party Committee plays the leading role to steer the direction, manage the overall situation, and promote the relevant implementations of the Company, and discusses and decides major issues of the Company in accordance with regulations. Major business and management matters must be studied and discussed by the Party Committee before being determined by the Board of Directors or the Management. The pre-study and discussion of the Party Committee to form opinions is not equivalent to a pre-decision, and cannot replace the decision of other governance entities.

7.2.2 Major business management matters must be subject to preliminary research and discussion by the Party Committee before the Board of Directors and others make decisions in accordance with their functions and powers and the prescribed procedures. The Company's Party Committee shall fully exercise its substantive oversight role over major operational and management matters, dynamically optimize and refine the decision-making authority for significant issues, and enhance the quality and efficiency of preliminary research and discussions. Attention shall be paid to whether the decision-making matters conform to the Party's theories, course, principles, and policies, whether the Party Central Committee's decision-making and deployment and the national development strategy are implemented, whether it is conducive to promoting the high-quality development of enterprises, enhancing the competitiveness of enterprises, and maintaining and increasing the value of state-owned assets, and whether it is conducive to safeguarding the interests of the public and the legitimate rights and interests of employees. The Party Committee shall study and discuss major business and management matters, while the general counsel or the person in charge of the legal compliance institution shall attend the meeting without voting rights and give legal opinions.

7.2.3 The main responsibilities of the Company's Party Committee are:

(I) To strengthen the political building of the Party in the Company, adhere to and implement the fundamental, basic and important systems of socialism with Chinese characteristics, and educate and guide all the Party members to maintain a high degree of unity with the CPC Central Committee with Comrade Xi Jinping as its core in terms of the political stand, political direction, political principle and political path;

(II) To study and put into effect Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, study and publicize the Party's theories, implement the Party's course, principles, and policies, and supervise and ensure that the major decisions and arrangements of the CPC Central Committee and the resolutions of the higher-level Party organization are implemented in the Company;

(III) To study and discuss major operation and management matters of the Company, and support the shareholders' meeting, the Board of Directors and the Management to exercise their functions and powers according to law.

(IV) To strengthen leadership and oversight in personnel selection and appointment within the Company, and enhance the building of the Company's leadership team, cadre team and talent pool;

(V) To fulfill the main responsibility for building a clean and honest Party conduct in the Company, lead and support the Discipline Inspection Committee to perform their duties of supervision, discipline enforcement and accountability, strictly enforce political discipline and political rules, and promote the comprehensive and strict governance of the Party to extend to the grassroots level;

(VI) To strengthen the building of primary Party organizations and Party members' teams, and unite and lead the workers to actively participate in the reform and development of the Company;

(VII) To lead the ideological and political work, cultural and ideological progress and united front work of the Company, as well as the Company's trade union, Communist Youth League, women's organizations and other mass organizations.

Chapter VIII Qualifications and Obligations of the Company's Directors, General Manager and Other Senior Executives

8.1.1 Any person may not serve as the director or the senior executive of the Company if such person:

(I) does not have civil capacity or with limited civil capacity;

(II) has been sentenced to criminal punishment for embezzlement, bribery, embezzlement of property, misappropriation of property or sabotage of the order of socialist market economy, or deprived of political rights for committing a crime, a suspended sentence has been pronounced within five years of the expiration of the sentence, and two years have not elapsed since the expiration of the probation period;

(III) has served as a director, factory manager, or general manager of a company or enterprise undergoing bankruptcy liquidation, and bears personal responsibility for such bankruptcy, such individual shall be disqualified for three years from the date of completion of the bankruptcy liquidation proceedings;

(IV) served as the legal representative of a company or enterprise whose business license was revoked due to legal violations, and bears personal responsibility for such revocation, such individual shall be disqualified for three years from the date of revocation of the business license or compulsory closure order;

(V) is listed by the people's court as a person subject to execution for breach of trust due to a large amount of debts that are due and unpaid.

(VI) has been prohibited by the CSRC from serving as directors, and senior executives in listed companies, and the prohibition term has not yet expired;

(VII) is publicly recognized by any stock exchange as unfit to be a director, or senior executive of listed companies, and the term has not yet expired;

(VIII) Other circumstances specified by laws, administrative regulations, or departmental rules.

For directors, or senior executives elected, delegated, or employed in violation of previous provisions, such election, delegation or employment is null and void. In case any circumstance as set forth in this Article occurs to directors, supervisors, or senior executives during their terms of office, the Company shall immediately remove such person from their position and terminate all exercise of their authorities.

8.1.2 The effectiveness of the acts of the directors, general manager and other senior executives of the Company on behalf of the Company to bona fide third parties shall not be affected by any noncompliance in their positions, elections or qualifications.

8.1.3 In addition to the obligations required by laws and regulations or the listing rules of the stock exchange where the Company's stocks or GDR are listed, the directors, general manager and other senior executives of the Company shall have the following obligations to each shareholder when exercising their functions and powers entrusted by the Company:

(I)            They must not be allowed to exceed the business scope specified in the Company's business license;

(II)           They shall act based on the best interests of the Company;

(III)         They shall not deprive the Company of its property in any form, including (but not limited to) opportunities beneficial to the Company;

(IV)         They shall not deprive shareholders of their personal rights and interests, including (but not limited to) distribution rights and voting rights, but excluding the reorganization of the Company submitted to the shareholders' meeting for approval in accordance with the Articles of Association.

8.1.4 The directors, general manager and other senior executives of the Company shall exercise their rights or perform their obligations with the care, diligence and skills that a reasonably prudent person would show under similar circumstances.

8.1.5 The directors, general manager and other senior executives of the Company must abide by the principle of good faith when performing their duties, and shall not put themselves in a situation where their own interests may conflict with their obligations. This principle includes but is not limited to fulfilling the following obligations:

(I) They shall act in good faith based on the best interests of the Company;

(II)           They shall exercise powers within the scope and not beyond the power;

(III)         They shall exercise the discretionary power granted to them in person and not be manipulated by others; without the permission of laws, administrative regulations, or the consent of the shareholders' meeting with full knowledge, they shall not transfer their discretionary power to others for exercise.

(IV)         Shareholders of the same class shall be equal;

(V)          Except as otherwise provided in the Articles of Association or known and approved by the shareholders' meeting, they shall not enter into any contracts, transactions or arrangements with any company;

(VI)         They shall not use the Company's property in any form to seek benefits for themselves without the informed consent of the shareholders' meeting;

(VII) They shall not take advantage of their functions and powers to collect bribes or other illegal income, and shall not misappropriate the Company's property in any form, including (but not limited to) opportunities beneficial to the Company;

(VIII)       They shall not accept commissions related to the Company transactions without the informed consent of the shareholders' meeting;

(IX) They shall abide by the Articles of Association, faithfully perform their duties, safeguard the interests of the Company, and shall not use their positions, functions and powers in the Company to seek personal gain for themselves;

(X)          They shall not compete with the Company in any form without the informed consent of the shareholders' meeting;

(XI)         They shall not embezzle the funds of the Company or loan the funds of the Company to others, open an account to deposit the assets of the Company in his or her name or in any other person's name, or provide any guarantee with the assets of the Company for any debt of any shareholder of the Company or any other person;

(XII)        Without the consent of the shareholders' meeting under the condition of being informed, they shall not disclose the confidential information related to the Company obtained during their tenure; nor shall they use such information except for the purpose of the Company's interests. However, the information may be disclosed to the court or other government authorities under the following circumstances:

1.    As required by law;

2.    As required for the common benefit;

3.    As required by their own interests of the directors, general manager and other senior executives.

8.1.6 The directors, general manager and other senior executives of the Company shall not instruct the following persons or institutions ("relevant persons") to do what the directors, general manager and other senior executives cannot do:

(I)            Spouses or minor children of the directors, general manager and other senior executives of the Company;

(II)           The trustees of the directors, supervisors, general manager and other senior executives or the persons mentioned in Item (I) of this Article;

(III) Partners of the directors, general manager and other senior executives or the persons mentioned in Items (I) and (II) of this Article;

(IV) Any company that is in fact independently controlled by the directors, general manager and other senior executives of the Company, or in fact jointly controlled by the personnel mentioned in Items (I), (II) and (III) of this Article or other directors, general manager and other senior executives of the Company;

(V) Directors, general manager and other senior executives of the controlled company referred to in Item (IV) of this Article.

8.1.7 The integrity obligations of the directors, general manager and other senior executives of the Company may not necessarily terminate upon the end of their term of office, and their obligation to keep the Company's trade secrets confidential survives the expiration of their term of office. The duration of other obligations shall be determined according to the principle of fairness, depending on the length of time between the occurrence of the incident and the employment termination, and the circumstances and conditions under which the employment relationship with the Company ends.

8.1.8 The responsibilities of the directors, general manager and other senior executives of the Company for violating a specific obligation can be relieved by the shareholders' meeting, except for the circumstances stipulated in Article 4.1.10 of these Articles of Association.

8.1.9 When the directors, general manager and other senior executives of the Company have direct or indirect important interests in contracts, transactions and arrangements that the Company has concluded or plans to conclude, (except the employment contracts between the Company and the directors, general manager and other senior executives), regardless of whether the relevant matters require the approval of the Board of Directors under normal circumstances, the nature and degree of its interest shall be disclosed to the Board of Directors as soon as possible.

Unless the interested directors, general manager and other senior executives of the Company have made a disclosure to the Board of Directors in accordance with the requirements of the first paragraph of this Article, and the Board of Directors approved the matter at the meeting where such persons were not included in the quorum and didn't participate in the voting, the Company has the right to cancel the contract, transaction or arrangement, except in the case that the other party is a bona fide party who is unaware of the violation of its obligations by the relevant directors, general manager and other senior executives.

If the relevant persons of the directors, general manager and other senior executives of the Company have an interest in a contract, transaction or arrangement, such directors, general manager and other senior executives shall also be deemed to have an interest.

8.1.10 If the directors, general manager and other senior executives of the Company inform the Board of Directors in writing before the Company first considers entering into relevant contracts, transactions and arrangements stating that it will have interest in the future contracts, transactions and arrangements of the Company, within the scope specified in the notice, the relevant directors, general manager and other senior executives shall be deemed to have made the disclosure specified in the preceding article of this chapter.

8.1.11 The Company shall not pay taxes for its directors, general manager and other senior executives in any way.

8.1.12 The Company shall not directly or indirectly provide loans or loan guarantees to the directors, general manager and other senior executives of the Company and its parent company.

The preceding paragraph shall not apply to:

(I)            The Company provides loans to its subsidiaries or provides loan guarantees for subsidiaries;

(II)           According to the employment contract approved by the shareholders' meeting, the Company provides loans, loan guarantees or other payments to the directors, general manager and other senior executives of the Company in order to pay the expenses incurred for the purposes of the Company or for the performance of their duties of the Company;

(III)         If the normal business scope of the Company includes providing loans and loan guarantees, the Company can provide loans and loan guarantees to the relevant directors, general manager and other senior executives and their related persons, only in normal business conditions.

8.1.13 If the Company provides loans in violation of the provisions of the preceding Articles, regardless of the terms of the loans, the person receiving the money shall repay the loan immediately.

8.1.14 The Company shall not be compelled to enforce the loan guarantee that is provided by the Company in violation of the provisions of Item 1 of Article 8.1.12; however, the following circumstances are exceptions:

(I)            When providing a loan to a person related to a director, general manager, or other senior executive of the Company or its parent company, the lender is unaware of the situation;

(II)           The collateral provided by the Company has been legally sold by the lender to a bona fide purchaser.

8.1.15 The term "guarantee" as mentioned in the preceding articles of this chapter includes the act that the guarantor bears the responsibility or provides property to ensure the obligor performs his obligations.

8.1.16 When the directors, general manager, and other senior executives of the Company violate their obligations to the Company, in addition to various rights and remedies stipulated by laws and administrative regulations, the Company shall have the right to:

(I)            Require relevant directors, general managers, and other senior executives to compensate for the losses caused to the Company due to their dereliction of duty;

(II)           Revoke any contract or transaction between the Company and the relevant directors, general manager and other senior executives, as well as any contract or transaction between the Company and a third party (when the third party knows or should have known that the directors, general manager and other senior executives representing the Company have violated their obligations to the Company);

(III)         Require the relevant directors, general manager, and other senior executives to surrender the proceeds obtained from the breach of obligations;

(IV)         Recover the money received by the relevant directors, general manager, and other senior executives that shall be owned by the Company, including but not limited to commissions;

(V)          Require the relevant directors, general manager, and other senior executives to refund the interest earned or likely to be earned on the money that shall be paid to the Company.

8.1.17 The Company shall conclude a written contract with the directors of the Company on the remuneration, which shall be approved in advance by the shareholders' meeting. The aforesaid remuneration matters include:

(I)            Remuneration as a director or senior executive of the Company;

(II)           Remuneration of directors or senior executives who are subsidiaries of the Company;

(III)         Remuneration for providing other services for the management of the Company and its subsidiaries;

(IV)         The amount of compensation received by the director due to loss of position or retirement.

Except as provided in the aforesaid contract, a director shall not bring a lawsuit against the Company for the benefits to which he is entitled due to the aforesaid matters.

8.1.18 The Company shall stipulate in the contracts on remuneration matters concluded with its directors that, when the Company is to be acquired, the directors of the Company shall have the right to obtain compensation or other amounts due to loss of position or retirement under the conditions approved in advance by the shareholders' meeting. The term "the Company is to be acquired," as mentioned in the preceding paragraph, refers to one of the following situations:

(I)            Any person makes a tender offer to all shareholders;

(II)           Any person makes a takeover offer, aiming to make the offeror a controlling shareholder. The definition of controlling shareholder is the same as that in Article 14.1 of these Articles;

(III)         If some directors do not comply with the provisions of this Article, any amount received by them shall be owned by those who sell their shares due to accepting the aforesaid offer, and such directors shall bear the expenses incurred in distributing such amount proportionally, which shall not be deducted from such amount.

Chapter IX Financial and Accounting System, Profit Distribution and Audit

Section I Financial and Accounting System

9.1.1 The Company formulates a financial accounting system according to the law, administrative regulations and provisions of relevant national authorities. The Company shall prepare financial reports at the end of each fiscal year, which shall be examined and verified according to law.

9.1.2 The Company shall submit and disclose an annual report to the local offices of the CSRC and the stock exchange within four months of the end of each fiscal year, a semiannual report to the CSRC and the stock exchange within two months from the end of the first half of each fiscal year, and quarterly reports to the CSRC and the stock exchange within one month of the end of the first three months and the first nine months of each fiscal year.

The above annual report, semiannual report, and quarterly reports shall be prepared according to the relevant laws, administrative regulations, and regulations specified by the CSRC and the Shanghai Stock Exchange.

9.1.3 At each annual shareholders' meeting, the Board of Directors of the Company shall submit to the shareholders the financial reports prepared by the Company as required by relevant laws, administrative regulations, normative documents issued by local governments and competent departments.

9.1.4 The financial reports of the Company shall be placed at the Company twenty days prior to the convening of the annual shareholders' meeting for inspection by shareholders. Every shareholder of the Company is entitled to obtain the financial reports mentioned in this chapter.

9.1.5 The Company shall not establish other accounting books in addition to the legal accounting books. No asset of the Company can be deposited in any account opened in the name of any individual.

9.1.6 The Company's accumulation funds shall be used to make up the losses of the Company, expand the production and management of the Company, or increase the capital of the Company.

When distributing after-tax profits of the current year, the Company shall allocate 10% of its profits for the statutory surplus reserve fund. Once the cumulative amount of the statutory reserve fund reaches 50% of the Company's registered capital, the Company may not allocate further after-tax profit to the statutory reserve fund.

If the statutory reserve of the company is insufficient to make up for the losses of the previous year, the profits of the current year shall be used to make up for the losses before the statutory reserve is withdrawn in accordance with the provisions of the preceding paragraph.

After the drawing of the statutory surplus reserve fund from the after-tax profits by the Company, it shall be determined by the shareholders' meeting through resolution whether to draw an optional surplus reserve fund from the after-tax profits or not.

The Company's after-tax profits remaining after it has made up its losses and made allocations to its surplus reserve shall be distributed in proportion to the shareholdings of its shareholders unless these Articles stipulate that the profits shall not be distributed in proportion to shareholding ratios.

If the shareholders' meeting distributes profits to shareholders in violation of the Company Law, the shareholders shall return the profits distributed in violation of the regulations to the company; if losses are caused to the company, the shareholders and responsible directors and senior executives shall be liable for compensation.

If the Company holds the shares of its own company, it shall not be entitled to profit distribution.

9.1.7 To make up for the corporate losses with the capital reserve funds, the optional reserve fund and the statutory reserve fund shall be used first. If they are still unable to make up for it, the capital reserve can be used in accordance with the regulations. The capital reserve includes the following funds:

(I)            The premium obtained from the issue exceeding the par value of the shares;

(II)           The portion of capital raised through the issuance of no-par value shares that is not accounted for as registered capital;

(III)         Other items stipulated by the finance department of the State Council to be included in the capital reserve.

When the statutory reserve fund is converted into an additional registered capital, the retained amount of this reserve fund shall not be less than twenty-five percent of the Company's registered capital before conversion.

9.1.8 The Company's profit distribution policy is:

(I)            Profit distribution principle

The Company's profit distribution should pay attention to the reasonable returns on investment to the public shareholders, aiming at sustainable development and safeguarding shareholders' rights and interests, and the Company should maintain the continuity and stability of the profit distribution policy.

The Company's profit distribution shall not exceed the range of accumulated distributable profits, and shall not prejudice the Company's ability to continue as a going concern.

(II)           Profit distribution form

The Company distributes profits by cash, stock, combination of cash and stock, or other reasonable means in line with laws and administrative regulations.

The Company gives priority to the profit distribution method of cash dividends.

When distributing profits in cash, the Company shall fully consider the capital needs of daily production and operation activities and investment activities in the future, as well as the cost and efficiency of financing from banks and securities markets in the future to ensure that the distribution scheme does not affect the Company's going concern and development.

When distributing profits by means of stocks, the Company should fully consider real and reasonable factors such as the Company's growth and the dilution of net assets per share and compatibility of total shares after profit distribution with the Company's scale of operation, to ensure that the distribution scheme is in line with the overall interests of shareholders of the Company.

(III)         Specific conditions and proportions for cash dividends

Under the condition that the Company is profitable in the current year and has no unrecovered losses, if there are no major investment plans or major cash expenditures, the Company shall distribute dividends in cash.

Major investment plans or major cash expenditures refer to that the Company plans to invest abroad, acquire assets or purchase equipment in the next 12 months (except for the items of raised funds), and the accumulated expenditure reaches or exceeds thirty percent of the latest audited net assets of the Company or a single cash expenditure item exceeds RMB 500 million.

The profits accumulatively distributed in cash by the Company in the recent three fiscal years are no less than thirty percent of the average annual profits available for distribution in the recent three fiscal years.

(IV)         Specific conditions for issuing stock dividends

On the basis of giving priority to cash dividends, when the Company is in good operating condition, and the scale of share capital is reasonable, and the Board of Directors of the Company thinks that issuing stock dividends is beneficial to the growth of the Company and the interests of all shareholders, a stock dividend distribution plan can be put forward.

(V)          Interval between profit distribution periods

The Company shall put forward a profit distribution scheme at the annual meeting of the Board of Directors and implement it after being approved by the shareholders' meeting.

Under the condition of meeting the aforesaid cash dividends, the Company shall make a cash dividend once a year. According to the Company's profitability and capital demand, and upon the proposal of the Company's Board of Directors and the approval of the shareholders' meeting, medium-term cash dividends may also be distributed.

(VI)         The Board of Directors of the Company shall distinguish the following cases and put forward a differentiated cash dividend policy according to the procedures specified in these Articles by considering its industrial characteristics, development stage, business model, profitability, debt repayment ability, major capital expenditure arrangement, and investor returns:

1. If the Company is at a mature development stage, without major capital expenditure arrangement, cash dividends shall account for at least 80% of the distributed profits in this profit distribution;

2. If the Company is at a mature development stage, with a major capital expenditure arrangement, cash dividends shall account for at least 40% of the distributed profits in this profit distribution;

3. If the Company is at the growth stage and has some significant fund expenditure arrangement, cash dividend shall at least account for 20% of this profit distribution at the time of profit distribution.

The specific stage at which the Company distributes dividends shall be determined by the Board of Directors based on the specific situation. If the actual development stage of the Company cannot be identified, and the Company has a major capital expenditure arrangement, it is still allowed to make decisions based on the provisions of (III).

(VII)        In case of adjusting the profit distribution policy due to the production and operation situation and long-term development needs of the Company, it should be based on protecting the interests of shareholders. The adjusted profit distribution policy shall not violate relevant laws, regulations, regulatory documents, and the provisions of these Articles. The profit distribution policy adjustment plan shall seek the opinions of the Audit Committee in advance, be deliberated and passed by the Board of Directors, then submitted to the shareholders' meeting for deliberation, and be approved by more than two-thirds of the voting rights held by the shareholders present at the shareholders' meeting.

(VIII)       The proportion of cash dividends in this profit distribution is calculated as the cash dividend divided by the sum of the cash dividend and stock dividend.

9.1.9 Profit distribution procedures of the Company

(I)            Before the announcement of a regular report, the Board of Directors will explore and formulate the annual profit distribution plan based on these Articles and the Company's operational status. When the Company prepares a cash dividend plan, the Board of Directors shall carefully explore and demonstrate the opportunity, conditions, minimum proportion, conditions of adjustment, and decision-making procedure requirements of cash dividends. The Board of Directors shall form the annual profit distribution plan on the basis of considering the sustained, robust, and scientific returns to all shareholders, and the plan shall be submitted to the shareholders' meeting for approval after being deliberated and approved by the Board of Directors.

If independent directors believe that the specific plan for cash dividends may harm the rights and interests of the Company or minority shareholders, they have the right to express independent opinions. If the Board of Directors has not adopted or fully adopted the opinions of independent directors, the opinions of independent directors and the specific reasons for not adopting them shall be recorded in the resolution of the Board of Directors and disclosed.

The independent director may solicit the opinions of the minority shareholders, propose a dividend plan, and submit it to the Board of Directors for discussion.

(II)           In the process of decision-making and demonstration of the profit distribution plan, the Board of Directors should actively communicate with shareholders, especially small and medium shareholders, through various channels, fully listen to the opinions and demands of small and medium shareholders, and answer the concerns of small and medium shareholders in a timely manner.

(III)         When a resolution on the profit distribution plan is passed at the shareholders' meeting, or, after the Board of Directors formulates a specific distribution plan based on the interim dividend conditions and ceiling approved by the annual shareholders' meeting for the following year, the Board of Directors shall complete such distribution of dividends (or shares) within two (2) months after the shareholders' meeting is held.

9.1.10 The Company shall appoint a collecting proxy for GDR holders. The proxy for receiving payments shall collect dividends and other payable amounts distributed by the Company to the relevant GDR holders on behalf of such GDR holders. The collection proxy appointed by the Company shall meet the requirements of the laws of the place of listing or the relevant provisions of the stock exchange.

Section II Internal Audit

9.2.1 The Company implements an internal audit system that clearly defines the leadership structure, responsibilities and authority, personnel allocation, funding support, utilization of audit results, and accountability measures for internal audit activities.

The internal audit system of the Company shall be implemented upon approval by the Board of Directors and will be disclosed to the public.

9.2.2 The internal audit department of the Company conducts supervision and inspection of business activities, risk management, internal controls, and financial information.

9.2.3 The internal audit institution is responsible to the Board of Directors.

The internal audit department shall be subject to the oversight and guidance of the Audit Committee during its supervision and inspection of the company's business activities, risk management, internal controls, and financial information. The internal audit department shall promptly report any significant issues or findings directly to the Audit Committee.

9.2.4 The specific organizational implementation of the Company's internal control evaluation is the responsibility of the internal control evaluation agency. The Company issues the annual internal control evaluation report based on the evaluation report and relevant materials issued by the internal control evaluation agency and reviewed by the Audit Committee.

9.2.5 The Audit Committee shall communicate with external audit entities such as accounting firms and national audit institutions, and the internal audit department should actively cooperate, providing necessary support and collaboration.

9.2.6 The Audit Committee participates in the assessment of the head of internal audit.

Section III Appointment of Accounting Firm

9.3.1 The Company shall engage an accounting firm meeting the requirements of Securities Law for the audit of the accounting statements, verification of net assets, and other relevant consultation services, etc. The employment term of the accounting firm shall be one (1) year and may be renewed.

9.3.2 The appointment and dismissal of the accounting firm must be determined by the shareholders' meeting. The Board of Directors shall not appoint an accounting firm before the decision of the shareholders' meeting.

9.3.3 The Company guarantees to provide the engaged accounting firm with true and complete accounting vouchers, accounting books, financial and accounting reports, and other accounting documents, and shall not refuse, conceal, or make false reports.

9.3.4 The audit fees of the accounting firm shall be decided by the shareholders' meeting.

9.3.5 The Company shall notify the accounting firm 30 days in advance when it dismisses or does not renew the appointment of the accounting firm, and the accounting firm shall be allowed to state its opinions when the shareholders' meeting of the Company votes on the dismissal of the accounting firm.

If an accounting firm proposes to resign, it shall explain to the shareholders' meeting whether there are any improper circumstances of the Company.

Chapter X Notice and Announcement

Section I Notice

10.1.1 The Company's notices shall be issued in the following forms:

(I)            By hand;

(II)           By postal mail;

(III)         Announcement;

(IV)         Any other form prescribed by these Articles.

10.1.2 A notice given by the Company by way of public announcement shall be deemed to have been received by all persons concerned upon such announcement.

10.1.3 The notice of the shareholders' meeting of the Company shall be made by announcement.

10.1.4 The notice of the meeting of the Board of Directors of the Company shall be sent by hand delivery or by fax.

10.1.5 In case the Company's notice is delivered by a designated person, the receiver shall sign (or stamp) on the service return receipt and the date on which the receiver signs for the receipt shall be the date of service; in case the Company's notice is sent through a mail, the fifth working day after it is delivered to the post office shall be the date of service; in case the Company's notice is given through a public announcement, the data on which the public announcement is published for the first time shall be the date of service; in case the Company's notice is sent by facsimile, the date of transmission shall be deemed the date of delivery, as evidenced by the facsimile machine's transmission report.

10.1.6 The accidental omission to give notice of the meeting to, or the non-receipt of notice of the meeting by, a person entitled to receive notice of the meeting shall not invalidate the meeting or the resolutions passed at the meeting.

Section II Announcement

10.2.1 The Company shall publish company announcements in the media designated by the CSRC in accordance with the regulations.

Chapter XI Merger, Division, Capital Increase, Capital Decrease, Dissolution and Liquidation

Section I Merger, Division, Capital Increase and Capital Decrease

11.1.1 A company merger may be effected by way of an absorption merger or a new establishment merger.

The absorption by one company of one or more other companies shall be merger by absorption, in which case the absorbed company or companies shall be dissolved. The merger of two or more companies for the establishment of a new company shall be merger by new establishment, in which case the parties to the merger shall be dissolved.

11.1.2 If the price paid for the merger does not exceed 10% of the net assets of the Company, it may be conducted without the approval of the shareholders' meeting, unless otherwise specified in these Articles.

If the merger of the Company in accordance with the provisions of the preceding paragraphs does not require a resolution of the shareholders' meeting, it shall be approved by the Board of Directors.

11.1.3 For the merger or division of the Company, the Board of Directors shall put forward a scheme, and go through the relevant examination and approval procedures according to laws after the scheme is adopted in accordance with the procedures specified in these Articles. Shareholders who oppose the merger and division scheme of the Company shall have the right to require the Company or the shareholders who agree on the merger or division of the Company to buy their shares at a fair price. The contents of the resolution on the merger and division of the Company shall be made into special documents for reference by the shareholders.

11.1.4 When the Company merges, the merging parties shall conclude a merger agreement and prepare a balance sheet and a list of assets. The Company shall notify its creditors within ten days from the date of the merger resolution and shall publish an announcement within thirty days in the media designated by the CSRC, as well as in newspapers or on the National Enterprise Credit Information Publicity System. Creditors may, within thirty days from receipt of the notice or, in the absence of such notice, within forty-five days from the date of the public announcement, request the Company to clear off their debts or to provide the corresponding guarantees.

11.1.5 When the Company merges, the credits and debts of all parties to the merger shall be succeeded by the surviving company after the merger or the newly established company.

11.1.6 When the Company is divided, its property shall be correspondingly divided.

When the Company is divided, a balance sheet and a list of property shall be prepared. The Company shall notify its creditors within ten days from the date of the division resolution and shall publish an announcement within thirty days in the media designated by the CSRC, as well as in newspapers or on the National Enterprise Credit Information Publicity System.

11.1.7 The debts of the Company before its division shall be jointly and severally liable by the companies after the division. However, the debts otherwise agreed in the written agreement on debt repayment reached between the Company and the creditors before the division of the Company are excluded.

11.1.8 When the Company reduces its registered capital, it shall prepare a balance sheet and a list of assets.

The Company shall notify its creditors within ten days from the date of the resolution of the shareholders' meeting to reduce the registered capital and shall publish an announcement within thirty days in the media designated by the CSRC, as well as in newspapers or on the National Enterprise Credit Information Publicity System. Creditors may, within thirty days from receipt of the notice or, in the absence of such notice, within forty-five days from the date of the public announcement, request the Company to clear off their debts or to provide the corresponding guarantees.

When the Company reduces its registered capital, it shall reduce the amount of the proportion of the shareholders' capital contribution, unless otherwise provided by laws or these Articles.

If the Company still incurs losses after making up for losses in accordance with the provisions of Article 9.1.7 of these Articles, it may reduce its registered capital to offset the losses. Where the registered capital is reduced to cover losses, the Company shall neither distribute any assets to shareholders nor release shareholders from their obligations to make capital contributions or pay for their shares.

Where the registered capital is reduced in accordance with the preceding paragraph, the provisions of Paragraph 2 of this article shall not apply. However, the Company shall publish an announcement in newspapers or on the National Enterprise Credit Information Publicity System within thirty (30) days from the date the resolution of the shareholders' meeting on capital reduction is adopted.

After reducing its registered capital in accordance with the preceding two paragraphs, the Company shall not distribute profits until the aggregate amount of its statutory reserve and discretionary reserve reaches fifty percent (50%) of the Company's registered capital.

11.1.9 If the Company reduces its registered capital in violation of the provisions of the law and the Company Law, the shareholders shall return the funds they have received, and if the capital contribution of the shareholders is reduced, it shall be restored to its original state; and if losses are caused to the Company, the shareholders and responsible directors and senior executives shall be liable for compensation.

11.1.10 Shareholders shall not have preemptive rights to subscribe to new shares issued by the Company to increase its registered capital. Unless otherwise provided in these Articles or resolved by the shareholders' meeting, shareholders shall not have preemptive rights.

11.1.11 Where the merger or division of the Company involves changes in registered items, such changes shall be registered with the company registration authority in accordance with the law; where the Company is dissolved, the Company shall be deregistered in accordance with the law; and where a new company is incorporated, the registration of the incorporation of such company shall be carried out in accordance with the laws.

If the Company increases or decreases its registered capital, the Company shall register such a change with the company registration authority in accordance with the law.

Section II Dissolution and Liquidation

11.2.1 The Company shall be dissolved for any of the following reasons:

(I)            The business term as stipulated in these Articles expires or other causes for dissolution as stipulated in these Articles occur;

(II)           The shareholders' meeting decides to dissolve the Company;

(III)         Dissolution is required as a result of the merger or division of the Company;

(IV)         The Company has its business license revoked, is ordered to close down, or is deregistered in accordance with the law;

(V)          Where the Company is confronted with serious difficulties in operation and management, its continued existence may cause grievous losses to the interests of its shareholders and the difficulties cannot be surmounted through other channels, the shareholders holding more than 10% of the total voting rights held by all the shareholders of the Company may request a people's court to dissolve the Company.

If the reasons for dissolution specified in the preceding paragraph occur, the Company shall publicize the reasons through the National Enterprise Credit Information Publicity System within 10 days.

11.2.2 The Company may continue to exist by amending these Articles or through a resolution of the shareholders' meeting under the circumstances specified in Item (I) or (II) of Article 12.2.1 of these Articles and has not yet distributed assets to shareholders.

Any amendment to these Articles or resolution of the shareholders' meeting made pursuant to the preceding paragraph shall require approval by shareholders representing at least two-thirds (2/3) of the voting rights present at the shareholders' meeting.

11.2.3 Where the Company is dissolved under Items (I), (II), (IV), or (V) of Article 11.2.1 of these Articles, a liquidation group shall be established to commence the liquidation within 15 days after a cause of dissolution occurs.

The liquidation group is composed of directors, unless otherwise provided in these Articles or other directors are appointed by a resolution of the shareholders' meeting. If the liquidation obligor fails to perform its liquidation obligations in time, thereby causing losses to the Company or its creditors, it shall be liable for compensation.

11.2.4 If the Company is dissolved pursuant to Item (IV), Paragraph 1, Article 11.2.1, the Department or company registration authority that issues the decision to revoke the business license, order closure, or cancel the Company may apply to the People's Court to appoint relevant personnel to form a liquidation group for liquidation. If the Board of Directors decides to liquidate the Company (except for the liquidation due to the Company's declaration of bankruptcy), it shall state in the notice of the shareholders' meeting convened for such purpose that the Board of Directors has made a comprehensive investigation into the Company's conditions and believes that the Company can fully pay off its debts within 12 months after the commencement of liquidation.

After the resolution on liquidation is adopted by the shareholders' meeting, the functions and powers of the Board of Directors of the Company shall be terminated immediately.

The liquidation group shall, as instructed by the shareholders' meeting, report to the shareholders' meeting at least once a year on the income and expenditure of the liquidation group and the business and liquidation progress of the Company, and make a final report to the shareholders' meeting at the end of the liquidation.

11.2.5 The liquidation group shall exercise the following functions and powers during the liquidation:

(I)            Sort out corporate assets, and prepare a balance sheet and a property inventory separately;

(II)           Notify or announce to creditors;

(III)         Handle the unsettled businesses related to the liquidation of the Company;

(IV)         Make full payment of unpaid taxes and the taxes incurred during liquidation;

(V)          Identify creditor's rights and debts;

(VI)         Distribute the residual property of the Company after paying off debts;

(VII)        Participate in civil litigation on behalf of the Company.

11.2.6 The liquidation group shall notify the creditors within ten days from its establishment, and shall make an announcement in the media designated by the CSRC, as well as in newspapers or on the National Enterprise Credit Information Publicity System, within sixty days. Creditors shall declare their credits to the liquidation group within thirty days from the receipt of the notice or within forty-five days from the date of announcement in case the notice has not been received.

When declaring the creditor's rights, the creditors shall specify the relevant matters relating to the creditor's rights and provide supporting materials. The liquidation group shall register creditors' rights.

During the declaration of creditors' rights, the liquidation group shall not pay off any of the debts of any creditor.

11.2.7 The liquidation group shall prepare a liquidation plan and submit it to the shareholders' meeting or the people's court for confirmation upon the liquidation of the Company's assets and the preparation of the balance sheet and property inventory.

Any of the Company's remaining property after paying off the liquidation costs, employee salaries, social insurance expenditure, statutory compensation, underpaid taxes, and the Company's debts shall be allocated by the Company to the Shareholders according to their types and ratios of shareholding.

During liquidation, the Company continues to exist but shall not carry out any operating activities unrelated to liquidation. Prior to the final settlement provided by the preceding paragraph, the Company's property shall not be allocated to the shareholders.

11.2.8 If, upon the liquidation of the Company's assets and the preparation of the balance sheet and property inventory, the liquidation group finds that the Company's assets are insufficient to pay its debts, it shall file a bankruptcy petition with the People's Court in accordance with the law.

After the people's court accepts the bankruptcy application, the liquidation group shall transfer the liquidation affairs to the bankruptcy administrator appointed by the people's court.

11.2.9 Upon completion of the liquidation of the Company, the liquidation group shall prepare a liquidation report, submit it to the shareholders' meeting or the people's court for confirmation, as well as to the company registration authority for deregistration of the Company.

11.2.10 Members of the liquidation group shall perform their liquidation duties and have the duty of loyalty and diligence.

If a member of the liquidation group neglects to perform his liquidation duties and causes losses to the Company, he/she shall be liable for compensation; if the member of the liquidation group causes losses to creditors due to intentional or gross negligence, he/she shall be liable for compensation.

11.2.11 Where the Company is declared bankrupt in accordance with law, the bankruptcy liquidation shall be carried out in accordance with the relevant applicable bankruptcy laws.

Chapter XII Amendment of Articles of Association

12.1 The Company may amend the Articles of Association in accordance with laws, administrative regulations, and provisions of the Articles of Association.

12.2 In any of the following circumstances, the Company will amend these Articles:

(I)            When the Company Law or relevant laws and administrative regulations are amended, and the matters stipulated in these Articles conflict with the amended laws and administrative regulations;

(II)           When the company's circumstances change, and are inconsistent with the matters recorded in these Articles;

(III)         When the shareholders' meeting determines to modify these Articles.

12.3 The amendment to the Articles approved by the resolutions of the shareholders' meeting, which is subject to the approval of competent authority, shall be submitted to the competent authority for approval; and which involves the Company's registration, be registered according to the law.

12.4 The Board of Directors shall amend these Articles according to the resolution with respect to the amendment of the Articles by the shareholders' meeting and the opinions of related competent authorities.

12.5 Amendments to the Articles of Association are information required to be disclosed by laws and regulations and shall be announced as required.

12.6 Amendments to the Articles of Association, if involving the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, shall take effect after being approved by the company examination and approval authority authorized by the State Council and the securities regulatory body under the State Council. Where the registration of the Company is involved, the registration changes shall be handled according to law.

Chapter XIII Dispute Resolution

13.1 With respect to disputes or claims arising between shareholders and the Company, between shareholders and the Company's directors, the general manager or other senior executives, or between shareholders themselves, which relate to rights and obligations stipulated in the Company's Articles of Association and relevant laws and administrative regulations and are associated with other company affairs, if the securities regulatory authority of the State Council has not reached any understanding or agreement with the relevant foreign securities regulatory authorities on dispute resolution methods, the parties concerned may resolve such disputes or claims in accordance with the methods specified in laws and administrative regulations, or through methods mutually agreed upon by the parties.

The resolution of the aforesaid disputes shall be governed by laws of the People's Republic of China.

Chapter XIV Supplementary Provisions

14.1 Definition

(I)            Controlling shareholder refers to a shareholder whose shares exceed 50% of the Company's total equity or a shareholder who holds less than 50% of the shares but whose voting rights are sufficient to have a significant impact on the resolutions of the shareholders' meeting.

(II)           Actual controller refers to a natural person, legal person, or other organization that can actually control the Company's behavior through investment relationships, agreements, or other arrangements.

(III)         Affiliation refers to relations between the Company's controlling shareholder, actual controller, directors, senior executives, and the enterprises indirectly or directly controlled by them or other relations that may result in the transfer of the Company's interests. However, the affiliation among state-controlled enterprises is not only attributed to the fact that they are all controlled by the state.

14.2 The Board of Directors may formulate bylaws in accordance with the provisions of these Articles. The bylaws shall not conflict with the provisions of these Articles.

14.3 These Articles are written in Chinese. In case of any discrepancy between this version of these Articles and other versions or translations (in any other languages) hereof, the Chinese version, which has been approved and registered by the State Market Regulatory Administration for the latest time, shall prevail.

14.4 In terms of figures, when using words such as "above" and "within", in these Articles, such figures shall be included; when using words such as "not more than", "less than", "except", "lower than", "higher than" and "more than", such figures shall be excluded.

14.5 The right to interpret these Articles shall rest with the Board of Directors.

14.6 The annexes of these Articles include the Rules of Procedures for the shareholders' meeting and the Rules of Procedures of the Board of Directors.

 

 

 

Annex Ⅱ

SDIC Power Holdings Co., Ltd.

Rules of Procedure of the Shareholders' Meeting

 

Chapter I    General Provisions

Article 1       To ensure the legality of procedures and resolutions, improve the deliberation efficiency of the shareholders' meeting, and safeguard the legitimate rights and interests of shareholders, the shareholders' meeting formulates these Rules according to the Company Law of the People's Republic of China (hereinafter referred to as the Company Law), the Rules of the General Meeting of Shareholders of Listed Companies (hereinafter referred to as the Rules of the General Meeting of Shareholders), the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (hereinafter referred to as the Trial Administrative Measures), and other relevant laws, regulations, and regulatory documents, as well as the Articles of Association of SDIC Power Holdings Co., Ltd. (hereinafter referred to as the Articles of Association).

Article 2       The Company shall strictly convene shareholders' meeting in accordance with the relevant provisions of laws, administrative regulations, these Rules and the Articles of Association, so as to ensure that shareholders can exercise their rights in accordance with the law. The Board of Directors of the Company shall earnestly perform its duties and organize the shareholders' meeting carefully and on time. All directors of the Company shall be diligent to guarantee the shareholders' meeting normally held and its duties legally exercised.

Article 3       The shareholders' meeting shall exercise its powers within the scope stipulated in the Company Law and the Articles of Association.

 

Chapter II   Powers of the Shareholders' Meeting

Article 4       The shareholders' meeting is an organ of authority in the Company and shall exercise the following powers:

(I)                 Elect and change directors and decide the remuneration of directors;

(II)               Deliberate on and approve the reports of the Board of Directors;

(III)              Deliberate on and approve the profit distribution plan, profit distribution policy adjustment plan, loss recovery plans for the Company;

(IV)              Make resolutions on the increase or reduction in the registered capital of the Company;

(V)               Make resolutions on the issuance of the corporate bonds;

(VI)              Make resolutions on the Company's acquisition of its own shares or on merger, division, dissolution, liquidation or alteration of the Company's form;

(VII)            Deliberate on and approve the amendment plan for the Articles of Association;

(VIII)           Make resolutions on the appointment, dismissal or non-reappointment of the accounting firm that undertakes the audit business of the Company;

(IX)              Deliberate on and approve the matter that the Company purchases or sells any major asset which exceeds 30% of the Company's total assets as audited in latest term;

(X)               Deliberate on and approve the proposed related-party transaction (except that the Company provides guarantees, receives cash assets and debts which purely reduce the Company's obligations) amounting to more than RMB 30 million between the Company and related party and such significant related-party transaction accounts for more than five percent of absolute value of the Company's net assets attributable to parent company as audited in latest term;

The amount of related-party transactions between the Company and the same related party, or transaction related to the type of transaction object between the Company and different related party, will be calculated according to the principles of accumulative calculation for twelve (12) consecutive months;

(XI)              Deliberate on and approve the following matters regarding external guarantees:

1.                  Any guarantee provided after the total external guarantee provided by the Company and its controlled subsidiaries has exceeded fifty percent of the Company's net assets as audited in the latest term;

2.                  Any guarantee provided after the total external guarantee provided by the Company and its controlled subsidiaries has exceeded thirty percent of the Company's total assets as audited in the latest term;

3.                  Any guarantee provided to others after the amount of the guarantee, calculated on a cumulative basis within twelve consecutive months according to the principle of cumulative calculation of the guaranteed amount, exceeds 30% of the Company's total assets as audited in the latest term;

4.                  Any guarantee provided to a party who has an asset-liability ratio in excess of seventy percent;

5.                  Any single guarantee with the amount in excess of ten percent of the Company's net assets as audited in the latest term;

6.                  Any guarantee provided for shareholders, actual controllers and their related parties;

(XII)            Deliberate on and approve matters concerning changing the purpose of raised funds;

(XIII)           Deliberate on the stock ownership incentive plan and employee stock ownership plan;

(XIV)           Deliberate on the repurchase of shares by the Company;

(XV)            Deliberate on the transaction behaviors (except that the Company provides financial support, provides guarantees, receives cash assets and debts which purely reduce the Company's obligations) in respect of the Company and its controlled subsidiaries and such transaction meets one of the following standards:

1.                  The total amount of the assets involved in such transaction (calculated based on the higher of the book value and estimated value if both exist) accounts for more than fifty percent of the Company's total assets as audited in the latest term;

2.                  The net assets involved in the transaction object (such as equity) (calculated based on the higher of the book value and estimated value if both exist) account for more than fifty percent of the Company's net assets as audited in the latest term, with an absolute amount of more than RMB 50 million;

3.                  The transaction amount (including the debts and expenses assumed) accounts for more than fifty percent of the Company's net assets as audited in the latest term, with an absolute amount of above RMB 50 million;

4.                  Profits from the transaction account for more than fifty percent of the net profit of the Company as audited in the latest fiscal year, with an absolute amount of above RMB 5 million;

5.                  Relevant operating revenue of the transaction object (such as equity) in the latest fiscal year accounts for more than fifty percent of the total operating revenue of the Company as audited in the latest fiscal year, with an absolute amount of above RMB 50 million;

6.                  Relevant net profit of the transaction object (such as equity) in the latest fiscal year accounts for more than fifty percent of the total net profit of the Company as audited in the latest fiscal year, with an absolute amount of above RMB 5 million.

If these Articles of Association or laws and regulations provide otherwise for the consideration and voting of transaction behaviors, the relevant provisions shall be followed.

If the data involved in the above indicators is negative, the absolute value shall be taken for the calculation. The term "transaction" as defined in these Rules includes the following: purchase or sale of assets; overseas investment (including entrusted wealth management, investment in subsidiaries, etc.); provision of financial support (including interest-bearing or interest-free loans, entrusted loans, etc.); provision of guarantees (including guarantees for controlled subsidiaries, etc.); lease-in or lease-out of assets; entrustment or trusteeship of assets and business; donation or receipt of donated assets; debt and debt restructuring; signing of license agreements; transfer or acquisition of research and development projects; waiver of rights (including waiver of preemptive right to purchase, preemptive right to subscribe for capital contributions, etc.); other transactions recognized by the Shanghai Stock Exchange (none of the above transactions include the purchase of raw materials, fuels and power; provision or receipt of labor services, etc.; as well as the sale of products and commodities, etc.; project contracting and other transactions related to daily operations, but such asset purchase or sale activities involved in asset swaps are still included).

(XVI)           Deliberate on proposals from shareholders who, individually or in the aggregate, hold more than one percent of the shares representing the voting rights of the Company;

(XVII)         Financial support matters that meet the following conditions:

1.                  The amount of single financial support exceeds 10% of the net assets of the Company as audited in the latest term;

2.                  The latest financial statement data of the funded object shows that the asset-liability ratio exceeds 70%;

3.                  The accumulated amount of financial support in the last 12 months exceeds 10% of the net assets of the Company as audited in the latest term;

4.                  Other circumstances as stipulated by CSRC, the stock exchange or the Articles of Association.

If the recipient of the financial support is a controlled subsidiary within the scope of the Company's consolidated financial statements and the other shareholders of such controlled subsidiary do not include the controlling shareholder, the actual controller and their related parties of the listed company, it may be exempted from the application of the provisions of the preceding paragraph.

(XVIII)        Deliberate on other matters required to be determined by the shareholders' meeting, as agreed by laws, administrative regulations, departmental regulations, or these Articles of Association.

When the shareholders' meeting of the Company deliberates on the third situation under Item (XI) of the preceding paragraph, it shall be adopted by more than two-thirds of the voting rights held by the shareholders present at the meeting.

The shareholders' meeting may authorize the Board of Directors to make resolutions on the issuance of corporate bonds.

 

Chapter III Convening of Shareholders' Meeting

Article 5       The shareholders' meetings are divided into annual shareholders' meeting and extraordinary shareholders' meeting. The annual shareholders' meeting shall be held annually within six (6) months after the end of the preceding fiscal year.

In case of any one of the following circumstances, the Company shall hold an extraordinary shareholders' meeting within two (2) months from the date of occurrence of the relevant fact:

(I)                 The number of directors is less than six;

(II)               The Company's unrecovered losses reach one-third of the total share capital;

(III)              Shareholder(s) who individually or jointly hold more than ten percent of the Company's shares (including preferred shares with the restoration of voting rights, etc.) make(s) a request to hold such a meeting;

(IV)              The Board of Directors deems it necessary to convene such a meeting;

(V)               The Audit Committee proposes to convene such a meeting;

(VI)              Such a meeting is required in other circumstances prescribed by laws, administrative regulations, and departmental rules or the Articles of Association.

Article 6       If the Company is unable to convene the annual shareholders' meeting or the extraordinary shareholders' meeting within the time limit stipulated in Article 5 above, it shall report to the CSRC's local office where the Company is located and the Shanghai Stock Exchange, explain the reasons and make announcements as required.

Article 7       The shareholders who propose to convene an extraordinary shareholders' meeting, the Audit Committee and the independent directors shall ensure that the content of the proposals they put forward falls within the scope of authority of the shareholders' meeting, has clear topics and specific resolution items, and complies with the provisions of laws, administrative regulations and the Articles of Association.

Article 8       The Board of Directors shall convene the shareholders' meeting on time within the prescribed time limit. With the consent of more than half of all independent directors, independent directors have the right to propose to the Board of Directors to convene an extraordinary shareholders' meeting. Where independent directors exercise such right of proposal, the Company shall disclose promptly. Where the above-mentioned right cannot be normally exercised, the Company shall disclose the specific circumstances and reasons. The Board of Directors shall, subject to provisions of laws, administrative regulations, and the Articles of Association, give a written response to agree or disagree to hold an extraordinary shareholders' meeting within ten (10) days after its receipt of the proposal for the extraordinary shareholders' meeting by independent directors.

Where the Board of Directors agrees to convene an extraordinary shareholders' meeting, the notice of convening the extraordinary shareholders' meeting will be issued within five (5) days after the resolution of the Board of Directors is made. Where the Board of Directors does not agree to convene an extraordinary shareholders' meeting, it shall explain the reasons and make an announcement.

Article 9       When the Audit Committee proposes to the Board of Directors to convene an extraordinary shareholders' meeting, it shall put forward the proposal to the Board of Directors in written form. The Board of Directors shall, in accordance with the provisions of laws, administrative regulations, and the Articles of Association, give written feedback on whether or not to agree to convene an extraordinary shareholders' meeting within ten (10) days after receiving the proposal.

If the Board of Directors agrees to convene an extraordinary shareholders' meeting, it shall issue a notice of convening the shareholders' meeting within five (5) days after making the Board of Directors' resolution. For any changes to the original proposal in the notice, the consent of the Audit Committee shall be obtained.

If the Board of Directors does not agree to convene an extraordinary shareholders' meeting or fails to give feedback within ten (10) days after receiving the proposal, it shall be deemed that the Board of Directors is unable to perform or fails to perform its duty of convening the shareholders' meeting. In such a case, the Audit Committee convene and preside over the meeting on its own.

Article 10     Shareholders who individually or jointly hold more than 10% of the Company's shares (including preferred shares with the restoration of voting rights, etc.) and request the Board of Directors to convene an extraordinary shareholders' meeting shall put forward the request to the Board of Directors in written form and clarify the topics of the meeting. The Board of Directors shall, in accordance with the provisions of laws, administrative regulations, and the Articles of Association, give written feedback on whether or not to agree to convene an extraordinary shareholders' meeting within ten (10) days after receiving the written request.

If the Board of Directors agrees to convene an extraordinary shareholders' meeting, it shall issue a notice of convening the shareholders' meeting within five (5) days after making the Board of Directors' resolution. For any changes to the original request in the notice, the consent of the relevant shareholders shall be obtained.

If the Board of Directors does not agree to convene an extraordinary shareholders' meeting or fails to give feedback within ten (10) days after receiving the request, shareholders who individually or jointly hold more than 10% of the Company's shares (including preferred shares with the restoration of voting rights, etc.) shall have the right to propose to the Audit Committee to convene an extraordinary shareholders' meeting and shall put forward the request to the Audit Committee in written form.

If the Audit Committee agrees to convene an extraordinary shareholders' meeting, it shall issue a notice of convening the shareholders' meeting within five (5) days after receiving the request. For any changes to the original request in the notice, the consent of the relevant shareholders shall be obtained.

If the Audit Committee fails to issue the notice of the shareholders' meeting within the prescribed time limit, it shall be deemed that the Audit Committee does not convene and preside over the shareholders' meeting. Shareholders who individually or jointly hold more than 10% of the Company's shares (including preferred shares with the restoration of voting rights, etc.) for more than ninety (90) consecutive days may convene and preside over the meeting on their own.

Article 11     If the Audit Committee or shareholders decide to convene the shareholders' meeting on their own, they must notify the Board of Directors in writing and file with the Shanghai Stock Exchange at the same time.

Before the announcement of the resolution of the shareholders' meeting, the shareholding proportion of the convening shareholders (including preferred shares with the restoration of voting rights, etc.) shall not be lower than 10%. The convening shareholders shall disclose the announcement no later than when sending out the notice of the shareholders' meeting and undertake that during the period from the date of proposing to convene the shareholders' meeting to the date of convening the meeting, their shareholding proportion will not be lower than 10% of the Company's total share capital.

The Audit Committee and the convening shareholders shall submit relevant supporting materials to the Shanghai Stock Exchange when sending out the notice of the shareholders' meeting and releasing the announcement of the resolution of the shareholders' meeting.

Article 12     For the shareholders' meeting convened by the Audit Committee or shareholders on their own, the Board of Directors and the secretary of the Board of Directors will provide cooperation. The Board of Directors shall provide the register of shareholders on the equity registration date. If the Board of Directors does not provide the register of shareholders, the convener may use relevant notice on convening the shareholders' meeting to apply for that register to the securities registration and settlement organization. The register of shareholders obtained by the convener shall not be used for purposes other than convening the shareholders' meeting.

Article 13     For the shareholders' meeting convened by the Audit Committee or shareholders on their own, the expenses necessary for the meeting shall be borne by the Company.

 

Chapter IV Proposal and Notice of the Shareholders' Meeting

Article 14     The content of the proposal shall fall within the scope of authority of the shareholders' meeting, have clear topics and specific resolution items, and comply with the relevant provisions of laws, administrative regulations and the Articles of Association.

Article 15     When the Company convenes a shareholders' meeting, the Board of Directors, the Audit Committee and shareholders who individually or jointly hold more than 1% of the Company's shares (including preferred shares with the restoration of voting rights, etc.) shall have the right to put forward proposals to the Company.

Where a qualified shareholder submits a provisional proposal prior to the shareholders' meeting, the percentage of shares held between the issuance of the notice of the proposal and the announcement of the resolution of the meeting shall not be less than one percent.

Where a shareholder proposes a provisional proposal, it shall provide the convener with the certification documents for holding more than one percent of the shares of the listed company. Where a shareholder jointly proposes a proposal by way of entrustment, the entrusting shareholder shall issue a written authorization document to the entrusted shareholder.

Shareholders individually or jointly holding not less than one percent of the Company's shares (including preferred shares with the restoration of voting rights, etc.) may submit a provisional proposal to the convener in writing ten (10) days prior to the date of the shareholders' meeting. The convener shall issue a supplementary notice of the shareholders' meeting within two (2) days after receiving the proposal, announce the content of the temporary proposal and submit the temporary proposal to the shareholders' meeting for deliberation, except for temporary proposals violating laws, administrative regulations or the provisions of these Articles, or are not within the authority scope of the shareholders' meeting.

Except for provisional proposals, it is not allowed to modify the proposals listed in the notice of the shareholders' meeting or add new proposals after the Company issues the notice of the shareholders' meeting.

The shareholders' meeting shall not vote on or make a resolution on proposals that are not listed in the notice of the shareholders' meeting or do not comply with the provisions of these Rules.

Article 16     When the Company convenes an annual shareholders' meeting, the convener shall notify all shareholders by means of an announcement twenty (20) days before the meeting is held. When convening an extraordinary shareholders' meeting, the convener shall notify all shareholders by means of an announcement fifteen (15) days before the meeting is held.

Article 17     The shareholders' meeting shall not make decisions on matters that are not stated in the notice.

Article 18     The notice of the shareholders' meeting shall include the following:

(I)                 Date, place, and duration of the meeting;

(II)               Matters and proposals to be discussed at the meeting;

(III)              A statement in clear words that: all shareholders have the right to attend the shareholders' meeting, or may attend and vote in the meeting by proxy in written form, who may not necessarily be the shareholder of the Company;

(IV)              The date of equity registration for shareholders entitled to attend the shareholders' meeting;

(V)               Name and telephone number of the standing contact person for the meeting;

(VI)              Voting time and voting procedures by online or other means.

After the announcement of the notice of convening the shareholders' meeting, if it is necessary to add proposals or modify the original proposals, the convener shall issue a supplementary notice in accordance with the provisions of these Rules.

The notice and supplementary notice of the shareholders' meeting shall fully and completely disclose the specific content of all the proposals, as well as all the materials or explanations required for shareholders to make a reasonable judgment on the matters to be discussed.

                     The starting time of online vote or other ways of voting of the shareholders' meeting shall not be earlier than 3:00 p.m. of the date before the on-site convening of the shareholders' meeting and later than 9:30 a.m. of the date of on-site convening of the meeting, while the ending time shall not be before 3:00 p.m. of the date when the on-site shareholders' meeting ends.

Article 19     The interval between the date of equity registration and the date of the meeting shall not be more than seven (7) working days. The equity registration date shall not be changed upon determination.

Article 20     The methods and procedures for proposing candidates of directors and independent directors are as follows:

(I)                 The Board of Directors and shareholder(s) who individually or jointly hold more than one percent of issued shares of the Company have the right to nominate director candidates of the Company (excluding independent directors and employee directors) and submit proposals to the shareholders' meeting; the Board of Directors and shareholders who individually or jointly hold more than one percent of the Company's issued shares have the right to nominate candidates of independent directors of the Company and submit proposals to the shareholders' meeting;

(II)               The nomination of directors by the Board of Directors to the shareholders' meeting shall be made through resolutions of the Board of Directors;

(III)              The Board of Directors shall provide the shareholders' meeting with the resumes and basic information of director candidates and independent director candidates, as well as statements that the nominees have no circumstances under which they are prohibited from serving as directors or senior executives as stipulated in the Company Law. Director candidates shall make a written commitment before the announcement of the notice of the shareholders' meeting, agreeing to accept the nomination. They shall also promise that the candidate information disclosed publicly is true, accurate and complete, and guarantee to earnestly perform the duties of directors after being elected. When electing independent directors, the Company shall submit the relevant materials of all independent director candidates (including but not limited to the nominator's statement and commitment, the candidate's statement and commitment, and the resume of independent directors) to the Shanghai Stock Exchange at the latest when issuing the announcement of the notice of the shareholders' meeting on the election of independent directors, and ensure the truthfulness, accuracy and completeness of the submitted materials. The nominator shall promise in the statement and commitment that there is no interest relationship or other circumstances that may affect the nominee's independent performance of duties between the nominee and the nominator. If the Board of Directors of the Company has objections to the relevant circumstances of the independent director candidates, it shall also submit the written opinions of the Board of Directors at the same time.

During the shareholders' meeting for electing independent directors, the Board of Directors shall make a statement on whether or not the Shanghai Stock Exchange has any objection to the candidates for independent directors. The Company shall not submit to the shareholders' meeting for election of candidates for independent directors who have raised objections from the Shanghai Stock Exchange.

Article 21     If the election of directors is to be discussed at the shareholders' meeting, the notice of the shareholders' meeting shall fully disclose the detailed information of the director candidates, including at least the following:

(I)                 Education background, work experience, part-time jobs, and other personal information;

(II)               Whether there is any affiliation to the directors, senior executives, controlling shareholders, actual controller, and shareholders holding more than 5% shares of the Company;

(III)              The number of shares held in the Company;

(IV)              Whether any circumstances prohibit such candidates from serving as directors or senior executives according to the Company Law, other laws and regulations, and other relevant provisions;

(V)               Whether such candidates are prohibited by CSRC from serving as directors and senior executives in listed companies, and the prohibition term has not yet expired;

(VI)              Whether such candidates are publicly recognized by any stock exchange as unfit to be directors or senior executives of listed companies, and the term has not yet expired;

(VII)            Other important matters required to be disclosed by the Shanghai Stock Exchange.

In addition to the election of directors by accumulative voting, each director candidate shall be put forward by a single proposal.

Article 22     The shareholders' meeting shall not be postponed or canceled and those proposals as listed in the notice of the shareholders' meeting shall not be canceled without justified reasons after the giving of the notice. In case of postponement or cancellation, the convener shall proclaim it and explain the reasons at least two (2) working days before the originally determined date of the meeting. If the shareholders' meeting is postponed, the date of the postponed meeting shall also be disclosed.

 

Chapter V   Convening of Shareholders' Meeting

Article 23     The Board of Directors and other conveners of the Company shall take necessary measures to ensure the normal order at the shareholders' meeting. For acts that interfere with the order of the shareholders' meeting, provoke troubles and infringe upon the legitimate rights and interests of other shareholders, the Company shall take measures and report to relevant department in time.

Article 24     Shareholders or their proxies registered after the closing of the market on the date of equity registration date are entitled to attend the shareholders' meeting and exercise their voting rights in accordance with relevant laws, regulations, the Articles of Association and these Rules. Neither the Company nor the convener may reject them for any reason.

Article 25     The starting time of online vote or other ways of voting of the shareholders' meeting shall not be earlier than 3:00 p.m. of the date before the on-site convening of the shareholders' meeting and later than 9:30 a.m. of the date of on-site convening of the meeting, while the ending time shall not be before 3:00 p.m. of the date when the on-site shareholders' meeting ends.

Article 26     The location where the shareholders' meeting is held is the place where the Company's office address is located.

Article 27     A meeting place shall be arranged for the shareholders' meeting, which shall be convened in the form of an on-site meeting, and may also be convened simultaneously by means of electronic communication. The Company will also provide online voting to facilitate the participation of the shareholders. Shareholders who participate in the shareholders' meeting through the above means shall be deemed to be present.

Article 28     Any shareholder who has the right to attend and vote at the shareholders' meeting may attend the shareholders' meeting in person or may appoint one person (who may not be a shareholder of the Company) as his/her proxy and attend and vote at the meeting on his/her behalf. The shareholder's proxy, under the authorization of such shareholder, may exercise the following rights:

(I)                 Exercising the shareholder's right to speak at the shareholders' meeting;

(II)               Requesting on its initiative or jointly with others to vote by poll.

Article 29     Shareholders shall entrust proxies in writing, and the entrustment shall be signed by the principal or the proxy entrusted in writing by the principal. If the principal is a legal person, it shall affix its corporate seal or be signed by its directors or formally appointed proxies. The power of attorney issued by a shareholder for entrusting others to attend the shareholders' meeting shall specify the following:

(I)                 The name of the principal, the type and quantity of the Company's shares held;

(II)               The name of the proxy;

(III)              The specific instructions of the shareholder, including instructions on voting for, against or abstaining from each item to be considered on the agenda of the shareholders' meeting, etc.;

(IV)              Date of issuance and validity period of the power of attorney;

(V)               The signature (or seal) of the principal. In case the principal is an institutional shareholder, the official seal of the legal person shall be affixed.

The format of any power of attorney issued by the Board of Directors of the Company to shareholders for appointing shareholder proxies shall allow shareholders to freely choose to instruct shareholder proxies to vote for or against, and give separate instructions on the matters to be voted on for each topic of the meeting.

Each shareholder may only entrust one person as his or her proxy.

Article 30     If the power of attorney regarding voting by the proxy is issued by another person entrusted by the principal, the power of attorney signed or other authorization documents shall be notarized. The notarized power of attorney or other authorization documents together with the power of attorney appointing a voting proxy shall be deposited at the domicile of the Company or any other place as designated in the notice of convening the meeting.

Article 31     Prior to voting, in case of death or incapacity of the principal, or if the appointment is canceled, the authorization for signing the appointment is withdrawn, or the relevant shares are transferred, the voting by the proxy under the proxy form shall remain in force, provided that the Company does not receive any written notice of such matters prior to the meeting.

Article 32     Shareholders attending the meeting shall register in accordance with the following requirements:

(I)                 If an individual shareholder attends the meeting in person, he or she shall present his or her ID card or other valid documents or certificates that can prove his or her identity. If he or she attends the meeting on behalf of others, he or she shall present his or her valid identity documents and the power of attorney of the shareholder.

(II)               For the institutional shareholder, the legal representative or the proxy appointed by the legal representative shall attend the meeting on behalf. The legal representatives who attend the meeting in person shall present their ID cards or other valid credentials that can certify their identities as legal representatives. For those who entrust their proxies to attend the meeting, the proxies shall present their ID cards and the written powers of attorney provided by the legal representatives of the institutional shareholders.

Article 33     The register of participants shall be prepared by the Company. Such register shall state the name (or entity name) of the attendee, ID card number, the number of shares held by the attendee or presenting voting right, the name (or entity name) of the principal and other relevant matters.

Article 34     The convener and the lawyer hired by the Company shall jointly verify the legality of shareholders' qualifications based on the list of shareholders provided by the securities registration and settlement organization, and register the names (or titles) of shareholders and the number of shares with voting rights they hold. The meeting registration shall be completed before the moderator announces the number of the present shareholders and proxies, and total number of voting shares.

Article 35     If the shareholders' meeting requires directors or senior executives to attend the meeting as nonvoting delegates, they shall do so and accept inquiries from shareholders.

Article 36     The shareholders' meeting shall be convened by the Board of Directors. The shareholders' meeting shall be presided over by the chairman as the moderator. If the chairman is unable to perform relevant duties or fails to perform relevant duties, the vice chairman shall preside over the meeting. If the vice chairman is unable to perform relevant duties or fails to perform relevant duties, a director jointly recommended by more than half of the directors shall preside over the meeting as the moderator.

If the shareholders' meeting is convened by the Audit Committee on its own, it shall be presided over by the convener of the Audit Committee. If the convener of the Audit Committee is unable to perform relevant duties or fails to perform relevant duties, a member of the Audit Committee jointly recommended by more than half of the members of the Audit Committee shall preside over it.

For the shareholders' meeting convened by shareholders on their own, it shall be presided over by the convener or the representative recommended by the convener.

When the shareholders' meeting is held, if the moderator violates the Articles of Association or the rules of procedure for the shareholders' meeting of the Company, causing the shareholders' meeting unable to continue, with the consent of shareholders with more than half of the voting rights present at the shareholders' meeting, the shareholders' meeting may recommend one person to serve as the moderator and continue the meeting.

Article 37     At the annual shareholders' meeting, the Board of Directors shall submit a report to the shareholders' meeting on its work in the past year. Each independent director shall also submit an annual work report to the annual shareholders' meeting to explain the performance of his or her duties.

Article 38     Shareholders attending the shareholders' meeting may request to speak at the meeting. Speeches at the shareholders' meeting include oral speeches and written speeches.

If shareholders request to speak at the shareholders' meeting, they shall register with the meeting registration office before the shareholders' meeting is held. The moderator shall arrange for shareholders to speak according to the registration situation. When shareholders speak, they shall first report the number of shares they hold. When shareholders request to speak, they shall not interrupt the reports of the meeting presenters or the speeches of other shareholders. When the shareholders' meeting is conducting voting, shareholders shall no longer make speeches at the meeting. I=If a shareholder requests to speak in violation of the above procedures, the moderator has the right to refuse or stop him/her.

Article 39     The directors and senior executive shall provide explanations and clarifications for the inquiries and suggestions made by the shareholders at the shareholders' meeting.

Article 40     Except for matters involving the Company's trade secrets that cannot be disclosed at the shareholders' meeting, the Company's directors and senior executives shall be obliged to earnestly and responsibly answer the questions raised by shareholders.

Article 41     There shall be minutes of the shareholders' meeting, which shall be taken by the secretary of the Board of Directors. The minutes shall record:

(I)                 Time, place, agenda, and name of the convener of the meeting;

(II)               The names of the moderator and the directors and senior executives who attend the meeting as nonvoting delegates.

(III)              Number of shareholders and proxies attending the meeting, total number of voting shares held by them, and their proportion in the total number of shares of the Company;

(IV)              Consideration process, main points of address, and voting results of each proposal;

(V)               Inquiries or suggestions raised by shareholders and the corresponding replies or explanations;

(VI)              Names of the lawyer, vote counter, and scrutineer;

(VII)            Other information that shall be recorded in the minutes according to relevant laws and regulations, the Articles of Association, and these Rules.

Article 42     The convener shall ensure that the minutes of the meeting are true, accurate and complete. The directors, the secretary of the Board of Directors, the convener or his or her representatives, and the moderator who attend or participate in the meeting as nonvoting delegates shall sign the minutes of the meeting. The minutes shall be kept together with the register of present shareholders and the power of attorney for present proxies as well as valid documents describing the results of online and other voting process, for a period of ten years at least.

Article 43     When the Company convenes a shareholders' meeting, it will hire lawyers to issue legal opinions on the following issues and make announcements:

(I)                 Whether the convocation and convening procedures of the meeting comply with the provisions of laws, regulations, the Rules of the General Meeting of Shareholders of Listed Companies, the Articles of Association and these Rules;

(II)               Whether the qualifications of the meeting attendees and that of the convener are legal and valid;

(III)              Whether the voting procedures and voting results of the meeting are legal and valid;

(IV)              Legal opinions issued on other issues at the request of the Company.

Article 44     The convener shall ensure that the shareholders' meeting is conducted continuously until final decisions are made. In case the shareholders' meeting is suspended or unable to make resolutions due to force majeure or other special reasons, necessary measures shall be taken to resume the convening of the shareholders' meeting as soon as possible or directly terminate this shareholders' meeting and make timely announcements. In addition, the convener shall report it to the CSRC's local office where the Company is located and the Shanghai Stock Exchange.

 

Chapter VI Voting and Resolution of Shareholders' Meeting

Article 45     Shareholders exercise their voting rights based on the number of voting shares they represent. Each share is entitled to one vote, except for holders of class shares.

When the shareholders' meeting deliberates on major matters concerning the interests of minority investors, the votes of small and medium investors shall be counted separately. Separate counting results shall be disclosed publicly and timely.

There shall be no voting right for the shares of the Company held by the Company itself and such shares shall not be included in the total number of shares with voting rights held by shareholders present at the shareholders' meeting.

Where a shareholder purchases the voting shares of the Company in violation of the provisions of Paragraphs 1 and 2 of Article 63 of the Securities Law, the share exceeding the prescribed proportion shall not exercise the voting rights within 36 months after purchase, and shall not be included in the total number of voting shares attending the shareholders' meeting.

The Board of Directors, independent directors, shareholders holding 1% or more of the shares with voting rights, or the investor protection institutions established according to laws, administrative regulations, or the provisions of CSRC may solicit the voting rights of shareholders. No payment shall be made for solicitation of voting rights, and adequate information shall be provided to persons whose voting rights are being solicited. It is prohibited to solicit the voting rights of shareholders for payment or in a disguised form of payment. Except for the statutory conditions, the Company may not impose the minimum shareholding ratio limit on the voting right solicitation.

Article 46     The same voting right shall be only one of the following voting modes, on-site voting, online voting, or other means. A repetitively used vote can be only valid as its first voting.

Article 47     The moderator shall announce the number of shareholders and proxies attending the meeting and the total number of voting shares held by them before voting, and such number and total number shall be subject to those registered for the meeting.

Article 48     Resolutions of the shareholders' meeting consist of ordinary resolutions and special resolutions.

Any ordinary resolution of the shareholders' meeting shall be passed with more than half of the voting rights held by the shareholders who attend the meeting.

Any special resolution of the shareholders' meeting shall be passed with more than two-thirds of the voting rights held by the shareholders who attend the meeting.

The shareholders referred to in this article include shareholders who entrust proxies to attend the shareholders' meeting.

Article 49     The following matters are decided by ordinary resolutions of the shareholders' meeting:

(I)                 Work Report of the Board of Directors;

(II)               Profit distribution plans and loss compensation plans prepared by the Board of Directors;

(III)              Appointment and dismissal of members of the Board of Directors as well as their remunerations and payment method;

(IV)              The Company's balance sheet, income statement, and other financial statements;

(V)               Matters other than those that shall be adopted by special resolutions as stipulated by laws, administrative regulations or the Articles of Association.

Article 50     The following matters shall be adopted by the shareholders' meeting through special resolutions:

(I)                 The Company's increase or decrease of its registered capital and issuance of any kind of stocks, warrants and other similar securities;

(II)               Issuance of corporate bonds;

(III)              Division, separation, merger, dissolution and liquidation of the Company;

(IV)              Amendment of the Articles of Association;

(V)               The amount of the Company's purchase or sale of major assets or the provision of guarantees to others within one year exceeds 30% of total assets of the Company as audited in the latest term;

(VI)              Stock ownership incentive plan;

(VII)            Profit distribution policy adjustment plan;

(VIII)           Matters regarding the Company's share repurchase;

(IX)              Other matters stipulated by laws, administrative regulations or the Articles of Association, and determined by ordinary resolutions of the shareholders' meeting to have significant impact on the Company and shall be approved by special resolutions.

Article 51     Except in special circumstances such as when the Company is in a crisis, without the approval of the shareholders' meeting through a special resolution, the Company shall not enter into a contract with a person other than director and senior executive that entrusts the management of all or part of the Company's business to that person.

Article 52     When the shareholders are related to the matters to be considered at the shareholders' meeting, the shareholders shall recuse themselves from voting, and the voting shares held by them shall not be included in the total number of voting shares of shareholders present at the shareholders' meeting. The announcement of the resolution of the shareholders' meeting shall fully disclose the voting situation of non-related shareholders.

Article 53     The related parties and related-party transactions referred to in these Rules shall be determined in accordance with the relevant provisions of the Rules Governing the Listing of Stocks on Shanghai Stock Exchange.

Article 54     The list of director candidates shall be submitted to the shareholders' meeting for voting in the form of a proposal.

When the shareholders' meeting conducts voting to elect the directors, cumulative voting shall apply according to these Articles or a resolution of the shareholders' meeting.

The above-mentioned cumulative voting system means that each share has voting rights of the same number of directors to be elected and voting rights held by a shareholder can be used in a centralized way in case of election of directors at the shareholders' meeting. Director candidates with the most votes shall be elected and the number of votes cast for the elected directors shall exceed 50% of the total shares held by shareholders attending the shareholders' meeting.

To ensure that the election of independent directors meets the regulations, the Company conducts separate elections for independent directors and non-independent directors, both using the cumulative voting system. The specific operation is as follows: In the election of independent directors, each shareholder present at the meeting is entitled to such number of votes as equal to the product of the total number of shares held by it and the number of independent directors to be elected at the shareholders' meeting, and such votes can only be used for the independent director candidates in the shareholders' meeting. In the election of non-independent directors, each shareholder present at the meeting is entitled to such number of votes as equal to the product of the total number of shares held by it and the number of non-independent directors to be elected at the shareholders' meeting, and such votes can only be used for candidates of non-independent directors in the shareholders' meeting.

If the number of directors elected at the shareholders' meeting falls short of the required number, or if there are multiple candidates with the same number of votes but only one can be elected as a director, a second round of voting shall be conducted for the remaining positions until all the required directors are elected. During the second round of voting, the total number of voting rights of each shareholder participating in the vote is equal to the product of the number of shares held by it and the number of directors still needed to be elected. Any matters not covered by the cumulative voting method shall be resolved through consultation between the moderator of the meeting and the shareholders attending the meeting. If consensus cannot be reached through consultation, it shall be handled following the opinion passed by the shareholders present at the meeting with more than half of the voting rights.

The Board of Directors shall announce to shareholders the resumes and basic information of the candidate directors.

Besides the cumulative voting system, the shareholders' meeting will conduct voting on each of the proposals. If different proposals are submitted on the same issue, the voting shall be conducted in the chronological order in which these proposals have been submitted. In case of interruption of the shareholders' meeting or failure to reach a resolution due to unusual reasons such as force majeure, the shareholders' meeting shall not leave the proposals suspended or leave them without voting.

When the appointment proposal for director candidates are being considered at the shareholders' meeting, they shall personally attend the meeting and provide clarifications on their abilities to perform their duties, professional qualifications, work experience, any past illegal or delinquent conduct, potential conflicts of interest with the listed company, as well as their relationships with the Company's controlling shareholder, actual controller, and other directors, and senior executives.

Article 55    Except for the circumstances set forth in Article 15 of these Rules, the convener shall not modify those proposals as listed in the notice of the shareholders' meeting or add any new proposal after giving such notice.

The shareholders' meeting shall not vote or make resolutions on the draft resolutions which have not been listed in the notice for convening the shareholders' meeting or are inconsistent with Article 14 of these Rules.

When the shareholders' meeting discusses the proposals, it shall not modify any proposals, otherwise the related changed proposal shall be deemed as a new proposal and shall not be voted at this shareholders' meeting.

Article 56     Shareholders attending the shareholders' meeting shall express one of the following opinions on a proposal submitted for voting: approve, disapprove or waiver. Except where the securities registration and settlement organizations, acting as nominee holders of stocks of interconnectivity mechanism between the Mainland and Hong Kong SAR on the stock market, or the depositary, acting as the nominal holder of the underlying A-shares represented by global depository receipt (GDR), makes declarations in accordance with the instructions of the actual holders.

In case the vote is uncompleted, mistakenly completed or illegible or the vote is not submitted, it shall be deemed that the voter gives up the voting right and the voting results of the holding shares shall be counted as "waiver".

Article 57     Two shareholder representatives shall be elected to participate in the vote counting and supervising before voting on a proposal at the shareholders' meeting. If the deliberation matters are related to certain shareholders, the relevant shareholders and proxies must not participate in vote counting and supervision.

When the shareholders' meeting is voting on a proposal, the lawyers and shareholder representatives shall work together to count and scrutinize the votes and announce the result of the voting on the spot.

Shareholders of the Company or their proxies voting through Internet or other means shall have the right to verify their own vote through the corresponding voting system.

Article 58     If having any doubt regarding the voting results on the resolutions submitted for a vote, the moderator may organize a recount of the votes cast. If the moderator does not conduct a recount, the shareholders or their proxies present at the meeting who dispute the results announced by the moderator have the right to demand an immediate recount after the announcement of the voting results. The moderator shall then promptly organize the recount.

Where votes are counted at the shareholders' meeting, the counting results shall be recorded in the minutes of the meeting.

Article 59     The votes cast by the Company's shareholders or their authorized proxies through the online voting system for the shareholders' meeting and other compliant voting methods shall be counted together with the votes cast at the physical meeting to determine the total number of votes entitled to be cast at the shareholders' meeting.

Article 60     After the voting at the Company's shareholders' meeting is completed, the voting results of on-site voting, online voting and other voting methods that comply with the regulations for each proposal shall be combined and counted before they can be announced.

Article 61     The completion of the shareholders' meeting at the venue cannot be earlier than voting by the Internet or other methods. The moderator shall announce the voting circumstances and results of each proposal. He/she shall also announce whether the proposals have been passed according to the voting results.

Prior to the formal announcement of the voting results, the listed companies, vote counters, scrutineers, shareholders, network service suppliers, etc. involved in the shareholders' meeting, online voting or voting in other manners, are all responsible for confidentiality of the voting results.

 

Chapter VII       Information Disclosure and Implementation of the Resolutions of the Shareholders' Meeting

Article 62     The resolutions of the shareholders' meeting shall be announced timely. The announcement shall state the number of present shareholders and proxies, the total number of voting shares, and its ratio to total voting shares of the Company, the method of voting, the voting result of each proposal, and the details of each resolution.

If a proposal is not approved at the meeting, or if a resolution of the previous shareholders' meeting is changed in this shareholders' meeting, a special prompt shall be made in the announcement of the resolutions of the shareholders' meeting.

The Company shall announce the resolution of repurchasing ordinary shares on the day following the shareholders' meeting when such a resolution is made.

When the Company announces the resolutions of the shareholders' meeting, it shall also submit the legal opinion issued by the lawyer invited to attend the meeting to the Shanghai Stock Exchange. If any proposals are rejected or amended during the shareholders' meeting, the full text of the legal opinion shall be disclosed.

Article 63     The Board of Directors shall organize the implementation of resolutions formed by the shareholders' meeting, and instruct the Company's management to implement the resolutions in accordance with the content and division of responsibilities. The implementation results of the resolutions shall be reported to the shareholders' meeting by the Board of Directors.

Article 64     If the shareholders' meeting approves proposals on cash dividends, bonus shares, or conversion of capital reserve into share capital, the Company shall implement the specific plans within two months after the conclusion of the shareholders' meeting.

 

Chapter VIII     Supplementary Provisions

Article 65     Terms used in these Rules have the same meanings as in the Articles of Association unless otherwise specified.

Article 66     For the purpose of these Rules, the term "above"shall include the number itself, while "exceeding", "more than" and "less than" shall not include the number itself.

Article 67     Matters not covered in these Rules shall be implemented in accordance with relevant national laws, regulations and the provisions of the Articles of Association.

Article 68     Under any of the following circumstances, the Board of Directors shall promptly revise these Rules and submit such to the shareholders' meeting for approval:

(I)                 After the relevant national laws, regulations or normative documents are amended, or new laws, regulations or normative documents are formulated and promulgated, the matters stipulated in these Rules conflict with the provisions of the aforementioned laws, regulations or normative documents.

(II)               After the Articles of Association are amended, the matters stipulated in these Rules conflict with the provisions of the Articles of Association;

(III)              Changes have occurred in the Company's circumstances, and the Board of Directors or the shareholders' meeting deems that these Rules shall be revised.

Article 69     These Rules shall come into force on the date of approval at the shareholders' meeting, and the same shall apply when it is amended. As of the date when these Rules come into effect, the Company's original Rules of Procedure of the General Meeting of Shareholders shall automatically become invalid.

Article 70     The right to interpret these Rules shall rest with the Board of Directors.

 

 

 

 

 

Annex Ⅲ

 

SDIC Power Holdings Co., Ltd.

Rules of Procedures of the Board of Directors

 

Chapter I       General Provisions

Article 1       To further standardize the deliberation methods and decision-making procedures of the Board of Directors of SDIC Power Holdings Co., Ltd. (hereinafter referred to as "the Company") and improve the standardized operation and scientific decision-making status of the Board of Directors, these Rules are formulated according to the Company Law of the People's Republic of China (hereinafter referred to as the Company Law), the Securities Law of the People's Republic of China (hereinafter referred to as the Securities Law), the Code of Corporate Governance for Listed Companies, the Rules Governing the Listing of Stocks on Shanghai Stock Exchange (hereinafter referred to as the Stock Listing Rules), the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (hereinafter referred to as the Trial Administrative Measures), and other laws, regulations, and regulatory documents, as well as the Articles of Association of SDIC Power Holdings Co., Ltd. (hereinafter referred to as the Articles of Association) in combination with the reality of the Company.

Article 2       In addition to complying with relevant laws, regulations, regulatory documents and the relevant provisions of the Articles of Association of the Company, the Board of Directors of the Company shall also abide by the provisions of these Rules.

Article 3       The Board of Directors of the Company is responsible to the shareholders' meeting. The research and discussion by the Company's Party Committee is a prerequisite procedure for the Board of Directors to make decisions on major issues. The "major decision making, important personnel appointment and removal, major project arrangement and large-amount capital operation" matters of the Company that are submitted to the Board of Directors for decision-making must be studied and discussed by the Company's Party Committee in advance.

 

Chapter II     Board of Directors

Section I       Powers of the Board of Directors

Article 4       The Board of Directors shall exercise the following powers:

(I)  Deliberate on and determine the implementation of decisions and arrangements of the CPC Central Committee and major initiatives of national development strategies;

(II)       Convene the shareholders' meeting and report on its work to the shareholders' meeting;

(III)      Implement the resolutions of the shareholders' meeting;

(IV)      Decide the Company's business plans and investment plans;

(VI)      Formulate the profit distribution plan, profit distribution policy adjustment plan, loss recovery plans for the Company;

(VI)      Formulate the plans to increase or decrease registered capital, issue bonds or other securities, and list for the Company;

(VII)     Draw up schemes concerning major purchase, purchase of the Company's stocks, or merger, division, dissolution and alteration of the Company;

(VIII)   Deliberate on and approve related-party transactions between the Company and related natural persons with a transaction amount of more than RMB 300,000 (except for the guarantee provided by the Company, if it meets the criteria for deliberation at the shareholders' meeting, it shall be submitted to the shareholders' meeting for deliberation and approval after deliberation by the Board of Directors), and deliberate and approve related-party transactions between the Company and related parties with a transaction amount of more than RMB 3 million and accounting for more than 0.5% of value of the Company's net assets as audited in the latest term (except for the guarantee provided by the Company, if it meets the criteria for deliberation at the shareholders' meeting, it shall be submitted to the shareholders' meeting for deliberation and approval after deliberation by the Board of Directors);

The amount of related-party transactions between the Company and the same related party, or transaction related to the type of transaction object between the Company and different related party, will be calculated according to the principles of accumulative calculation for twelve (12) consecutive months;

(IX)      Deliberate on and approve the guarantees and other transactions that should be reviewed by the Board of Directors as stipulated in 5.2.8 of the Articles of Association;

(X)       Decide on the establishment of internal management organizations of the Company;

(XI)      Decide on the appointment or dismissal of the Company's general manager, secretary of the Board of Directors, and other senior executives according to relevant regulations and procedures, and determine their remuneration, rewards, and punishments; appoint or dismiss the deputy general manager, the chief accountant (chief financial officer), and the general counsel according to the nomination of general manager and determine their remuneration, rewards, and punishments.

(XII)     Formulate the basic management system of the Company;

(XIII)   Develop the methods of performance evaluation, sign annual and term performance responsibility letters with the management members, and scientifically and reasonably determine the performance evaluation results of management members;

(XIV)   Develop the salary management measures for senior executives, make the salary distribution plan for senior executives, and establish and improve the restraint mechanism matching with the incentives of the management members;

(XV)    Formulate the revision plan for the Articles of Association;

(XVI)   Manage information disclosure matters of the Company;

(XVII)  Propose to the shareholders' meeting to hire or replace the accounting firm as the auditor of the Company and determine its remuneration;

(XVIII) Make major accounting policies and accounting estimate change plans of the Company;

(XIX)   Formulate the stock ownership incentive plan of the Company;

(XX)    Receive the working reports of the general manager and investigate his or her work;

(XXI)   Decide on the establishment of special committees and the appointment and dismissal of their relevant candidates;

(XXII)  Formulate a work report of the Board of Directors;

(XXIII) Decide on the Company's compliance management system, deliberate on and approve the basic system, system construction plan and annual report of compliance management, promote the improvement of the compliance management system and evaluate its effectiveness, study and decide on major matters of compliance management, and decide on the setting and responsibilities of the Compliance Management Department;

(XXIV)       Guide, inspect and evaluate the Company's internal audit, decide on the person in charge of the Company's internal audit institution, establish a mechanism under which the audit department is responsible to the Board of Directors, and deliberate on and approve the annual audit plan and important audit reports;

(XXV)  Other powers granted by laws, administrative regulations, departmental rules, the Articles of Association or the shareholders' meeting.

When the Board of Directors makes resolutions mentioned in the preceding paragraph, except for the circumstances in which directors shall recuse themselves from voting according to relevant laws, regulations, the Articles of Association, and these Rules, more than half of the total number of directors of the Company must vote in favor of the proposal. When the Board of Directors makes resolutions on the matters mentioned in Items (VI), (VII), and (XV) of the preceding paragraph, the consent of more than half of all directors of the Company shall be obtained and it must also be approved by more than two-thirds of the directors present at the board meeting and disclosed timely. If it is stipulated in laws, administrative regulations, and the Articles of Association that the Board of Directors should obtain the consent of more directors when creating a resolution, such stipulation shall apply.

Article 5       When the Board of Directors disposes of fixed assets, if the expected value of the fixed assets to be disposed of, together with the total value of the fixed assets that have been disposed of within the four months prior to the proposal for such disposal, exceeds 33% of the value of the fixed assets shown in the balance sheet most recently reviewed by the shareholders' meeting, the Board of Directors shall not dispose of or agree to dispose of such fixed assets without the approval of the shareholders' meeting.

The disposal of fixed assets referred to in this article shall include the transfer of rights and interests of some assets, excluding the provision of guarantee with the fixed assets.

The validity of transactions conducted by the Company in relation to the disposal of fixed assets shall not be affected by the violation of the first paragraph of this article.

Article 6       When the Company shall disclose foreign investments, purchase and sale of assets, pledge of assets, related-party transactions, entrusted financing, external donations, and external guarantees according to the provisions of the Articles of Association and under the Stock Listing Rules, these matters shall be subject to review and approval by the Board of Directors. For matters that require submission to the shareholders' meeting for deliberation and approval according to relevant laws, administrative regulations, departmental rules, and the Stock Listing Rules, the Board of Directors shall submit such matters to the shareholders' meeting for deliberation and approval.

Article 7       The Board of Directors shall formulate a management system for authorizing the management layer, clearly define requirements such as the authorization principles, management mechanisms, scope of matters, and authority conditions in accordance with the law, and establish and improve an authorization mechanism for tracking, supervision and dynamic adjustment as well as a working mechanism under which the general manager regularly reports to the Board of Directors.

Article 8       The Board of Directors shall actively promote the construction of the rule of law within the Company, listen to the annual work report on the construction of the rule of law, and put forward opinions and suggestions.

 

Section II             Office of the Board of Directors

Article 9       The Securities, Legal Affairs and Risk Control Department of the Company shall exercise the functions of the Office of the Board of Directors and be responsible for handling the daily affairs of the Board of Directors.

The secretary of the Board of Directors shall serve as the chief person in charge of the daily affairs of the Board of Directors and take on the responsibility of safeguarding the seals relevant to the Board of Directors.

 

Chapter III    Procedures for Convening Board Meetings

Article 10     Directors conduct their deliberations in the form of holding board meetings.

The board meetings shall be convened and presided over by the chairman. Where the chairman is unable to perform relevant duties or fails to perform, the board meeting shall be convened and presided over by the vice chairman; where the same thing happened on the vice chairman, a director, elected by more than half of directors jointly, shall convene and preside over the meeting.

Article 11      The board meetings are divided into regular meetings and extraordinary meetings.

The Board of Directors shall hold at least one regular meeting respectively in each of the first half and the second half of each year. Extraordinary meetings shall be held as needed.

Article 12     An extraordinary meeting shall be convened by the Board of Directors where one of the following cases occurs:

(I)  Shareholders representing more than one tenth of the voting rights propose to convene such a meeting;

(II)       More than one-third of all the directors jointly propose to convene such a meeting;

(III)      More than half of all the independent directors propose to convene such a meeting;

(IV)      The Audit Committee proposes to convene such a meeting;

(V)       Other circumstances as stipulated in the Articles of Association.

Article 13     Those who propose to convene an extraordinary meeting of the Board of Directors in accordance with the provisions of Article 12 shall submit a written proposal with signatures (seals). The following matters should be stated in the written proposal:

(I)  Names of the proposers;

(II)       The reasons for the proposal or the objective causes on which the proposal is based;

(III)      The time or time limit, place and manner of the proposed meeting;

(IV)      Clear and specific proposal;

(V)       The contact information of the proposers and the date of the proposal, etc.

The content of the proposal shall fall within the scope of the powers and functions of the Board of Directors as stipulated in the Articles of Association. Materials related to the proposal shall be submitted simultaneously.

Upon receiving the above-mentioned written proposal and relevant materials, the Securities, Legal Affairs and Risk Control Department of the Company shall report them to the chairman on the same day. If the chairman deems that the content of the proposal is unclear, not specific enough or that the relevant materials are insufficient, he or she may request the proposer to make modifications or supplements.

The chairman shall convene and preside over the board meetings within ten (10) days after receiving the proposal or the request from the securities regulatory department.

Article 14     Notification method for the meeting of the Board of Directors:

For the convening of regular meetings and extraordinary meetings of the Board of Directors, the Securities, Legal Affairs and Risk Control Department of the Company shall, respectively, ten (10) days and five (5) days in advance, submit written meeting notices stamped with the seal of the Board of Directors to all directors as well as the general manager and the secretary of the Board of Directors through direct delivery, fax, email or other written means. If the notice is not delivered directly, confirmation shall also be made by telephone and corresponding records shall be kept.

If the extraordinary meetings of the Board of Directors need to be convened immediately in case of emergencies, the convener may send the notice of meetings through telephone or oral means, and shall make explanations on the meetings.

Article 15     The written meeting notice shall include the following content:

(I)  Date and place of the meeting;

(II)       Duration of the meeting;

(III)      Cause and topics of the meeting;

(IV)      Date of giving notice.

Article 16     After the written notice of a regular meeting of the Board of Directors has been sent out, if it is necessary to change matters such as the time and place of the meeting or to add, change or cancel meeting proposals, a written notice of change shall be sent out three (3) days before the originally scheduled meeting date, explaining the situation, the relevant content of the new proposals and related materials. If the time is less than three (3) days, the meeting date shall be postponed accordingly or the meeting shall be held on the originally scheduled date upon the approval of all the directors attending the meeting.

After the notice of an extraordinary meeting of the Board of Directors has been sent out, if it is necessary to change matters such as the time and place of the meeting or to add, change or cancel meeting proposals, the approval of all the directors attending the meeting shall be obtained in advance and corresponding records shall be made properly.

Article 17     A board meeting shall be held with the attendance of a majority of directors.

The general manager and the secretary of the Board of Directors shall attend the board meeting as nonvoting delegates. When the matters under deliberation by the Board of Directors involve legal issues, the general counsel shall attend the meeting as nonvoting delegate and express legal opinions. If the moderator deems it necessary, he or she may notify other relevant personnel to attend the board meeting as non-voting delegates. Those attending the meeting as nonvoting delegates have the right to express their opinions on relevant topics, but they do not have the right to vote.

Article 18     Directors shall attend board meetings in person. Where a director is unable to attend for any reason, other director could be entrusted in writing to attend such meeting on his/her behalf. The certificate of entrustment shall specify:

(I)  Names of trustor and trustee;

(II)       The trustor's brief opinions on each proposal;

(III)      The trustor's authorization scope and validity period and directives for the intention of voting on proposals;

(IV)      The trustor's signature, seal, date, etc.

The director representative attending the meeting shall exercise the director's duties within the authorized scope.

The trustee shall submit the written certificate of entrustment to the moderator and specify the entrustment.

Where a director neither attends the board meeting nor entrusts another director to attend on his/her behalf, he/she shall be deemed to waive his/her voting rights at the said meeting.

Article 19     The responsibilities of directors for voting matters shall not be exempted by the entrustment of other directors. The person entrusting another person to attend or being entrusted by another person to attend a board meeting shall comply with the following principles:

(I)  When considering matters related to related-party transactions, non-connected directors shall not entrust connected directors to attend on their behalf, and connected directors shall not accept the entrustment from non-connected directors either;

(II)       Independent directors shall not entrust non-independent directors to attend on their behalf, and non-independent directors shall not accept the entrustment from independent directors either;

(III)      The entrusting director shall clearly state in the certificate of entrustment his or her opinions of approval, opposition or abstention on each matter. A director shall not make or accept an entrustment without an intention of voting, a general entrustment or an entrustment with an unclear scope of authorization;

(IV)      One director shall not accept the entrustment of more than two directors in one board meeting, and a director shall not entrust another director who has already accepted the entrustment of two other directors to attend on his or her behalf.

Article 20     Board meetings shall, in principle, be held on-site. When necessary, on the premise of ensuring that all directors attending the meeting can communicate fully and express their opinions, with the consent of the convener (moderator) and the proposer, the meeting can also be held through means such as voting by video, telephone, fax or email. The board meeting can be held at site and in other ways simultaneously.

 

Chapter IV    Rules of Procedure and Voting Procedures for Board Meetings

Article 21     When the board meeting is held, first of all, the moderator shall announce the meeting topics and preside over the discussion according to the meeting topics. The moderator shall successively invite the directors attending the board meeting to express clear opinions on each proposal.

If a director repeats his or her speech on the same proposal or the speech goes beyond the scope of the proposal, thus affecting the speeches of other directors or impeding the normal progress of the meeting, the moderator shall promptly stop it.

Unless unanimous consent of all the directors attending the meeting is obtained, the board meeting shall not vote on proposals that are not included in the meeting notice. If a director accepts the entrustment of other directors to attend the board meeting on their behalf, he or she shall not vote on behalf of other directors on proposals that are not included in the meeting notice.

Article 22     Directors shall carefully read the relevant meeting materials and express their opinions independently and prudently on the basis of fully understanding the situation.

Directors may obtain the information needed for decision-making from relevant personnel and institutions such as the Company's Securities, Legal Affairs and Risk Control Department, the convener of the meeting, the general manager and other senior executives, various special committees, accounting firms and law firms before the meeting. They may also suggest to the moderator during the meeting to invite representatives of the above personnel and institutions to attend the meeting and explain the relevant circumstances.

Article 23     After the full discussion on each proposal, the moderator shall ask the present directors to vote for proposals one by one.

The one-person-one-vote system shall be practiced when resolutions of the Board of Directors are put to vote.

The meeting holding and voting method for resolutions of the Board of Directors is on-site voting, including voting by poll and voting by a show of hands.

The voting intention of directors shall be divided into "favor", "against", and "abstention". The present directors shall choose one from the foregoing intentions. The moderator shall request directors who have not chosen any intention or have chosen at least two intentions simultaneously to re-choose the intention, and those directors who refuse to choose any intention shall be deemed as abstention of the exercise of voting power; directors who leave the venue during meetings and have not chosen any intention shall be deemed as abstention of the exercise of voting power.

Provided that the directors are ensured to be able to fully express opinions, the extraordinary meeting of the Board of Directors can be held and resolution can be made by video, correspondence (including fax), and the resolution shall be signed by directors attending the meeting.

Article 24     After the directors present at the meeting have completed voting, the relevant staff members of the Company's Securities, Legal Affairs and Risk Control Department shall promptly collect the voting ballots of the directors and hand them over to the secretary of the Board of Directors for tallying under the supervision of an independent director or another director.

If the meeting is held on-site, the moderator shall announce the tallying results on the spot. In other circumstances, the moderator shall require the secretary of the Board of Directors to notify the directors of the voting results before the next working day after the expiration of the specified voting time limit.

If a director casts a vote after the moderator has announced the voting results or after the expiration of the specified voting time limit, his or her voting will not be counted.

Article 25     Except for the circumstances stipulated in Article 26 of these Rules, for the Board of Directors to deliberate and adopt meeting proposals and form relevant resolutions, more than half of all the directors of the Company must vote in favor of the proposals. The Board of Directors shall, in accordance with the provisions of the Articles of Association, make resolutions on guarantee or financial support matters within the scope of its authority. In addition to requiring the consent of more than half of all the directors of the Company, it must also obtain the consent of more than two-thirds of the directors present at the board meeting and disclose it in a timely manner. If it is stipulated in laws, administrative regulations, and the Articles of Association that the Board of Directors should obtain the consent of more directors when creating a resolution, such stipulation shall apply.

In case there are contradictions in the content and meaning of different resolutions, the resolution formed later in time shall prevail.

Article 26     In the event of the following circumstances, directors shall abstain from voting on relevant proposals and shall not exercise the right to vote on behalf of other directors:

(I)  Circumstances under which directors are required to recuse themselves as stipulated in the Stock Listing Rules;

(II)       Circumstances that the directors themselves believe they should recuse themselves from;

(III)      Other circumstances under which directors are required to recuse themselves due to their affiliated relationships with the enterprises involved in the meeting proposals as stipulated in the Articles of Association;

(IV)      If an independent director discovers that the matters under deliberation have circumstances that affect his or her independence, he or she shall declare to the Company and apply for recusal.

If a director has an affiliated relationship with the enterprise or individual involved in the matters of the board meeting resolutions, the director shall promptly submit a written report to the Board of Directors. Directors with affiliated relationships shall not exercise the right to vote on such resolutions, nor shall they exercise the right to vote on behalf of other directors. In the case where directors recuse themselves from voting, the relevant board meeting can be held as long as it is attended by more than half of the directors without affiliated relationships, and resolutions shall be adopted upon the approval of more than half of the directors without affiliated relationships. If the number of directors without affiliated relationships present at the meeting is less than three, relevant proposals shall not be voted on, and the matter shall be submitted to the shareholders' meeting for deliberation instead.

Article 27     The Board of Directors shall act strictly in accordance with the authorization of the shareholders' meeting and the Articles of Association, and shall not form resolutions by exceeding its authority.

Article 28     If independent directors believe that the specific plan for cash dividends may harm the rights and interests of the Company or minority shareholders, they have the right to express independent opinions. If the Board of Directors has not adopted or fully adopted the opinions of independent directors, the opinions of independent directors and the specific reasons for not adopting them shall be recorded in the resolution of the Board of Directors and disclosed.

Article 29     If a proposal is not adopted, under the condition that relevant conditions and factors have not changed significantly, the board meeting shall not deliberate on a proposal with the same content again within one month.

The board meeting shall be convened in strict accordance with the prescribed procedures. The Board of Directors shall notify all directors in advance within the prescribed time and provide sufficient information. If two or more independent directors believe that the materials are incomplete, the demonstration is insufficient or the provision is not timely, they may jointly submit a written request to the Board of Directors for postponing the convening of the meeting or postponing the deliberation of the matter. The Board of Directors shall adopt such a request, and the listed company shall disclose the relevant situation in a timely manner.

Chapter V     Minutes and Resolutions of Board Meetings

Article 30     The Board of Directors shall keep minutes on decisions of the meeting on the agenda items. The secretary of the Board of Directors shall arrange for the relevant personnel of the Securities, Legal Affairs and Risk Control Department to take good records of the board meeting. Directors, the secretary of the Board of Directors present at the meeting and the recorder shall sign on the minutes. The minutes of the board meeting shall be preserved as archives. The minutes shall record:

(I)  The date and place of the meeting and the name of the convener;

(II)       Names of the directors attending the meeting and the directors (proxies) entrusted to attend the meeting of the Board of Directors;

(III)      Agenda of the meeting;

(IV)      Main points of speeches delivered by directors;

(V)       Voting method and results of the resolution for each issue (the voting result shall state the number of affirmative votes, negative votes, or abstention votes).

Article 31     Directors shall be responsible for the resolutions of the Board of Directors. If the resolutions of the Board of Directors violate laws, administrative regulations or the Articles of Association, resulting in serious losses to the Company, the directors who participated in the resolutions shall be liable for compensation to the Company. However, if it can be proved that they expressed objections during the voting and such objections were recorded in the minutes, those directors may be exempted from liability.

Article 32     In addition to the minutes, the secretary of the Board of Directors may also arrange for the relevant personnel of the Company's Securities, Legal Affairs and Risk Control Department to make concise meeting summaries on the convening of the meetings and prepare separate resolution records for the resolutions formed at the meetings based on the counted voting results.

Article 33     The directors present at the meeting shall sign for confirmation on behalf of themselves and the directors who have entrusted them to attend the meeting with respect to the minutes, meeting summaries (if any), and resolution records (if any). If a director has different opinions on the minutes, meeting summaries (if any) or resolution records (if any), he or she may make a written explanation when signing. When necessary, it shall promptly report to the regulatory authorities and may also issue a public statement.

If a director fails to sign for confirmation as stipulated in the preceding paragraph, and also fails to make a written explanation of his or her different opinions or report to the regulatory authorities or issue a public statement, it shall be deemed that the director fully agrees with the content of the minutes, meeting summaries (if any), and resolution records (if any).

Article 34    If the Board of Directors does not adopt or fully adopt the opinions of any special committee, the opinions of such special committee and the specific reasons for not adopting them shall be recorded in the resolutions of the Board of Directors and disclosed.

The Audit Committee shall submit its deliberation opinions to the Board of Directors of the Company regarding the matters within its scope of responsibilities. If the Board of Directors does not adopt such opinions, the Company shall disclose the matter and fully explain the reasons.

If independent directors believe that the specific plan for cash dividends may harm the rights and interests of the listed company or minority shareholders, they have the right to express independent opinions. If the Board of Directors has not adopted or fully adopted the opinions of independent directors, the opinions of independent directors and the specific reasons for not adopting them shall be disclosed in the announcement of the resolutions of the Board of Directors.

When disclosing resolutions of the Board of Directors, the Company shall also disclose the dissenting opinions of independent directors and record them in the resolutions of the Board of Directors and minutes of meetings.

Chapter VI    Announcement of Board of Directors' Resolutions, Execution of Resolutions and Archiving of Documents

Article 35    Matters regarding the announcement of the resolutions of the Board of Directors shall be handled by the secretary of the Board of Directors in accordance with the relevant provisions of the Stock Listing Rules. Before the disclosure, directors, attendants, record keepers, and service personnel of the meeting shall be obliged to keep the resolution content secret.

Article 36    The chairman shall urge the relevant personnel to implement the resolutions of the Board of Directors, check the implementation status of the resolutions, and report on the execution status of the resolutions already formed at subsequent board meetings.

Article 37    The secretary of the Board of Directors shall be responsible for preserving the archives of meetings of the board meetings, including notice of meetings, documents of meetings, certificate of entrustment, votes, records of meetings signed by the present directors for confirmation, minutes of meetings (if any), records of resolutions (if any), and announcements of resolutions. The secretary of the Board of Directors may entrust the Securities, Legal Affairs and Risk Control Department of the Company to act as the custodian.

The archives of meetings of the Board of Directors shall be preserved for 10 years.

 

Chapter VII   Supplementary Provisions

Article 38    For the purpose of these Rules, the terms "above", "within" and "below" all include the number itself, while "exceeding", "more than" and "less than" do not include the number itself.

Article 39    Matters not covered in these Rules shall be implemented in accordance with relevant national laws, regulations, normative documents and the provisions of the Articles of Association.

Article 40    Under any of the following circumstances, the Board of Directors shall promptly revise these Rules and submit such to the shareholders' meeting for approval:

(I)  After the relevant national laws, regulations or normative documents are amended, or new laws, regulations or normative documents are formulated and promulgated, the matters stipulated in these Rules conflict with the provisions of the aforementioned laws, regulations or normative documents.

(II)       After the Articles of Association are amended, the matters stipulated in these Rules conflict with the provisions of the Articles of Association;

(III)      Changes have occurred in the Company's circumstances, and the Board of Directors or the shareholders' meeting deems that these Rules shall be revised.

Article 41    These Rules and revisions thereof shall come into effect as of the date when they are deliberated on and approved by the shareholders' meeting. As of the date when these Rules come into effect, the Company's original Rules of Procedures of the Board of Directors shall automatically become invalid.

Article 42    These Rules shall be interpreted by the Board of Directors of the Company.