**Exhibit 1.3**

 

**THE COMPANIES ORDINANCE (CHAPTER 32)**

**Company Limited by Shares**

**ARTICLES OF ASSOCIATION(inclusive amendments up to 12 May 2004)**

**OF**

**CHINA UNICOM LIMITED**

 

##### **PRELIMINARY**

#####  

1.             The regulations in Table A in the FirstSchedule to the Ordinance shall not apply to the Company.

 

##### **INTERPRETATION**

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2.             (a)           Inthese Articles save where the context otherwise requires:

 

***associate*** in relation to any Director, has themeaning ascribed to it under the Listing Rules;

 

***Auditors***means the Auditors of the Company for thetime being;

 

***Chairman***means the Chairman presiding at anymeeting of members or the Board;

 

***Company***means the above-named Company;

 

***Board***and ***Directors***means the directors for the time being of theCompany or the Directors present at a duly convened meeting of directors atwhich a quorum is present;

 

***call***includes any instalment of a call and, in theapplication of provisions of these Articles to forfeiture of shares, a sumwhich, by the terms of issue of a share, is payable at a fixed time either inrespect of the nominal value of the share or by way of premium;

 

***capital***means the share capital from time to time of theCompany;

 

***Clearing House***shall mean a recognised clearing housewithin the meaning of Schedule 1 to the Securities and Futures Ordinance (Chapter571 of the Laws of Hong Kong);

 

***Dividend***includes distributions in specie or inkind, capital distributions and capitalisation issues;

 

***Dollars***& ***$***means dollars in the lawful currency of Hong Kong;

 

***Hong Kong***means the Hong Kong Special AdministrativeRegion of the People’s Republic of China;

 

***Listing Rules*** means the Rules Governing the Listing ofSecurities on The Stock Exchange of Hong Kong Limited;

 

***month***means calendar month;

 

***Office***means the registered office of the Company for thetime being;

 

***paid up***includes credited as paid up;

 

***Ordinance***means the Companies Ordinance (Chapter 32of the Laws of Hong Kong), and includes every other ordinance incorporatedtherewith or substituted therefor, and in the case of any such substitution thereferences in these Articles to the provisions of the Ordinance shall be readas references to the provisions substituted therefor in the new ordinance;

 

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***Register***means the register of members of theCompany kept pursuant to the Ordinance and includes any branch register keptpursuant to the Ordinance;

 

***Seal***means the common seal of the Company or any officialseal that the Company may have as permitted by the Ordinance;

 

***Secretary***means the person or persons appointed forthe time being to perform for the Company the duties of a secretary;

 

***share***means a share in the capital of the Company andincludes stock except where a distinction between stock and shares is expressedor implied;

 

***Stock Exchange***means The Stock Exchange of Hong KongLimited;

 

***these Articles***means these Articles of Association intheir present form or as altered from time to time;

 

***in writing*** and ***written*** shall include printing, lithograph,xerography, photography or other modes of representing or reproducing words ina permanent visible form or, to the extent permitted by and in accordance withthe Ordinance and any other applicable laws, rules and regulations, any visiblesubstitute for writing (including a communication sent by electronictransmission in any form through any medium), or modes of representing orreproducing words partly in one visible form and partly in another visibleform.

 

(b)           In these Articles, if not inconsistentwith the subject or context, words importing the singular number only shallinclude the plural number and vice versa, words importing any gender shallinclude all other genders and references to persons shall include corporations(acting, where applicable, by their duly authorised representatives).

 

(c)           Subject as aforesaid, any words definedin the Ordinance shall, if not inconsistent with the subject or context, bearthe same meaning in these Articles.

 

(d)           The headings and any marginal notes areinserted for convenience only and shall not affect the construction of theseArticles.

 

##### **THEOFFICE**

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3.             The Office shall be at such place in HongKong as the Directors shall from time to time appoint.

 

##### **SHARES**

 

4.             Shares may be issued with a preferential orqualified right to dividends and in the distribution of assets of the Companyand with a special, or without any right of voting.

 

5.             Without prejudice to any special rights,privileges or restrictions for the time being attached to any issued shares,any unissued or forfeited shares may be issued or re-issued upon such terms andconditions, and with such rights, privileges and restrictions attached thereto,whether in regard to dividends, voting, repayment or redemption of sharecapital, or otherwise, as the Company may, subject to the Ordinance, from timeto time determine or, in the absence of any such determination, as theDirectors shall determine.

 

6.             The Board may, subject to the approval bythe shareholders in general meeting, issue warrants to subscribe for any classof shares or securities of the Company on such terms as the Board may from timeto time determine.  Where warrants areissued to bearer, no certificate thereof shall be issued to replace one thathas been lost unless the Board is satisfied beyond reasonable doubt that theoriginal certificate thereof has been destroyed and the Company has received anindemnity in such form as the Board shall think fit with regard to the issue ofany such replacement certificate.

 

7.             Save as provided by contract or theOrdinance or these Articles to the contrary, all unissued shares shall be atthe disposal of the Directors who may allot, grant options over or otherwisedeal with or dispose

 

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of the same tosuch persons, at such times, for such consideration and generally upon suchterms and conditions as they shall in their absolute discretion think fit,provided that no shares of any class shall be issued at a discount except inaccordance with section 50 of the Ordinance.

 

8.             The Company may make arrangements on theissue of shares for a difference between the holders of such shares in theamount of calls to be paid and the time of payment of such calls.

 

9.             If by the conditions of allotment of anyshares the whole or part of the issue price thereof shall be payable byinstalments, every such instalment shall, when due, be paid to the Company bythe person who for the time being and from time to time shall be the registeredholder of the shares, or his legal personal representative.

 

10.           Subject to the provisions of section 49 ofthe Ordinance, any preference share may, with the sanction of a specialresolution, be issued on the terms that it is, or at the option of the Companyis liable, to be redeemed.

 

11.           Subject to the provisions of theseArticles, except as required by law or ordered by a court of competentjurisdiction, no person shall be recognised by the Company as holding any shareupon any trust, and except as aforesaid, the Company shall not be bound by orrequired in any way to recognise any contingent, future, partial or equitableinterest in any share or in any fractional part of a share or any other rightin respect of any share or any other claim to or in respect of any such shareon the part of any person (even when having notice thereof) except an absoluteright to the entirety thereof in the registered holder.

 

12.           The Company may in connection with theissue of any shares exercise all powers of paying interest out of capital andof paying commission and brokerage conferred or permitted by the Ordinance.

 

13.           No person shall become a member until hisname shall have been entered into the Register.

 

##### **JOINTHOLDERS OF SHARES**

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14.           Where two or more persons are registered asthe holders of any share they shall be deemed to hold the same as joint tenantswith benefit of survivorship, subject to the following provisions:

 

(a)           the Company shall not be bound to registermore than four persons as the holders of any shares except in the case of thelegal personal representatives of a deceased member;

 

(b)           the joint holders of any shares shall beliable severally as well as jointly in respect of all payments which ought tobe made in respect of such shares;

 

(c)           on the death of any one of such jointholders the survivor or survivors shall be the only person or personsrecognised by the Company as having any title to such shares, but the Directorsmay require such evidence of death as they may deem fit;

 

(d)           any one of such joint holders may giveeffectual receipts for any dividend, bonus or return of capital payable to suchjoint holders; and

 

(e)           the Company shall be at liberty to treatthe person whose name stands first in the Register as one of the joint holdersof any shares as solely entitled to delivery of the certificate relating tosuch shares, or to receive notices from the Company, or to attend or vote atgeneral meetings of the Company, and any notice given to such person shall bedeemed notice to all the joint holders; but any one of such joint holders maybe appointed the proxy of the persons entitled to vote on behalf of such jointholders, and as such proxy to attend and vote at general meetings of the Company,but if more than one of such joint holders be present at any meeting personallyor by proxy that one so present whose name stands first in the Register inrespect of such shares shall alone be entitled to vote in respect thereof.

 

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##### **SHARECERTIFICATES**

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15.           Every person whose name is entered as amember in the Register shall be entitled without payment to receive within twomonths after allotment or lodgment of an instrument of transfer duly stamped,or within such other period as the conditions of issue shall provide, onecertificate for all his shares of any particular class, or if he shall sorequest, upon payment of a fee (not exceeding HK$2.50 or such greater sum asthe Stock Exchange may from time to time permit) for every certificate after thefirst, as the Directors shall from time to time determine, such number ofcertificates for shares in Stock Exchange board lots or multiples thereof as heshall request and one for the balance (if any) of the shares in question,provided that in the event of a member transferring part of the sharesrepresented by a certificate in his name a new certificate in respect of thebalance thereof shall be issued in his name without payment and, in the case ofa share or shares held jointly by several persons the Company shall not bebound to issue a certificate or certificates to each such person, and the issueand delivery of a certificate or certificates to one of several joint holdersshall be sufficient delivery to all such holders.

 

16.           Every share certificate shall be issuedunder the Seal (which for this purpose may be any official seal as permitted bysection 73A of the Ordinance) and shall specify the number and class of sharesand, if required, the distinctive numbers thereof, to which the certificate relates,and the amount paid up thereon and may otherwise be in such form as the Boardmay from time to time determine.  If atany time the share capital of the Company is divided into different classes ofshares, every share certificate issued at that time shall comply with section57A of the Ordinance, and no certificate shall be issued in respect of morethan one class of shares.

 

17.           Subject to section 71A of the Ordinance, ifany share certificate shall be worn out, defaced, destroyed or lost, it may bereplaced on payment of such fee, if any (not exceeding HK$2.50 or such greatersum as the Stock Exchange may from time to time permit), on such evidence beingproduced as the Directors shall require, and in case of wearing out ordefacement, on delivery up of the old certificate, and in case of destructionor loss, on the execution of such indemnity (if any), as the Directors mayrequire.  In case of destruction orloss, the person to whom such replacement certificate is given shall also bearand pay to the Company all expenses incidental to the investigation by theCompany of the evidence of such destruction or loss and of the production ofsuch indemnity.

 

##### **CALLS ONSHARES**

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18.           (a)           The Directors may from time to time makecalls upon the members in respect of all moneys unpaid on their shares whetheron account of the nominal value of the shares or by way of premium but subjectalways to the terms of issue of such shares, and any such call may be madepayable by instalments.

 

(b)           Each member shall, subject to receiving atleast fourteen days’ notice specifying the time or times and place of payment,pay to the Company the amount called on his shares and at the time or times andplace so specified.  The non-receipt ofa notice of any call by, or the accidental omission to give notice of a callto, any of the members shall not invalidate the call.

 

19.           A call shall be deemed to have been made atthe time when the resolution of the Directors authorising such call waspassed.  A call may be revoked, variedor postponed as to all or any of the members liable therefor as the Directorsmay determine.  A person on whom a callis made will remain liable for calls made upon him notwithstanding thesubsequent transfer of the shares in respect whereof the call was made.

 

20.           If any part of a call is not paid before oron the day appointed for payment thereof, the person from whom the payment isdue shall be liable to pay all costs, charges and expenses that the Company mayhave incurred by reason of such non-payment together with interest on theoutstanding part thereof at such rate as the Directors shall determine (notexceeding twenty per cent. per annum) from the day appointed for the payment ofsuch call or instalment to the time of discharge thereof in full; but the Directorsmay, if they shall think fit, waive the payment of such costs, charges,expenses or interest or any part thereof.

 

21.           If, by the terms of the issue of any sharesor otherwise, any amount is made payable upon allotment or at any fixed time,whether on account of the nominal amount of the shares or by way of premium,every such amount shall be payable as if it were a call duly made and payableon the date on which by the terms of issue the same becomes payable; and allthe provisions hereof with respect to the payment

 

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of calls andinterest thereon, or to the forfeiture of shares for non-payment of calls shallapply to every such amount and the shares in respect of which it is payable inthe case of non-payment thereof.

 

22.           The Directors may, if they shall think fit,receive from any member willing to advance the same (either in money or money’sworth) all or any part of the moneys uncalled and unpaid or instalments payableupon any shares held by him; and upon all or any of the moneys so paid in advancethe Directors may (until the same would, but for such payment in advance,become presently payable) pay interest at such rate as may be agreed uponbetween the member paying the moneys in advance and the Directors (notexceeding twenty per cent. per annum). But a payment in advance of a call shall not entitle the shareholder toreceive any dividend or to exercise any other rights or privileges as ashareholder in respect of the share or the due portion of the shares upon whichpayment has been advanced by such shareholder before it is called.  The Directors may also at any time repay theamount so advanced upon giving to such member one month’s notice in writingunless before the expiration of such notice the amount so advanced shall havebeen called up on the shares in respect of which it was advanced.

 

23.           On the trial or hearing of any action forthe recovery of any money due for any call, it shall be sufficient to provethat the name of the member sued is entered in the Register as the holder, orone of the holders, of the shares in respect of which such money is due; thatthe resolution making the call is duly recorded in the minute book of theCompany; and that notice of such call was duly given to the member sued inpursuance of these Articles, and it shall not be necessary to prove theappointment of the Directors who made such call, nor any other matterwhatsoever, but the proof of the matters aforesaid shall be conclusive evidencethat the money is due.

 

24.           No member shall, unless the Directors otherwisedetermine, be entitled to receive any dividend or bonus, or to receive noticeof or to be present or vote at any general meeting, either personally or (saveas proxy for another member) by proxy, or to exercise any privileges as amember, or be reckoned in a quorum, until he shall have paid all calls or othersums for the time being due and payable on every share held by him, whetheralone or jointly with any other person, together with interest and expenses (ifany).

 

##### **FORFEITURE**

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25.           If any member fails to pay in full any callor any instalment of a call on the day appointed for payment thereof, theDirectors may at any time thereafter, during such time as any part of the callremains unpaid without prejudice to the provisions of Article 24, serve anotice on him requiring him to pay so much of the call as is unpaid togetherwith interest accrued and any expenses incurred by reason of such non-payment.

 

26.           The notice shall name a further day (notbeing less than fourteen days from the date of the notice) on or before whichsuch call or part thereof and all interest accrued and expenses incurred byreason of such non-payment are to be paid, and it shall also name the placewhere payment is to be made, such place being either the Office, or some otherplace at which calls of the Company are usually made payable.  The notice shall also state that, in theevent of non-payment at or before the time and at the place appointed, theshares in respect of which such call is payable will be liable to forfeiture.

 

27.           If the requirements with regard to paymentof any such notice as aforesaid be not complied with, any shares in respect ofwhich such notice has been given may, at any time thereafter and before thepayment required by the notice has been made, be forfeited by a resolution ofthe Directors to that effect, and any such forfeiture shall extend to alldividends and bonuses declared in respect of the shares so forfeited but notpayable until after such forfeiture. The Directors may accept surrender of any shares liable to be forfeitedhereunder and in such cases references in the Articles to forfeiture shallinclude surrender.

 

28.           Any shares so forfeited shall be deemed forthe purposes of this Article to be the property of the Company and may be sold,re-allotted or otherwise disposed of either subject to or discharged from allcalls made prior to the forfeiture, to any person, upon such terms as tosubscription price and otherwise and in such manner and at such time or timesas the Directors think fit.  For thepurpose of giving effect to any such sale or other disposition the Directorsmay authorise the transfer of the shares so sold or otherwise disposed of tothe purchaser thereof or any other person becoming entitled thereto.  The Directors shall account to the personwhose shares have been forfeited with the balance (if any) of 

 

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moniesreceived by the Company in respect of those shares after deduction of expensesof forfeiture, sale or disposal of the shares and any amount due to the Companyin respect of the shares.

 

29.           The Directors may, at any time before anyshares so forfeited shall have been sold, re-allotted or otherwise disposed of,annul the forfeiture thereof upon such conditions as they think fit or permitthe share forfeited to be redeemed upon the terms of payment of all calls andinterest due thereon and all expenses incurred in respect of the share, andupon such further terms (if any) it thinks fit.

 

30.           Any person whose shares have been forfeitedshall cease to be a member in respect of the forfeited shares but shallnotwithstanding the forfeiture be and remain liable to pay to the Company allmoneys which, at the date of forfeiture, were payable by him to the Company inrespect of the shares, together with interest thereon from the date offorfeiture until payment at such rate as the Directors may prescribe (notexceeding twenty per cent. per annum), and the Directors may enforce thepayment of such moneys or any part thereof and without any deduction orallowance for the value of the shares at the date of forfeiture, but hisliability shall cease if and when the Company shall have received payment infull of all such moneys in respect of the shares.  For the purposes of this Article any sum which, by the terms ofissue of a share payable thereon at a fixed time which is subsequent to thedate of forfeiture, whether on account of the nominal value of the share or byway of premium, shall notwithstanding that that time has not yet arrived bedeemed to be payable at the date of forfeiture, and the same shall become dueand payable immediately upon the forfeiture, but interest thereon shall only bepayable in respect of any period between the said fixed time and the date ofactual payment.

 

31.           When any shares have been forfeited, noticeof the resolution shall be given to the member in whose name it stoodimmediately prior to the forfeiture and an entry shall be made in the Registerrecording the forfeiture and the date thereof but no forfeiture shall be in anymanner invalidated by any omission or neglect to give such notice or make anysuch entry, and so soon as the shares so forfeited have been sold or otherwisedisposed of an entry shall also be made of the manner and date of the sale ordisposal thereof.

 

##### **LIEN**

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32.           The Company shall have a first andparamount lien on every share (not being a fully paid-up share) for all moneysoutstanding in respect of such share whether presently payable or not, and theCompany shall also have a first and paramount lien on every share (other than fullypaid-up shares) standing registered in the name of a member, whether singly orjointly with any other person or persons, for all the debts and liabilities ofsuch member or his estate to the Company, whether the same shall have beenincurred before or after notice has been given to the Company of any interestof any person other than such member, and whether the time for the payment ordischarge of the same shall have already arrived or not, and notwithstandingthat the same are joint debts or liabilities of such member or his estate andany other person, whether a member or not. The Company’s lien on a share shall extend to all dividends payablethereon.  The Directors may at any timeeither generally or in any particular case waive any lien that has arisen, ordeclare any share to be wholly or in part exempt from the provisions of thisArticle.

 

33.           The Company may sell in such manner as theDirectors think fit any share on which the Company has a lien, but no saleshall be made unless some sum in respect of which the lien exists is presentlypayable or the liability or engagement in respect of such lien exists is liableto be presently fulfilled or discharged, nor until the expiration of fourteendays after a notice in writing stating and demanding payment of the sumpresently payable and giving notice of intention to sell in default shall havebeen given to the holder for the time being of the share or the person entitledthereto by reason of his death, bankruptcy or winding-up or otherwise by operationof law or court order.

 

34.           The net proceeds of such sale after paymentof the costs of such sale shall be applied in or towards payment orsatisfaction of the debts or liabilities in respect whereof the lien exists sofar as the same are presently payable and any residue shall (subject to a likelien for debts or liabilities not presently payable as existed upon the sharesprior to the sale) be paid to the person entitled to the shares at the time ofthe sale.  For giving effect to any suchsale the Directors may authorise some person to transfer the shares so sold tothe purchaser thereof and may enter the purchaser’s name in the Register asholder of the shares, and the purchaser shall not be bound to see to theapplication of the purchase money, nor 

 

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shall his title to the shares be affected by anyirregularity or invalidity in the proceedings in reference to the sale.

 

35.           A statutory declaration in writing that thedeclarant is a Director or the Secretary of the Company and that a share hasbeen duly forfeited or surrendered or sold on a date stated in the declarationshall be conclusive evidence of the facts therein stated as against all personsclaiming to be entitled to the share. Such declaration and the receipt of the Company for the consideration(if any) given for the share on the sale, re-allocation or disposal thereoftogether with the share certificate delivered to a purchaser or allotteethereof shall (subject to the execution of a transfer if the same be required)constitute a good title to the share and the person to whom the share is sold,re-allotted or disposed of shall be registered as the holder of the share andshall not be bound to see to the application of the purchase money (if any) norshall his title to the share be affected by any irregularity or invalidity inthe proceedings in reference to the forfeiture, surrender, sale, re-allotmentor disposal of the share.

 

##### **TRANSFEROF SHARES**

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36.           The instrument of transfer of any shares inthe Company shall be in writing in the usual common form or in such other formas the Board may accept and may be under hand only or, if the transferor ortransferee is a Clearing House (or its nominee), by hand or by machineimprinted signature or by such other manner of execution as the Board may approvefrom time to time and shall be executed by or on behalf of the transferor andby or on behalf of the transferee.  Thetransferor shall remain the holder of the shares concerned until the name ofthe transferee is entered in the Register in respect thereof.  Nothing in these Articles shall preclude theBoard from recognising a renunciation of the allotment or provisional allotmentof any share by the allottee in favour of some other person.

 

37.           Every instrument of transfer shall belodged at the Office for registration (or at such other place the Board mayappoint for such purpose) accompanied by the certificate relating to the sharesto be transferred and such other evidence as the Directors may require inrelation thereto.  All instruments oftransfer which shall be registered shall be retained by the Company, but savewhere fraud is suspected any instrument of transfer which the Directors maydecline to register shall, on demand, be returned to the person depositing thesame.

 

38.           There shall be paid to the Company inrespect of the registration of a transfer and of any Grant of Probate orLetters of Administration, Certificate of Marriage or Death, Power of Attorneyor other document relating to or affecting the title to any share or for makingof any entry in the Register affecting the title to any share such fee (if any)as the Directors may from time to time require or prescribe (but not exceedingHK$2.50 or such greater sum as the Stock Exchange may from time to timepermit).

 

39.           The registration of transfers may besuspended at such times and for such periods as the Directors may, inaccordance with section 99 of the Ordinance, from time to time determine andeither generally or in respect of any class of shares.

 

40.           The Directors may, subject to section 69 ofthe Ordinance, at any time in their absolute discretion and without assigningany reason therefor decline to register any transfer of any share (not being afully paid-up share).  If the Directors refuseto register a transfer they shall, within two months after the date on whichthe transfer was lodged with the Company, send to the transferor and transfereenotice of the refusal.

 

41.           The Directors may also decline to registerany transfer unless:

 

(a)           the instrument of transfer is in respectof only one class of share;

 

(b)           in the case of a transfer to jointholders, the number of transferees does not exceed four;

 

(c)           the shares concerned are free of any lien in favour ofthe Company;

 

(d)           the instrument of transfer is properlystamped;

 

(e)           such other conditions as the Directorsmay from time to time impose for the purpose of

 

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guarding against losses arising from forgery aresatisfied;

 

(f)            a fee not exceeding the maximum feeprescribed or permitted from time to time by the Stock Exchange is paid to theCompany in respect thereof;

 

(g)           the instrument of transfer is accompaniedby the certificate of the shares to which it relates, and such other evidenceas the Board may reasonably require to show the right of the transferor to makethe transfer.

 

42.           No transfer may be made to an infant or toa person of unsound mind or under other legal disability.

 

##### **TRANSMISSIONOF SHARES**

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43.           In the case of the death of a member, thesurvivor or survivors where the deceased was a joint holder, and the legalpersonal representatives of the deceased where he was a sole or only survivingholder, shall be the only persons recognised by the Company as having any titleto his shares; but nothing herein contained shall release the estate of adeceased holder, whether sole or joint, from any liability in respect of anyshare solely or jointly held by him.

 

44.           Any person becoming entitled to shares inthe Company in consequence of the death, bankruptcy or winding-up of any memberor otherwise by operation of law or by court order shall, upon procuring suchevidence of his title as the Directors may require, have the right either to beregistered himself as the holder of the shares upon giving to the Companynotice in writing of such his desire or to transfer such shares to some otherperson.  All the limitations,restrictions and provisions of these Articles and the Ordinance relating to theright to transfer and the registration of transfers of shares shall beapplicable to any such notice or transfer as if the same were a transfer ofshares by a member, including the Directors’ right to refuse or suspendregistration.

 

45.           A person becoming entitled to shares in theCompany in consequence of the death, bankruptcy or winding-up of any member orotherwise by operation of law or by court order shall have the right to receiveand give a discharge for any dividends or other moneys payable in respect ofthe shares, provided always that the Directors may at any time give noticerequiring any such person to elect to be registered himself or to transfer theshares, and if the notice is not complied with within sixty days, the Directorsmay thereafter withhold payment of all dividends or other moneys payable inrespect of the shares until the requirements of the notice have been compliedwith but subject to the requirements of Article 76 being met, such a person mayvote at meetings.

 

##### **STOCK**

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46.           The Company may from time to time byordinary resolution convert any fully paid-up shares into stock and mayreconvert any stock into fully paid-up shares of any denomination.  After the passing of any resolutionconverting all the fully paid-up shares of any class in the capital of theCompany into stock, any shares of that class which subsequently become fullypaid-up and rank pari passu in all other respects with such shares shall, byvirtue of this Article and such resolution, be converted into stocktransferable in the same units as the shares already converted.

 

47.           The holders of stock may transfer the sameor any part thereof in the same manner and subject to the same regulations asthe shares from which the stock arose might prior to conversion have beentransferred or as near thereto as circumstances admit.  The Directors may from time to time fix theminimum amount of stock transferable and restrict or forbid the transfer offractions of such minimum, but the minimum shall not, without the sanction ofan ordinary resolution of the Company, exceed the nominal amount of each of theshares from which the stock arose.  Nowarrants to bearer shall be issued in respect of any stock.

 

48.           The holders of stock shall, according tothe amount of the stock held by them, have the same rights as regardsdividends, participation in assets on a winding-up, voting at general meetingsof the Company and other matters as if they held the shares from which thestock arose, but no such right (except as to participation in dividends,profits and in assets on a reduction of capital or a winding-up) shall beconferred by an amount of stock which would not, if existing in shares, haveconferred such right.

 

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49.           Such of these Articles as are applicable tofully paid-up shares shall apply mutatis mutandis to stock, and the words“share” and “shareholder” shall include “stock” and “stockholder”.

 

##### **INCREASEOF CAPITAL AND PURCHASE OF OWN SHARES**

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50.           The Company may, from time to time, byordinary resolution increase its authorised capital by such sum divided intoshares of such amounts as the resolution shall prescribe.

 

51.           The general meeting resolving upon thecreation of any new shares may direct that the same or any of them shall beoffered in the first instance, and either at par or at a premium or (subject tothe provisions of the Ordinance) at a discount, to all the holders for the timebeing of any class of shares in the capital of the Company, in proportion tothe number of shares of such class held by them respectively, or make any otherprovisions as to the issue and allotment of the new shares, and in default ofany such direction, or so far as the same shall not extend, the new sharesshall be at the disposal of the Directors, and Article 7 shall applythereto.  The Company may exercise anypowers conferred or permitted by the Ordinance or any other ordinance from timeto time to purchase or otherwise acquire its own shares and warrants (includingany redeemable shares) at any price or to give, directly or indirectly, bymeans of a loan, guarantee, the provision of security or otherwise, financialassistance for the purpose of or in connection with a purchase or otheracquisition made or to be made by any person of any shares or warrants in theCompany and should the Company purchase or otherwise acquire its own shares orwarrants neither the Company nor the Board shall be required to select theshares or warrants to be purchased or otherwise acquired ratably or in anyother particular manner as between the holders of shares or warrants of thesame class or as between them and the holders of shares or warrants of anyother class or in accordance with the rights as to dividends or capitalconferred by any class of shares provided always that (a) purchases notmade through the market or by tender shall be limited to a maximum price, and(b) if purchases are by tender, tenders shall be available to allshareholders alike and provided further that any such purchase or otheracquisition or financial assistance shall only be made or given in accordancewith any relevant rules or regulations issued by the Stock Exchange or theSecurities and Futures Commission from time to time in force.

 

52.           Subject to any direction or determinationthat may be given or made in accordance with the powers contained in theseArticles, all new shares created pursuant to Article 50 shall be subjectto the same provisions herein contained with reference to the payment of calls,transfer, transmission, forfeiture, lien and otherwise as the existing sharesof the Company.

 

##### **ALTERATIONSOF SHARE CAPITAL**

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53.           The Company may by ordinary resolution:

 

(a)           subdivide its existing shares or any ofthem into shares of smaller amount than is fixed by the Memorandum ofAssociation of the Company, provided that in the subdivision of an existingshare the proportion between the amount paid and the amount (if any) unpaid oneach reduced share shall be the same as it was in the case of the share fromwhich the reduced share is derived, and so that the resolution whereby anyshare is subdivided may determine that as between the holders of the sharesresulting from such subdivision one or more of the shares may, as compared withthe others, have any such preferred, deferred or other special rights or besubject to any such restrictions as the Company has power to attach to unissuedor new shares;

 

(b)           divide its shares into several classes andattach thereto respectively any preferential, deferred, qualified or specialrights, privileges or conditions;

 

(c)           consolidate and divide its capital or anypart thereof into shares of larger amount than its existing shares;

 

(d)           cancel any shares which at the date of thepassing of the resolution have not been taken or agreed to be taken by anyperson and diminish the amount of its authorised capital by the amount of theshares so cancelled; or

 

(e)           make provision for the issue and allotmentof shares which do not carry any voting rights.

 

----

 

54.           The Company may by special resolutionreduce its share capital and any capital redemption reserve fund or any sharepremium account in any manner allowed by law.

 

55.           Where any difficulty arises in regard toany consolidation and division under paragraph (c) of Article 53, theDirectors may settle the same as they think expedient and in particular mayarrange for the sale of the shares representing fractions and the distributionof the net proceeds of sale in due proportion amongst the members who wouldhave been entitled to the fractions, and for this purpose the Directors mayauthorise some person to transfer the shares representing fractions to thepurchaser thereof, who shall not be bound to see to the application of thepurchase money nor shall his title to the shares be affected by anyirregularity or invalidity in the proceedings relating to the sale.

 

##### **MODIFICATIONOF RIGHTS**

#####  

56.           All or any of the special rights attachedto any class or shares (unless otherwise provided for by the terms of issue ofthe shares of that class) for the time being in issue may subject to theprovisions of the Ordinance, at any time, as well before as during liquidation,be altered or abrogated either with the consent in writing of the holders ofnot less than three-fourths of the issued shares of that class or with thesanction of a special resolution passed at a separate general meeting of theholders of shares of that class, and all the provisions contained in theseArticles relating to general meetings shall mutatis mutandis apply to everysuch meeting but so that the quorum thereof shall be not less than two personsholding or representing by proxy one-third in nominal value of the issuedshares of the class, and that any holder of shares of that class present inperson or by proxy may demand a poll.

 

57.           The provisions of the foregoing Articleshall apply to the variation or abrogation of the special rights attached tosome only of the shares of any class as if each group of shares of the classdifferently treated formed a separate class the rights whereof are to bevaried.

 

58.           The special rights concurred upon theholders of the shares or class of shares shall not unless otherwise expresslyprovided in the rights attaching to or the terms of issue of such shares, bedeemed to be altered by the creation or issue of further shares ranking paripassu therewith.

 

##### **GENERALMEETINGS**

#####  

59.           The Company shall in each year hold ageneral meeting as its annual general meeting in addition to any other meetingsin that year.  The annual generalmeeting shall be held at such time (within a period of not more than fifteenmonths, or such longer period as the Registrar of Companies may authorise inwriting, after the holding of the last preceding annual general meeting) andplace as may be determined by the Directors. All other general meetings shall be called extraordinary generalmeetings.

 

60.           The Directors may wherever they think fit,and shall on requisition in accordance with the Ordinance, proceed to convenean extraordinary general meeting.

 

##### **NOTICEOF GENERAL MEETINGS**

#####  

61.           Subject to section 116C of the Ordinance,an annual general meeting and a meeting called for the passing of a specialresolution shall be called by not less than twenty-one days’ notice in writing,and any other general meeting shall be called by not less than fourteen days’notice in writing.  The notice shallspecify the place, date and time of meeting, and, in the case of special business,the general nature of that business. The notice convening an annual general meeting shall specify the meetingas such, and the notice convening a meeting to pass a special resolution shallspecify the intention to propose the resolution as a special resolution.  There shall appear on every such notice withreasonable prominence a statement that a member entitled to attend and vote isentitled to appoint one or more proxies to attend and vote instead of him andthat a proxy need not be a member of the Company.

 

62.           Notwithstanding that a meeting of theCompany is called by shorter notice than that specified in these Articles orrequired by the Ordinance, it shall be deemed to have been duly called if it isso agreed:

 

(a)           in the case of a meeting called as theannual general meeting, by all the members entitled to attend and vote thereat;and

 

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(b)           in the case of any other meeting, by amajority in number of the members having the right to attend and vote at themeeting, being a majority together holding not less than 95 per cent. innominal value of the shares giving that right.

 

63.           The accidental omission to give notice of ameeting or (in cases where instruments of proxy are sent out with the notice)the accidental omission to send such instrument of proxy to, or the non-receiptof notice of a meeting or such instrument of proxy by, any person entitled toreceive such notice shall not invalidate the proceedings at that meeting.

 

##### **PROCEEDINGSAT GENERAL MEETINGS**

#####  

64.           All business shall be deemed special thatis transacted at an extraordinary general meeting and at an annual generalmeeting with the exception of:

 

(a)           the receipt of the accounts and balancesheet and the reports of the Directors and other documents required to beannexed to the accounts;

 

(b)           the declaration and sanction of dividends;

 

(c)           the election of Directors in place of thoseretiring (if any);

 

(d)           the election or re-election of the Auditorsof the Company; and

 

(e)           the fixing of, or the determination of themethod of fixing, the remuneration or extra remuneration of the Directors andof the Auditors of the Company.

 

65.           No business save the election of a chairmanof the meeting shall be transacted at any general meeting unless a quorum ispresent when the meeting proceeds to business. Two members present in person or by proxy and entitled to vote shall bea quorum for all purposes.

 

66.           If, within thirty minutes from the timeappointed for the meeting a quorum be not present, the meeting, if convenedupon requisition in accordance with the Ordinance, shall be dissolved; but inany other case it shall stand adjourned to the same day in the next week at thesame time and place, or to such other day, time and place as the Chairman ofthe meeting may determine.  If at suchadjourned meeting a quorum be not present within thirty minutes from the timeappointed for the meeting, the member or members present in person or by proxyshall be a quorum and may transact the business for which the meeting iscalled.

 

67.           The Chairman (if any) of the Board or, inhis absence, a Deputy Chairman (if any) shall preside as Chairman at everygeneral meeting.  If there is no suchChairman or Deputy Chairman, or if at any meeting neither the Chairman nor aDeputy Chairman is present within fifteen minutes after the time appointed forholding the meeting, or if neither of them is willing to act as Chairman, theDirectors present shall choose one of their number to act, or if one Directoronly is present he shall preside as Chairman if willing to act.  If no Director is present, or if each of theDirectors present declines to act as Chairman, the persons present and entitledto vote shall elect one of their number to be Chairman of the meeting.

 

68.           The Chairman of any general meeting atwhich a quorum is present may, with the consent of the meeting, and shall, ifso directed by the meeting, adjourn the meeting from time to time and fromplace to place or sine die; but no business shall be transacted at anyadjourned meeting other than business which might have been transacted at themeeting from which the adjournment took place unless due notice thereof isgiven or such notice is waived in the manner prescribed by these Articles.  When a meeting is adjourned for thirty daysor more, or sine die, notice of the adjourned meeting shall be given as in thecase of an original meeting.  Save asaforesaid, it shall not be necessary to give any notice of an adjourned meetingor the business to be transacted thereat. Where a meeting is adjourned sine die the time and place for theadjourned meeting shall be fixed by the Directors.

 

----

 

##### **VOTING**

#####  

69.           (a)           At any general meeting a resolution put tothe vote of the meeting shall be decided on a show of hands unless (before oron the declaration of the result of the show of hands or on the withdrawal ofany other demand for a poll) a poll is demanded by:

 

(i)            the Chairman of the meeting; or

 

(ii)           at least three members present in person(or in the case of a member being a corporation, by its duly authorisedrepresentative) or by proxy and entitled to vote at the meeting; or

 

(iii)          any member or members present in person (orin the case of a member being a corporation, by its duly authorisedrepresentative) or by proxy and representing in the aggregate not less thanone-tenth of the total voting rights of all members having the right to attendand vote at the meeting; or

 

(iv)          any member or members present in person (orin the case of a member being a corporation, by its duly authorisedrepresentative) or by proxy and holding shares conferring a right to attend andvote at the meeting on which there have been paid up sums in the aggregateequal to not less than one-tenth of the total sum paid up on all sharesconferring that right.

 

(b)           Unless a poll is so demanded and the demandis not withdrawn, a declaration by the Chairman that a resolution has, on ashow of hands, been carried unanimously or by a particular majority or lostshall be final and conclusive, and an entry to that effect in the minute bookof the Company shall be conclusive evidence of the fact without proof of thenumber or proportion of the votes recorded for or against such resolution.

 

70.           A demand for a poll may be withdrawn onlywith the approval of the Chairman of the meeting, at any time before the closeof the meeting or the taking of the poll, whichever is earlier.  If a poll be directed or demanded in themanner (including the use of ballot or voting papers or tickets) abovementioned it shall (subject to the provisions of Article 72 hereof) betaken at such time (being not later than thirty days after the date of thedemand) and in such manner as the Chairman of the meeting may appoint.  No notice need be given of a poll not takenimmediately.  The result of such poll shallbe deemed for all purposes to be the resolution of the meeting at which thepoll was so directed or demanded.

 

71.           In the case of an equality of votes at anygeneral meeting, whether upon a show of hands or on a poll, the Chairman of themeeting shall be entitled to a second or casting vote.

 

72.           A poll demanded upon the election of aChairman or upon a question of adjournment shall be taken forthwith.  Any business, other than that upon which apoll has been demanded, may be proceeded with pending the taking of the poll.

 

73.           (a)           Save as expressly provided in theseArticles, no person other than a member duly registered and who shall have paideverything for the time being due from him payable to the Company in respect ofhis shares shall be entitled to be present or to vote (save as proxy foranother member) either personally or by proxy, or to be reckoned in a quorum atany general meeting.

 

(b)           No objection shall be made to the validityof any vote except at a meeting at which such vote shall be tendered and everyvote whether given personally or by proxy not disallowed at such meeting shallbe deemed valid for all purposes whatsoever of such meeting or poll.

 

(c)           In case of any dispute as to voting theChairman shall determine the same, and such determination shall be final andconclusive.

 

74.           Subject to the provisions of the Ordinance,a resolution in writing signed by all the members for the time being entitledto receive notice of and to attend and vote at general meetings shall be asvalid and effective as if the same had been passed at a general meeting of theCompany duly convened and held.  Awritten notice of confirmation of such resolution in writing signed by or onbehalf of a member shall be deemed to be his signature to such resolution inwriting for the purposes of this Article. Such 

 

----

 

resolution in writing may consist of several documentseach signed by or on behalf of one or more members.

 

##### **VOTES OFMEMBERS**

#####  

75.           Subject to Article 85 and to anyspecial rights, privileges or restrictions as to voting for the time beingattached to any class or classes of shares, every member who (being anindividual) is present in person or (being a corporation) is present by arepresentative duly authorised under section 115 of the Ordinance at anygeneral meeting shall be entitled, on a show of hands, to one vote only and, ona poll, to one vote for every fully paid-up share of which he is the holder.

 

76.           Any person entitled under Article 45to be registered as the holder of any shares may vote at any general meeting inrespect thereof in the same manner as if he were the registered holder of suchshares, provided that at least 48 hours before the time of the holding of themeeting or adjourned meeting (as the case may be) at which he proposes to vote,he shall satisfy the Board of his right to be registered as the holder of suchshares or the Board shall have previously admitted his right to vote at suchmeeting in respect thereof.

 

77.           On a poll, votes may be given eitherpersonally or by proxy and a member entitled to more than one vote need not useall his votes or cast all the votes he uses in the same way.

 

78.           A member of unsound mind, or in respect ofwhom an order has been made by any court having jurisdiction in lunacy, mayvote, whether on a show of hands or on a poll, by his committee, curator bonisor other person in the nature of a committee or curator bonis appointed by thatcourt, and such committee, curator bonis or other person may on a poll, vote byproxy.  If any member be a minor he mayvote by his guardian or one of his guardians who may give their votes personallyor by proxy.

 

78A.        Where any member is, under theListing Rules, required to abstain from voting on any particular resolution orrestricted to voting only for or only against any particular resolution, anyvotes cast by or on behalf of such member in contravention of such requirementor restriction shall not be counted.

 

##### **PROXIES**

#####  

79.           (a)           A proxy need not be a member of theCompany.

 

(b)           An instrument appointing a proxy shall bein writing in any usual or common form or in any other form which the Directorsmay accept, and shall be deemed, subject to the proviso hereinafter contained,to confer authority upon the proxy to vote on any resolution (or amendmentthereto) put to the meeting for which it is given as the proxy thinks fit.

 

Provided thatany form issued to a member for use by him for appointing a proxy to attend andvote at an extraordinary general meeting or at an annual general meeting atwhich special business (determined as provided in Article 64) is to betransacted shall be such as to enable the member according to his intention toinstruct the proxy to vote in favour of or against (or, in default ofinstructions, to exercise his discretion in respect of) each resolution dealingwith any such special business and shall, unless the contrary is statedtherein, be valid as well for any adjournment of the meeting as for the meetingto which it relates.

 

80.           The instrument appointing a proxy shall besigned by the appointor, or his duly authorised attorney, of if such appointorbe a corporation, under its common seal or signed by some officer, attorney orother person duly authorised in that behalf.

 

81.           The instrument appointing a proxy and thepower of attorney or other authority (if any) under which it is signed, or anotarially certified copy of such power or authority, shall be deposited at theOffice at least forty-eight hours before the time fixed for holding the meetingat which the person named in such instrument proposes to attend and vote or, inthe case of a poll, at least thirty-six hours before the time appointed for thetaking of the poll; otherwise the person so named shall not be entitled to voteat that meeting (or as the case may be) except with the approval of theChairman of the meeting.  No instrumentappointing a proxy shall be valid after the expiration of twelve months fromthe date of its execution, except at an adjourned meeting or on a poll demandedat a meeting or an adjourned meeting

 

----

 

in cases wherethe meeting was originally held within twelve months from such date.  Delivery of an instrument appointing a proxyshall not preclude a member from attending and voting in person at the meetingor poll concerned and, in such event, the instrument appointing a proxy shallbe deemed to be revoked.

 

82.           Any member may by power of attorney appointany person to be his attorney for the purpose of attending and voting at anymeeting, and such power may be a special power limited to any particularmeeting or a general power extending to all meetings at which such member isentitled to vote.  Every such powershall be deposited at the Office at least thirty-six hours before the timefixed for holding the meeting at which such attorney proposes to attend andvote or, in the case of a poll, at least twenty-four hours before the time appointedfor the taking of the poll; otherwise the attorney shall not be entitled tovote at that meeting (or as the case may be) except with the approval of theChairman of the meeting.

 

83.           (a)           An instrument of proxy may be revoked byforwarding to the Office written notification of such revocation signed by oron behalf of the person who issued or authorised the issue of the instrument ofproxy.

 

(b)           A vote given in accordance with the termsof an instrument of proxy or power of attorney or by the duly authorisedrepresentative of a corporation shall be valid notwithstanding the previousdeath or insanity of the principal, or revocation of the proxy or power ofattorney or other authority, or transfer of the shares in respect of which theproxy is given, provided no intimation in writing of the death, insanity,revocation or transfer shall have been received at the Office twenty-four hoursat least before the time fixed for holding the meeting, or adjourned meeting,or the taking of the poll, at which the instrument of proxy is used.

 

84.           Any corporation which is a member of theCompany may, by resolution of its Directors or other governing body or by powerof attorney, authorise such persons at it thinks fit to act as itsrepresentative at any meeting of the Company or of any class of members of theCompany, and the person so authorised shall be entitled to exercise the samepowers on behalf of the corporation which he represents as that corporationcould exercise if it were an individual member of the Company.  References in these Articles to a memberpresent in person at a meeting shall, unless the context otherwise requires,include a corporation which is a member represented at the meeting by such dulyauthorised representative.

 

85.           Without prejudice to the generality ofArticle 84 if a Clearing House (or its nominee) is a member of theCompany, it (or, as the case may be, its nominee) may authorise such person orpersons as it thinks fit to act as its proxy and proxies or representative orrepresentatives at any meeting of the Company or at any meeting of any class ofmember of the Company provided that, if more than one person is so authorised,the proxy form or authorisation shall specify the number and class of shares inrespect of which each such person is so authorised.  A person so authorised under the provisions of this Article shallbe entitled to exercise the same powers on behalf of the Clearing House (or itsnominee) which he represents as that Clearing House (or its nominee) couldexercise if it were an individual member of the Company and, on a show ofhands, each such person shall be entitled to a separate vote.

 

##### **DIRECTORS**

#####  

86.           Unless and until otherwise determined by anordinary resolution of the Company, the Directors shall be not fewer than twoin number, and there shall be no maximum number of Directors.

 

87.           The Company shall keep in accordance withthe Ordinance a register containing the names and addresses and occupations ofits Directors and shall from time to time notify to the Registrar of Companiesany change that takes place in such Directors as required by the Ordinance.

 

88.           A Director need not hold any shares in theCompany.  A Director who is not a memberof the Company shall nevertheless be entitled to attend and speak at generalmeetings.

 

##### **DIRECTORS’REMUNERATION**

#####  

89            (a)           The Directors shall be entitled to receiveby way of remuneration for their services such sum as is from time to timedetermined by the Company in general meeting, such sum (unless 

 

----

 

otherwisedirected by resolution by which it is voted) is to be divided amongst theDirectors in such proportions and in such manner as the Board may agreed, orfailing agreement, equally, except that in such event any Director holdingoffice for less than the whole of the relevant period in respect of which theremuneration is paid shall only rank in such division in proportion to the timeduring such period for which he has held office.  The foregoing shall not apply to a Director who holds anysalaried employment or office in the Company in the case of sums paid inrespect of directors’ fees.

 

(b)           The Directors shall also be entitled to berepaid their reasonable travelling, hotel and other expenses incurred by themin or about the performance of their duties as Directors, including theirexpenses of travelling to and from board meetings, committee meetings orgeneral meetings or otherwise incurred whilst engaged on the business of theCompany or on the discharge of their duties as directors.

 

90.           The Directors may award specialremuneration out of the funds of the Company (by way of salary, commission orotherwise as the Directors may determine) to any Director who performs serviceswhich in the opinion of the Directors are outside the scope of the ordinaryduties of a Director.

 

##### **POWERSOF DIRECTORS**

#####  

91.           The Directors may establish any localboards or agencies for managing any of the affairs of the Company, either inHong Kong or elsewhere, and may appoint any persons to be members of such localboards, or any managers or agents for the Company, and may fix theirremuneration, and may delegate (with or without power to sub-delegate as theDirectors shall determine) to any local board, manager or agent any of thepowers, authorities and discretions vested in the Directors, and may authorisethe members of any local boards, or any of them, to fill any vacancies therein,and to act notwithstanding vacancies, and such appointment or delegation may bemade upon such terms and subject to such conditions as the Directors may thinkfit, and the Directors may remove any person so appointed and may annul or varyany such delegation, but no person dealing in good faith and without notice ofany such annulment or variation shall be affected thereby.

 

92.           The Directors may from time to time and atany time by power of attorney or other instrument appoint any company, firm orperson or any fluctuating body of persons, whether nominated directly orindirectly by the Board, to be the attorney or attorneys of the Company forsuch purposes and with such powers, authorities and discretions (not exceedingthose vested in or exercisable by the Directors under these Articles) and forsuch period and subject to such conditions as they may think fit, and any suchpower of attorney or other instrument may contain such provisions for theprotection and convenience of persons dealing with any such attorney as theDirectors may think fit, and may also authorise any such attorney tosub-delegate all or any of the powers, authorities and discretions vested inhim.  The Company may, by writing underits seal, empower any person, either generally or in respect of any specifiedmatter, as its attorney to execute deeds and instruments on its behalf and toenter into contracts and sign the same on its behalf and every deed signed bysuch attorney on behalf of the Company and under his seal shall bind theCompany and have the same effect as if it were under the seal of the Company.

 

93.           Subject to and to the extent permitted bythe Ordinance, the Company or the Directors on behalf of the Company, may causeto be kept in any territory a Branch Register of members resident in suchterritory, and the Directors may make and vary such regulations as they maythink fit respecting the keeping of any such Branch Register.

 

94.           All cheques, promissory notes, drafts,bills of exchange, and other negotiable or transferable instruments, and allreceipts for moneys paid to the Company, shall be signed, drawn, accepted,endorsed, or otherwise executed, as the case may be, in such manner as theDirectors shall from time to time by resolution determine.  The Company’s bank accounts shall be keptwith such banker or bankers as the Board shall from time to time determine.

 

95.           (a)           The Directors may exercise all the powersof the Company to borrow money and to mortgage or charge all or any part of theundertaking, property and assets (present and future) and uncalled capital ofthe Company and to issue debentures, debenture stocks, bonds and othersecurities, whether outright or as collateral security for any debt, liabilityor obligation of the 

 

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Company or ofany third party.  Debentures, debenturestocks, bonds and other securities of the Company may be made assignable freefrom any equities between the Company and the person to which the same may beissued, and may be issued at a discount, premium or otherwise and with anyspecial privileges as to redemption, surrender, drawings, allotment of shares,attending and voting at general meetings of the Company, appointment ofDirectors and otherwise.

 

(b)           The Directors shall cause a proper registerto be kept, in accordance with the provisions of the Ordinance, of allmortgages and charges affecting the property of the Company and shall dulycomply with the requirements of the Ordinance in regard to the registration ofmortgages and charges therein specified and otherwise.  Where any uncalled capital of the Company ischarged, all persons taking any subsequent charge thereon shall take the samesubject to such prior charge, and shall not be entitled, by notice to themembers or otherwise, to obtain priority over such prior charge.

 

96.           The Board may establish and maintain orprocure the establishment and maintenance of any contributory ornon-contributory pension or superannuation funds for the benefit of, or give orprocure the giving of donations, gratuities, pensions, allowances or emolumentsto any persons who are or were at any time in the employment or service of theCompany, or of any company which is a subsidiary of the Company, or is alliedor associated with the Company or with any such subsidiary company, or who areor were at any time directors or officers of the Company or of any such othercompany as aforesaid, and holding or who have held any salaried employment oroffice in the Company or such other company, and the wives, widows, familiesand dependants of any such persons.  TheBoard may also establish and subsidise or subscribe to any institutions,associations, clubs or funds calculated to be for the benefit of or to advancethe interests and well being of the Company or of any such other company asaforesaid or of any such persons as aforesaid, and may make payments for ortowards the insurance of any such persons as aforesaid, and subscribe orguarantee money for charitable or benevolent objects or for any exhibition orfor any public, general or useful object. The Board may do any of the matters aforesaid, either alone or inconjunction with any such other company as aforesaid.  Any Director holding any such employment or office shall beentitled to participate in and retain for his own benefit any such donation,gratuity, pension, allowance or emolument.

 

##### **APPOINTMENTAND REMOVAL OF DIRECTORS**

#####  

97.           At each annual general meeting one-third ofthe Directors for the time being, or, if their number is not three or amultiple of three, then the number nearest one-third, shall retire from officeby rotation save any Director holding office as Chairman or Chief ExecutiveOfficer.  The Directors to retire inevery year shall be those who have been longest in office since their lastelection but as between persons who became Directors on the same day shall(unless they otherwise agree between themselves) be determined by lot.  The retiring Directors shall be eligible forre-election.  The Company at any generalmeeting at which any Directors retire may fill the vacated offices.  No person other than a Director retiring atthe meeting shall, unless recommended by the Directors for election, beeligible for election as a Director at any general meeting unless during a periodof not less than seven (7) days commencing no earlier than the day after thedispatch of the notice of the meeting appointed for such election and ending nolater thanseven (7) days before the date appointed for the meeting there shall have beenlodged at the Office or at the head office of the Company a Notice signed by aMember (other than the person to be proposed) duly qualified to attend and voteat the meeting for which such notice is given of his intention to propose suchperson for election and also a Notice signed by the person to be proposed ofhis willingness to be elected.

 

98.           If at any general meeting at which anelection of Directors ought to take place the places of the retiring Directorsare not filled, the retiring Directors or such of them as have not had theirplaces filled shall be deemed to have been re-elected and shall, if willing,continue in office until the next annual general meeting and so on from year toyear until their places are filled, unless:

 

(i)            it shall be determined at such meeting toreduce the number of Directors;

 

(ii)           it is expressly resolved at such meetingnot to fill such vacated offices;

 

(iii)          in any such case the resolution forre-election of a Director is put to the meeting and lost; or

 

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(iv)          such Director has given notice in writingto the Company that he is not willing to be re-elected.

 

99.           The Company may, from time to time, byordinary resolution elect any person to be a Director either to fill a casualvacancy or as an addition to the Board.

 

100.         The Company may by ordinary resolutionremove any Director notwithstanding anything in these Articles or in anyagreement between him and the Company (but without prejudice to any right todamages for termination of such agreement not in accordance with the termsthereof), and may, if thought fit, by ordinary resolution appoint anotherperson in his stead.  Any person soelected shall hold office for such time only as the Director in whose place heis elected would have held the same if he had not been removed.

 

101.         The Directors shall have power, exercisableat any time and from time to time, to appoint any other person as a Director,either to fill a casual vacancy or as an addition to the Board but so that thenumber of Directors so appointed shall not exceed the maximum number determinedfrom time to time (if any) by the shareholders in general meeting and anydirectors so appointed shall hold office only until the next following annualgeneral meeting of the Company and shall then be eligible for re-election, butshall not be taken into account in determining the Directors or the number ofDirectors who are to retire by rotation at each annual general meeting.

 

102.         The continuing Directors may actnotwithstanding any vacancy in their body, but if and so long as the number ofDirectors is reduced below the number fixed by or pursuant to these Articles asthe necessary quorum of Directors, the continuing Directors may act for thepurpose of increasing the number of Directors to that number, or of summoning ageneral meeting of the Company, but for no other purpose.  If there shall be no Directors able orwilling to act, then any two members may summon a general meeting for thepurpose of appointing Directors.

 

103.         No person other than a retiring Directorshall, unless recommended by the Board for re-election, be eligible forelection to the office of Director at any annual general meeting unless noticein writing for the intention to propose that person for election as a Directorand notice in writing by that person of his consent to be elected, shall havebeen lodged at the Office or head office of the Company at least seven daysbefore the date of the annual general meeting.

 

##### **ALTERNATEDIRECTORS**

#####  

104.         Each Director may by written notificationto the Company nominate any other person to act as alternate Director in hisplace and at his discretion in similar manner remove such alternateDirector.  If such person is not anotherDirector, such appointment, unless previously approved by the Board, shall haveeffect only upon and subject to being so approved.  The alternate Director shall (except as regards the power toappoint an alternate) be subject in all respects to the terms and conditionsexisting with reference to the other Directors of the Company; and eachalternate Director, whilst acting as such, shall exercise and discharge all thefunctions, powers and duties of the Director he represents, but shall look tosuch Director solely for his remuneration as alternate Director.  Every person acting as an alternate Directorshall (except when absent from Hong Kong) be entitled to receive notices ofmeetings of the Board and shall have one vote for each Director for whom heacts as alternate at any such meeting at which the Director appointing him isnot personally present (in addition to his own vote if he is also aDirector).  The signature of analternate Director to any resolution in writing of the Board or a committee ofthe Board shall, unless the notice of his appointment provides to the contrary,be as effective as the signature of his appointor.  Any person appointed as an alternate Director shall vacate hisoffice as such alternate Director if and when the Director by whom he has beenappointed removes him or vacates office as Director.  Every person acting as an alternate Director shall be deemed tobe the agent of and for the Director appointing him and shall, withoutprejudice to any liability which he may cause to his appointor under theOrdinance or otherwise, be responsible to the Company for his own acts anddefaults.  To such extent as the Boardmay from time to time determine in relation to any committee of the Board, theforegoing provisions of this paragraph shall also apply mutatis mutandis to anymeeting of any committee of which his appointor is a member.  An alternate Director shall not, save asaforesaid, have power to act as a Director nor shall he be deemed to be aDirector for the purposes of these Articles.

 

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##### **DISQUALIFICATIONOF DIRECTORS**

#####  

105.         The office of a Director shall ipso factobe vacated:

 

(a)           if he becomes prohibited by law or courtorder from being a Director;

 

(b)           if a receiving order is made against him orhe makes any arrangement or composition with his creditors;

 

(c)           if he becomes of unsound mind;

 

(d)           if he absents himself from the meetings ofthe Board during a continuous period of six months, without special leave ofabsence from the Board, and his alternate Director (if any) shall not duringsuch period have attended in his stead, and the Board passes a resolution thathe has by reason of such absence vacated his office;

 

(e)           if he shall be removed from office bynotice in writing served upon him signed by all his co-directors;

 

(f)            if he resigns his office;

 

(g)           if he is removed by an ordinary resolutionof the Company; or

 

(h)           if he is convicted of an indictableoffence.

 

##### **DIRECTORS’INTERESTS**

#####  

106.         If a Director or any of his associates isin any way, whether directly or indirectly, interested in a contract,transaction or arrangement or proposed contract, transaction or arrangementwith the Company, the Director shall declare the nature of his interest or theinterest of any of his associates at the earliest meeting of the Board at whichit is practicable for him so to do notwithstanding that the question ofentering into the contract, transaction or arrangement is not taken intoconsideration at that meeting.  Ageneral notice given to the Board by a Director stating that, by reason offacts specified in the notice, he or any of his associates is to be regarded asinterested in a contract, transaction or arrangement of any description whichmay subsequently be made by the Company, that notice shall be a sufficientdeclaration of his interest or the interest of such of his associates, so faras attributable to those facts, in relation to any contract, transaction orarrangement of that description which may subsequently be made by the Company;but no such general notice shall have effect in relation to any contract,transaction or arrangement unless it is given before the date on which thequestion of entering into the contract, transaction or arrangement is firsttaken into consideration on behalf of the Company.  Without prejudice to the generality of the foregoing, a Directorshall give notice to the Company of such matters relating to himself as may benecessary for the purposes of sections 155B, 158, 161 and 161B of theOrdinance.

 

107.         A Director may hold any other office orplace of profit under the Company (other than the office of Auditor), and he orany firm of which he is a member may act in a professional capacity for theCompany in conjunction with his office of Director, for such period and on suchterms (as to remuneration and otherwise) as the Directors may determine andsuch extra remuneration shall be in addition to any remuneration provided forby or pursuant to any other Article.  NoDirector or intended Director shall be disqualified by his office fromcontracting with the Company, nor shall any contract or arrangement enteredinto by or on behalf of the Company with any Director or any firm or company inwhich any Director is in any way interested be liable to be avoided, nor shallany Director so contracting or being so interested be liable to account to theCompany for any profit, remuneration or other benefits realised by any suchcontract or arrangement by reason only of such Director holding that office orof any fiduciary relationship thereby established, provided that such Directorshall disclose the nature of his interest in any contract or arrangement inwhich he is interested at the meeting of the board at which the question ofentering into the contract or arrangement is first taken into consideration, ifhe knows his interest then exists, or in any other case at the first meeting ofthe Board after he knows that he is or has become so interested.

 

----

 

 

108.         A Director shall not vote (nor shall he becounted in the quorum) on any resolution of the Board approving any contract or**4(1) Note 1**arrangement or proposal inwhich he or any of his associates is to his knowledge materially interested, and if heshall do so his vote shall not be counted (nor shall he be counted in thequorum for that resolution), but this prohibition shall not apply to any of thefollowing matters, namely:

 

(i)            any contract or arrangement for thegiving by the Company of any security or indemnity to the Director or any ofhis associates in respect of money lent or obligations incurred or undertakenby him or any of them at the request of or for the benefit of the Company orany of its subsidiaries;

(ii)           any contract or arrangement for thegiving by the Company of any security to a third party in respect of a debt orobligation of the Company or any of its subsidiaries for which the Director orany of his associates has assumed responsibility in whole or in part andwhether alone or jointly under a guarantee or indemnity or by the giving ofsecurity;

(iii)          anyproposal concerning an offer of the shares or debentures or other securities ofor by the Company or any other company which the Company may promote or beinterested in for subscription or purchase where the Director or any of hisassociates is or is to be interested as a participant in the underwriting orsub-underwriting of the offer;

(iv)          any contract or arrangement in which theDirector or any of his associates is interested in the same manner as otherholders of shares or debentures or other securities of the Company by virtueonly of his or their interest in shares or debentures or other securities ofthe Company;

(v)           any proposal concerning any other companyin which the Director or any of his associates is interested only, whetherdirectly or indirectly, as an officer or a shareholder or in which the Directoror any of his associates is beneficially interested in shares of that companyother than a company in which the Director and any of his associates are inaggregate beneficially interested in five per cent. or more of the issuedshares of any class of the equity share capital of such company (or of anythird company through which such interest is derived) or of the voting rights(excluding for the purpose of calculating such five per cent. interest anyindirect interest of such Director or any of his associates by virtue of aninterest of the Company in such company);

(vi)          any proposal or arrangement for thebenefit of employees of the Company or its subsidiaries including the adoption,modification or operation of a pension fund or retirement, death or disabilitybenefit scheme which relates to Directors, their associates and employees ofthe Company or of any of its subsidiaries and does not give in respect of anysuch Director or any of his associates any privilege or advantage not generallyaccorded to the class of persons to whom such scheme or fund relates;

(vii)         anyproposal or arrangement concerning the adoption, modification or operation ofany employees’ share scheme involving the issue or grant of options over sharesor other securities by the Company to, or for the benefit of, the employees ofthe Company or its subsidiaries under which the Director or any of hisassociates may benefit.

 

If anyquestion shall arise at any meeting of the Board as to the materiality of theinterest of a Director (other than the Chairman of the meeting) or any of hisassociates or as to the entitlement of any Director (other than such Chairman)to vote or be counted in the quorum and such question is not resolved by hisvoluntarily agreeing to abstain from voting or not to be counted in the quorum,such question shall be referred to the Chairman of the meeting and his rulingin relation to such other Director or any of his associates shall be final andconclusive except in a case where the nature or extent of the interest of theDirector concerned or any of his associates as known to such Director has notbeen fairly disclosed to the Board.  Ifany question as aforesaid shall arise in respect of the Chairman of the meetingor any of his associates such question shall be decided by a resolution of theBoard (for which purpose such Chairman shall not be counted in the quorum andshall not vote thereon) and such resolution shall be final and conclusiveexcept in a case where the nature or extent of the interest of such Chairman orany of his associates as known to such chairman has not been fairly disclosedto the Board.

 

109.         A Director may continue to be or become adirector, managing director, joint managing director, executive director, chiefexecutive officer or manager or other officer or member of any other company inwhich the Company is interested, and (unless otherwise agreed) shall not beliable to account to the Company for any remuneration or other benefitsreceived by him as a director, managing director, joint managing director,executive director, chief executive officer, manager or other officer or memberof any such other company.  The Boardmay exercise the voting powers conferred by the shares in any 

 

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other companyheld or owned by the Company or exercisable by it as directors of such othercompany in such manner as in all respects as the Board thinks fit (includingthe exercise thereof in favour of any resolution appointing themselves or anyof them directors, chief executive officers, managing directors, joint managingdirectors, deputy managing directors, executive directors, managers or otherofficers of such company) and any director may vote in favour of the exerciseof such voting rights in manner aforesaid notwithstanding that he may be, or beabout to be, appointed a director, managing director, joint managing director,deputy managing director, executive director, chief executive officer, manageror other officer of such a company, and that as such he is or may becomeinterested in the exercise of such voting rights in manner aforesaid.  A Director of the Company may be or become adirector of any company promoted by the Company or in which it may beinterested as a vendor, shareholder or otherwise and no such Director will beaccountable for any benefits received as a director or member of suchcompany.  A Director of the Company orhis firm may not act as auditor of the Company.

 

##### **CHIEFEXECUTIVE OFFICERS AND OTHER APPOINTMENTS**

#####  

110.         The Directors may, from time to time,appoint one or more of their number to be Chief Executive Officer or JointChief Executive Officer of the Company, or to hold such office in themanagement, administration or conduct of the business of the Company as theymay decide, and for such period and upon such terms and for such remunerationas the Directors shall think fit, and the Directors may also, from time to time(subject to the provisions of any agreement between him or them and theCompany) remove him or them from office, and appoint another or others in hisor their place or places.

 

111.         A Chief Executive Officer or a Joint ChiefExecutive Officer (subject to the provisions of any agreement between him andthe Company) shall be subject to the same provisions as to resignation andremoval as the other Directors of the Company, and shall ipso facto andimmediately cease to be Chief Executive Officer or Joint Chief ExecutiveOfficer if he shall cease to hold the office of Director.

 

112.         The Directors may, from time to time,entrust to and confer upon any Chief Executive Officer, Joint Chief ExecutiveOfficer or Director, holding any other office in the management, administrationor conduct of the business of the Company, such of the powers exercisable underthese Articles by the Directors as they may think fit, and may confer suchpowers for such time, and to be exercised for such objects and purposes, andupon such terms and conditions and with such restrictions as they may considerexpedient, and may from time to time revoke, withdraw, alter or vary all or anyof such powers.

 

##### **PROCEEDINGSOF DIRECTORS**

#####  

113.         The Directors may meet together for thedespatch of business, adjourn and otherwise regulate their meetings as theythink fit, and determine the quorum necessary for the transaction ofbusiness.   Until otherwise determinedby the Board, two Directors shall constitute a quorum.  For the purpose of this Article an alternateDirector shall be counted in a quorum but, notwithstanding that an alternateDirector is also a Director or is an alternate for more than one Director, heshall for quorum purposes count as only one Director.  Matters arising at any meeting shall be decided by a majority ofvotes.  In case of an equality of votesthe Chairman of the meeting shall have a second or casting vote.  A Director or the Secretary may, at anytime, summon a meeting of the Directors. A meeting of the Board or any committee of the Board may be held bymeans of such telephone, electronic or other communication facilities as permitall persons participating in the meeting to communicate with each other simultaneouslyand instantaneously, and participation in such a meeting shall constitutepresence in person at such meeting.

 

114.         Notice of a meeting of Directors shall bedeemed to be duly given to a Director if it is given to him personally, inwriting or by word of mouth, or sent to him at his last known address or anyother address given by him to the Company for this purpose provided that noticeneed not be given to any Director or alternate Director for the time beingabsent from Hong Kong.  A Director mayconsent to short notice of and may waive notice of any meeting and any suchwaiver may be retrospective.

 

115.         The Directors may elect a Chairman of theBoard and determine the period for which he is to hold office; but if no suchChairman be elected, or if at any meeting the Chairman be not present withinfive minutes after the time appointed for holding the same, the Directorspresent shall choose one of their number to be Chairman of such meeting.

 

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116.         A resolution in writing signed by all theDirectors except such as are absent from Hong Kong or temporarily unable to actthrough ill health or disability (or their alternate Directors) shall (so longas they constitute a quorum) be as effective for all purposes as a resolutionof the Directors passed at a meeting duly convened, held and constituted.  A written notification of confirmation ofsuch resolution in writing signed by a Director shall be deemed to be hissignature to such resolution in writing for the purposes of this Article.  Such resolution in writing may consist ofseveral documents, each signed by one or more Directors.

 

117.         A meeting of the Directors at which aquorum is present shall be competent to exercise all the powers, authoritiesand discretions for the time being vested in or exercisable by the Boardgenerally.

 

118.         The Directors may, from time to time,appoint committees consisting of such one or more persons as they think fit,and may delegate any of their powers to any such committee and, from time totime, revoke any such delegation and discharge any such committee wholly or inpart.  Any committee so appointed shall,in the exercise of the powers so delegated, conform to any regulations thatmay, from time to time, be imposed upon it by the Directors.  All acts done by any such committee inconformity with such regulations and in fulfilment of the purposes for which itis appointed, but not otherwise, shall have the like force and effect as ifdone by the Board, and the Board shall have power, with the consent of the Companyin general meeting, to remunerate the members of any special committee, andcharge such remuneration to the current expenses of the Company.

 

119.         The meetings and proceedings of any suchcommittee consisting of two or more members shall be governed mutatis mutandisby the provisions of these Articles regulating the meetings and proceedings ofthe Directors, insofar as the same are not superseded by any regulations madeby the Directors under the last preceding Article.

 

120.         All acts done bona fide by any meeting ofthe Directors or of a committee of Directors, or by any persons acting asDirectors, shall, notwithstanding that there was some defect in the appointmentof any such Directors or persons acting as aforesaid, or that they or any ofthem were disqualified, or had vacated office, be as valid as if every suchperson had been duly appointed and was qualified and continued to be aDirector.

 

##### **MINUTES**

#####  

121.         The Directors shall cause to be entered andkept in books provided for the purpose minutes of the following:

 

(a)           all appointments of officers;

 

(b)           all the names of the Directors and anyalternate Director who is not also a Director present at each meeting of theDirectors and of any committee; and

 

(c)           all resolutions and proceedings ofgeneral meetings and of meetings of the Directors and committees.

 

Any suchminutes of any meeting of the Directors, or of any committee, or of theCompany, if purporting to be signed by the Chairman of such meeting, or by theChairman of the next succeeding meeting shall be receivable as evidence of theproceedings of such meeting.

 

##### **THE SEAL**

#####  

122.         The Directors shall procure a common sealto be made for the Company, and shall provide for the safe custodythereof.  The Seal shall not be affixedto any instrument except by the authority of the Directors or a committeeauthorised by the Board in that behalf, and every instrument to which the Sealshall be affixed shall be signed by one Director or some other person nominatedby the Directors for the purpose, provided that the Board may either generallyor in any particular case or cases resolve (subject to such restrictions as tothe manner in which the seal may be affixed as the Board may determine) thatsuch signature may be affixed to certificates for shares or debentures orrepresenting any other form of security by some mechanical means other thanautographic to be specified in such resolution or that such certificates needsnot be signed by any person.  Everyinstrument executed in 

 

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mannerprovided by this Article shall be deemed to be sealed and executed with theauthority of the Directors previously given.

 

123.         The Company may have an official seal foruse for sealing certificates for shares or other securities issued by theCompany as permitted by section 73A of the Ordinance (and no signature of anyDirector, officer or other person and no mechanical reproduction thereof shallbe required on any such certificates or other document to which such officialseal is affixed and such certificates or other document shall be valid anddeemed to have been sealed and executed with the authority of the Boardnotwithstanding the absence of any such signature or mechanical reproduction asaforesaid) and an official seal for use abroad under the provisions of theOrdinance where and as the Board shall determine, and the Company may bewriting under the seal appoint any agents or agent, committees or committeeabroad to be the duly authorised agents of the Company for the purpose ofaffixing and using such official seal and may impose such restrictions on theuse thereof as may be thought fit. Wherever in these Articles reference is made to the seal, the referenceshall, when and so far as may be applicable, be deemed to include any suchofficial seal as aforesaid.

 

124.         The Company may exercise all the powers ofhaving official seals conferred by the Ordinance and such powers shall bevested in the Directors.

 

##### **SECRETARY**

#####  

125.         The Directors shall appoint such person,persons or entities to be Secretary or Joint Secretaries of the Company forsuch period, at such remuneration and upon such conditions as they may thinkfit, and any Secretary or Joint Secretaries so appointed may be removed bythem.  Anything by the Ordinance orthese Articles required or authorised to be done by or to the Secretary orJoint Secretaries, if the office is vacant or there is for any other reason noperson capable of acting in the capacity as Secretary or Joint Secretaries, maybe done by or to any assistant or deputy Secretary, or if there is no assistantor deputy Secretary capable of acting, by or to any officer of the Companyauthorised generally or specially in that behalf by the Board.

 

##### **DIVIDENDSAND RESERVES**

#####  

126.         The Company may by ordinary resolutiondeclare dividends but no such dividend shall exceed the amount recommended bythe Directors.

 

127.         Unless and to the extent that the rightsattached to any shares or the terms of issue thereof otherwise provide, alldividends shall (as regards any shares not fully paid throughout the period inrespect of which the dividend is paid) be apportioned and paid pro rataaccording to the amounts paid on the shares during any portion or portions ofthe period in respect of which the dividend is paid.  For the purposes of this Article no amount paid on a share inadvance of calls shall be treated as paid on the share.

 

128.         The Directors may retain any dividend orother monies payable on or in respect of a share on which the Company has alien, and may apply the same in or towards satisfaction of the debts andliabilities in respect of which the lien exists.  The Board may deduct from any dividend or bonus payable to anymember all sums of money (if any) presently payable by him to the Company onaccount of calls, instalments or otherwise.

 

129.         Any resolution declaring a dividend onshares of any class, whether a resolution of the Company in general meeting ora resolution of the Directors, may specify that the same shall be payable tothe persons registered as the holders of such shares at the close of businesson a particular date, notwithstanding that it may be a date prior to that onwhich the resolution is passed, and thereupon the dividend shall be payable tothem in accordance with their respective holdings so registered, but withoutprejudice to the rights inter se in respect of such dividend of transferors andtransferees of any such shares.  Theprovisions of this Article shall mutatis mutandis apply to capitalisations tobe effected in pursuance of these Articles.

 

130.         Any general meeting sanctioning a dividendmay make a call on the members of such amount as the meeting fixes, but so thatthe call on each member shall not exceed the dividend payable to him, and so 

 

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that the callshall be made payable at the same time as the dividend, and the dividend may,if so arranged between the Company and the member, be set off against the call.

 

131.         (a)           In respect of any dividend which the Boardhas resolved to pay or any dividend declared or sanctioned or proposed to bedeclared or sanctioned by the Board or by the Company in general meeting, theBoard may determine and announce, prior to or contemporaneously with theannouncement, declaration or sanction of the dividend in question:

 

either

 

(i)            that shareholders entitled thereto willreceive in lieu of such dividend (or such part thereof as the Board may thinkfit) an allotment of shares credited as fully paid provided that theshareholders are at the same time accorded the right to elect to receive suchdividend (or part thereof as the case may be) in cash in lieu of suchallotment.  In such case, the followingprovisions shall apply:

 

(A)          the basis of any such allotment shall bedetermined by the Board;

 

(B)           the Board, after determining the basis ofallotment and notwithstanding that the number of shares to be allotted may notbe calculated until after notice to the shareholders has been given as requiredby the provisions of this sub-paragraph and subject to the provisions ofsub-paragraph (D) below, shall give notice in writing to the shareholders of theright of election accorded to them and shall send with such notice forms ofelection and specify the procedure to be followed and the place at which andthe latest date and time by which duly completed forms of election must belodged in order to be effective which shall be not less than two weeks from thedate on which the notice above referred to was despatched to the shareholders;

 

(C)           the right of election accorded toshareholders as aforesaid may be exercised in whole or in part;

 

(D)          the Board may resolve:

 

(I)            that the right of election accorded toshareholders as aforesaid may be exercised so as to take effect on all futureoccasions (if any) when the Board makes a determination pursuant tosub-paragraph (i) of this paragraph (a); and/or

 

(II)           that a shareholder who does not exercisethe right of election accorded to him as aforesaid either in whole or in partmay notify the Company that he will not exercise the right of election accordedto him in respect of all future occasions (if any) when the Board makes adetermination pursuant to sub-paragraph (i) of this paragraph (a) of thisArticle.

 

Provided that a shareholder may exercise such election or give suchnotice in respect of all but not some of the shares held by him and may at anytime give seven days notice in writing to the Company of the revocation of suchan election or such a notice which revocation shall take effect at the expiryof such seven days, and until such revocation has taken effect, the Board shallnot be obligated to give to such shareholder notice of the right of electionaccorded to him or send to him any form of election;

 

(E)           the dividend (or that part of thedividend in lieu of which an allotment of shares is to be made as aforesaid)shall not be payable in cash on shares in respect whereof the cash election hasnot been duly exercised (the “Non-Elected Shares”) and in lieu thereof sharesshall be allotted credited as fully paid to the holders of the Non-ElectedShares on the basis of allotment determined as aforesaid and for such purposethe Board shall capitalise and

 

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apply out of the amount standing to the credit of share premium accountor out of any part of the undivided profits of the Company (including profitscarried and standing to the credit of any reserve or reserves or other specialaccount) as the Board may determine, a sum equal to the aggregate nominalamount of shares to be allotted on such basis and apply the same in paying upin full the appropriate number of unissued shares for allotment and distributionto and amongst the holders of the Non-Elected Shares on such basis;

 

(F)           the Board may resolve that the shares tobe allotted shall be allotted at a premium provided that the premium iscredited as fully paid up and in such case the Board shall in addition to theamount to be capitalised and applied pursuant to sub-paragraph (E) above, andfor the purposes therein set out, capitalise and apply out of the amountstanding to the credit of the share premium account or out of any part of theundivided profits of the Company (including profits carried and standing to thecredit of any reserve or reserves or other special account) as the Directorsmay determine, a sum equal to the aggregate amount of the premium on the sharesto be allotted and shall apply the same together with the sum to be appliedpursuant to sub-paragraph (E) above and on the basis therein set out in payingup in full the appropriate number of unissued shares for allotment anddistribution to and amongst the holders of the Non-Elected Shares;

 

or

 

(ii)           that shareholders entitled to suchdividend be entitled to elect to receive an allotment of shares credited asfully paid in lieu of the whole or such part of the dividend as the Board maythink fit.  In such case, the followingprovisions shall apply:

 

(A)          the basis of any such allotment shall bedetermined by the Board;

 

(B)           the Board, after determining the basis ofallotment and notwithstanding that the number of shares to be allotted may notbe calculated until after notice to the shareholders has been given as requiredby the provisions of this sub-paragraph and subject to the provisions ofsub-paragraph (D) below, shall give notice in writing to the shareholders ofthe right of election accorded to them and shall send with such notice forms ofelection and specify the procedure to be followed and the place at which andthe latest date and time by which duly completed forms of election must belodged in order to be effective which shall be not less than two weeks from thedate on which the notice above referred to was despatched to the shareholders;

 

(C)           the right of election accorded toshareholders as aforesaid may be exercised in whole or in part;

 

(D)          the Board may resolve;

 

(I)            that the right of election accorded toshareholders as aforesaid may be exercised so as to take effect on all futureoccasions (if any) when the Board makes a determination pursuant tosub-paragraph (ii) of this paragraph (a); and/or

 

(II)           that a shareholder who does not exercisethe right of election accorded to him as aforesaid either in whole or in partmay notify the Company that he will not exercise the right of election accordedto him in respect of all future occasions (if any) when the Board makesdetermination pursuant to sub-paragraph (ii) of paragraph (a).

 

Provided that a shareholder may exercise such election or give suchnotice 

 

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in respect of all but not some of the shares held by him and may at anytime give seven days notice in writing to the Company of the revocation of suchan election or such a notice which revocation shall take effect at the expiryof such seven days, and until revocation has taken effect, the Board shall notbe obliged to give to such member notice of the right of election accorded tohim or send to him any form of election;

 

(E)           the dividend (or that part of thedividend in respect of which a right of election has been accorded) shall notbe payable on shares in respect whereof the share election has been dulyexercised (the ***Elected Shares***)and in lieu thereof shares shall be allotted credited as fully paid to theholders of the Elected Shares on the basis of allotment determined as aforesaidand for such purpose the Board shall capitalise and apply out of the amountstanding to the credit of share premium account or out of any part of theundivided profits of the Company (including profits carried and standing to thecredit of any reserve or reserves or other special account) as the Board maydetermine, a sum equal to the aggregate nominal amount of shares to be allottedon such basis and apply the same in paying up in full the appropriate number ofunissued shares for allotment and distribution to and amongst the holders ofthe Elected Shares on such basis;

 

(F)           the Board may resolve that the shares tobe allotted shall be allotted at a premium provided that the premium iscredited as fully paid up and in such case the Board shall in addition to theamount to be capitalised and applied pursuant to sub-paragraph (E) above, andfor the purpose therein set out, capitalise and apply out of the amountstanding to the credit of the share premium account or out of any part of theundivided profits of the Company (including profits carried and standing to thecredit of any reserve or reserves or other special account) as the Board may determine,a sum equal to the aggregate amount of the premium on the shares to be allottedand shall apply the same together with the sum to be applied pursuant tosub-paragraph (E) above and on the basis therein set out in paying up in fullthe appropriate number of unissued shares for allotment and distribution to andamongst holders of the Elected Shares.

 

(b)           The shares allotted pursuant to theprovisions of paragraph (a) of this Article shall rank pari passu in allrespects with the fully paid shares then in issue save only as regardsparticipation:

 

(i)            in the relevant dividend (or the right toreceive or to elect to receive an allotment of shares in lieu thereof asaforesaid); or

 

(ii)           in any other distributions, bonuses orrights paid, made, declared or announced prior to or contemporaneously with thepayment or declaration of the relevant dividend

 

unless, contemporaneously with the announcement by the Board of itsproposal to apply the provisions of sub-paragraph (i) or (ii) of paragraph (a)of this Article in relation to the relevant dividend or contemporaneously withtheir announcement of the distribution, bonus or rights in question, the Boardshall specify that the shares to be allotted pursuant to the provisions ofparagraph (a) of this Article shall rank for participation in suchdistribution, bonus or rights.

 

(c)           The Board may do all acts and thingsconsidered necessary or expedient to give effect to any capitalisation pursuantto the provisions of paragraph (a) of this Article with full power to the Boardto make such provisions as they think fit in the case of shares becomingdistributable in fractions (including provisions whereby, in whole or in part,fractional entitlements are aggregated and sold and the net proceedsdistributed to those entitled, or are disregarded or rounded up or down orwhereby the benefit of fractional entitlements accrues to the Company ratherthan to the members concerned).  TheBoard may authorise any person to enter into on behalf of all membersinterested, an agreement with the Company providing for such capitalisation andmatters incidental thereto and any agreement made pursuant to such authorityshall be effective and binding on all concerned.

 

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(d)           The Company may upon the recommendationof the Board by ordinary resolution resolve in respect of any one particulardividend of the Company that notwithstanding the provisions of paragraph (a) ofthis Article a dividend may be satisfied wholly in the form of an allotment ofshares credited as fully paid up without offering any right to shares to electsuch dividend in cash in lieu of such allotment.

 

(e)           The Board may on any occasion when itmakes a determination pursuant to paragraph (a) of this Article, resolve thatno allotment of shares or rights of election for shares to be issued pursuantto such determination shall be made available or made to any shareholders withregistered addresses in any particular territory or territories or to aDepositary where the allotment of shares or the circulation of an offer of suchrights of election would or might, in the opinion of the Board, be unlawful orwould or might, in the opinion of the Board, be unlawful in the absence of aregistration statement or other special formalities, and in such event theprovision aforesaid shall be read and construed subject to such resolution andthe only entitlement of shareholders in any such territory or territories shallbe to receive in cash the relevant dividend resolved to be paid ordeclared.  “Depositary” means acustodian or other person (or a nominee for such custodian or other person)appointed under contractual arrangements with the Company or other arrangementsapproved by the Board whereby such custodian or other person or nominee holdsor is interested in shares of the Company or rights or interests in shares ofthe Company and issues securities or other documents of title or otherwiseevidencing the entitlement of the holder thereof to or to receive such shares,rights or interests, provided and to the extent that such arrangements havebeen approved by the Board for the purpose of these Articles and shall include,where approved by the Board, the trustees (acting in their capacity as such) ofany employees’ share scheme established by the Company or any other scheme orarrangements principally for the benefit of employees of the Company and/or itssubsidiaries which have been approved by the Board.

 

(f)            The Board may at any time resolve tocancel all (but not some only) of the elections made and the notices given bythe shareholders pursuant to sub-paragraphs (i)(D) and (ii)(D) of paragraph (a)of this Article by giving seven days notice in writing to the relevantshareholders.

 

(g)           The Board may on any occasion determinethat rights of election under paragraph (a) of this Article shall not be madeavailable to shareholders who are registered in the register of shareholders,or in respect of shares the transfer of which is registered, after a date fixedby the Board and in such event the provisions aforesaid shall be read and construedsubject to such determination.

 

132.         No dividend shall be payable except out ofthe profits or other distributable reserves of the Company, and no dividendshall bear interest as against the Company.

 

133.         The Directors may, if they think fit, from timeto time, resolve to pay to the members such interim dividends as appear to theDirectors to be justified by the reserves of the Company.  If at any time the share capital of theCompany is divided into different classes the Directors may resolve to pay suchinterim dividends in respect of those shares in the capital of the Companywhich confer on the holders thereof deferred or non-preferred rights as well asin respect of those shares which confer on the holders thereof preferential orspecial rights in regard to dividend, and provided that the Directors act bonafide they shall not incur any responsibility to the holders of sharesconferring a preference for any damage that they may suffer by reason of thepayment of an interim dividend on any shares having deferred or non-preferredrights.  The Directors may also resolveto pay at half-yearly or at other suitable intervals to be settled by them anydividend which may be payable at a fixed rate if they are of the opinion thatthe reserves of the Company justify the payment.

 

134.         All dividends unclaimed for one year afterhaving become payable may be invested or otherwise made use of by the Directorsfor the benefit of the Company until claimed, and all dividends unclaimed forsix years after having become payable may be forfeited by the Directors andshall revert to the Company.  Thepayment into a separate account of any monies payable in respect of a dividendshall not constitute the Company a trustee in respect thereof for any person.

 

135.         Unless otherwise directed any dividend orother monies payable in cash on or in respect of a share may be paid by chequeor warrant sent through the post to the registered address of the member orperson 

 

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entitled, or,in the case of joint holders, to the registered address of that one whose namestands first on the Register in respect of the joint holding, or addressed tosuch person at such address as the holder or joint holders shall direct.  The Company shall not be liable orresponsible for any cheque or warrant lost in transmission nor for any dividendor other monies lost to the member or person entitled thereto by the forgedendorsement of any cheque or warrant. Payment of the cheque or warrant by the banker on whom it is drawn shallbe a good discharge to the Company.

 

136.         The Directors may distribute in specie orin kind among the members in satisfaction in whole or in part of any dividendany of the assets of the Company, and in particular any shares or securities ofother companies to which the Company is entitled and where any difficultyarises in regard to the distribution the Board may settle the same as it thinksexpedient, and in particular may issue fractional certificates, disregardfractional entitlements or round the same up or down, and may fix the value fordistribution of such specific assets, or any part thereof, and may determinethat cash payments shall be made to any members upon the footing of the valueso fixed in order to adjust the rights of all parties, and may vest any suchspecific assets in trustees as may seem expedient to the Board and may appointany person to sign any requisite instruments of transfer and other documents onbehalf of the persons entitled to the dividend and such appointment shall beeffective.  Where required, a contractshall be filed in accordance with the provisions of the Ordinance and the Boardmay appoint any person to sign such contract on behalf of the persons entitledto the dividend and such appointment shall be effective.

 

137.         Before recommending a dividend theDirectors may set aside any part of the net profits of the Company to one ormore reserves, and may apply the same either by employing it in the business ofthe Company or by investing it in such manner as they shall think fit and theincome arising from such reserves shall be treated as part of the profits ofthe Company.  Such reserves may beapplied for the purpose of maintaining the property of the Company, replacingwasting assets, meeting contingencies, forming an insurance fund, equalisingdividends, paying special dividends, or for any other purpose for which theundivided profits of the Company may lawfully be used, and until the same shallbe so applied it shall be deemed to remain undivided profit.  The Directors may also carry forward asundivided profit any profit or balance of profit which they shall not think fitto recommend as dividend or to place to reserve.

 

##### **AUTHENTICATIONOF DOCUMENTS**

#####  

138.         Any Director or the Secretary or otherauthorised officer of the Company shall have power to authenticate anydocuments affecting the constitution of the Company and any resolutions passedby the Company or the Directors or any committee, and any books, records,documents and accounts relating to the business of the Company, and to certifycopies thereof or extracts therefrom as true copies of extracts; and where anybooks, records, documents or accounts are elsewhere than at the Office, thelocal manager or such other officer of the Company having the custody thereofshall be deemed to be the authorised officer of the Company as aforesaid.  A document purporting to be a copy of aresolution or an extract from the minutes of a meeting of the Company or of theDirectors or any local board or committee which is certified as aforesaid shallbe conclusive evidence in favour of all persons dealing with the Company uponthe faith thereof that such resolution has been duly passed or, as the case maybe, that any minute so extracted is a true and accurate record of proceedingsat a duly constituted meeting.

 

##### **CAPITALISATIONOF RESERVES ETC.**

#####  

139.         The Company in general meeting may upon therecommendation of the Directors resolve to capitalise any part of the Company’sreserves or undivided profits not required for the payment or provision of thedividend on any shares with a preferential right to a dividend, and accordinglythat such part be divided amongst the members who would have been entitledthereto if distributed by way of dividend and in the same proportions, oncondition that the same be not paid in cash but be applied as a capitalisationissue either in or towards paying up any amounts for the time being unpaid onany shares held by such members respectively or paying up in full unissuedshares or debentures or other securities of the Company to be allotted anddistributed credited as fully paid to and amongst such members in theproportion aforesaid, or partly in one way and partly in the other:

 

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Provided thatany amount standing to the credit of a share premium account or a capitalredemption reserve fund may, for the purposes of this Article, only be appliedin the paying up of unissued shares to be issued to members of the Company asfully paid-up shares.

 

140.         Whenever such a resolution as aforesaidshall have been passed the Directors shall make all appropriations andapplications of the reserves and undivided profits resolved to be capitalisedthereby, and all allotments and issues of fully paid-up shares, debentures orother securities and generally shall do all acts and things required to giveeffect thereto.

 

141.         For the purpose of giving effect to anyresolution under Articles 136 and 139 hereof the Directors may settle anydifficulty which may arise in regard to the distribution or capitalisationissue as they think expedient, and in particular may issue fractionalcertificates, and may fix the value for distribution of any specific assets,and may determine that cash payments shall be made to any members based uponthe value so fixed or that fractions of such value as the Directors maydetermine may be disregarded in order to adjust the rights of all parties, andmay vest any such cash or specific assets in trustees upon such trusts for thepersons entitled to the distribution or capitalisation issue as may seemexpedient to the Directors.  Theprovisions of the Ordinance in relation to the filing of contracts forallotment shall be observed, and the Directors may appoint any person to signsuch contract on behalf of the persons entitled to share in the distribution orcapitalisation issue, and such appointment shall be effective and binding uponall concerned, and the contract may provide for the acceptance by such personsof the shares, debentures or other securities to be allotted and distributed tothem respectively in satisfaction of their claims in respect of the sum socapitalised.

 

##### **ACCOUNTSAND AUDITORS**

#####  

142.         The Directors shall cause proper books ofaccount to be kept with respect to:

 

(a)           all sums of money received and expendedby the Company and the matters in respect of which such receipt and expendituretake place; and

 

(b)           the assets and liabilities of theCompany.

 

Proper book shall not be deemed to be keptif there are not kept such books of accounts as are necessary to give a trueand fair view of the transactions.

 

143          (A) The Directors shall, from time totime, in accordance with the Ordinance, cause to be prepared and to be laidbefore its annual general meeting the relevant financial documents required bythe Ordinance.  The Directors may alsocause to be prepared a summary financial report if they think fit, which may beprovided to members and/or debenture holders instead of the relevant financialdocuments in circumstances permitted by the Ordinance, the Listing Rules andany other applicable laws, rules and regulations.

 

(B)          Subject to paragraph (C) below, a copy ofthe relevant financial documents or the summary financial report shall, notless than 21 days before the meeting, be delivered or sent by post to theregistered address of every member and debenture holder of the Company, or inthe case of a joint holding to the member or debenture holder (as the case maybe) whose name stands first in the appropriate Register in respect of the jointholding.  No accidental non-compliancewith the provisions of this Article shall invalidate the proceedings at themeeting.

 

(C)          Where a member or debenture holder of theCompany has, in accordance with the Ordinance, the Listing Rules and any otherapplicable laws, rules and regulations, consented to treat the publication ofthe relevant financial documents and/or the summary financial report on theCompany’s computer network as discharging the Company’s obligation under theOrdinance to send a copy of the relevant financial documents and/or the summaryfinancial report, then subject to compliance with the Ordinance, the ListingRules and any other applicable laws, rules and regulations, publication by theCompany on the Company’s computer network of the relevant financial documentsand/or the summary financial report at least 21 days before the date of themeeting shall, in relation to each such member or debenture holder of theCompany, be deemed to discharge the Company’s obligations under paragraph (B)above.

 

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144.         For the purposeof Article 143, “relevant financial documents” and “summary financial report”shall have the meaning ascribed to them in the Ordinance.”145.               Auditors shall be appointed and theirduties regulated in the manner provided by the Ordinance.

 

146.         Subject as otherwise provided by theOrdinance the remuneration of the Auditors shall be fixed by the Company ingeneral meeting provided always that in respect of any particular year theCompany in general meeting may delegate the fixing of such remuneration to theBoard.

 

147.         Every statement of accounts audited by theCompany’s Auditors and presented by the Board at a general meeting shall afterapproval at such meeting be conclusive except as regards any error discoveredtherein within three months of the approval thereof.  Whenever any such error is discovered within that period, itshall forthwith be corrected, and the statement of accounts amended in respectof the error shall be conclusive.

 

##### **NOTICES**

#####  

 

148          Any notice or document to be given orissued under these Articles shall be in writing, except that any such notice or**7(3)** document to be given orissued by or on behalf of the Company under these Articles (including any“corporate communication” within the meaning ascribed thereto in the ListingRules) shall be in writing which may or may not be in a transitory form and maybe recorded or stored in any digital, electronic, electrical, magnetic or otherretrievable form or medium and information in visible form (including anelectronic communication and publication on a computer network) whether havingphysical substance or not may be served or delivered by the Company by any ofthe following means subject to and to such extent permitted by and inaccordance with the Ordinance, the Listing Rules and any other applicable laws,rules and regulations:

 

(i)            personally;

 

(ii)           by sending it through the post in aproperly prepaid letter, envelope or wrapper addressed to a member at hisregistered address as appearing in the Register of Members or in the case ofanother entitled person, to such address as he may provide;

 

(iii)          bydelivering or leaving it at such address as aforesaid;

 

(iv)          by advertisement in an English languagenewspaper and a Chinese language newspaper in Hong Kong in accordance with theListing Rules;

 

(v)           by transmitting it as an electroniccommunication to the entitled person at such electronic address as he may haveprovided; or

 

(vi)          by publishing it on a computer network.

 

149.         Any notice or document (including any“corporate communication” within the meaning ascribed thereto in the ListingRules) given or issued by or on behalf of the Company:

 

(i)         if sent by post, shall be deemed to havebeen served on the day following that on which the envelope or wrappercontaining the same is put into a post office situated within Hong Kong and inproving such service it shall be sufficient to prove that the envelope orwrapper containing the notice or document was properly prepaid, addressed andput into such post office (airmail if posted from Hong Kong to an addressoutside Hong Kong) and a certificate in writing signed by the Secretary orother person appointed by the Board that the envelope or wrapper containing thenotice or document was so properly prepaid, addressed and put into such postoffice shall be conclusive evidence thereof;

 

(ii)        if not sent by post but delivered or leftat a registered address by the Company, shall be deemed to have been served onthe day it was so delivered or left;

 

(iii)       ifpublished by way of a newspaper advertisement, shall be deemed to have beenserved on the date on which it is advertised in one English language newspaperand one Chinese language newspaper in Hong Kong;

 

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(iv)       if sent as an electronic communication,shall be deemed to have been served at the time when the notice or document istransmitted electronically provided that no notification that the electroniccommunication has not reached its recipient has been received by the sender,except that any failure in transmission beyond the sender’s control shall notinvalidate the effectiveness of the notice or document being served; and

 

(v)        if published on the Company’s computernetwork, shall be deemed to have been served on the day on which the notice ordocument is published on the Company’s computer network to which the entitledperson may have access.

 

149A.      Subject to any applicable laws, rules andregulations, any notice or document, including but not limited to the documentsreferred to in Article 143 and any “corporate communication” within the meaningascribed thereto in the Listing Rules, may be given in the English languageonly, in the Chinese language only or in both the English language and theChinese language.

 

149B.      For the purpose of Article 148and 149, “entitled person” shall have the meaning ascribed to them in theOrdinance.

 

150.         Any person who, by operation of law,transfer or other means whatsoever, shall become entitled to any share shall bebound by every notice in respect of such share which, previously to his nameand address being entered in the Register, shall be duly given to the personfrom whom he derives his title to such share.

 

151.         Any notice or document served inaccordance with these Articles shall, notwithstanding such member be then deceasedor bankrupt, and whether or not the Company has notice of his decease or bankruptcy,be deemed to have been duly served in respect of any shares held by suchmember, whether held solely or jointly with other persons by such member, untilsome other person be registered in his stead as the holder or joint holderthereof, and such service shall for all purposes of these Articles be deemed asufficient service of such notice or document on his executors, administratorsor assigns and all persons (if any) jointly interested with him in any suchshare.

 

152.         Any summons, notice, order or otherdocument required to be sent to or served upon the Company, or upon any officerof the Company, may be sent or served by leaving the same or sending it throughthe post in a prepaid letter, envelope or wrapper, addressed to the Company orto such officer at the Office.

 

153.         The signature to any notice to be given bythe Company may be written, typed,  printed or made electronically.

 

154.         Subject to any special provisions containedin these Articles or in the Ordinance, all notices required to be given by **7(1)**advertisement shall be advertised in at least onedaily Chinese and one daily English newspaper circulating in Hong Kong.

 

155.         In reckoning the period for any noticegiven under these Articles, the day on which notice is served, or deemed to beserved, and the day for which such notice is given shall be excluded.

 

##### **WINDINGUP**

#####  

156.         If the Company shall be wound up, thesurplus assets remaining after payment to all creditors shall be divided amongthe members in proportion to the capital paid up on the shares held by themrespectively, and if such surplus assets shall be insufficient to repay thewhole of the paid-up capital, they shall be distributed so that, as nearly asmay be, the losses shall be borne by the members in proportion to the capitalpaid upon on the shares held by them respectively.  This Article is, however, subject to the rights of the holders ofany shares which may be issued on special terms or conditions.

 

157.         If the Company shall be wound up, theliquidator (whether voluntary or official) may, with the sanction of a specialresolution, divide among the members in specie or kind the whole or any part ofthe assets of the Company or vest any part of the assets of the Company intrustees upon such trusts for the benefit of the members or any of them as theresolution shall provide.  Any suchresolution may provide for and sanction a distribution of any specific assetsamongst different classes of members otherwise than in accordance with theirexisting rights, but each member shall in that event have a right 

 

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of dissent andother ancillary rights in the same manner as if such resolution were a specialresolution passed pursuant to section 237 of the Ordinance.

 

158.         In the event of a winding-up of the Companyin Hong Kong, every member of the Company who is not for the time being in HongKong shall be bound, within fourteen days after the passing of an effectiveresolution to wind up the Company voluntarily, or within the like period afterthe making of an order for the winding up of the Company, to serve notice inwriting on the Company appointing some person resident in Hong Kong upon whomall summonses, notices, processes, orders and judgements in relation to orunder the winding up of the Company may be served and, in default of suchnomination, the liquidator of the Company shall be at liberty on behalf of suchmember to appoint some such person, and service upon any such appointee shallbe deemed to be a good personal service on such member for all purposes, andwhere the liquidator makes any such appointment he shall, with all convenientspeed, give notice thereof to such member by advertising in such Englishlanguage daily newspaper circulating in Hong Kong as he shall deem appropriateor by a registered letter sent through the post and addressed to such member athis address as appearing in the Register, and such notice shall be deemed to beserved on the day on which the advertisement appears or the letter is posted.

 

##### **INDEMNITY**

#####  

159.         Subject to the provisions of the Ordinance,every Director or other officer of the Company shall be indemnified out of theassets of the Company against all costs, charges, expenses, losses andliabilities which he may sustain or incur in or about the execution of hisoffice or otherwise in relation thereto and in particular and without prejudiceto the generality of the foregoing every Director and other officer of theCompany shall be indemnified by the Company against, and it shall be the dutyof the Directors out of the funds of the Company to pay all costs, losses andexpenses which any such Director and other officer may incur or become liablefor by reason of any contract entered into, or act or thing done by him or themas such Director and other officer, or in any way in the discharge of their orhis duties, including travelling expenses; and the amount for which suchindemnity is provided shall immediately attach as a lien on the property of theCompany, and have priority as between the members over all other claims.  Any person who is a Director or otherofficer of the Company shall not be liable (except in consequence of his owndishonesty) for the acts, receipts, neglects or defaults of any other Directoror other officer of the Company or for any losses or expenses incurred by theCompany through the insufficiency or deficiency of title to any propertyacquired by order of the Directors for or on behalf of the Company, or for theinsufficiency or deficiency of any security in or upon which any of the moneysof the Company shall be invested, or for any loss or damage arising from thebankruptcy, insolvency or tortious act of any person with whom any moneys,securities or effects of the Company shall be deposited or for any lossoccasioned by any error of judgement, omission, default or oversight on theiror his part, or for any other loss, damage or misfortune whatever which shallhappen in the execution of the duties of his office or in relation thereto.

 

##### **DESTRUCTIONOF DOCUMENTS**

#####  

160.         Subject to the Ordinance, the Company maydestroy:

 

(a)           any share certificate which has been cancelled at anytime after the expiry of one year from the date of such cancellation;

 

(b)           any dividend mandate or any variation or cancellationthereof or any notification of change of name or address at any time after theexpiry of two years from the date on which such mandate, variation,cancellation or notification was recorded by the Company;

 

(c)           any instrument of transfer of shares which has beenregistered at any time after the expiry of six years from the date ofregistration; and

 

(d)           any other document, on the basis of which any entry inthe register is made, at any time after the expiry of six years from the dateon which an entry in the register was first made in respect of it;

 

and it shallconclusively be presumed in favour of the Company that every share certificateso destroyed was a valid certificate duly and properly cancelled and that everyinstrument of transfer so 

 

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destroyed wasa valid and effective instrument duly and properly registered and that everyother document destroyed hereunder was a valid and effective document inaccordance with the recorded particulars thereof in the books or records of theCompany.  Provided always that:

 

(i)            the foregoing provisions of this Article shall applyonly to the destruction of a document in good faith and without express noticeto the Company that the preservation of such document was relevant to a claim;

 

(ii)           nothing contained in this Article shall be construedas imposing upon the Company any liability in respect of the destruction of anysuch document earlier than as aforesaid or in any case where the conditions ofproviso (i) above are not fulfilled; and

 

(iii)          references in this Article to the destruction of anydocument include reference to its disposal in any manner.

 

##### **UNTRACEABLESHAREHOLDERS**

#####  

161.         Without prejudice to the rights of theCompany, the Company may cease sending such cheques for dividend entitlementsor dividend warrants by post if such cheques or warrants have been left uncashedon two consecutive occasions.  However,the Company may exercise the power to cease sending cheques for dividendentitlements or dividend warrants after the first occasion on which such acheque or warrant is returned undelivered.

 

162.         The Company shall have the power to sell,in such manner as the Board thinks fit, any shares of a shareholder who isuntraceable, but no such sale shall be made unless:

 

(i)            all cheques or warrants, being not lessthan three in total number, for any sum payable in cash to the holder of suchshares in respect of them sent during the relevant period in the mannerauthorised by the Articles of Association of the Company have remaineduncashed;

(ii)           so far as it is aware at the end of therelevant period, the Company has not at any time, during the relevant periodreceived any indication of the existence of the shareholder who is the holderof such shares or of a person entitled to such shares by death, bankruptcy oroperation of law;

 

(iii)          theCompany has caused an advertisement to be inserted in English in one Englishlanguage daily newspaper and in Chinese in one Chinese language daily newspaper(provided that the aforesaid daily newspapers shall be included in the list ofnewspaper issued and published in the Hong Kong Government Gazette for thepurpose of section 71A of the Ordinance) advertising its intention to sell suchshares and a period of three months has elapsed since the date of suchadvertisement; and

(iv)          the Company has notified the stockexchange in the relevant territory of its intention to effect such sale.

 

For thepurpose of the foregoing, “relevant period” means the period commencing twelveyears before the date of publication of the advertisement referred to inparagraph (iii) of this Article and ending at the expiry of the period referredto in that paragraph.

 

The manner,timing and terms of any sale of shares pursuant to this Article (including butnot limited to the price or prices at which the same is made) shall be such asthe Board determines, based upon advice from such bankers, brokers or otherpersons as the Board considers appropriate consulted by it for the purposes, tobe reasonably practicable having regard to all the circumstances including thenumber of shares to be disposed of and the requirement that the disposal bemade without delay and the Board shall not be liable to any person for any ofthe consequences of reliance on such advice.

 

163.         To give effect to any such sale pursuant toArticle 162 the Board may authorise any person to transfer the said shares andthe instrument of transfer signed or otherwise executed by or on behalf of suchperson shall be as effective as if it had been executed by the registeredholder or the person entitled by transmission to such shares, and the purchasershall not be bound to see to the application of the purchase money nor shallhis title to the shares be affected by any irregularity or invalidity in theproceedings relating to the sale.  Thenet proceeds of the sale will belong to the Company and, upon receipt by theCompany of such proceeds, it shall become indebted to the former shareholder bycarrying all moneys in respect thereof to a separate account for an amountequal to such net proceeds. 

 

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No trustsshall be created in respect of such debt and no interest shall be payable inrespect of it and the Company shall not be required to account for any moneyearned from the net proceeds which may be employed in the business of theCompany or as it thinks fit.  Any saleunder this Article shall include any additional shares which during therelevant period or during any period ending on the date when all therequirements of sub-paragraphs (i) to (iii) of Article 162 have beensatisfied have been issued in respect of those held at the beginning of suchrelevant period and shall be valid and effective notwithstanding that theshareholder holding the shares sold is dead, bankrupt or otherwise under anylegal disability or incapacity.

 

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