大冷Ｂ：公司章程（英文版）

ARTICLES OF ASSOCIATIONOF DALIAN REFRIGERATION CO., LTD.

Approved by

2018 Shareholders’ General Meeting

[English translation for reference only. Should there be anyinconsistence between the Chinese and English version, then the

Chinese version should prevail.]

CONTENTS

Chapter 1 General Provisions…………………………………………………3Chapter 2 Objectives, Scope of Business and Method of Operation……. ….4Chapter 3 Registered Capital, Share and Share Certificates……….…….5Chapter 4 Shareholders……………………………………………………...….10Chapter 5 General Meeting………………………………………………….…12Chapter 6 Board of Directors……………..……………………………………20Chapter 7 Supervisory Board…………………………………………………28Chapter 8 Business Management Structure……………………..……………30Chapter 9 Labour and Personnel Management…………………..………….32Chapter 10 Finance, Accounting and Auditing ……………………………33Chapter 11 Profits Distribution…………………………………………….35Chapter 12 Merger and Division……………………………………………37Chapter 13 Dissolution and Liquidation……………………………………38Chapter 14 Disclosure of Information…………………………………….40Chapter 15 Amendment of the Articles of Association………………..41Chapter 16 Supplementary Provisions……………………………………41

Chapter 1 General ProvisionsArticle 1. 1 Principles of the Articles of AssociationPursuant to the "Company Law of the People's Republic of China" (the "Company Law")and other relevant laws, rules and regulations, the Articles of Association are preparedwith a view to establishing the legal status of Dalian Refrigeration Company Limited (the"Company"), regulating the operations, management, organization and activities of theCompany, and protecting the legal interests of the Company, shareholders and creditors.Article 1.2 Name, Address and Legal Representative of the CompanyThe registered Chinese name of the Company is: 大连冷冻机股份有限公司The English name of the Company is: Dalian Refrigeration Company Limited.The address of the Company is: 106 East Road of Liaohe, Dalian City Economic andTechnological Development Zone with postcode 116630The Chairman of the Company shall be the legal representative of the Company.Article 1. 3 Method of Establishing the CompanyThe Dalian Bingshan Group Company acted as the promoter pursuant to the documentNo. (1993)7 issued by the Dalian Economic System Reform Committee, converted thestated-owned assets in Dalian Refrigeration Factory into state shares as authorized by theDalian State-owned Assets Administration Bureau, and then set up the Company by wayof a initial public offer of legal person shares, public individual shares and employeeshares with the approval of the China Securities Regulatory Commission.The Company was registered with the Dalian Administrative Bureau For Industry andCommerce on 18th December, 1993 and obtained a business license No. 24236130-0.Article 1. 4 Form of the CompanyThe Company takes the form of a company limited by shares, i.e. the entire capital of theCompany is divided into shares with equal nominal value and the liability of ashareholder to the Company is limited to the nominal value of the shares held by theshareholder. The Company commits its entire assets to assume its liabilities.Article 1. 5 Legal Status of the CompanyThe Company possesses the status of an independent legal person. The laws of thePeople's Republic of China (the "PRC") govern the Company's activities and protect thelegal rights and interests of the Company. The Company shall enjoy exclusive proprietaryrights over the assets injected into the Company by the shareholders (including the State).The Company shall have independent autonomy over its operation, management andfinancial budget, and shall enjoy civil rights and assume civil liabilities in accordancewith the laws.Article 1.6 Principle of Purchasing Shares in the CompanyThe Company shall ensure that the shares in the Company are purchased voluntarily andthat the same rights in relation to the sharing of profits and the assumption of risks shallattach to shares of the same class.Article 1.7 External InvestmentThe Company has the right to invest in other limited companies or joint stock companiesand assumes liabilities as limited by the amount of investment.The Company shall not become a shareholder with unlimited liability of anyprofit-making organizations.Article 1.8 External guaranteeThe Company cannot guarantee for any entity without legal personality or personal, the

Company guarantee for the controlling shareholder and other related party must reviewand approval by the general meeting of shareholders.The total amount of guaranteeissuance of the Company shall not exceed 50% of the net assets listed in the consolidatedaccounting statement for the last fiscal year.The procedure for approving guarantee issuance of the Company: the Company’s issuingany guarantee must be approved by the general shareholders meeting or the Board ofDirectors of the Company. Issuing any guarantee with the guaranteed amount accountingfor less than 10% of the Company’s net assets audited recently shall be approved by 2/3of the total directors of the Board. Any guarantee issuance with the guaranteed amountaccounting for 10% or more of the Company’s net assets audited recently shall beapproved by the general shareholders meeting of the Company. Any guarantee after thetotal amount of external guarantees provided by the Company and its holding subsidiariesreaches or exceeds 50% of the audited net assets as at the most recent period end must beapproved by the general meeting of shareholders. Any guarantee after the total amount ofexternal guarantees provided by the Company reaches or exceeds 30% of the auditedtotal assets as at the most recent period end must be approved by the general meetingshareholders.The credit standing requirement for guaranteed objects: the bank credit rating shall not belower than AA and the asset-liability ratio not higher than 70%.Article 1.9 Term of OperationThe Company is deemed to be a joint stock company with a going concern except in thecases as described in Chapter 12 and Chapter 13.Article 1. 10 Legal Effect of the Articles of AssociationThe Articles of Association are the rules of highest authority for the Company'sorganization and activities and shall be legally binding on the Company, the Company'sshareholders, directors, supervisors, and general manager and other senior managing staff.As the Articles of Association are a public legal document, any acts of subscribing for theshares of the Company (whether the shares of the Company can be legally andsuccessfully obtained or not) shall be considered to have the legal effect that: the personsubscribing for the Company's shares has voluntarily accepted all the terms andconditions, and the binding effect of the Articles of Association on him withoutreservation.

Chapter 2 Objectives, Scope of Business and Method of OperationArticle 2.1 Objectives of the CompanyThe objectives of the Company are: to follow the trend of the development of a socialistmarket economy; to implement scientific management; to fully utilize the existing humanresources, financial resources and material resources to enable a stable and rapiddevelopment of the Company; to promote actively the development in refrigeration,air-conditioning and other businesses of the Company; to protect and increase its assetvalue; to safeguard the legal rights and interests of all shareholders to enable them toreceive a satisfactory return on their investments.Article 2.2 Scope of BusinessThe scope of business of the Company is as follows:

Its main business is to process and manufacture refrigeration equipment and auxiliarymachines, valves, component parts and the accessory products required in refrigeration

engineering packages.Subsidiary businesses include the design, manufacturing, installation, maintenance,calibration of refrigeration and air-conditioning systems and technical consultation,technical services, trading and supply of materials.As required by the business development of the Company, the Company may carry outother relevant businesses with the approval of the companies registration authority.Article 2.3 Mode of OperationThe modes of operation of the Company include processing, manufacturing, wholesale,retail import and export, investment, selling agency, buying agency, leasing andservicing.As required by the business development of the Company, with the approval of therelevant government departments, the Company may establish joint ventures withdomestic and foreign companies, or set up branches, representative offices or agencyorganizations within or outside the PRC.Article 2.4 Adjustment of the Scope of Business and the Mode of operationAs required by the changing conditions of the market and the business development ofthe Company, the Company may adjust its business scope and operation mode. If thebusiness scope and the operation mode is adjusted, the Articles of Association shall beamended accordingly and the amended Articles of Association shall be registered withthe companies registration authority. If the business scope adjusted falls within thecategory of restricted business under the laws and regulations of the PRC, the approval ofthe relevant government departments shall be obtained.

Chapter 3 Registered Capital, Share and Share CertificatesArticle 3.1 Registered CapitalThe registered capital of the Company shall be the total paid up capital of RMB843,212,507.Article 3.2 Division of Registered CapitalThe total registered capital of the Company shall be divided into shares with equalnominal value 1 for which share certificates shall be issued.The Company has in issue 843,212,507shares in total, with a par value of RMB1.00 each.Article 3.3 Types and Composition of Registered CapitalThe shares issued by the Company are all ordinary shares. The shares of the Company aredivided into Renminbi ordinary shares and domestically listed foreign investment shares.All these stocks are put on trust to China Securities Registry & Settlement Co., Ltd.Shenzhen Branch.Renminbi ordinary shares ("A Shares ") shall be held by legal persons or otherorganisations registered in the PRC, natural persons of PRC nationality, or entitiesstipulated by the laws of the PRC or approved by the relevant government authorities ofthe PRC. A Shares comprise State shares, legal person shares and public individualshares.Domestically listed foreign investment shares ("B Shares") shall be held by naturalpersons, legal persons, and other organizations of foreign countries; legal persons, naturalpersons and other organizations of Hong Kong, Macau and Taiwan; PRC nationalsresiding overseas or other investors as stipulated by the Securities Committee of the StateCouncil.

The structure of the issued share capital of the Company is as follows:

Type of shares Number of sharesRenminbi ordinary shares 601,712,507Domestically listed foreign investment shares 241,500,000Article 3.4 Contribution of Share CapitalShareholders may, in accordance with the provisions of the Articles of Association andthe PRC laws, make capital contributions to the Company in form of cash or by means ofinjection of tangible assets such as buildings, factories, machinery equipment orintangible assets such as industrial property rights, non-patented technologies and landuse rights, in exchange for the shares of the Company.A good legal title held by the shareholders over the assets to be injected shall be apre-requisite to the injection of assets in exchange for the shares of the Company. Inaddition I such injection of assets in exchange for the Company's shares shall complywith the Company Law and any conditions imposed by the Board of Directors of theCompany.Article 3.5 Limitations on the Holding of SharesAny investor who comes to hold 5 percent of the shares issued by the Company directlyor indirectly shall, within three days from the date on which such shareholding becomes afact, submit a written report to China Securities Regulatory Committee and ShenzhenStock Exchange, notify the Company and make the fact known to the general public.Once an investor holds 5 percent of the shares issued by the Company, he shall, pursuantto the provisions of the preceding paragraph, report and make announcement of each 5percent increase or decrease in the proportion of the issued shares he holds of theCompany through securities trading on a stock exchange. During the reporting period,and for two days after the report and announcement are made, the investor may notcontinue to purchase or sell shares of the Company.However, where the amount of shares held by an investor exceeds the abovementionedlimitation of 5 per cent as a result of a decrease in the total number of shares of theCompany, the above restrictions will not apply.If the shareholder described in the preceding paragraph sells , within six months ofpurchase, the shares he holds of the Company or repurchases the shares within sixmonths after selling the same , the earnings so obtained by the shareholder shall belong tothe Company and be recovered by the Board of Directors of the Company .However, a securities company that has a shareholding of not less than 5 percent due topurchase of the remaining shares not he capacity of a company that underwrites as thesole agent shall not be subject to the restriction of six months when selling the saidshares.The provision of the preceding paragraph is suitable for directors, supervisors, generalmanager, and other senior mangers of the Company.In this Article, shares are deemed to be indirectly held by an individual or a legal personif the shares are held by the companies, beneficially owned by an individual or by theaffiliates of the legal persons, or under the control of an individual or a legal personalthough held by other legal entities.Article 3.6 Share IssuePayment should be made in full upon subscription for new issued shares. Oncesubscribed, the shares cannot be returned.

The principles of openness, fairness and justice shall be observed in the issue of theCompany's shares and the same rights, dividends I share of profits and assumption ofrisks shall attach to shares of the same class. The issue conditions and issue price for theshares under the same issue shall be the same. Shares may be issued at a par value or at apremium but shall not be issued at a discount.General meetings shall resolve the following matters when the Company intends to issuenew shares:

1. type and number of the new shares;2. placing price of the new shares;3. type and number of the new shares to be issued to the existing shareholders.Article 3.7 Form and Registration of Share CertificatesThe issued share capital of the Company takes the form of share certificates whichconstitute the written evidence of the respective shareholdings of the shareholders, andare issued and signed by the Company. The Company uses the register of shareholdersregistered by the securities registration authorities as the evidence of the existingshareholdings. Registration records in the register of shareholders shall be conclusiveevidence for such shareholdings.Article 3.8 Transfer and Trading of SharesShareholders holding the Renminbi ordinary shares and domestically listed foreigninvestment shares of the Company may, subject to the laws, the trading regulations of thestock exchange on which the Company's shares are listed and other relevant regulationsand laws, sell the shares held by them by agreement to other legal persons or naturalpersons who are legally eligible to hold such shares. However, any transfer of thestate-owned shares shall be approved by the state-owned assets administrationdepartments.The placing rights and other derivative rights attached to the shares held by theshareholders of the Company may be transferred and traded in accordance with therelevant laws and regulations.The Company shall only recognize the transferees of registered shares as the Company'sshareholders after the names and addresses of the transferees have been recorded in theregister of shareholders and verified by the statutory registration authorities.The Company’s directors, supervisors, general manager and other senior managementmembers shall regularly declare to the Company their shareholdings in the Company andany changes during their tenure of office, and any share transfer by a director, supervisor,general manager or senior management member shall not exceed 25% of the total sharesheld by him/her in the Company each year during his/her tenure of office. Any shares ofthe Company held by them are prohibited being transferred within one year from theshares are listed and traded. Anyone above-mentioned shall not transfer his/her heldshares of the Company within six months from his/her demission.The shares held by the promoter of the Company shall not be transferred within one yearfrom the date of establishment of the Company.Article 3.9 Gift, Mortgage and Succession of SharesThe Company's shareholders may transfer the shares of the Company held by them byway of gift, mortgage and succession in accordance with the laws and regulations.Any transfer of the Company's shares by way of gift and succession shall be registeredwith the statutory registration authorities upon presentation of valid and enforceable legal

documents. A mortgage over the Company's shares shall be registered with theregistration authorities as required by the laws and regulations.The Company shall not accept any mortgage the subject of which are the Company'sshares.Article 3.10 Amalgamation and Division of SharesAs required by the production, operation and development of the Company, the Companymay, subject to the proposal of the Board of Directors and the resolutions passed at ageneral meeting, amalgamate or divide the Company's shares in a specified ratio.Article 3.11 Increase of Issued Share CapitalAs required by business development of the Company, the Company may, subject to theproposal of the Board of Directors, the passing of a resolution by shareholders at ageneral meeting and the approval of the relevant government departments, increase theCompany's issued share capital by the followings means:

1. issuing shares in a public manner;2. issuing shares in a non-public manner;3. bonus issue to the existing shareholders; or4. other methods in compliance with the relevant laws and regulations.Article 3.12 Re-issue of Share CertificatesWhere registered share certificates of the Company have been stolen, lost or destroyed,shareholders shall notify the Company or securities registration authorities appointed bythe Company in writing, and shall apply to the People's Court for declaring such sharecertificates as null and void in accordance with the provisions of "The Code of CivilProcedures of the PRC". Upon declaration by the People's Court of such share certificatesto be null and void, the shareholders may apply to the Company or securities registrationauthorities appointed by the Company for the re-issue of share certificates.Article 3.13 Other Classes of SharesWhere necessary, the Company may, subject to the proposal of the Board of Directors,the passing of a resolution by shareholders at a general meeting and the approval of therelevant government departments, issue preference shares or other classes of shares andcorporate bonds (including but not limited to convertible bonds).Where preference shares or other classes of shares and corporate bonds are issued, inaddition to the compliance with the relevant laws and regulations, the shareholders atgeneral meeting shall lay down clear regulations to govern the rights and obligations ofthe holders of such securities, and the Articles of Association shall also be amendedaccordingly subject to the passing of relevant resolutions at the general meeting.Article 3.14 Reduction of Registered CapitalIn accordance with the laws, regulations and the provisions of the Articles of Association,the Company may reduce its registered capital.In the event that the Company reduces its registered capital, a balance sheet and a list ofproperties shall be prepared.The Company shall inform the creditors of its decision to reduce the registered capitalwithin ten days since such a decision is made, and announce it on the newspapersspecified in Art. 14 of the Articles of Association within 30 days. The creditors shall havethe right to ask the Company to pay off the debits or provide appropriate guarantees forpaying off the debts within 30 days from receiving the notice or within 45 days from thedate of announcement if he/she does not receive the notice.

The Company's registered capital after reduction shall not be less than the statutoryminimum amount.Article 3.15 Re-purchase of SharesIn the following circumstances, the Company may re-purchase its issued shares inaccordance with the procedures prescribed in the Articles of Association or laid down bythe stock exchange where the shares are listed and with the approval of the relevantgovernment departments:

1. cancellation of shares for the reduction of the Company's registered capital;2. merger with other companies holding the Company's shares;3. applying shares to employee stock ownership plan or equity incentive;4. there is any shareholder who has objections on the general meeting’s decision formergence or split of the Company and requests the Company to repurchase his/hershares;5. applying shares to convert corporate bonds convertible to stocks issued by listedcompanies; or6. necessity of listed companies to maintain company value and shareholders' rights andinterests.Except in the above circumstances, the Company does not engage in trading in its stocks.The Company may repurchase shares in one of the following ways:

1. The way of centralized bidding in stock exchanges;2. The mode of offer;3. Other ways approved by CSRC.Where the Company purchases its shares under the circumstances specified in items (3),(5) and (6) of paragraph 1 of this article, it shall adopt an open and centralized tradingmethod.Art. 3.16 Disposal of the Repurchased SharesWhere the Company purchases its shares under the circumstances of items (1) and (2) ofarticle 3.15 of the Articles of Association, it shall be decided by the shareholders' generalmeeting.Where the Company purchases its shares under the circumstances specified in items (3),(5) and (6) of article 3.15 of the Articles of Association, the decision of the board meetingattended by more than two-thirds of the directors shall be adopted.Where the Company purchases its shares in accordance with article 3.15 of the Articlesof Association, if it belongs to the case of item (1), it shall cancel them within 10 daysfrom the date of acquisition; if it belongs to items (2) and (4), it shall transfer or cancelthem within 6 months; if it belongs to items (3), (5) and (6), the total number of sharesheld by the Company shall not exceed the number of 10% of the total shares theCompany has issued, and shall transfer or cancel them within three years after disclosingthe results of repurchase and the announcement of changes in shares.After the acquisition of the Company's shares, the Company shall fulfill its obligation ofinformation disclosure in accordance with the provisions of the Securities Law.The par value of the cancelled shares shall be reduced from the registered capital of theCompany.Article 3.17 Liability for CompensationThe Company shall not be liable to compensate anyone who suffers losses resulting fromthe cancellation of the original share certificates or the re-issue of share certificates unless

the party concerned can prove that such losses are caused by the Company's omissions orfraudulent acts.Article 3.18 Financial AssistanceThe Company and its subsidiaries shall not in any way provide financial assistance tosubscribers to subscribe for the Company's shares.The above-mentioned financial assistance refers to any gifts, guarantees, price reductionsor advances for the purpose of reducing or exempting the subscribers' paymentobligations for subscription of the Company's shares.Where the Company distributes new shares to shareholders in proportion to theirshareholdings as a result of capitalization of provident funds or profits in accordance withthe laws, the restriction stipulated in this Article shall not apply.Article 3.19 Registration of ChangesWhen the increase or reduction of the Company's registered capital is subject to approval.such approval shall be sought from the approving authorities and the increase orreduction must be registered with the companies registration authorities.

Chapter 4 ShareholdersArticle 4.1 ShareholdersHolders of the Company's shares shall be the Company's shareholders. Subject tocontrary evidence, the register of shareholders shall be the conclusive evidence of theidentities of the Company's shareholders. In accordance with the Articles of Associationand the laws and regulations, the shareholders' liabilities to the Company shall be limitedto the nominal value of the shares held by them and the shareholders are entitled to thecorresponding rights provided by the Articles of Association and the laws andregulations.In the event that any shareholder of the Company is a legal person, its rights shall beexercised by its legal representative or the agent of its legal representative on its behalf.Article 4.2 Shareholders' rightsThe shareholders of the Company's ordinary shares shall be entitled to the followingrights:

1. to receive dividends and benefits in other forms on their shares;2. to request, convene, preside or attend the general meetings of the Company in personor by proxy and exercise the rights to vote;3. to conduct supervision, give suggestions and make queries in respect of the operationand financial management of the Company;4. to transfer the shares held by them by way of transfer, gift or mortgage in accordancewith the relevant laws and regulations and the Articles of Association;5. to inspect the Company's Articles of Association, the list of shareholders, the minutesof general meetings, the minutes of the Board of Directors, the minutes of the Board ofsupervisors, and financial accounting report;6. to be entitled to the net assets of the company in proportion to their shareholdings inthe event that the Company becomes insolvent and is wound up;7. to require the Company to acquire their shares for those shareholders who object toresolution on the merger and separation of the Company made by the shareholders’general meeting;8. to enjoy other rights as stipulated by the relevant laws and regulations and the Articles

of Association.For the procedure for convening a general meeting or a meeting of the Board of Directorsor the method of voting in violation of the laws, regulations or these Articles ofAssociation, or any resolution in violation of these Articles of Association, theshareholders shall have the right to appeal to the people’s court for cancellation within 60days from the day when such resolution is adopted.In case of any director or senior management member, who violates the laws andregulations or these Articles of Association in his/her duty and causes loss to theCompany, any shareholder(s) who individually or jointly holds 1% or more shares of theCompany for a period of continuative 180 days shall have the right to submit the writtenrequest to the Board of Supervisors for bringing suit to the people’s court. In case theBoard of Supervisors violates the laws and regulations or these Articles of Association inits duty, which causes loss to the Company, any shareholder shall have the right to submitthe written request to the Board of Directors for bringing suit to the people’s court.If the Board of Supervisors or Board of Directors refuses to bring suit after receiving theaforementioned written request, or fails to bring suit within 30 days after receiving therequest, or fails to bring suit immediately in case of emergency, which may causeirretrievable impairment to the Company’s interest, the aforementioned shareholder(s)shall have the right to bring suit directly to the people’s court in his/her/their name(s) forthe Company’s interest.In case any other person infringes the legal rights and interests of the Company, whichcauses loss to the Company, any shareholder(s) individually or jointly holds 1% or moreshares of the Company for a period of continuative 180 days shall have the right to bringsuit to the people’s court as stipulated in the above two clauses.In case any director or senior management member violates the laws and regulations orthese Articles of Association, which impairs the shareholders’ interest, any shareholdershall have the right to bright suit to the people’s court.Article 4.3 Shareholders' ObligationsShareholders holding ordinary shares shall perform the following obligations:

1. to observe the Articles of Association;2. to pay up punctually for the shares subscribed in accordance with the method ofsubscription;3. to obey and implement resolutions passed at general meetings pursuant to the laws;4. to disclose certain information when their shareholdings reach the statutory prescribedamount;5. not to engage in any malicious activities which are detrimental to the interests of theCompany;6. to perform other obligations stipulated in the relevant laws and regulations and theArticles of Association.Article 4.4 Behavior of controlling shareholdersThe proprietary shareholders and actual controllers of the Company shall have theobligation to be faithful to the company and social public shareholders. The proprietaryshareholders should exercise the rights as contributors strictly by law, without detrimentto the legal interests of the company and social public shareholders by taking advantageof any associate transaction, profit distribution, assets regrouping, external investment,occupation of funds, financial guarantee, etc. and no detriment to the interests of the

company and social public shareholders by taking advantage of the holding position. Thecontrolling shareholder shall1. strictly abide by the laws and regulations, and the conditions and procedures stipulatedin the Articles of Association in nominating candidates of directors and supervisors;2. not be engaged in any approval for the general meeting's resolutions on personnelelection or for the Board of Directors' resolutions on personnel appointment;3. not appoint or dismiss any senior staff members bypassing the general meeting and theBoard of Directors; and4. not intervene, directly or indirectly, the Company's decision-making and legalproduction and business activities, and not harm the interests of the Company and othershareholders.Article 4.5 Meaning of Controlling ShareholderThe controlling shareholder mentioned in Article 4.4 refers to any person who satisfiesany of the following conditions:

1. He can elect more than half of the Board of Directors when acting alone or in concertwith other persons;2. He can exercise or control over 30 per cent of the voting rights of the Company whenacting alone or in concert with other persons;3. He holds over 30 per cent of the issued shares of the Company when acting alone or inconcert with other persons; or4. He has actual control of the Company by any other means when acting alone or inconcert with other persons.Article 4.6 The Composition of the Register of ShareholdersThe Company shall keep a complete register of its shareholders. The register ofshareholders shall be registered by the securities registration authorities.Article 4.7 Registration Day of ShareholdingWhere the Company convenes a general meeting) distributes dividends) goes intoliquidation or engages in other acts which require confirmation of shareholdings, theBoard of Directors shall fix a day as a reference date for registration of shareholdings forconfirmation purposes. At the close of such registration day) shareholders whose namesappear on the register of shareholders shall be deemed to be the shareholders of theCompany.The interval between the date of equity registration and the date of meeting shall be notmore than 7 working days. Once the date of equity registration is confirmed, it shall notbe altered.

Chapter 5 General MeetingArticle 5.1 General MeetingAll the shareholders of the Company who are entitled to exercise their rights and powersof the Company in general meetings have the highest authority according to the CompanyLaw and the Articles of Association.Article 5.2 Annual General Meeting and Extraordinary General MeetingA general meeting shall be either an annual general meeting or an extraordinary generalmeeting. The general meeting shall be held at a designated place in a manner of on-sitemeeting. The Company will also provide shareholders with the network facilities.Anyshareholder, who attends the general meeting in one of the above manners, shall be

regarded as his/her presence. The general meeting on site shall not end up until themeeting in the network manner ends up. The general meeting shall be held at the locationof the Company.Article 5.3 Annual General MeetingAn annual general meeting shall be held once every year within 6 months after the end ofevery financial year. The interval between two annual general meetings shall not exceed15 months.Article 5.4 Extraordinary General MeetingAn extraordinary general meeting shall be convened within 2 months of the occurrence ofany of the following events:

1. the Board of Directors considers it necessary or if proposed by the Supervisory Board;2. a written request is made by a shareholder or shareholders holding more than 10 percent (including 10 per cent) of the issued share capital of the Company;3. the number of directors falls short by two-thirds of the statutory number or the numberstipulated in the Articles of Association;4. the Company's losses represent one-third or more of the total registered capital;5. more than one half of the independent directors propose to convene the meeting.A written request by the shareholders holding 10 per cent or more of the issued sharecapital of the Company shall be submitted to the Board of Directors.Extraordinary general meeting shall not pass any resolution concerning proposals that arenot set out in the notice of the meeting.For any proposal of independent directors for convening an extraordinary generalmeeting, the Board of Directors shall, within ten days after receiving the proposal, givethe written feedback stating to approve or not approve to convene the extraordinarygeneral meeting according to the laws and regulations and these Articles of Association.The Board of Directors shall give the notification of convening the extraordinary generalmeeting within five days after the Board makes the decision if it approves to convene thegeneral meeting; or explain the reason and make announcement if it does not approve toconvene the general meeting.For any proposal of the Board of Supervisors for convening an extraordinary generalmeeting, the Board of Directors shall, within ten days after receiving the proposal, givethe written feedback stating to approve or not approve to convene the extraordinarygeneral meeting according to the laws and regulations and these Articles of Association.The Board of Directors shall give the notification of convening the extraordinary generalmeeting within five days after the Board makes the decision if it approves to convene thegeneral meeting; and any change to the original proposal in the notification shall besubject to consent of the Board of Supervisors. The Board of Directors’ disapproval toconvene the extraordinary general meeting or failure to give any feedback within ten daysafter receiving the proposal shall be regarded as the Board of Directors’ being unable toperform or failing to perform the obligations to convene the general meeting, and theBoard of Supervisors may convene and preside over the meeting itself.For any proposal of shareholder(s) who individually or jointly holds 10% or more of theCompany’s shares for convening an extraordinary general meeting, the Board ofDirectors shall, within ten days after receiving the proposal, give the written feedbackstating to approve or not approve to convene the extraordinary general meeting accordingto the laws and regulations and these Articles of Association. The Board of Directors

shall give the notification of convening the extraordinary general meeting within fivedays after the Board makes the decision if it approves to convene the general meeting;and any change to the original proposal in the notification shall be subject to consent ofthe related shareholder(s). If the Board of Directors does not approve to convene theextraordinary general meeting, or fails to give any feedback within ten days afterreceiving the proposal, the shareholder(s) who individually or jointly holds 10% or moreof the Company’s shares shall have the right to submit proposal in written form to theBoard of Supervisors for convening the extraordinary general meeting. The Board ofSupervisors shall give the notification of convening the extraordinary general meetingwithin five days after receiving the proposal if it approves to convene the general meeting;and any change to the original proposal in the notification shall be subject to consent ofthe related shareholder(s). The Board of Supervisors’ failure to give the notification ofthe general meeting within the specified period shall be regarded as its failure to conveneand preside over the general meeting and any shareholder(s) individually or jointlyholding 10% or more of the Company’s shares for a period of continuative 90 days mayconvene and preside over the general meeting themselves.The Board of Supervisors or shareholders shall inform in writing the Board of Directorsof any decision to convene the general meeting themselves to file to the local agency ofChina Securities Regulatory Commission and the Securities Exchange. The conveningshareholders shall have the shareholdings not less than 10% before the announcement ofany general meeting’s resolution. The convening shareholders shall submit the necessarycertificates to the local agency of China Securities Regulatory Commission and theSecurities Exchange before giving the notice of the general meeting and makingannouncement of the general meeting’s resolution.For the general meeting convened by the Board of Supervisors or shareholdersthemselves, the Board of Directors and its secretary shall give cooperation. The Board ofDirectors shall provide the list of shareholders registered upon registration ofshareholdings. For the general meeting convened by the Board of Supervisors orshareholders themselves, the necessary cost for the meeting shall be borne by theCompany.Article 5.5 Functions and Powers of Shareholders in General MeetingShareholders in general meeting shall have the following functions and powers:

1. to set the guiding principles of operation and to prepare investment proposals for theCompany;2. to elect and dismiss directors and fix their remuneration;3. to elect and dismiss supervisors whose positions are occupied by the shareholders'representatives and fix their remuneration;4. to examine and approve the reports of the Board of Directors;5. to examine and approve the reports of the Supervisory Board;6. to examine and approve the annual budget and final accounts of the Company;7. to examine and approve the profit distribution proposal and the loss offset proposal ofthe Company;8. to resolve on whether to increase or reduce the registered capital of the Company;9. to resolve on the listing and trading of the Company's shares on a stock exchange.10. to resolve on whether the Company should issue debentures;11. to resolve on matters such as the merger, division, dissolution and liquidation of the

Company;12. to appoint or dismiss accountants;13. to amend the Articles of Association;14. to review the proposals of the shareholders holding 3% or more of the voting sharesissued by the Company;15. to review the matters concerning guarantees described in Art. 1.8 of these Articles ofAssociation;16. to review the matters concerning purchase or sale of any major assets of the Companywithin one year, which exceeds 30% of the Company’s audited total assets as at the mostrecent period end;17. to review and approving the matters concerning change of the use of raised funds;18. to review the stock incentive plan;19. to examine other matters that shall be decided at the general meeting as stipulated inthe laws and regulations and the Articles of Association.Article 5.6 Convening of the General MeetingFor convening a general meeting of shareholders, the convener shall inform allshareholders 20 days in advance of the date when the meeting is held. For convening anextraordinary general meeting, the convener shall inform all shareholders 15 days inadvance of the date when the meeting is held.The convener shall ensure that the meeting of the general meeting of shareholders go insuccession until the final resolution is made. Where the general meeting of shareholdersis paused or no resolution can be made due to force majeure or any other special cause,necessary measures shall be taken to resume the meeting of the general meeting ofshareholders or the meeting shall be directly terminated, and an announcement shall bemade in a timely manner. At the same time, the convener shall report it to the dispatchedoffice of the CSRC at the locality of the company and the stock exchange.The notice of the general meeting shall comply with the following requirements and shallbe published by way of an announcement in the newspapers as selected by the Board ofDirectors in accordance with the laws and regulations and the Articles of Association:

1. the date, address and time of the general meeting shall be specified;2. the proposals to be discussed in the general meeting shall be specified;3. the registration date for the shareholdings of the shareholders who are entitled to attendthe general meeting shall be specified;4. the names, telephone numbers and fax numbers of the designated contact persons forthe purpose of convening meeting shall be specified.A letter of appointment of proxy by the shareholders should be attached to the notice ofthe general meeting. To attend the general meeting, a shareholder or his proxy shall holda certificate of attendance for the relevant general meeting. Such certificate shall showthe name of the shareholder, the number of shares held or represented, the time of theshareholders' general meeting, the Company seal, the signature of the issuing person andthe date of issue.Notice of the shareholders’ general meeting shall clearly specify the voting time andvoting procedure of the network way. The starting time of the network voting ofshareholders' general meeting should not earlier than 3:00 pm during the day before theshareholders' general meeting held, and not later than 9:30 am during the day theshareholders' general meeting held. The end time of the network voting should not earlier

than 3:00 pm during the day the shareholders' general meeting finished.Upon the announcement of the notice of the general meeting, all shareholders shall bedeemed to have received notice of the general meeting.In case the Company has to postpone the general meeting for some reason, the notice ofpostponement shall be issued at least two work days before the original date when thegeneral meeting is held. The Board of Directors shall state the reason and announce thedate of the postponed meeting in the notice.After the notice of convening the general meeting is issued, the Board of Directors shallnot issue new proposals for any items unlisted in the notice, and any changes to theoriginal proposal shall be announced 15 days before the general meeting is held, or themeeting shall be postponed so that there is an interval of at least 15 days.Article 5.7 Presiding of the General MeetingThe general meeting shall be presided over by the Chairman of the Board of Directors. Incase the Chairman is unable or fails to perform his duty, the Vice Chairman shall presideover the meeting. If the Vice Chairman is unable or fails to perform his duty, a directorelected by the majority of directors shall preside over the meeting. Any general meetingthat is convened by the Board of Supervisors shall be presided over by the Chairman ofthe Board of Supervisors. In case the Chairman is unable or fails to perform his duty, asupervisor elected by the majority of supervisors shall preside over the meeting. Thegeneral meetings convened by shareholders themselves shall be presided over by arepresentative elected by the conveners. In case the meeting chairman breaches the ruleof procedure during the meeting, which results in discontinuousness of the generalmeeting, the general meeting may elect a person to preside over the meeting by theattending shareholders holding the majority of voting shares.Article 5.8 Attendence NoticeThe shareholders who intend to attend the general meeting shall notify the Company oftheir attendances before the convening of the general meeting. The attendance noticeshall specify the number of shares with the voting rights held by them and shall bedelivered in written form.Article 5.9 Attendence and ProxyA shareholder may attend the general meeting in person, or may appoint a proxy inwriting to attend the general meeting and exercise shareholder's rights on his behalf. Ifthe shareholder attends the general meeting in person, he shall produce his identity cardand proof of shareholding. To attend the meeting, a proxy shall carry with him thecertificate of attendance of the relevant shareholder, letter of appointment and his ownidentity card, and shall exercise voting rights within the scope specified in the letter ofappointment. A proxy does not have to be a shareholder of the Company.Where the shareholder is a legal person, the legal representative or the proxy appointedby the legal representative shall attend the general meeting. If a legal representativeattends the general meeting, he shall produce his identity card, valid proof of his capacityas a legal representative and proof of shareholding. In case of a proxy attending themeeting, he shall produce his identity card and letter of appointment issued by the legalrepresentative of the legal person shareholder in accordance with the laws, and proof ofshareholding.The Company's Board of Directors, independent directors and other directors meeting theconcerned conditions may acquire votes at the general meeting from shareholders of the

Company. Such acquirement of votes shall be unrequited, and the concerned informationshall be disclosed to the persons whose votes are acquired. There is no limit on thepercentage of acquiring votes.Article 5.10 Letter of Appointment of ProxyThe letter of appointment of proxy issued by shareholders to appoint other persons toattend general meeting on their behalf shall specify the following information:

1. name of the proxy;2. whether the proxy has the right to vote (where more than one proxy is appointed, thenumber of shares represented by each proxy shall be specified);3. instructions such as "for", "against" or "abstain" for each proposed resolution as set outin the agenda of the general meeting;4. whether the proxy has voting rights on any extraordinary proposals which may beincluded in the general meeting in accordance with the Articles of Association and if thisis the case, detailed instructions for the exercise of the voting rights shall be specified;5. the date of issue and the effective period;6. signature (or chop) of the appointer. If the appointer is a legal person shareholder, thecompany seal shall be affixed thereto.Article 5.11 Sign-in Book of the AttendantsA sign-in book of attendants of general meetings shall be prepared. The sign-in bookshall specify the attendants' names, identity card number and addresses of residence orregistered offices, number of shares with voting rights represented, and the names of theshareholders, and shall be filled in by the shareholders (or proxies) attending the generalmeeting.Article 5.12 Method of VotingFor annual general meetings or general meetings ,convened at the proposal ofhareholders or the Supervisory Board, voting by the method of communication is notallowable.Every ordinary share carries one voting right at the general meeting. Voting shall be doneby open ballot and not by a simple show of hands.When voting at the general shareholders meeting, a shareholder (or his proxy) shallexcise his voting power corresponding to the number of his votable shares. For commonshares, one share stands for one vote except the stipulation in Article 5.13 for theaccumulative voting system that shall be adopted in electing directors and supervisors.The Company’s shares held by the Company itself shall neither have the voting right norenjoy the profit distribution. The same voting share shall be used in the on-site votingprocedure or in the network voting procedure only. In case of any ballot duplication ofthe same voting share, the first voting shall be taken.While the shareholders’ general meeting considers significant matters affecting theinterests of small and medium investors, small and medium investors should separatevote counting. The result of separate vote counting should be disclosed publicly timely.Article 5.13 Election of Directors and SupervisorsShareholders holding 3 per cent or more of the total issued shares with voting rights areentitled to propose candidates for directors and supervisors. The Company's Board ofDirectors, Supervisory Board or a shareholder or shareholders holding 1% or more of theissued shares of the Company have the right to nominate independent director candidates.Before the election of directors and supervisors of the Company, the Board of Directors

shall provide the shareholders with the resumes and general information of the directorsand supervisors.The list of candidates for the directors and supervisors should be submitted to theshareholders general meeting for voting in the manner of proposal.Election and dismissal of directors and supervisors shall be passed by more than half ofthe votes held by the shareholders present at the general meeting.The accession date of the new directors and the supervisor, if the election proposal isapproved by the general meeting, shall be the date when the resolution is adopted at thegeneral meeting.If the holding shareholders hold 30% or higher of the total shares of the Company, theaccumulative voting procedure shall be adopted in voting for any proposal of electingdirectors or supervisors at the shareholders’ general meeting. It means that when two ormore directors or supervisors are to be elected at the general shareholders meeting, everyshare held by voting shareholders (or their proxies) has the equal votes to the number ofdirectors or supervisors to be elected, and a shareholder (or his proxy) may vote oneperson with all his votes or distribute his votes for multiple persons. The Board ofDirectors shall work out the implementation rules for the accumulative voting procedurefor electing directors/supervisors according to these Articles of Association and submit itto the general shareholders meeting for approval and adoption.Article 5.14 Voting on Ordinary ResolutionsOrdinary resolutions at the general meeting shall be passed by more than half of the votesheld by the shareholders present at the general meeting.Article 5.15 Voting on Special ResolutionsSpecial resolutions at the general meeting shall be passed by two-thirds or more of thevotes held by the shareholders present at the general meeting.Resolutions proposed in relation to the following matters shall be special resolutions:

1. increase or decrease of the Company's registered capital;2. issue of debentures by the Company;3. merger, division, application for winding-up, dissolution and liquidation of theCompany;4. amendment of the Articles of Association;5. the Company purchases its shares under the circumstances specified in items (1) and (2)of article 3.15 of the Articles of Association;6. the Company’s purchase or sale of major assets or issuance of guarantees whichexceed 30% of the audited total assets as at the most recent period end within one year;7. the stock incentive plan; and8. other matters required to be resolved by special resolutions as stipulated in the Articlesof Association and the laws.Apart from the above matters which are required to be resolved by special resolutions,other matters shall be resolved by ordinary resolutions.Article 5.16 Results of the VotingThe chairman should declare the number of shareholders and agents present at themeeting and their total shares before voting. Number of shareholders and their agentspresent at the meeting and their shares are subject to that in meeting registration.At least one lawyer, two or more shareholders’ representatives and one or moresupervisors shall be involved in the check of voting for every proposed matter at the

shareholders general meeting, and publish the voting result at the meeting and record it inthe meeting minutes.The chairman should declare the number of shareholders and proxies attending themeeting and the number of the total voting shares. The number of shareholders andproxies attending the meeting and the number of the total voting shares are subject to therecord at the meeting.Before the voting result is formally announced, the listed companies, vote counters, votecounting supervisors, major shareholders and the network service provider, etc. involvedin the voting at the general meeting of shareholders on the spot, through network or byany other means, shall be obliged to keep secrets to themselves.Article 5.17 Resolutions Proposed by ShareholdersShareholders holding 3 per cent or more of the total issued shares with voting rights,whether individually or jointly, are entitled to propose resolutions to the general meetingfor consideration.Article 5.18 Conditions of ResolutionsResolutions proposed by the shareholders shall satisfy the following conditions:

1. The proposed resolutions shall fall within the jurisdiction of the general meeting andtheir contents shall not contravene the laws and regulations and the Articles ofAssociation;2. The proposed resolutions shall be specific and precise;3. The proposed resolutions shall be delivered in written form to the Board of Directors.Shareholders holding 3 per cent or more of the total issued shares with voting rights,whether individually or jointly, are entitled to propose resolutions to the convenor inwritten form ten days before the shareholders’ general meeting is held. The convenorneeds to issue a supplementary notice on shareholders’ general meeting and announce thecontents of the provisional proposal within 2 days after receipt of the proposal.Any new distribution proposal presented by the first strong shareholder shall besubmitted to the Board of Directors ten days before the annual general meeting is held,and announced by the Board of Directors. If the period is less than ten days, the firststrong shareholder shall not make any new distribution proposals at that annual generalmeeting.The Board of Directors may request the proposers to amend proposed resolutions whichdo not satisfy the above conditions. The Board of Directors shall include in the agenda ofthe general meeting any amended proposed resolutions which have satisfied the aboveconditions in the above paragraph. The proposed resolutions shall become invalid and notbe included in the agenda if the proposers do not amend the proposed resolutions or ifamended proposed resolutions still do not satisfy the above conditions. The report of theBoard of Directors submitted to the general meeting shall explain the handling of invalidproposed resolutions.Article 5.19 Minutes of General MeetingMinutes shall be prepared for general meeting recording the date, time and venue of thegeneral meeting, the name of the Chairman of the general meeting, the agenda of thegeneral meeting, a summary of comments given by each person present at the generalmeeting regarding every proposal, results of every resolution, inquires and suggestionsmade by the shareholders and the answers and explanations given by the directors andsupervisors. The minutes shall be signed by the directors attending the general meeting

and the person preparing the minutes, and shall be kept with the Company's recordstogether with the sign-in book of the shareholders present at the general meeting and theletter of appointment of proxy.Article 5.20 Right to Initiate ProceedingsWhere resolutions passed at the general meeting contravene the laws and regulations orinfringe the legal rights and interests of the shareholders, the shareholders are entitled tocommence proceedings at the People's Court to stop such illegal acts and infringement.Article 5.21 Witness of lawyersThe Company's Board of Directors shall invite a lawyer holding the securities tradequalification to attend the general meeting, who shall give legal advice on concernedproblems and make announcement.Article 5.22 Rules of Procedure for Shareholders’ General MeetingThe Company may set out rules of procedure. The rules of procedure shall beimplemented after they have been examined and approved by the shareholders in generalmeeting.Article 5.23 Announcement on the Resolution of the General Meeting ofShareholdersThe resolution of the general meeting of shareholders shall be announced in a timelymanner, and the announcement shall indicate the number of shareholders and proxies thatattended the meeting, the number of the total voting shares and its proportion to the totalvoting shares of the company, the voting method, the voting result of each proposal anddetailed contents of each resolution.The domestic-share holders and the foreign-share holders attending the meeting and theirvoting are counted and announced separately.If a proposal is not adopted or the general meeting of shareholders modifies the resolutionof any previous general meeting of shareholders, it shall give a special explanation in theannouncement on the resolution of the general meeting of shareholders.

Chapter 6 Board of DirectorsArticle 6.1 Board of DirectorsThe Board of Directors of the Company is the standing executive organization of theshareholders in general meeting and shall be accountable to the shareholders at thegeneral meeting.Article 6.2 Election of the Board of DirectorsDirectors shall be natural persons and shall be elected by the shareholders at the generalmeeting. A director mayor may not be a shareholder of the Company.The term of officefor the directors is 3 years and is renewable on re-appointment.However, the renewedterm of office for the independent directors shall not exceed 6 years. The term of officecommences from the day on which the relevant resolution is passed. Any director whohas any wrongdoing during the term of office may be dismissed by an ordinary resolutionpassed at the general meeting.Article 6.3 Responsibilities of DirectorsDirectors shall abide by the laws and regulations and the Articles of Association, shallowe a fiduciary duty to the Company, shall be diligent to the Company, shall safeguardthe interests of the Company, shall not seek personal interests by taking advantage oftheir position and powers, shall not engage in business which competes with the business

of the Company or is detrimental to the interests of the Company and shall take theresponsibilities as provided in Articles 59 to 63 of the Company Law.Article 6.4 Candidates for DirectorsCandidates for directors shall be nominated individually or jointly by the shareholders. Inthe election of the Board of Directors for a new term, persons nominated by the existingBoard of Directors may also be the candidates for directors. Independent directorcandidates may be nominated by the Board of Directors, Supervisory Board, or ashareholder or shareholders holding 1% or more of the issued shares of the Company.Article 6.5 Composition of the Board of DirectorsThe Board of Directors shall adopt the odd number system and shall consist of 9 directorswith independent directors and directors. The Board of Directors shall have one chairman,one vice-chairman and three independent directors (at least one of them is theprofessional in accounting). The chairman and vice-chairman shall be the directors whoare nominated by the shareholders, and may be elected or dismissed by more than half ofall the directors.Article 6.6 Convening of Board MeetingsBoard meetings shall be held at least three times every year and shall be convened andpresided by the Chairman. If the Chairman is unable to perform his duties, he mayauthorize the Vice-Chairman or other directors to take the chair.All directors shall be given ten day's notice of the board meeting. The notice of the boardmeeting shall specify the date and the venue of the board meeting name and the proposedresolutions to be passed at the board meeting. Except as otherwise stipulated in theArticles of Association, more than half of all the directors attending the board meetingshall be the quorum for board meetings. If the Chairman and the directors are unable toattend the board meeting, they may appoint proxies to attend the board meeting and voteon their behalf. Such appointment shall be in writing and the letter of appointment shallspecify the authorities of the proxy.Directors who do not attend or appoint other directors as proxies to attend board meetingsfor two consecutive occasions shall be regarded as W1able to perform their duties and theBoard of Directors may propose resolutions to the general meeting to dismiss suchdirectors.Where the Board of Directors convenes an extraordinary board meeting, the method ofgiving notice of board meeting and the period of notice may be changed but all thedirectors shall be given five day's notice of the board meeting.Except with the consents of two-thirds or more of all the directors for holding themeeting in another place, the board meeting shall be held at the address of the Company.Article 6.7 Extraordinary MeetingsThe Board of Directors shall convene an extraordinary board meeting in the followingcircumstances:

1. where the Chairman deems it to be necessary;2. where one-third of the directors suggest holding a board meeting;3. where the General Manager of the Company suggests holding a board meeting;4. where the Supervisory Board of the Company requests to hold a board meeting;5. where more than half of all the independent directors requests to hold a board meeting.6. shareholders holding 10% or more of the voting shares propose it.The Extraordinary Meeting of the Board of Directors may be held by communication

vote on the basis of the full expression of the directors, with resolution signed bydirectors attending the meeting.Article 6.8 Functions and Powers of the Board of DirectorsThe Board of Directors shall have the following functions and powers:

1. to be responsible for convening general meetings and to report the work of the Boardof Directors at the general meeting;2. to implement resolutions passed at general meetings;3. to elect the Chairman and Vice-Chairmen of the Board of Directors;4. to determine on the production and business plans and investment strategies of theCompany;5. to formulate the annual financial budget and final accounts of the Company, and topropose the profits distribution plans or loss offset plans;6. to formulate plans for the increase or decrease of the Company's registered capital, toextend the number of shares to be subscribed or to decide on matters in relation to themethods for the listing and trading of the shares of the Company, pledging, leasing,transfer and takeover of the material assets of the Company and plans for the issue ofdebentures;7. to formulate plans for major acquisition, repurchase of the Company's shares under thecircumstances specified in items (1) and (2) of article 3.15 of the Articles of Association ,or merger, division, dissolution and change of the Company's form;8. to determine purchase of the Company's shares under the circumstances specified initems (3), (5) and (6) of article 3.15 of the Articles of Association;9. to determine the establishment of the internal management authorities of the Company,and to examine and approve rules and systems concerning the internal management of theCompany;10. to supervise, co-ordinate and direct the management and operation of the Companyand its associated companies and enterprises;11. to stipulate the amendment scheme for the Articles of Association;12. to appoint and dismiss the General Manager) and to appoint and dismiss deputygeneral manager and other senior management personnel in accordance with the generalmanager's nomination, and to determine their remuneration and method of payment;13. to appoint and dismiss the secretary of the Board of the Directors;14. to compile, verify and issue discloseable information of the Company;15. to appoint intermediary organizations (except accountants) to provide professionalservices to the Company, to appoint the directors of the Company, associated companiesand enterprises (including any directors representing the Company in the joint ventures)and to propose to the general meeting to appoint) dismiss or terminate the service of theaccountants;16. to formulate the standard of salary and employees' welfare standard as well as thereward and penalty system for the employees;17. to handle important external affairs of the Company; and18. other functions and powers as stipulated in the Articles of Association or conferred bythe shareholders at general meetings.The restrictive power of the Board of Directors in risk investment with the assets of theCompany:

Risk investment range: refrigeration and air conditioning industry and other fields.

Restrictive amount of fund for application: not exceeding 5% of the total assets auditedmost recently of the Company.Article 6.9 Duties and Powers of the ChairmanThe principal duties and powers of the Chairman are as follows:

1. to preside over and convene general meetings) to preside over board meetings and torepresent the Board of Directors in reporting to the general meetings on the work of theBoard of Directors;2. to lead the work of the Board of Directors) to monitor and report the progress on theimplementation of resolutions of the Board of Directors to the Board of Directors) to giveguidance on the important business activities of the Company and to report importantproblems to the next board meeting;3. to sign the share certificates of the Company and all documents and statements whichshall be signed by the legal representative of the Company, to sign the resolutions andminutes of the board meetings and other important documents in the name of the Boardof Directors;4. to nominate candidates for the position of the General Manager for consideration andapproval of the Board of Directors;5. to exercise absolute discretion in decision-making and disposal concerning thebusiness of the Company in emergencies arising from force majeure such as wars orserious natural disasters but such decision and disposal shall be made in the interests ofthe Company and shall be reported to the Board of Directors and shareholders at generalmeetings afterwards.6. other duties and powers as stipulated in the Articles of Association or conferred byresolutions of the Board of Directors.Where the Chairman is unable to perform his duties for any reasons, he may authorize theVice-Chairman or other directors to perform his duties on his behalf.Article 6.10 Dismissal of DirectorsAny director of the Company who commits any of the following acts during his term ofoffice shall be dismissed in accordance with the procedures stipulated in the Articles ofAssociation:

1. makes use of his position and powers to accept bribes or other illegal income orillegally takes the possession of the properties of the Company;2. embezzles the funds of the Company or lends the funds of the Company to otherpersons or uses the Company's assets as security for the debts of other persons;3. conducts business for himself or for others which competes with the Company orengages in activities which are detrimental to the interests of the Company;4. affirmed by the securities administration department of the government as beingprohibited to enter the market;5. discloses without permission the confidential information of the Company whichcauses harm to the business and reputation of the Company; or6. engages in other illegal activities as stipulated by the laws and regulations.Article 6.11 Resignation of DirectorsDirectors may resign before the expiry of their terms of office. Unless a director's certainresponsibilities have not been discharged, the resignation shall take immediate effectupon reporting to the Board of Directors and need not be approved by the shareholders ingeneral meeting or the Board of Directors. The resignation in respect of the Chairman or

a director who is also the general manager, shall become effective only after anexamination in respect of the resignation has been conducted. Any director who cannotresign as certain responsibilities have not been discharged or has not passed theexamination in respect of the resignation but terminates the term of office withoutpermission shall be liable to compensate for any loss incurred by the Company as aresult.Article 6.12 Voting by the Board of DirectorsThe system of “one person, one vote” shall apply to the meeting of the Board of Directors.Any resolution of the Board of Directors shall be adopted by the majority of all directors.Any director, who is associated with the enterprise concerned in the resolution matter ofthe Board meeting, shall neither exercise his/her voting right nor exercise the voting rightas the proxy of other director. Such a Board meeting can be held with the majority ofunassociated directors attending and any resolution made at the meeting shall be adoptedby the majority of unassociated directors. In case there are less than three unassociateddirectors attending the Board meeting, the matter shall be submitted to the generalmeeting of shareholders for review.Except with the approval of more than half of all the directors (excluding the interesteddirectors) or the approval of shareholders in general meeting, directors shall not enter intoany contracts or transactions with the Company.Article 6.13 Written ResolutionsThe Board of Directors may pass a written resolution without convening a board meetingprovided that the written resolution shall be circulated among and signed by all thedirectors. A written resolution shall take effect from the day when it is signed by the lastdirector. A written resolution shall have the same effect as other resolutions passed by theBoard of Directors.Article 6.14 Rules of Decisions of the Board of DirectorsThe Board of Directors may set out rules of decisions to ensure that the Board ofDirectors can operate effectively and perform their duties properly. The rules of decisionsof the Board of Directors shall be implemented after they have been examined andapproved by the shareholders in general meeting.Article 6.15 Minutes of Board MeetingMinutes of board meeting shall be prepared which shall record the agenda and thematerial contents of the board meeting including the date and venue of the board meeting,the name of the convener, the names of the directors present, the names of the directorswho appoint proxies to attend the board meeting and the names of the proxies, the agenda,the voting method and result of every proposed resolution. The minutes shall be signedby all the directors present at the meeting (including the proxies appointed by thedirectors) and shall then be filed and shall not be destroyed for ten years.Directors areentitled to request to have certain notes recorded in the minutes.Directors shall be responsible for the resolutions of the board meeting. When theresolution of the Board of Directors is in contravention with the laws and regulations orthe Articles of Association and causes serious losses to the Company, the directorsapproving the resolution shall be liable to compensate the Company. However, a directormay be exempted from liabilities if it is proved and recorded in the minutes of boardmeeting that he objected to the relevant resolution during voting. Directors who neitherattended the meeting, nor appointed proxies, nor provided written opinions regarding the

relevant resolution at the time of the board meeting or prior to the board meeting, shall beregarded as not having expressed any objections and shall not be exempted fromliabilities.Article 6.16 Secretary of the Board of DirectorsThe Company shall have a secretary of the Board of Directors. The Secretary shall beappointed and dismissed by the Board of Directors and shall be the Company's seniormanagement personnel responsible for the secretarial matters of the Board of Directorsand be accountable to the Board of Directors.The Secretary of the Board of Directors shall perform the following duties:

1. to prepare and submit reports and documents issued by the Board of Directors and theshareholders in general meeting as required by the relevant government departments;2. to make preparations for the board meetings and general meetings and to beresponsible for preparing the minutes of the meetings and for the safekeeping ofdocuments and minutes of the meetings;3. to assist the Board of Directors to comply with the relevant laws and regulations, theArticles of Association and various rules of the Company in the performance of theirduties;4. to be responsible for the disclosure of the Company's information in accordance withthe laws;5. to be responsible for the safe-keeping of the register of shareholders and the seal of theBoard of Directors;6. to handle relevant matters arising between the Company and the directors, securitiesmanagement departments, stock exchange, shareholders and other relevant organizations;7. to perform other duties as authorized by the Board of Directors.The position of the Secretary may be taken up by a director of the Company, but wherean act shall be done by a director and the Secretary in separate capacities, the directorwho is also the Secretary shall not act in dual capacities.Article 6.17 Independent directorsIndependent directors are the directors who do not hold any positions in the Companyother than the director, and have no relationship with the Company or major directorswhich may disturb their independent and objective judgments.An independent director shall have good faith and give encouragement to the Companyand all shareholders. He shall earnestly fulfill his obligations according to the concernedlaws and regulations and these Articles of Association, and protect the overall interests ofthe Company, in particular, shall concern about and protect the legal rights and interestsof medium or minority shareholders.To be an independent shall meet the following basic conditions:

1. holding the qualification to be the director of a listed company according to the laws,administrative regulations and other relevant regulations;2. being independent;3. having the basic knowledge about operations of a listed company, and being familiarwith relevant laws, administrative regulations and rules;4. having the experience in laws, economy or other fields necessary to be an independentdirector; and5. other conditions stipulated in these Articles of Association.The following persons shall not act as the independent directors:

1. A person holding the position in the Company or its subordinate entities, and his linealrelative and those keeping major social relations with him;2. A natural-person shareholder who directly or indirectly holds 1% or more of the shareshaving been issued by the Company or is one of the first ten shareholders, and his linealrelatives;3. The personnel in a shareholder unit directly or indirectly holding 5% or more of theshares having been issued by the Company or which is one of the first five shareholdersof the Company, and their lineal relatives;4. Anyone who has been at the states listed in the above three items within the past year;5. Anyone who provides service as an accountant, lawyer or consultant to the Companyor its subordinate entities;6. Other persons stipulated in these Articles of Association;7. Other persons identified by the China Securities Regulatory Commission.Nominating, electing and replacing independent directors shall be according to thefollowing procedure:

1. The Board of Directors, Supervisory Board or a shareholder or shareholders holding1% or more of the issued shares of the Company may nominate independent directorcandidates, who shall be confirmed through voting at the general meeting;2. Nominating an independent director shall obtain the consent from the nominatedperson. The nominating person shall have good knowledge about the occupation,educational background, professional qualification, detailed employment experience andall information about his part-time jobs of the nominated person, and shall give opinionsabout his qualification and independence as an independent director. The nominatedperson shall make public statements that he has no relationship with the Company whichmay disturb his independent and objective judgments;3. Before the general meeting for voting the independent directors is held, the Companyshall submit the information ab9ut all the nominated persons to the China SecuritiesRegulatory Commission, its representative office at the location of the Company, and thestock exchange where the Company's shares are listed. If the Board of Directors has anyobjections about the conditions of any nominated person, the opinions in writing of theBoard of Directors shall be attached. When the general meeting is held for electing theindependent directors, the Board of Directors shall state whether or not the ChinaSecurities Regulatory Commission has any objections about the independent directorcandidates;4. The term of office for the independent directors is the same as that for other directorsof the Company, and is renewable on re-appointment. However, the renewed term ofoffice shall not exceed 6 years;5. In case of any independent director who does not attend personally the board meetingsfor successive three times, the Board of Directors shall submit a proposal to the generalmeeting for replacing him.Except for the cases above listed, and for the cases ofpreventing from being a director as stipulated in the Company Law, any independentdirector shall not be dismissed before expiration of his term of office. Anyone who isdismissed before expiration of his term of office shall be disclosed as a special matter.The dismissed independent director, if he thinks it improper that the Company dismisseshim, may make public statement.6. An independent director may resign from his office before expiration of his term of

office. In this case, the independent director shall hand the written resignation over to theBoard of Directors stating the conditions related to his resignation or that he thinksnecessary to draw attentions from the Company's shareholders or debt creditors. If theindependent director's resignation results in that the number of independent directors inthe Board of Directors is less than the quorum, the resignation report of this independentdirector shall not come into effect until a successor makes up his position.Apart from the authorities of office endued by the Company Law and other relevant lawsand regulations, an independent director has the following special authorities of office:

1. Major associated transactions (the associated transactions to be reached between theCompany and the associated party with the total value more than RMB 3 million or 5%of the Company's net assets recently audited) shall be agreed by the independent directorbefore submitted to the Board of Directors for discussion;The independent director may invite an agency to issue the independent financialconsultant's report, by which he can make the judgment.2. He can make a motion to the Board of Directors for engaging or dismissing anaccountant firm;3. He can submit a proposal to the Board of Directors for convening an extraordinarygeneral meeting;4. He can propose to convene a board meeting;5. He can independently engage external auditors and consultants;6. He can acquire votes from shareholders before a general meeting is held.The independent director's exercising the above special authorities shall be subject toconsent of one half of all the independent directors. If the proposals as above listed arenot adopted or these authorities of office are unable to be exercised normally, theCompany shall disclose the information.The independent director shall present his independent opinions on the following mattersat the board meeting or general meeting:

1. nomination or dismissal of directors;2. employment or dismissal of senior staff members;3. salary and remuneration standard for the Company's directors and senior staffmembers;4. existing or new loans or other current accounts of the Company's shareholders, actuallycontrolling persons and associated entities from or with the Company with the total valuemore than RMB 3 million or 5% of the Company's net assets recently audited; and theCompany's actions to collect such loans;5. matters which may damage the rights and interests of medium and minorityshareholders in his opinion;6. other matters stipulated in these Articles of Association.In order to ensure the effective exercise of independent director's authorities of office, theCompany shall provide the necessary conditions as below:

1. The Company ensures the independent directors having the same right to learn thetruth as other directors doing. For any matters to be decided through resolutions of theboard meeting, the Company must inform the independent directors in a legal time with acomplete set of documents delivered to them. If any independent director thinks thedocuments incomplete, he may ask for supplements. When two or more independentdirectors believe that the documents are incomplete or the demonstration is not clear, they

may make a joint request in writing to the Board of Directors for postponing the boardmeeting or postponing review of that matter, and the Board of Director shall adopt it.2. The Company offers the independent directors the work conditions necessary for theirexercise of authorities. The secretary of the Board of Directors shall actively assist theindependent director in his work. For any independent opinions, proposals and writtenstatements made by the independent directors, which should be announced, the secretaryshall timely deal with such announcements.3. The concerned personnel of the Company shall cooperate in the independent director'sexercise of authorities, without refusal, hindering, concealing, or intervening theirindependent exercise of authorities.4. Expenses incurred in engagement of agencies by the independent directors and otherexpenses necessary for their exercise of authorities shall be borne by the Company.5. The Company shall offer the independent directors appropriate allowances. Thestandard for the allowances shall be preplanned by the Board of Directors and adopted atthe general meeting with disclosure on the Company's annual report.6. The Company may establish the necessary liability insurance system for independentdirectors to minimize the independent director's risks in his exercise of authorities.

Chapter 7 Supervisory BoardArticle 7. 1 Supervisory BoardThe Company shall have a Supervisory Board which shall be the supervising authorityfor the business operations of the Company. The Supervisory Board shall exercise asupervisory function over the senior management personnel such as the Board ofDirectors, individual directors and the general manager.The Supervisory Board shall be accountable to and shall report to the shareholders atgeneral meetings.Article 7.2 Composition of Supervisory BoardThe Supervisory Board of the Company shall consist of three supervisors, two-thirds ofwhom shall be the representatives of the shareholders who shall be elected and dismissedby the shareholders in general meeting while the other one-third shall be the staffrepresentative(s) of the Company who shall be elected and dismissed by the staff of theCompany.The chairman of the Supervisory Board shall be elected and dismissed by more thantwo-thirds of all supervisors. Supervisors cannot concurrently be the directors, generalmanager, financial controller or other senior management personnel of the Company.Article 7.3 Term of Office of SupervisorsA supervisor shall be appointed for a term of 3 years and may serve consecutive terms ifreappointed.A supervisor may resign before the expiry of his term of office, and the provisions ofArticle 6.11 in respect of the resignation of directors are also applicable to supervisors.Article 7.4 Duties and Powers of the Supervisory BoardThe Supervisory Board shall have the following duties and powers:

1. Examining the Company’s regular reports prepared by the Board of Directors andgiving the written opinions;2. Examining the Company’s accounts;3. Supervising the directors and senior management members’ act in their duty in the

Company and proposing to dismiss those violating the laws and regulations, theseArticles of Association or resolutions of the general meeting;4. Requiring the director or senior management member, whose act impairs theCompany’s interest, to correct;5. Proposing to convene an extraordinary general meeting or convening and presidingover the general meeting if the Board of Directors fails to perform its duty to convene andpreside over the general meeting according to the Company Law;6. Presenting proposals to the general meeting;7. Bringing suit against directors or senior management members according to Art. 152of the Company Act;8. Conducting investigations on any abnormality of the Company’s operation; and9. Exercising other authorities granted by the laws and regulations, these Articles ofAssociation or the general meeting of shareholders.The Company shall be responsible for all costs arising from the engagement ofprofessionals such as lawyers, registered accountants and auditors incurred by theSupervisory Board in the exercise of its functions.Article 7.5 Report of Illegal ActivitiesWhere the Board of Directors and the general manager act in contravention of anystatutory regulations and the Articles of Association of the Company, the SupervisoryBoard shall promptly stop them. If the actions taken to stop the said activities prove to beineffective, the situation shall be reported to the shareholders in general meeting and therelevant government authority.Article 7.6 Meetings of the Supervisory BoardThe Supervisory Board shall hold at least three meetings every year. The SupervisoryBoard shall hold at least one meeting every six month.Meetings of the Supervisory Board shall be convened by the chairman of the SupervisoryBoard and the chairman of the Supervisory Board shall decide on the time and method ofgiving notice of meeting. The notice of meeting shall include the date, the agenda and thevenue of the meeting and the date of notice.Meetings of the Supervisory Board shall be presided over by the chairman of theSupervisory Board. In the event that he is not able to attend a meeting, he shall appointanother supervisor to preside over the meeting on his behalf. Where no appointment hasbeen made, those supervisors who are present at the meeting shall elect a supervisor topreside over the meeting.Article 7.7 Special Meetings of the Supervisory BoardThe chairman of the Supervisory Board may convene special meetings based on actualneeds or at the request of more than one-third of the supervisors. When requesting toconvene a special meeting of the Supervisory Board, the supervisors shall clearly statethe reason and purpose of the meeting.Article 7.8 Resolutions of the Supervisory BoardResolutions of the Board of Supervisors shall be adopted by the majority of allsupervisors. Supervisors have the right to speak in the meetings of the SupervisoryBoard.The Supervisory Board shall put all proposed resolutions raised by any supervisorsfor voting.Article 7.9 Minutes of the Meeting of the Supervisory BoardMinutes of the meetings of the Supervisory Board shall be prepared and signed by the

supervisors and the recorder present at the meeting. The supervisors are entitled torequest certain matters to be noted in the minutes with respect to his opinions expressed.The provisions of Article 6.15 in relation to the preparation of the minutes of boardmeetings are also applicable to those of the meeting of the Supervisory Board.Article 7.10 Dismissal and CompensationSupervisors shall abide by all the laws and regulations and the Articles of Associationand shall act in good faith and diligently. The provisions of Articles 6.10 and 6.15 withrespect to the dismissal of and the compensation to the directors are also applicable tothat of the supervisors.

Chapter 8 Business Management StructureArticle 8.1 General Manager and Deputy General ManagerThe Company shall adopt a system whereby the general manager assumes responsibilityunder the leadership of the Board of Directors. There shall be one general manager andseveral deputy general managers. Under the leadership of the Board of Directors, thegeneral manager shall be responsible for the management of the day-to-day operations ofthe Company. The deputy general managers shall assist the general manager in his workand when the general manager is unable to perform his duties for any reason, the Boardof Directors shall authorize a deputy general manager to perform the duties of the generalmanager. The Company shall have several functional departments working under theleadership of the general manager.The general manager is appointed for a term of 3 years and can serve consecutive terms ifreappointed.Article 8.2 ElectionThe general manager shall be nominated by the chairman and appointed by the Board ofDirectors. The deputy general managers and other senior management personnel shall benominated by the general manager and appointed by the Board of Directors.The generalmanager and deputy general managers may also be the members of the Board ofDirectors.Any person who holds the position other than a director in the Company’s controllingshareholder or actual controller’s unit shall not hold any position in the seniormanagement of the Company.Article 8.3 ResignationThe general manager and deputy general manager can resign before the expiry of his termof office. A resignation report submitted to the Board of Directors shall only be effectiveafter an examination on the resignation report has been completed. Those who resignbefore the examination is completed shall be responsible for any economic loss sufferedby the Company.Article 8.4 Duties and Powers of the General ManagerThe general manager shall have the following duties and powers:

1. to attend the board meetings, to implement the Company's Articles of Association andresolutions passed at general meetings and board meetings, to be directly accountable tothe Board of Directors and to report to the same on his work;2. to be fully responsible for the Company's operation, management and routine business;3. to formulate the Company's production, operation and development plans and theannual financial and accounting plans, and to propose the profits distribution plans and

losses offset plans;4. to organize and prepare the Company's basic management systems, basic regulationsand to render opinions on the establishment and adjustment of any part of the Companystructure and to submit them to the Board of Directors for approval beforeimplementation;5. to nominate the deputy general managers and other senior management personnel andto appoint or dismiss other management personnel who are not required to be appointedor dismissed by the Board of Directors;6. to decide on matters relating to the staff of the Company including rewards or penalties,promotion or demotion, increase or decrease in salary, appointment, dismissal andtermination of service;7. within the scope authorized by the Board of Directors, to represent the Company inhandling external affairs and to enter into economic contracts and agreements, torepresent the Company in performing obligations under the contracts and to check andsupervise in order to ensure that all departments of the Company comply with the termsand conditions specified in the contracts;8. to sign and issue documents concerning the daily business, the financial expenses andthe administration of the Company;9. to exercise other functions conferred by the Board of Directors.The general manager shall not, in performance of his duties, change the resolutions of theshareholders passed at general meetings and the resolutions of the Board of Directors andshall not exceed the authorized scope of his powers.Article 8.5 Duties and Powers of the Deputy General ManagerThe deputy general managers shall have the following duties and powers:

1. to assist in the work of the general manager and in the case where the general managercannot exercise his duties and powers, to act on his behalf with the authorisation of theBoard of Directors.2. to be responsible for the management of the work of the designated departments.Article 8.6 Limitations on the Conduct of the Management Personnel1. The directors, the general manager and the staff at all levels shall not engage inactivities which compete with or jeopardise the interests of the Company. All the incomereceived from the above activities shall belong to the Company.2. The remuneration of the general manager and his interests in the Company shall bestated in the annual report.3. The directors, the supervisors, the general manager and other senior managementpersonnel shall not receive bribes or other illegal income in any way and shall notmisappropriate the Company's properties to seek personal gain nor use the Company'sassets as security for the liabilities of the Company's shareholders or other individuals.4. Except with the approval of more than half of the directors (excluding the directorswith an interest) or the approval of shareholders in general meetings, the general managershall not enter into any contracts or transactions with the Company.5. The directors, the supervisors and the general manager shall observe the Articles ofAssociation, shall perform their duties in good faith, shall protect the Company's interests,and shall not make use of their office and powers in the Company to seek personal gain.6. Under anyone of the following situations, a person shall not take the office of adirector, the supervisor or the general manager of the Company:

(1) a person has no legal capacity or his legal capacity is restricted; or(2) in any other situations where the laws or regulations provide that a person isunsuitable for taking the office of a director, a supervisor or the general manager.Article 8.7 PenaltiesWhere the Company suffers economic losses as a result of the contravention of the lawsand regulations, the Articles of Association or the resolutions passed by shareholders ingeneral meetings, practice of favoritism, malpractice or neglection of duties by seniormanagement personnel such as the directors or the general manager) depending on thecircumstances and upon approval by the Board of directors, the following punishmentsshall be imposed:

1. to restrict their rights;2. to remove them from their office;3. to hold them liable for any resulting economic loss;4. where there is violation of law, to initiate proceedings in a judicial authority pursuantto the laws and to hold them legally liable.

Chapter 9 Labour and Personnel ManagementArticle 9.1 Labour and Personnel Management and SalaryThe Company is entitled to employ staff and to formulate its personnel managementpolicies at its own discretion in accordance with the Labour Law of the People's Republicof China and statutory regulations and policies concerning labour and personnelmanagement of Liaoning Province and Dalian Municipality.The Company is entitled to determine the salaries of the salaried personnel and themethod of payment at its own discretion in accordance with the laws.Article 9.2 Employment ContractsThe Company shall enter into employment contracts with its staff and workers to providefor the employment relationship and to clarify the rights and obligations of both parties.The Company is entitled to impose administrative penalties on unqualified staff, evento the extent of their dismissal or discharge from the Company. An employee who isdismissed shall be given one month's notice and shall be entitled to address hisgrievances to the relevant department of the Company and government department.Employees of the Company have the freedom to resign provided that necessaryprocedures in accordance with the Company's personnel management policies must becomplied with. Resigning employees who fail to follow the prescribed procedures shallbe liable for any economic loss suffered by the Company.Article 9.3 Employees WelfareThe Company shall allocate funds to cover the insurance for the medical treatment,retirement and unemployment of its employees in accordance with the relevant laws andregulations of the State and Liaoning Province. Employees shall enjoy the correspondinginsurance benefits.Article 9.4 Health and Safety at WorkLabour protection and the related disputes shall be dealt with in accordance with theLabour Law of the People's Republic of China and other relevant statutory regulations.Article 9.5 HolidaysThe staff of the Company shall be entitled to holidays in accordance with the provisionsof the laws and regulations of the State.

Article 9.6 Labour UnionThe Company's employees are entitled to form a labour union, to organize unionactivities and to safeguard their legal interests in accordance with the Labour Union Lawof the People's Republic of China and other relevant regulations.The labour union of the Company is the representative of the staff's interests. Its primaryobjective is to protect the rights and material interests of the staff in accordance with thelaws, to assist and supervise the use of the Company's reserves and public welfare fund,to organize the education of the staff on science and technology and to develop culturaland sports activities.When the Board of Directors of the Company is deciding on matters concerning thestaff's personal interests including salaries, benefits, industrial safety, labour protectionand labour insurance, the labour union and the staff of the Company shall be consultedand the representatives of labour union shall be invited to attend the relevant meetings.

Chapter 10 Finance, Accounting and AuditingArticle 10.1 Financial SystemsThe Company shall formulate its financial and accounting system and internal auditingsystem and shall prepare quarterly reports, interim reports and annual reports inaccordance with the relevant laws and regulations of the State.Article 10.2 Accounting YearThe Company shall adopt the Gregorian calendar year as its accounting year, which shallbegin on 1st January and end on 31st December of each year.Article 10.3 Book-keeping SystemThe Company shall adopt the accrual basis of accounting and the debit and credit doubleentry system as commonly used worldwide.Article 10.4 Denomination of CurrencyThe Company shall adopt the Renminbi as the denomination of currency in preparationof its accounts. When converting Renminbi into other currencies, the exchange rate shallbe fixed at the median of the buying and selling rates at the foreign exchange tradingmarket as published by the People's Bank of China on the actual day of conversion.Business conducted in currencies other than the Renminbi shall be processed inaccordance with the relevant laws and regulations relating to the foreign currencyadministration of the State.Article 10.5 Language for BookkeepingThe Company's vouchers, account books and statements shall all be prepared inChinese.Books and statements may also be prepared in English if necessary, but theChinese version shall prevail.Article 10.6 Quarterly Report, Interim Report and Annual ReportAn accounting firm registered in the People's Republic of China with authority toundertake securities business shall be appointed to examine and audit the Company'sannual report and the audit report issued by the said accounting firm shall prevail.The Company's quarterly report, interim report and annual report shall be preparedaccording to the relevant laws and regulations. The Company's quarterly report shall beworked out within 30 days respectively after the third month and the ninth month of eachaccounting year, the interim report shall be worked out within 60 days after the first 6months of each accounting year while the annual report shall be worked out within 120

days of the closing of the accounting year.Article 10.7 StatementsThe Company's accounting statements, statistical statements and relevant financialdocuments shall be submitted regularly to the financial department, taxation departmentand statistics department of the State. A copy of such documents shall be submitted to thegovernment department in charge and shall be kept in the Company for shareholders'inspection.All accounting statements shall be kept by the Company for at least 10 years.Article 10.8 Financial ReportFor each accounting year, the Company shall maintain its financial report audited by anaccounting firm at the registered address of the Company for the shareholders to inspectand photocopy and shall publish the financial report in accordance with the laws andregulations and the Articles of Association. The balance sheet and the profit and lossaccount for the accounting year shall be audited and signed by a registered accountant.Upon receipt of a shareholder's written request for the financial report and the relevantpayment for reasonable printing and postage costs, the Company shall send out thefinancial report within three business days.The Company's financial report shall include (but not limited to) written explanations ofthe financial condition, a balance sheet (only applicable to an annual report), a statementon changes in financial position and a statement on profits distribution.Where necessary, the aforesaid financial statements may be presented in a summary formor as a brief report.Article 10.9 Internal AuditThe Company shall adopt an internal auditing system. As prescribed in the Articles ofAssociation, the internal auditing department shall carry out internal auditing andsupervision of the Company's income and expenditure and economic activities under theleadership of the Board of Directors, and it shall be accountable to the Board ofDirectors.Article 10.10 Common ReservesThe Company shall set up two kinds of common reserves:

1. Surplus common reserve which is divided into two kinds:

(1) Statutory surplus common reserve. The Company shall allocate from the after-taxprofits of the current year an amount not less than 10 per cent thereof to the surpluscommon reserve. However, in the event that the surplus common reserve has reached 50per cent of the issued share capital, the allocation may be stopped;(2) Discretionary surplus common reserve shall be allocated and utilized in accordancewith resolutions passed by shareholders in general meetings.2. Capital common reserve. common reserve. The following sums shall be allocated tothe capital:

(1) premiums generated from the issue of securities in excess of their nominal value;

(2) donations received;

(3) other amounts which shall be included pursuant to the regulations of the State.Article 10.11 Use of Common ReservesThe public reserve fund of the company is used for making up the company’s deficit,expanding production and business of the company or being transferred for increase ofthe capital of the company. However, the capital surplus shall not be used for makeup of

the company’s deficit.When the statutory surplus common reserve has been converted into capital, the balanceof the statutory surplus common reserve shall not be less than 25 per cent of theregistered capital.Article 10.12 Appointment of certified public accountantsThe Board of Directors shall not appoint any certified public accountants before thegeneral meeting adopts the resolution.

Chapter 11 Profits DistributionArticle 11. 1 Paying Taxes in accordance with the LawsThe Company shall implement the relevant taxation system of the State, shall pay taxesto the government in accordance with the laws and to accept the examination andsupervision of the financial and taxation authorities of the State.Article 11.2 Distribution of After-tax ProfitsThe Company's annual after-tax profits shall be distributed according to the followingorder and ratio:

1. for offsetting the losses of the previous year;2. 10 per cent allocation to the statutory surplus common reserve;3. allocation to discretionary surplus common reserve;4. payment of dividends.The distribution ratio of the after-tax profits shall be recommended by the Board ofDirectors in accordance with the Company's business situation for the current year andshall be submitted to the shareholders in general meeting for examination and approval.It shall not be drawn any more in case the company’s accumulated legal reserve exceeds50% of its registered capital.The company’s after-tax profit after any loss is made and the reserve is drawn should bedistributed according to the shareholding of the shareholders, except that the profit cannot be distributed according to the shareholding as specified in the Articles ofAssociation.If the shareholders general meeting breaks the above regulation and distributes profit tothe shareholders before making up the loss and drawing the legal public reserve, theshareholders must return to the company the profit distributed by breaking theregulations.The shares held by the company itself has nothing with the profit distribution.If the shareholders general meeting adopts resolutions on the profit distribution plan, theboard of directors of the company shall finish the distribution of dividend (or share)within two months after the shareholders general meeting.

Plan to repay the shareholders of the company:

The company emphasizes ratioal investment return of shareholders and considersconcurrently the sustainable development of the company.The company implements a positive profit distribution policy and maintains its continuityand stability.In principle, the company distributes dividends once each year and does this by cash inpriority.The company will strive to distribute dividends in cash at a proportion exceeding the

minimum proportion as regulated by the Articles of Association of the company.Profit distribution decision-making procedure and mechanism of company:

In drawing up the profit distribution preplan each year, the company should considercomprehensively such factors as the characteristics of the industry it is in, developmentstage, self operation mode, profit level, cash flow position and important funddisbursement arrangement, etc. The above profit distribution preplan can be submitted tothe general shareholder meeting for review subject to agreement by more than half of alldirectors and independent directors expressing their explicit opinions on this.When the Board of Directors of the company reviews the above profit distributionpreplan, it should carefully study and demonstrate such matters as company cashdividend distribution opportunity, condition and minimum proportion, etc.When the company reviews the above profit distribution preplan by holding a generalshareholders meeting, it should communicate and exchange with shareholders, especiallymedium and small shareholders on its own initiative through multiple channels,sufficiently listen to the comments and appeals of medium and small shareholders andreply questions that medium and small shareholder concern about.Condition, decision-making procedure and mechanism for company to adjust profitdistribution policy:

In case of any force majeure or a substantial change in the external operatingenvironment or self operation condition of the company, the company may adjust theprofit distribution policy.The Board of Directors of the company is under way of studying and demonstrating theprofit distribution policy. It should consider sufficiently the opinions of independentdirectors and medium and small shareholders; after adjustment, the profit distributionpolicy should not violate related regulations of China Securities Regulatory Commissionand the securities exchange.An adjusted profit distribution policy can be submitted to the general shareholdersmeeting for review only subject to agreement by more than half of all directors and theindependent directors making explicit comments. When the general shareholders meetingreviews an adjusted profit distribution policy, the voting method should meet relatedregulations of China Securities Regulatory Commission and the securities exchange andbe passed by over 2/3 of voting rights held by the attending shareholders (includingshareholder’s representatives).

Article 11. 3 DividendsIn principle, the Company shall distribute dividends based on the number of shares inissue once every year after the Company's final accounts at the end of the year (exceptpursuant to special resolutions passed by the shareholders’ general meeting). No fixeddividends shall be paid for ordinary shares and dividends may be paid in the followingmanner:

1. Cash: Cash dividends shall be declared in Renminbi. Dividends in respect of domesticshares shall be paid in Renminbi whereas dividends in respect of foreign investmentshares shall be paid in Hong Kong Dollars. The exchange rate of Renminbi to HongKong Dollars shall be referred to the median exchange rate as quoted by the People'sBank of China on the first business day after the date of the general meeting.2. Shares: Shareholders may receive proportional bonus shares for the types of shares

they hold in accordance with the laws.

When the company distributes share dividends, it shall adopt cash dividend distributionmethod in priority. The company may, under the prerequisite of meeting cash dividenddistribution proportion requirement, distribute profits by presenting bonus shares. Whenmaking profit distribution with bonus shares, such true and reasonable factors ascompany growth, dilution of net asset value per share, etc. should be available.When the company makes profit distribution, the minimum proportion of cash dividenddistribution accounting for this profit distribution should reach 20%.

The amount of dividend in cash distributed annually by the Company shall not be lessthan 10% of the net profit of the Company in that year, or the accumulated amount ofdividend in cash in the past three years shall not be less than 30% of the annual net profiton the average made in the past three years.Article 11.4 Income Tax for DividendsWhen distributing dividends and bonuses, the Company shall withhold and pay on behalfof the shareholders taxes payable on dividends in accordance with the laws.After payment of tax, the dividends and other entitlements arising from the foreigninvestment shares may be remitted abroad.Article 11. 5 Notice of Distribution of DividendsThe Company shall inform shareholders of distribution of dividends by publishingannouncements in the newspapers specified in Chapter 14 of the Articles of Association.

Chapter 12 Merger and DivisionArticle 12.1 Resolutions and ApprovalMergers or divisions of the Company shall be effected in accordance with the stipulationsof the Articles of Association. A merger or division plan shall be adopted by the Board ofDirectors and relevant resolution shall be passed by shareholders in general meeting. Amerger or division plan shall be submitted to the relevant examining and approvingauthority for approval.Article 12.2 Method and ProceduresMergers of the Company may be carried out by takeover or establishment of a new entity,and divisions of the Company may be carried out by sub-division or establishment of newentities.Mergers or divisions of the Company may be carried out in accordance with thefollowing procedures:

1. the Board of Directors formulates the plans for merger or division;2. all the parties involved in the merger or division sign a merger or division agreement;3. shareholders in general meeting pass relevant resolution in accordance with theArticles of Association;4. report to the departments authorized by the State Council for approval;5. sort out matters in relation to financial claims and liabilities in accordance with laws,and6. comply with the registration procedures.Article 12.3 Sorting Out Financial Claims and Liabilities

Within ten days after the passing of a resolution regarding merger or division by theshareholders in general meeting, notice shall be given to all the creditors. Such noticeshall also be published in the newspapers specified in Chapter 14 within 30 days of thedate of the resolution. Creditors who have received the notice are entitled within 30 daysof the date of the notice, and creditors who have not received the notice are entitledwithin 45 days of the announcement, to request the Company to settle the debts orprovide security for the liabilities.Article 12.4 Registration of ChangeThe parties involved in a merger and division shall submit an application to theexamining and approving authority of the State after the relevant agreement has beensigned and shall within 30 days after obtaining the approval apply to the relevantcompany registration authority to register the change of registration of the originalcompany or the establishment of the new company, or to cancel the registration of theoriginal company, shall report to the taxation authority in charge to register the change inthe particulars of the registration or to re-register or cancel the registration and shallpublish an announcement in accordance with in Chapter 14 of the Articles of Association.

Chapter 13 Dissolution and LiquidationArticle 13.1 Conditions for Dissolution of the CompanyThe Company shall be dissolved and liquidated on the occurrence of one of the followingevents:

1. The Company declares insolvent in accordance with the laws due to inability to settledebts due;2. The Company is ordered to close down due to the serious violation of the laws andregulations of the State causing harm to the interests of the public;3. The shareholders in general meeting decide that the Company should be wound up;4. The Company has to be wound up due to the merger or division of the Company.Article 13.2 Liquidation after DissolutionThe liquidation of the Company after termination shall be carried out according to therelevant procedures as stipulated by the laws as applicable to the particular cause ofdissolution:

1. When the Company is declared insolvent in accordance with the law due to its inabilityto repay its debts due, the People's Court shall, in accordance with the relevant laws,organize the shareholders, the relevant authorities and the professionals to set up aliquidation committee to liquidate the Company;2. When the Company is ordered to terminate its operation due to its contravention withthe laws and regulations of the state and infringment of the public interests, the relevantauthorities in charge shall organize the shareholders, the relevant authorities and therelevant professionals to set up a liquidation committee to liquidate the Company;3. If the dissolution is consequential to a resolution of shareholders in general meeting,the liquidation committee shall be set up within 15 days from the date of the passing ofsuch resolution and the members of the liquidation committee shall be selected by anordinary resolution of shareholders in general meeting;4. If the Company is terminated due to the dissolution resulting from a merger or division,the liquidation shall be carried out by all the parties involved in the merger or division inaccordance with the relevant agreement signed in connection with the merger or division.

Article 13.3 Prohibition of New Business ActivitiesAfter the liquidation committee has formed, the duties of the Board of Directors and thegeneral manager shall be terminated immediately. During the period of liquidation, nonew business activities shall be carried out by the Company.Article 13.4 Notice of and Application for LiquidationThe Company shall inform its creditors within 10 days and a relevant announcement shallbe published in accordance with Chapter 14 of the Articles of Association within 60days after the establishment of the liquidation committee. Creditors who have receivednotice in writing shall, within 30 days upon receipt of the notice, or those who have notreceived notice in writing shall, within 45 days from the date of the announcement of thenotice, declare their claims.When creditors declare their claims, they shall specify the relevant matters in relation tothe claims and shall provide proofs of debt. The liquidation committee shall register theclaims.Creditors who fail to file their claims within the above specified period shall not beincluded in the liquidation and can only request their debts to be settled from theremaining undistributed assets except for those creditors who believe that the Company isaware of their claims but fails to give them notice and are able to produce evidence oftheir claims.Article 13.5 Duties and Powers of Liquidation CommitteeThe liquidation committee shall have the following duties and powers:

1. to examine the Company's properties, to prepare a balance sheet and a list of assets andto compile a liquidation plan;2. to notify creditors or to make announcements;3. to deal with and settle the outstanding business of the Company;4. to settle outstanding taxes;5. to deal with the Company's creditors and debtors and to dismiss the Company's staff;6. to dispose of the remaining assets of the Company after settling the debts;7. to represent the Company in civil legal proceedings;8. to handle other matters specified by the laws and regulations and the Articles ofAssociation.Article 13.6 Limitations on the Duties and Powers of the Liquidation CommitteeThe liquidation committee shall not arrange settlements with creditors during the periodfor the filing of claims against the Company. The Company shall not however be releasedfrom the responsibility of compensating damages caused as a result of the deferredsettlement.Notwithstanding the above, the liquidation committee may, with the permission of thecourt, settle those secured debts which will not prejudice the interests of other creditors.Article 13.7 Insolvency DeclarationWhenever it is found that the Company's assets are insufficient to settle the debts, theliquidation committee shall immediately stop liquidation proceedings and shall lodge anapplication with the People's Court in accordance with the relevant procedures to declarethe Company insolvent.Upon a ruling by the People's Court that the Company be declared insolvent, theliquidation committee shall hand over the liquidation matters to the insolvencycommittee.

Article 13.8 Order of PaymentAfter the liquidation plan has been approved by shareholders in general meeting or therelevant government authority in charge, the Company's assets shall be appropriated tomeet the liquidation expenses and thereafter be used for other payments in the followingorder:

1. salaries for the staff and labour insurance premium;2. outstanding tax payments;3. repayment of bank loans, the Company's bonds and other debts.Having settled liabilities according to the above order, the remaining assets shall bedistributed to the shareholders in proportion to their respective shareholdings.Financial distributions in contravention of the aforesaid liquidation order shall be invalid.Creditors shall be entitled to demand the liquidation committee to recover the invaliddistributions and to request compensation for any that losses incurred.Article 13.9 Cancellation of RegistrationUpon completion of liquidation, the liquidation committee shall present a liquidationreport and shall prepare a statement of income and expenditure and various financialaccount books for the liquidation period. Upon certification by an accounting firm andapproval by shareholders in general meeting and the relevant government department incharge, the liquidation committee shall lodge an application with the registrationauthority for cancellation of registration within 30 days from the granting of the approvaland shall cancel the Company's registration at the taxation authority, pay all outstandingtaxes, cancel tax payment invoices and relevant papers issued by the taxation authority,and announce the winding-up of the Company.

Chapter 14 Disclosure of InformationArticle 14.1 Legal BasisDisclosure of information of the Company shall be subject to the requirements of thelaws and regulations such as the "Company Law", "Provisional Regulations on theAdministration of the Issue and Trading of Shares" and "Detailed Implementing Rules onDisclosure of Information for Companies Issuing Shares to the Public" and otherstipulations regarding disclosure of information of the Stock Exchange on which theshares of the Company are listed.Article 14.2 Approval from Supervisory AuthoritiesBefore any disclosure of material events pursuant to the Articles of Association, theCompany shall report to the China Securities Regulatory Commission and the stockexchange on which the shares of the Company are listed about the method and thecontents of the disclosure. The announcement shall not be made until their approvalshave been granted.Article 14.3 Mode of AnnouncementThe announcements on material matters (including announcements of interim financialreports and annual financial reports to shareholders) as required by the provisions hereofand other relevant regulations shall be published in Chinese in the People's Republic ofChina in at least one of the national newspapers designated by the China SecuritiesRegulatory Commission and at the same time in both Chinese and English overseas(including Hong Kong, Macau and Taiwan) in at least one Chinese and one English

newspaper.Where any discrepancies arise between the Chinese version and the English version inrelation to the understanding and the interpretation of the announcement concerned, theChinese version shall prevail.Article 14.4 Joint LiabilitiesThe Board of Directors shall warrant that all information and documents disclosed to thepublic is true and do not contain any statements which are severely misleading or haveimportant omission. All the members of the Board of Directors shall be jointlyresponsible for this.Article 14.5 Management of Relationship with InvestorsThe company shall establish and perfect the work system for investors’ relationshipmanagement and shall strengthen actively communications and exchanges withshareholders, especially the social public ones, in multiple ways. The secretary of theBoard of Directors of the Company shall be responsible concretely for the work ofinvestor’s relationship management.

Chapter 15 Amendment of the Articles of AssociationArticle 15.1 Amendment to the Articles of AssociationThe Company may amend the Articles of Association as required by changes in therelevant laws and regulations and the actual situation of the Company. Any amendmentto the Articles of Association shall be made in accordance with the procedures prescribedherein.Article 15.2 Procedures for AmendmentsWhen amending the Company's Articles of Association, the following procedures shallbe followed:

1. A resolution to amend the Articles of Association shall be passed by the Board ofDirectors which shall propose the amendment:

2. The shareholders shall be informed of the proposed amendments and a general meetingshall be convened to vote on the proposed amendments;3. The shareholders in general meeting shall vote on the proposed amendments. If theresolution obtaining the number of affirmative votes specified in Article 5.15 of theArticle of Association shall be passed.4. The amended Articles of Association shall be registered in a manner as required by theregistration authority and a relevant announcement shall be published.Article 15.3 Inspection and FilingAfter the Articles of Association have been amended, the amended Articles ofAssociation shall be kept at the registered address of the Company for shareholders'inspection and shall be filed for record with the Dalian Securities Administration Officeand the stock exchange on which the shares of the Company are listed.

Chapter 16 Supplementary ProvisionsArticle 16.1 Parts of Articles of AssociationAll supplementary resolutions, articles of association and details relating to the Articlesof Association passed by the shareholders in general meeting of the Company shall beintegral parts of the Articles of Association.Article 16.2 Settlement of Matters Not Covered

Matters not covered by the Articles of Association shall be resolved at the next generalmeeting of shareholders in accordance with the Company Law and the relevantregulations.Article 16.3 Other Rules and SystemsAll rules and systems adopted by the Company which are inconsistent with the Articlesof Association shall all be invalid.Article 16.4 Power of Interpretation of the Articles of AssociationThe Board of Directors may interpret the provisions of the Articles of Association but thepower of amendment shall be vested in the shareholders in general meetings.Disputes shall be dealt with in accordance with the procedures prescribed in the Articlesof Association.Article 16.5 Effect of FiguresThe terms "above", "before", "at least", and "within" as mentioned in the Articles ofAssociation shall be construed as inclusive of the figure itself.Article 16.6 Taking EffectThe Articles of Association have been passed by the shareholders in general meeting.Article 16.7 Arbitration and Applicable LawsDisputes or claims regarding the rights and obligations specified in the Articles ofAssociation and the relevant laws and regulations arising between the shareholders of thedomestically listed foreign investment shares and the Company, between the shareholdersof the domestically listed foreign shares and the Company's directors, supervisors,general manager or other senior management personnel, and between the shareholders ofthe domestically listed foreign shares and the shareholders of Renminbi ordinary shares,shall be handled by the China International Economic and Trade Arbitration Commissionin accordance with its arbitration rules.The provisions of the above paragraph does not apply to cases in which the shareholdersmay initiate proceedings at the People's Court pursuant to Articles 5.20 and 6.17.Any disputes concerning the Articles of Association shall be governed by laws of PRC.