DALIAN REFRIGERATION CO., LTD.
RULES OF PROCEDURE FORSHAREHOLDERS’ GENERAL MEETING
Chapter 1 General Provisions
Art. 1 In order to protect the legal rights and interests of Dalian Refrigeration
Company Limited (hereinafter referred to as the Company) and the Company's
shareholders, define the limits of authority of the general meeting, and ensure the
general meeting's legal exercise of authority, these Rules are worked out in accor-
dance with the Company Law of the People's Republic of China (hereinafter referred
to as the Company Law), the Articles of Association of Dalian Refrigeration
Company Limited (hereinafter referred to as the Articles of Association), and relevant state laws and regulations.
Chapter 2 Nature and Authority of the General Meeting
Art. 2 The general meeting shall be the authority mechanism of the Company.
Art. 3 The general meeting shall have the following functions and powers:
(1) to set the guiding principles of operation and to prepare investment proposals for
the Company;
(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 of the 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 examine the resolutions proposed by a shareholder or shareholders who hold
more than3% of the issued shares of the Company with voting rights; and
(15) to review the matters concerning guarantees described in Art. 1.8 of these
Articles of Association;
(16) to review the matters concerning purchase or sale of any major assets of the
Company within one year, which exceeds30% of the Company’s audited total assets as at the most recent period end;
(17) to review and approve 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 by the laws and regulations and the Articles of Association.
Chapter 3 Conditions for Convening a General Meeting
Art. 4 A general meeting shall be either an annual general meeting or an extraordinary general meeting. The general meeting shall be held at a designated place in a manner of on-site meeting. The Company will also provide shareholders with the network
facilities. Any shareholder, 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 the meeting in the network manner ends up. Notice of the shareholders’ general meeting shall clearly specify the voting time and voting procedure of the
network way. The starting time of the network voting of shareholders' general
meeting should not earlier than 3:00 pm during the day before the shareholders'
general meeting held, and not later than 9:30 am during the day the shareholders'
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. The general meeting
shall be held at the location of the Company. The annual general meeting shall be
convened at least once every year and held within 6 months after the end of every
financial year. The interval between two annual general meetings shall not exceed 15
months.
Art. 5 An extraordinary general meeting shall be convened within 2 months of the
occurrence of any 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 percent but excluding votes of proxies) of the issued share
capital of the Company;
(3) the number of directors falls short of the statutory number or two-thirds of the
number stipulated in the Articles of Association;
(4) the Company's losses which are not set off represent one-third or more of the total registered capital;
(5) if proposed by one half of all the independent directors.
Art. 6 The Board of Supervisors or shareholders shall inform in writing the Board of
Directors of any decision to convene the general meeting themselves to file to the
local agency of China Securities Regulatory Commission and the Securities
Exchange. The convening shareholders shall have the shareholdings not less than
10% before the announcement of any general meeting’s resolution. The convening shareholders shall submit the necessary certificates to the local agency of China
Securities Regulatory Commission and the Securities Exchange before giving the
notice of the general meeting and making announcement of the general meeting ’s resolution.
Art. 7 For the general meeting convened by the Board of Supervisors or shareholders themselves, the Board of Directors and its secretary shall give cooperation. The
Board of Directors shall provide the list of shareholders registered upon registration
of shareholdings. For the general meeting convened by the Board of Supervisors or
shareholders themselves, the necessary cost for the meeting shall be borne by the
Company.
Chapter 4 Convening a General Meeting
Art. 8 For convening a general meeting of shareholders, the convener shall inform all shareholders 20 days in advance of the date when the meeting is held. For convening
an extraordinary general meeting, the convener shall inform all shareholders 15 days
in advance of the date when the meeting is held. The notice of the general meeting
shall be published by way of an announcement in the newspapers as selected by the
Board of Directors in accordance with the laws and regulations and the Articles of
Association. The period of 30 days for notice shall not include the day when the
meeting commences but include the publishing day.
Art. 9 The notice of the general meeting shall meet the following requirements:
(1) the date, address and time of the general meeting shall be specified;
(2) the proposals to be discussed at the general meeting shall be specified;
(3) it shall lie stated in clear words that all the shareholders are entitled to attend the
general meeting, and may appoint a proxy who has not to be the director of the
Company to attend and vote at the general meeting;
(4) the registration date for the shareholdings of the shareholders who are entitled to
attend the general meeting shall be specified;
(5) the time and address when and where the letter of appointment of proxy is
delivered shall be specified; and 6. the name, telephone numbers and fax numbers of
the designated contact persons for the purpose of convening meeting shall be
specified. .
Art. 10 In the notice of the general meeting, the Board of Directors shall list the
matters to be discussed at the general meeting and fully disclose all the proposed
resolutions. Any matters in the resolutions of the previous general meeting, which
need to be changed, shall be listed completely instead of the items to be changed only. Any items listed as "other matters" without details specified shall not he regarded as
the proposed resolutions, ,and the general meeting shall not vote on them.
Art. 11 After the notice of the meeting is issued, the Board of Directors shall not
present any new resolutions which are not listed in the notice. Any changes to the
existing proposals shall be announced at least 15 days before the general meeting is
held, or the meeting shall be postponed so that an interval of 15 days is ensured.
Art. 12 After the Board of Directors issues the notice of the general meeting, the
general meeting shall not be postponed without reasons. In case the Company has to postpone the general meeting for some reason, the notice of postponement shall be
issued at least two work days before the original date when the general meeting is
held. The Board of Directors' notice of postponing the general meeting shall state the reason and specify the date of the postponed meeting.
For the postponed general meeting, the registration date specified in the original
notice for the shareholdings of the shareholders who are entitled to attend the general
meeting shall not be changed.
Art. 13 For any proposal of independent directors for convening an extraordinary
general meeting, the Board of Directors shall, within ten days after receiving the
proposal, give the written feedback stating to approve or not approve to convene the
extraordinary general meeting according to the laws and regulations and these
Articles of Association. The Board of Directors shall give the notification of
convening the extraordinary general meeting within five days after the Board makes
the decision if it approves to convene the general meeting; or explain the reason and
make announcement if it does not approve to convene the general meeting.
Art. 14 For any proposal of the Board of Supervisors for convening an extraordinary
general meeting, the Board of Directors shall, within ten days after receiving the
proposal, give the written feedback stating to approve or not approve to convene the
extraordinary general meeting according to the laws and regulations and these
Articles of Association. The Board of Directors shall give the notification of
convening the extraordinary general meeting within five days 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 of the Board of
Supervisors. The Board of Directors ’ disapproval to convene the extraordinary
general meeting or failure to give any feedback within ten days after receiving the
proposal shall be regarded as the Board of Directors ’ being unable to perform or
failing to perform the obligations to convene the general meeting, and the Board of
Supervisors may convene and preside over the meeting itself.
Art. 15 For any proposal of shareholder(s) who individually or jointly holds10% or
more of the Company’s shares for convening an extraordinary general meeting, the
Board of Directors shall, within ten days after receiving the proposal, give the written feedback stating to approve or not approve to convene the extraordinary general
meeting according to the laws and regulations and these Articles of Association. The
Board of Directors shall give the notification of convening the extraordinary general
meeting within five days 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 of the related shareholder(s). If the Board of Directors does not
approve to convene the extraordinary general meeting, or fails to give any feedback
within ten days after receiving the proposal, the shareholder(s) who individually or
jointly holds10% or more of the Company’s shares shall have the right to submit
proposal in written form to the Board of Supervisors for convening the extraordinary
general meeting.
Art. 16 The Board of Supervisors shall give the notification of convening the
extraordinary general meeting within 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 of the related shareholder(s). The Board of
Supervisors’ failure to give the notification of the general meeting within the
specified period shall be regarded as its failure to convene and preside over the
general meeting and any shareholder(s) individually or jointly holding10% or more
of the Company’s shares for a period of continuative 90 days may convene and
preside over the general meeting themselves.
Art. 17 If the proposing shareholders decide to convene the extraordinary general
meeting, it shall be submitted in writing to the Board of Directors, and reported to
Dalian representative office of the China Securities Regulatory Commission and
Shenzhen Securities Exchange for file. After then they shall send the notice of the
extraordinary general meeting. The notice shall comply with the Articles of
Association, and shall meet the following requirements:
(1) Any new items shall not be added to the proposal, or otherwise the proposing
shareholders shall present to the Board of Directors a new proposal for convening the general meeting in the above procedures;
(2) The meeting shall be held at the location of the Company.
Chapter 5 Matters to he Discussed at the General Meeting and Proposed
Resolutions
Art. 18 All the items listed in Art. 3 of these Rules are the matters to be discussed at
general meetings.
Art. 19 Matters to be discussed (topics for discussion) at the annual general meeting
and extraordinary general meeting shall be fixed at the Board meeting (or the
extraordinary Board meeting) held 30 days before the general meeting is held, and the Company's shareholders shall be notified. The topics for discussion at the general
meetings fixed by the Board of Directors shall be the proposals which shall be
presented to the general meeting for examination and approval in accordance with the Articles of Association and these Rules and the resolutions proposed by shareholders according to law.
Art. 20 A shareholder or shareholders holding more than3% of the Company's total
votes or the Supervisory Board may make an extraordinary proposal.
If an extraordinary proposal is a new matter not listed in the Board of Directors'
notice of meeting but is one of the items listed in Art. 64 of these Rules, the proposing person shall submit the proposal to the Board of Directors 10 days before the general
meeting is held and the Board of Directors shall examine and announce it.
Any new distribution proposal presented by the first strong shareholder shall be
submitted 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 first strong shareholder shall not make any new distribution proposals at that annual
general meeting.
For any proposals other than the above listed, the proposing person may submit in
advance the proposal to the Board of Directors for its announcement, or present it
directly at the annual general meeting.
Art. 21 For extraordinary proposals for the annual general meeting as above
mentioned, the Board of Directors shall examine them on the following bases:
(1) Relevancy. Any resolutions proposed by shareholders, which are directly related
to the Company and not beyond the scope of authority of the general meeting
stipulated in the laws and regulations and the Articles of Association, shall be
submitted to the general meeting for discussion. Any proposal not meeting the above
requirements shall not be submitted to the general meeting. If resolving not to present the shareholders' proposal to the general meeting for voting, the Board of Directors
shall give explanations and notes at that general meeting.
(2) Procedure. The Board of Directors may make decisions for the procedures related to the shareholders' proposals. For example, splitting a proposal or consolidating
proposals for voting shall be agreed by the proposing person. If the proposing person
does not agree on such changes, the chairman of the general meeting may present the procedure problem to the general meeting for settlement, which shall be discussed in
the procedure decided at. the general meeting.
Art. 22 Resolutions proposed by the shareholders shall satisfy the following
conditions:
(1) The proposed resolutions shall fall within the jurisdiction of the general meeting
and their contents shall not contravene the laws and regulations and the Articles of
Association;
(2) The proposed resolutions shall be specific and precise;
(3) The proposed resolutions shall be delivered in written form to the Board of
Directors.
Art. 23 The Board of Directors shall examine the proposed resolutions of the general
meeting as stipulated in the Articles of Association and for the top interests of the
Company and the shareholders.
Art. 24 The proposing shareholders, whose proposed resolutions are not taken into
the agenda of the general meeting by the Board of Directors and who have objections
on it, may convene an extraordinary general meeting in the procedure stipulated in
the Articles of Association.
Art. 25 Any proposed resolutions related to investment, property disposal or purchase, or merger shall be described in detail, including the money amount, price or pricing
method, book value of the assets, impact on the Company, examination and approval, whether involving in associated transactions, and so on. If the assets evaluation, audit or independent financial consultant's report is required according to the regulations,
the Board of Directors shall announce the result of assets evaluation, audit or
independent financial consultant's report at least 5 workdays before the general
meeting is held.
Art. 26 For any proposed resolutions for changing the use of raised funds, the Board
of Directors shall give the reason of changing the use of raised funds, background of
the new project and influence on the future of the Company in the notice of the
general meeting.
Art. 27 Any matters related to increase of issued shares or share placing, which
should be submitted to the China Securities Regulatory Commission for verification,
shall be proposed as a special resolution.
Art. 28 After adopting the annual report, the Board of Directors shall adopt a
resolution for the profit distribution proposal and present it to the annual general
meeting. The Board of Directors shall give detailed explanations for the resolution of transferring the capital surplus into the share capital, and disclose it in the announce-
ment. When announcing the proposal of issuing shares or transferring the capital
surplus into the share capital, the Board of Directors shall disclose the comparison of
the earnings per share and the net assets per share before and after such issuance and
transfer as well as the influence on the future development of the Company.
Art. 29 For engagement of accountants, the Board of Directors shall propose the
resolution. . For the proposed resolution for dismissing or not renewing the
accountants, the Board of Directors shall notify the accountants in advance and give
explanations at the general meeting. The accountants have the right to state their
opinions at the general meeting.
The Board of Directors shall not appoint any certified public accountants before the
general meeting adopts the resolution.
In case the accountants quit, the Board of Directors shall give explanations at the next general meeting. The accountants have the obligation to present a written statement or send a representative to attend the general meeting stating any improprieties of the
Company. ,
Art. 30 The list of the candidates of the directors and the supervisors whose positions are occupied by the shareholders' representatives shall be proposed as a resolution to
the general meeting for adoption. The supervisors whose positions are occupied by
the employees' representatives shall be elected at the congress of staff and workers.
A shareholder or shareholders holding more than3% of the total Company's shares
with voting rights have the right to nominate the candidates of directors and
supervisors. The Board of Directors, the Supervisory Board or a shareholder or
shareholders holding more than1% of the issued shares of the Company have the
right to nominate the candidates of independent directors. The number of candidates
in each resolution shall not exceed the number stipulated in the Articles of
Association.
The proposing person shall submit to the Board of Directors and the Supervisory
Board the candidates' resumes and backgrounds as well as necessary certificates for
examination of the Board of Directors and the Supervisory Board. Any resolutions
conforming to the laws and regulations and the Articles of Association shall be
submitted to the general meeting for discussion. Any resolutions not conforming to
the above regulations shall not be submitted to the general meeting and, however,
shall be explained at the general meeting.
The Board of Directors and the Supervisory Board shall provide the shareholders
with the candidates' resumes and backgrounds.
Chapter 6 Identification and Registration of the Qualification of Shareholders
Attending the General Meeting
Art. 31 The Board of Directors shall specify the registration day of shareholding. All
the shareholders in enrollment after the end of the registration day of shareholding
shall have the right to attend the general meeting.
Art. 32 A shareholder may attend the general meeting in person, or may appoint a
proxy in writing to attend the general meeting and exercise the shareholder's rights on his behalf. If the shareholder attends the general meeting in person, he shall produce
his identity card and proof of shareholding. To attend the meeting, a proxy shall carry with him the letter of appointment and the proof of shareholding of the relevant
shareholder and his own identity card, and shall exercise voting rights within the
scope specified in the letter of appointment. 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
appointed by the legal representative shall attend the general meeting. If a legal
representative attends the general meeting, he shall produce his identity card, valid
proof of his capacity as a legal representative and proof of shareholding. In case of a
proxy attending the meeting, he shall produce his identity card and letter of
appointment issued by the legal representative of the legal person shareholder in
accordance with the laws, and proof of shareholding.
Art. 33 The shareholders to attend the general meeting shall sign up at the Company
before the meeting is held. The notice of signing up for attending the general meeting shall indicate the shareholdings with voting rights of the Company and shall be in
writing form. Shareholders in other cities may sign up by mail or fax.
Art. 34 The letter of appointment of proxy issued by shareholders to appoint other
persons to attend the 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,
the shares represented by each proxy shall be specified);
(3) instructions such as "for", "against" or "abstain" for each proposed resolution as
set out in the agenda of the general meeting;
(4) whether the proxy has voting rights on any extraordinary proposals which may be included in the agenda of the general meeting in accordance with the Articles of
Association and if this is 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, the company seal shall be affixed thereto.
The letter of appointment shall indicate whether the proxy can vote at his will if the
shareholder does not give instructions.
Art. 35 In one of the following cases on the proofs submitted by anyone attending the meeting, he shall be considered unqualified to attend the meeting:
(1) the identify card of the appointer or the person attending the meeting does not
conform to the stipulations of the Rules for Identity Cards and its Rules for
Implementation, such as forged, outdated or altered cards, or incorrect digits of the
identity card number;
(2) such submitted proofs as the identity card of the appointer or person attending the meeting are indistinct;
(3) if a shareholder appoints' more than one proxy attending the meeting, the
signatures on the letters of appointment are not identical evidently;
(4) the signature on the letter .of appointment for signing up by fax is not identical
evidently to that submitted when the proxy attends the meeting;
(5) there are no signatures or seals on the letter of appointment;
(6) the submitted proofs of the appointer or the proxy on behalf of the appointer for
attending the meeting evidently violate the laws and regulations and the Articles of
Association on other aspects.
Art. 36 In case of any unclear appointment by the appointer or in case the proofs of
the appointer's identity and appointment relationship submitted by the proxy do not
conform to the. laws and regulations and the Articles of Association, which leads to
invalidity of the qualification of the appointer or the proxy on behalf of the appointer
for attending the meeting, the appointer or his proxy shall be liable for it.
Chapter 7 Signing in for a General Meeting
Art. 37 A sign-in book of participants in the general meeting shall be prepared by the Company. The sign in book shall specify the name, identify card number, address of
residence or registered office and number of shares with voting rights represented of
each participant or unit (shareholder or proxy), and shall be filled by the shareholders (or proxies) attending the general meeting.
Art. 38 The registered shareholders shall produce their own identity card and sign on
the sign-in book. Any unregistered shareholder shall not attend the general meeting in principle. However, if the chairman of the general meeting gives special approval and the shareholder submits the documents listed in Art. 32 herein, which are found being up to the requirements specified in the notice of the general meeting, he may attend
the general meeting after signing on the sign-in book.
Art. 39 The shareholders shall enter the meeting place before the meeting is started.
Anyone shall not enter the place after the meeting is started unless obtaining the
consent of the chairman of the meeting.
Chapter 8 Standing Orders of the General Meeting
Art. 40 The general meeting shall be presided over by the Chairman of the Board of
Directors. In case the Chairman is unable or fails to perform his duty, the Vice
Chairman shall preside over the meeting. If the Vice Chairman is unable or fails to
perform his duty, a director elected by the majority of directors shall preside over the
meeting.
Art. 41 Any general meeting that is convened by the Board of Supervisors shall be
presided over by the Chairman of the Board of Supervisors. In case the Chairman is
unable or fails to perform his duty, a supervisor elected by the majority of supervisors shall preside over the meeting. The general meetings convened by shareholders
themselves shall be presided over by a representative elected by the conveners.
Art. 42 In case the meeting chairman breaches the rule of procedure during the
meeting, which results in discontinuousness of the general meeting, the general
meeting may elect a person to preside over the meeting by the attending shareholders holding the majority of voting shares.
Art. 43 The chairman of the general meeting shall call the meeting to order on
schedule. In special cases, he may call the meeting to order after the scheduled time.
Art. 44 After calling the meeting to order, the chairman shall firstly announce the
particulars of each shareholder or proxy attending the general meeting as well as their shareholdings with voting rights represented.
Art. 45 The meeting, presided over by the chairman, shall go through the topics for
discussion and proposed resolutions listed in the agenda item by item. The chairman
may adopt the procedure of reporting, centralized examining and voting for the items listed in the agenda or the procedure of reporting item by item, examining item by
item and voting, depending on the actual conditions. The general meeting shall give
reasonable time for discussion of each topic.
Art. 46 For an annual general meeting, the Board of Directors shall report at the
general meeting about the performance of matters that shall be dealt with by the
Board of Directors as specified in the resolutions of the lasting annual general
meeting.
Art. 47 At the annual general meeting, the Supervisory Board shall announce the
Company's special report about supervision in the past year, including the following
information:
(1) audit of the Company's accounts;
(2) directors' and senior staff members' performance of duties for the Company and
implementation of the relevant laws and regulations, the Articles of Association, and
the resolutions of the general meeting;
(3) other major events the Supervisory Board considers necessary to be reported at
the general meeting.
If considering it necessary, the Supervisory Board may give its opinions about the
proposed resolutions examined at the general meeting, and present an independent
report.
Art. 48 When discussing the topics, the shareholders or proxies shall state their points of view in a plain way, and inquire or ask for the reporter to give explanations and
descriptions for any issues undefined by the reporter which may disturb their
judgment and voting.
Art. 49 The shareholders may inquire or put forward suggestions for any proposed
resolutions. The chairman of the meeting shall give replies or descriptions in person
or appoint the directors, supervisors or other persona attending the meeting to give
replies or descriptions. In one of the following cases, the chairman may refuse to
answer the inquiries and, however, shall state the reason:
(1) the inquiry is not related to the topic;
(2) the inquired matter needs to be investigated;
(3) any matters related to the Company's business secrets which are unable to be
made public at the general meeting;
(4) the answer to the inquiry may harm the common interests of shareholders;
(5) other major matters.
Art. 50 When examining the matters related to associated transactions at the general
meeting, the shareholders in connection with the associated transactions may attend
the general meeting and, however, shall state on their own initiative such connection
relations at the general meeting. The associated shareholders may state their opinions to all the shareholders attending the meeting according to the agenda of the meeting
but shall avoid voting, and their shareholdings with voting rights represented shall not be reckon into the total number of effective votes. The resolution of the general
meeting shall fully indicate the voting of non-associated shareholders.
Art. 51 When examining the matters related to associated transactions, the chairman
of the meeting shall announce the list of associated shareholders with brief
introduction to the associated matters. The chairman shall announce the total number
of the shares held by the non-associated shareholders attending the meeting or rep-
resented by the proxies with voting rights and the proportion to the total shares of the Company, and then proceed to examination and voting.
Art. 52 Matters listed in the agenda of the general meeting shall be adopted by voting.
Each shareholder or proxy exercises the voting right corresponding to their
shareholdings with voting rights represented. Each share represents one vote. TheCompany’s shares held by the Company itself shall not have the voting right. The method of disclosed ballots is adopted for voting.
Art. 53 All the proposed resolutions listed in the agenda shall be voted item by item at the general meeting. Any resolutions shall not be laid aside or not put to voting for
any reasons. For different proposed resolutions related to the same matter at the
annual general meeting, the resolutions shall be adopted by voting in the precedence
order as the resolutions propose.
Art. 54 For any proposed resolutions related to election of directors and supervisor at the general meeting, voting shall be required for each director or supervisor candidate. As soon as the resolution for reelecting directors or supervisors is adopted, the elected directors or supervisors shall take office immediately after the meeting.
Art. 55 Any matters not included in the notice of the general meeting shall not voted
at an extraordinary general meeting. Any proposed resolutions listed in the
examination notice of the extraordinary general meeting, which are related to the
matte.. specified in Art. 64 herein, shall not be changed. Any change shall be regarded as a new proposal, and shall not be voted at the general meeting.
Art. 56 The votes for each matter under examination at the general meeting shall be
counted by at least two shareholder representatives and one supervisor. The
representative of the persons participating in the counting shall announce the counting result on the spot.
When a matter related to associated transactions is under examination, the associated
shareholders shall not participate in counting the votes for that matter.
Art. 57 The shares held by the shareholders who fail filling the vote because of being ordered to exit the place by the chairman of the meeting according to the stipulations
of these Rules for the discipline of the general meeting or because of exiting from the meeting place before voting shall not be reckoned into the total number of effective
votes at the general meeting.
Art. 58 Any vote on which the filled contents do not meet the requirements specified
on the vote or which are indistinct shall be considered invalid, and shall not be
reckoned into the total number of shares with voting rights represented at the general
meeting.
Art. 59 For anyone who is unqualified to attend the general meeting, his exercise of
the rights as a shareholder at the meeting or exercise of such rights on behalf of a
shareholder shall be considered invalid (including but not limited to his vote). The
invalid votes so generated shall not be reckoned into the total number of shares with
voting rights represented at the meeting.
Chapter 9 Resolutions of the General Meeting
Art. 60 The general meeting shall adopt resolutions for matte passed through voting.
A resolution shall be either an ordinary resolution or a special resolution. Ordinary
resolutions at the general meeting shall be passed by more than half of the votes held
by the shareholders or proxies present at the general meeting. Special resolutions at
the general meeting shall be passed by more than two - thirds of the votes held by the shareholders or proxies present at the general meeting.
Art. 61 Resolutions at the general meeting shall comply with the laws' and the
Articles of Association. Directors attending the meeting shall faithfully fulfill their
obligations and ensure the authenticity, correctness and completeness of resolutions
without any expressions leading to different meanings.
Art. 62 The following matters shall be adopted as ordinary resolutions at the general
meeting:
(1) the work reports of the Board of Directors and the Supervisory Board;
(2) the profit distribution proposal and the loss setoff proposal prepared by the Board of Directors;
(3) appointment and dismissal of the members of the Board of Directors and the
Supervisory Board and their remuneration and payment;
(4) the Company's annual budget and final accounts;
(5) annual report of theCompany；and
(6) other matters that should be resolved by a resolution other than special resolutions according to the laws and administrative regulations or the Articles of Association.
Art. 63 The following matters shall be adopted as special resolutions at the general
meeting:
(1) increase or decrease of the Company's registered capital;
(2) issue of the Company's debentures;
(3) merger, division, dissolution and liquidation of the Company;
(4) amendments to the Articles of Association;
(5) buyback of the Company's shares;
(6) theCompany’s purchase or sale of major assets or issuance of guarantees which
exceed30% of the audited total assets as at the most recent period end within one
year;
(7) the stock incentive plan;
(8) other matters to be resolved by special resolutions as stipulated in the Articles of
Association or which would bring about major influence on the Company and should be resolved by special resolutions according to an ordinary resolution at the general
meeting.
Art. 64 For annual general meetings or general meetings held at the request of the
shareholders or the Supervisory Board, voting by communication is not allowable.
The following matters presented to an extraordinary general meeting shall not be
voted by communication:
(1) increase or decrease of the Company's registered capital;
(2) issue of the Company's debentures;
(3) merger, division, dissolution and liquidation of the Company;
(4) amendments to the Articles of Association;
(5) the profit distribution proposal and the loss setoff proposal;
(6) appointment and dismissal of the members of the Board of Directors and the
Supervisory Board;
(7) changes of the raised capital investment;
(8) associated transactions to be examined at the general meeting;
(9) assets purchasing or selling to be examined at the general meeting;
(10) dismissal of the accountants;
(11) other matters that should not be voted by ,communication as stipulated in the
Articles of Association.
Art. 65 Resolutions at the general meeting, which are related to the associated matters, shall be passed by more than half of the votes held by the non-associated shareholders or proxies present at the general meeting for ordinary resolutions or by more than
two-thirds of the votes held by the non-associated shareholders or proxies present at
the general meeting for special resolutions.
Art. 66 The chairman of the meeting shall decide whether the resolution is adopted or not at the general meeting according to the voting result, and shall announce the
voting result at the meeting. The voting result shall be listed in the meeting minutes.
Art. 67 If the chairman of the meeting is doubtful of the voting result of the resolution presented for voting, he may re-count the votes. If the chairman does not re-count the votes and the shareholders or proxies attending the meeting have objections to the
result announced by the chairman, they have the right to require re-counting the votes immediately after announcement of the voting result, and the chairman shall re-count the votes immediately.
Art. 68 The Company's Board of Directors shall invite a lawyer holding the
professional qualification for securities to attend the meeting and give and announce
his advice for the following matters:
(1) whether or not the general meeting is convened and held in the procedure
according to the laws and regulations and the Articles of Association;
(2) verification of the legality and validity of the qualifications of all the participants
in the meeting;
(3) verification of the qualification of the shareholders proposing new resolutions at
the annual general meeting;
(4) whether or not the voting procedure of the general meeting is legal and valid;
(5) giving legal advice on other problems at the request of the Company.
The Company's Board of Directors may invite notaries to attend the general meeting
and give notarization for concerned matters.
Art. 69 Quotation for the Company's shares shall be suspended during the general
meeting. The Board of Directors of the Company shall ensure that the general
meeting is not interrupted in reasonable work time until final resolutions are adopted. For any force majeure or other special reasons, which prevent the general meeting
from going on normally or adopting any resolutions, the Board of ,Directors of the
Company shall state the reason to Shenzhen Securities Exchange and make it public.
The Board of Directors has the obligations to take necessary actions for recovering
the meeting as soon as possible.
Chapter 10 Disciplines of the General Meeting
Art. 70 The Company's shareholders who have been registered or proxies appointed
by the shareholders, directors, supervisors, the Board of Directors' secretary, senior
staff members, and the lawyers, notaries and other guests and journalists invited by
the Board of Directors or the proposing shareholders can attend the general meeting.
Anyone except 'the above listed shall not enter the meeting place, and those who have entered the place may be required to exist the place by the chairman of the meeting.
Art. 71 The chairman of the meeting may require the following persons to exist the
meeting place:
(1) those unqualified for the meeting;
(2) those disturbing the order of the meeting;
(3) those dressing improperly, which offends public morals;
(4) those carrying hazard articles with them;
(5) other conditions that result in being ordered to exist the meeting place.
In case anyone defies the order to exist the place, the chairman of the meeting may
take necessary actions to force him to exist.
Art. 72 When a proposed resolution is under examination, only the shareholder or
proxy has the right to speak. Other participants shall not ask questions or speak. Any
shareholder, who is going to speak, shall hint by raising his hand, and can make a
speech at his seat or a designated seat after the chairman of the meeting admits it.
In case several shareholders raise their hands for speaking, the chairman shall
designate the speaker.
The chairman shall specify the speaking time and the number of times of speaking for each, person depending on the actual conditions. The shareholder's speech shall not
be interrupted in the specified time so that the shareholder has the full right to speak.
Any speech of the shareholder, which violates the stipulations in the above three
paragraphs, may be refused or stopped by the chairman of the meeting.
Directors, supervisors, the general manager and the Company's other senior staff
members who attend the general meeting, and others approved by the chairman of the meeting can speak at the meeting.
Art. 73 Any speaking shareholder or proxy shall introduce his status as a shareholder, the unit he is on behalf of and the shareholdings, and then state his opinions.
Art. 74 The Company shall hold general meetings on the basis of simplicity, and shall not offer any extra benefits to the shareholders or proxies attending the meeting.
Chapter 11 Minutes of the General Meeting
Art. 75 Minutes shall be prepared for the general meeting, indicating the following
items: the shareholdings of the attending shareholders or proxies holding internal
shares and domestically listed foreign investment shares with voting rights and the
proportions to the total shares of the Company; the date and place of the meeting;
name of the meeting chairman; the agenda of the meeting; the speakers' speech
outlines for each matter under discussion; the voting result of each resolved matter;
the voting result of the shareholders holding internal shares and the shareholders
holding domestically listed foreign investment shares for each matter; the sharehold-
ers' inquiries and suggestions and the replies or description of the Board of Directors
and the Supervisory Board; and other items which shall he listed in the meeting
minutes as considered at the general meeting and according to the Articles of
Association. All the directors attending the meeting and the recorder shall sign on the minutes, which shall be filed together with the sign-in book and the letters of
appointment as the archives of the Company.
Art. 76 All the directors attending the meeting and the recorder shall sign on the
minutes of the general meeting, which shall be kept as the archives of the Company
by the Board of Directors' secretary. The minutes of the general meeting shall be kept for ten years.
Chapter 12 Adjournment and Termination of the General Meeting
Art. 77 The meeting chairman has (he right to announce the meeting adjournment
according to the meeting agenda and schedule. He may announce the meeting
adjournment if he considers it necessary.
Art. 78 The chairman of the meeting shall not announce the termination of the
meeting until the chairman announces the voting result for all the resolutions and
nobody has objections.
Chapter 13 Execution of the Resolutions of General Meeting and Disclosure of
the Information
Art. 79 The information shall be disclosed according to the Articles of Association
and the laws and administration regulations after the general meeting. The Chairman
of the Board of Directors shall be responsible for examining the information to be
disclosed according to the laws and regulations, and the Board of Directors' secretary shall be responsible for the execution according the laws.
Art. 80 The announcement of the resolutions of general meeting shall indicate the
number of shareholders and proxies attending the general meeting, the total number
of shares held or represented by them and its proportion to the Company's total
number of shares with voting rights, the voting method, and the voting result for each resolution and the lawyer's advice on it. Each resolution proposed by the shareholder
which is adopted at the general meeting shall indicate the name of the proposing
shareholder (individual or unit), his/its shareholdings and the description of the
proposed resolutions.
The announcement of the resolutions adopted at the general meeting shall give the
statistics respectively of attendance and voting' of the shareholders holding the
internal shares and the shareholders holding the foreign investment shares.
While the shareholders’ general meeting considers significant matters affecting the
interests of small and medium investors, small and medium investors should separate vote counting. The result of separate vote counting should be disclosed publicly
timely.
Art. 81 For any proposed resolution not adopted at the general meeting, or any
resolutions adopted at the previous general meeting which are changed at this general meeting, the Board of Directors shall give explanations in the announcement of the
resolutions of the general meeting.
Art. 82 The Board of Directors shall be responsible for execution of the resolutions
adopted at the general meeting, and turn them over to the Company's general manager, who shall allocate personnel to do the work. Matters in the resolutions to be dealt
with by the Supervisory Board shall be executed directly by the Supervisory Board.
Art. 83 After the profit distribution proposal and the proposal of transferring the
public reserves into the share capital are approved at the Company's general meeting, the Board of Directors shall complete the dividend (or share) issue (or transfer) within two months after the general meeting is held. .
Art. 84 The general manager shall report the execution of the resolutions of the
general meeting to the Board of Directors who report at the next general meeting.
Any' matters which are to be executed by the Supervisory Board shall be reported
directly by the Supervisory Board at the general meeting, or reported firstly to the
Board of Directors if the Supervisory Board considers it necessary.
Art. 85 The Chairman of the Board of Directors shall supervise and inspect the
execution of all the resolutions of the general meeting except those to be executed by the Supervisory Board, and may convene an extraordinary board meeting to hear and
review the report about the execution of the resolutions of the' general meeting, if
necessary.
Art. 86 The Chairman of the Board of Directors shall be responsible for or authorize
another director to be responsible for the information disclosure to the shareholders
and the public. The Board of Directors' secretary shall be designated as the news
spokesman of the Company.
Chapter 14 Supplementary Articles
Art. 87 These Rules shall be enforced after being examined and approved at the
general meeting.
Art. 88 In case of any conflicts between these Rules and the Company Law of the
People's Republic of China, the Securities Law of the People's Republic of China, the Rules on Shares Listing at Shenzhen Securities Exchange, the Opinions about
Regulation of General Meetings for Listed Companies and other laws, regulations
and regulatory documents as well as the Articles of Association, the concerned laws,
regulations and regulatory documents as well as the Articles of Association shall
prevail.
Art. 89 In one of the following cases, the Company shall amend these Rules:
(1) the Company Law or other relevant laws, regulations and regulatory documents or the Articles of Association are revised, which results in conflicts between these Rules and the revised laws, regulations or regulatory documents or the Articles of
Association.
(2) the general meeting decides to amend these Rules.
Art. 90 Any amendments to these Rules shall be decided by the general meeting that
authorizes the Board of Directors to draft the amendments. The drafted amendments
can come into effect after being approved by the general meeting.
Art. 91 The Board of Directors has the right to interpret these Rules.