Laws of the People's Republic of China

   Article 1 In order to strengthen the supervision and control on listed companies, standardize their operation, and safeguard the interests of the investors, these procedures have been formulated according to the State laws, rules and regulations.

   Article 2 These procedures are applicable to the limited stock companies listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange.

   Article 3 The China Securities Regulatory Commission (hereinafter referred as the CSRC) is responsible for the implementation of these procedures.

   Article 4 Checks on the listed companies mainly cover:

(1) Whether the release of the companies' information meets the requests of the laws, rules and regulations as wall as the regulations and standardized documents promulgated by the CSRC; whether the reports, announcements, information and documents released by the companies are true, complete and accurate; and whether the information is released in time.

(2) Whether the funds raised are used for the purposes as stated in the original prospectus for rallying or rationing shares; whether changes of the uses of funds raised have been approved by meetings of share holders; and whether the changes of fund used after approved by meetings of share holders have been fully acknowledged to the share holders in time.

(3) Whether the articles of association are conformed with laws, rules and regulations as well as the regulations and standardized documents promulgated by the CSRC, and how the articles of association have been implemented.

(4) Whether the meetings of share holders have been convened in accordance with the provisions of the laws, rules, regulations and the articles of association, how are discussions and resolutions are made in the meetings; and whether the interests of the minority share holders have been protected.

(5) How meetings of the companies' board of directors are held; how the legal functions and powers of boards of directors and chairmen and members of the boards of directors are exercised; how the companies' boards of directors are formed; how the candidates of the members of the boards of directors are nominated; what are rules for the discussions at meetings of boards of directors; how the resolutions of boards of directors are implemented; and records of the discussions and decisions of boards of directors on important investment matters of the companies.

(6) How the legal functions and powers of the companies' supervision commissions are exercised; the composition of the supervision commissions; the rules and voting procedures of the supervisions commissions; and how the duties of the supervision commissions are fulfilled.

(7) How the duties and powers of the general managers (managers) and other senior managerial persons are carried out; scopes of the power vested to the general managers (managers) and other senior managerial persons, the companies' boards of directors; how the general managers (managers) and other senior managerial persons execute the resolutions adopted by boards of directors and manage the operational departments, branches and subsidiaries of the companies.

(8) The institution of the posts of secretaries for the companies' boards of directors; scopes of the secretaries' duties and power; and how the secretaries organize and coordinate the releases of the companies' information.

(9) Other affairs which the CSRC thinks necessary to be checked.

   Article 5 The checks shall be organized by the CSRC.

The CSRC shall draw and unite, according to needs, personnel concerned from local securities administrative departments, accountant (auditing) offices and lawyers offices of a high professional level, good reputation and qualified to do business related to securities to form groups for the checks and concrete works of the checks shall be led and organized by the personnel of the CSRC.

   Article 6 A listed company being checked shall help but not refuse the checking and persons being checked shall report the situation accurately but not refuse the checking or hide the facts.

   Article 7 When checking a listed company, the checking personnel concerned may take notes, make audio or video records, take pictures and make copies.

   Article 8 For a check, the checking personnel concerned shall show their I.D. cards and the certificates issued by the CSRC.

   Article 9 The companies being checked and related accountant offices shall mainly provide the inspection personnel with the following documents:

(1) The companies' accounting statements, related account books and certificates as well as other data being involved in the accounting statements;

(2) Records and resolutions of the meetings of share holders, records and resolutions of the meetings of boards of directors, records and resolutions of meetings of supervision commissions, documents of the working meetings of managers, and other documents related to the management system of the companies;

(3) The data and documents concerning the important investment;

(4) Original copies of the auditing on financial statements of the companies formulated by the accountant offices;

(5) Other documents necessary to be checked.

   Article 10 Checking personnel shall conscientiously carry out the work of checking in line with laws and rules as well as regulations concerned.

Before results of the checks are announced, both the checking personnel and the companies checked must not release any information related to the results.

   Article 11 Companies to be checked shall be decided by the CSRC on a sampling basis.

   Article 12 Time to make the checks shall be decided and acknowledged to the companies to be checked by the CSRC.

   Article 13 Should violation of laws, rules and related regulations by listed companies and responsible persons concerned be found through the checks, the CSRC shall, within its authority empowered by the laws and rules and regulations concerned, enforce punishment. Cases beyond the authority of handling of the CSRC shall be sent to be handled by institutions concerned. Criminal cases shall be sent to judicial organs for affixing responsibilities of crimes.

   Article 14 If a document issued by an accountant office or lawyer office violates rules and regulations concerned, the CSRC shall, within its authority, enforce punishment according to the law.

   Article 15 The CSRC shall be responsible for interpreting these procedures.

   Article 16 These procedures shall become effective as of the day when they are promulgated.