Strengthening the Protection of the Rights and Interests of Public Shareholders Several Provisions

(1) While the separation of equity ownership and trading rights remains, as a transitional measure, listed companies shall establish and then improve a system wherein public shareholders have a vote on material matters. In accordance with laws, administrative regulations and the company's articles of association, the following matters may be implemented or applications made therefor only after they have been adopted by an affirmative vote at a shareholders' general meeting and passed by a simple majority of the voting rights held by public shareholders who participated in the vote:

(a) the listed company's additional offering of new shares to the public (including the issuance of warrants of offshore-listed foreign investment shares and other types of shares), offering of convertible bonds and rights issues to existing shareholders (unless the shareholder with actual control undertakes before the meeting to subscribe to the entire amount in cash);

(b) a major asset reorganization by the listed company, where the price premium of the total price of the assets to be purchased over their audited net book value is 20% or more;

(c) a shareholder uses his or her equity in the listed company to discharge a debt to the company;

(d) the offshore listing of a subsidiary that would have a material impact on the listed company; and

(e) matters that, in the course of the development of the listed company, would have a material impact on the interests of the public shareholders.

Once the listed company issues its notice of a shareholders' general meeting, it shall again publish the notice within three days of the date of equity registration.

When a listed company announces the resolutions of its shareholders' general meeting, it shall specify the number of public shareholders who participated in the vote, the total number of shares held by them, the percentage of the company's public shares they account for and the result of their votes, and shall additionally disclose the shareholdings and votes of the 10 largest public shareholders who participated in the vote.

(2) Listed companies shall proactively take measures to increase the percentage of public shareholders who attend shareholders' general meetings. Listed companies are encouraged, when holding shareholders' general meetings, to provide to shareholders a network voting platform in addition to the physical meetings. When a listed company convenes a shareholders' general meeting to deliberate on the matters specified in Item (1) above, it shall provide a network voting platform for its shareholders.

When a listed company implements network voting for a shareholders' general meeting, it shall do so in accordance with the relevant implementing procedures.

(3) Listed companies shall genuinely protect the right of public shareholders to attend shareholders' general meetings. Shareholders may vote in person or appoint a proxy to vote on their behalves. The board of directors, independent directors and shareholders who meet certain conditions may solicit the votes of the listed company's shareholders at a shareholders' general meeting.

When the soliciting party publicly solicits the votes of the shareholders of the listed company, it/he or she shall do so in accordance with the relevant implementing procedures.

(4) Listed companies shall genuinely protect the right of public shareholders to select directors and supervisors. During the process of electing directors or supervisors, the opinions of the public shareholders shall be fully reflected and a cumulative voting system actively promoted.

For the purposes of these Provisions, the term "cumulative voting system" means a system wherein, when the listed company's shareholders' general meeting is electing directors or supervisors, each voting share represents a number of votes equivalent to the number of directors or supervisors to be elected, and the votes held by a shareholder may be used in a focused manner.

(5) When a listed company is formulating or amending its articles of association, it shall implement the spirit of the foregoing provisions and the relevant implementing procedures and set forth the relevant provisions.

2. Improving the Independent Director System and Fully Leveraging the Function of Independent Directors

(1) Listed companies shall establish independent director systems. Independent directors shall faithfully perform their duties, safeguard the interests of the company and, in particular, shall pay attention to whether the lawful rights and interests of the public shareholders are being harmed.

(2) Independent directors shall perform their duties and responsibilities independently, free from the influence of the listed company's largest shareholders, party in actual control and work units and individuals that have a material interest in the listed company, its largest shareholders, or in the party in actual control.

(3) Material affiliated transactions and the engagement or dismissal of an accounting firm must be approved by a majority of the independent directors before they can be submitted to the board of directors for deliberation. Subject to the consent of all the independent directors, the independent directors may independently engage an external auditor or consultant to audit or provide consulting services in respect of specific matters of the company. The relevant fees shall be borne by the company.

(4) Listed companies shall establish independent director work systems. The board secretary shall actively cooperate with the independent directors in the performance of their duties and responsibilities. Listed companies shall ensure that independent directors enjoy the same right to know as the other directors, promptly provide to the independent directors relevant materials and information, regularly report to them the operational status of the company and, when necessary, may arrange to have the independent directors carry out an onsite inspection.

(5) Independent directors shall attend board meetings on time, keep themselves apprised of the company's production and operation circumstances and take the initiative in reviewing and obtaining the information and data required to make decisions. The independent directors shall submit to the shareholders' general meeting of the company annual reports on their work, and give an explanation of the performance of their duties and responsibilities.

(6) Independent directors may not be dismissed without just cause prior to the expiration of their terms of service. If a listed company intends to dismiss an independent director early, it shall disclose the same as a matter requiring special disclosure.

3. Strengthening of the Management of Investor Relations and Improving the Quality of Information Disclosures by Listed Companies

(1) Listed companies shall timely, accurately, completely and fully disclose information in strict accordance with laws, administrative regulations and listing rules. The contents and form of information disclosed by a listed company shall be presented in such a manner as to facilitate review, understanding and access by public investors.

(2) Listed companies shall actively engage in investor relations management work and establish sound investor relations management systems. The board secretary shall have specific responsibility for managing the company's investor relations.

(3) Listed companies shall take the initiative and proactively disclose information, treat all of their shareholders fairly and may not selectively disclose information.

(4) Listed companies shall, through various means, take the initiative in strengthening their contact and communication with investors, in particular, public investors, set up dedicated investor inquiry lines, set up investor relations sections on their websites, hold regular activities to meet public investors and timely respond to questions of concern to public investors.

4. Implementation of Proactive Profit Distribution Methods by Listed Companies

(1) The profit distribution of listed companies shall emphasize reasonable investment returns to investors.

(2) Listed companies shall specify their profit distribution method in their articles of association.

(3) If the board of directors of a listed of company fails to prepare an advance plan for the distribution of profits in cash, it shall disclose the reason in the periodic report and the independent directors shall express their opinions thereon. If a listed company has not distributed profits in cash during the most recent three years, it may not make an additional offer of new shares to the public, offer convertible bonds or make a rights issue to its existing shareholders.

(4) If a shareholder appropriates funds of the listed company in violation of provisions, the listed company shall make a deduction from the cash bonus dividends distributed to the shareholder to recover such funds.

5. Strengthening of the Supervision of Listed Companies and Their Senior Management Personnel

(1) The controlling shareholder and party in actual control of a listed company have a fiduciary duty toward the listed company and the public shareholders. The controlling shareholder or party in actual control may not appropriate funds of the listed company in violation of provisions, provide guarantees to affiliated parties in violation of provisions or use such means as affiliated transactions, profit distribution, asset reorganization, investment in third parties, etc. to damage the lawful rights and interests of the listed company or the public shareholders. If the controlling shareholder or party in actual control uses its controlling position to damage the interests of the listed company or the public shareholders, its liability shall be pursued in accordance with the law.

(2) If the controlling shareholder or party in actual control of a listed company appropriates funds of the listed company in violation of provisions or if the listed company provides a guarantee to an affiliated party in violation of provisions, the China Securities Regulatory Commission will refuse to accept the listed company's applications for further financing until such circumstances are rectified. If the controlling shareholder or party in actual control of a listed company appropriates funds of the listed company in violation of provisions, the China Securities Regulatory Commission will refuse to accept the listed company's applications for public offerings of securities or other approval matters until such circumstance is rectified.

(3) The senior management personnel of listed companies shall faithfully perform their duties and safeguard the best interests of the company and all the shareholders. If a member of the senior management personnel of a listed company fails to faithfully perform his or her duties or violates his or her fiduciary duty, his or her act shall be recorded in the fiduciary file and published at the appropriate time. If the circumstances of his or her violation are serious, he or she will be banned from the market. If he or she has caused damage to the interests of the listed company or the public shareholders, he or she shall be liable for damages in accordance with the law.

(4) A listed company may not engage to serve as a member of its senior management personnel a person whom the PRC Company Law specifies may not serve as a director, supervisor or manager, a person who has been declared banned from the market by the China Securities Regulatory Commission and who is still under the ban or a person who has been declared an inappropriate candidate by a stock exchange and less than two years have elapsed since such declaration.

6. These Provisions shall apply to listed companies whose shares are listed and traded on the Shanghai and Shenzhen Stock Exchanges.

7. These Provisions shall be implemented as of the date of issuance.